Indian motorcycles again ends production

Las Vegas Sun ^ | 23Sep03 | Edward Wong

[muslims=borg]

GILROY, Calif. -- When the gleaming reincarnations of Indian Motorcycles rolled off the factory floor four years ago, enthusiasts wondered whether the new machines would recapture the glory of the vintage line that had ceased production nearly a half-century earlier.

Now they have their answer: The Indian Motorcycle Co. announced on Monday that it had sputtered to a halt and was stopping production in its factory in Gilroy, Calif. It is laying off about 380 workers, virtually the entire staff.

The move means that the Indian brand will once again be relegated to the halcyon memories and oil-stained garages of its many devoted collectors, including George Clooney and Jay Leno. No longer will new machines roll off the assembly line, and no longer will the company lose large sums of money as it tries to compete with Harley-Davidson. The company said in its announcement that the halt to production was intended to "conserve cash and preserve its assets."

Frank J. O'Connell, chairman and chief executive, said that while sales had increased steadily since 1999, the company was also plagued by rising costs.

"The board made a decision that we have to go down a different path," O'Connell said in a phone interview. "Our volume continues to grow and dealers continue to grow, but the cost structure is out of line. It's a stand-alone manufacturing operation that's too expensive."

With the exception of a few sales people scattered across the country, the layoffs will all be in Gilroy, a Northern California town of 40,000 that proudly calls itself the Garlic Capital of the World. (Each summer, the town holds the prominent Gilroy Garlic Festival.) The Indian Motorcycle Co. owns a 150,000-square-foot factory in the middle of town.

The company said it would keep a skeleton crew of workers to sustain basic operations.

The company is controlled by the Audax Group, a private equity firm based in Boston that injected $45 million into the company in 2001. O'Connell declined to give any financial numbers but said the company had failed to break even during any of the years since it won the rights to the Indian trademark in November 1998.

The six-member board made a unanimous decision to shut down production, he said, in hopes that the company will be able to raise more capital.

"Costs have increased because we put in a lot of infrastructure to service dealers and parts," O'Connell said. He estimated that 200 dealers sell Indian motorcycles. There are several hundred outstanding orders that will go unfilled, he said.

Sales to dealers have risen steadily, he said, to 3,500 motorcycles last year from 1,000 in 1999.

One former dealer in Indian motorcycles, Steven V. DeStout, said that those numbers might be optimistic. Though it is true that the number of dealers -- and thus sales from the factory floor -- has increased over the years, he said, dealers are not necessarily able to sell the bikes briskly to customers. DeStout said that by the time he retired last year and shut down his company, Staz's American Motorcycles in Las Vegas, the sales of Indian bikes made up only a small part of his revenue, though that was not the main reason for his retirement.

The current Indian line consists of three models: the Chief, Scout and Spirit. Prices range from $25,000 for a high-end Chief to $17,000 or so for a Spirit. Last year, the company began making its own motors for the Chief, which had previously used an engine designed for after-market use on Harley-Davidson motorcycles.

The use of the engine meant for the Harley drew skepticism from some enthusiasts of the old Indian motorcycles. Though the Chief had many of the swooping lines of the pre-1953 models, its similarities ended on the most superficial level, they said.

"We called them the Pretendians, which is a little bit mean," said Wilson Plank, owner of American Indian Specialists, a restoration business based in Fullerton, Calif. "But the factory never tried to insult us. They were too busy trying to get their act together and keep it going."

[hdrider]

I see...so you don't ride much.

[JoeSixPack1]

Nah.

When ya got a chameleon for a ride, there's just too many decisions about what to wear! So I walk around in my underwear all day sayin'..

Vrooom.... Vrooomm...

And by the end of the day, somehow, my bike is hot, needs gas, is all dirty and stuff, and it thinks it went somewhere.

Works for both of us!

<|:-)~~

[JoeSixPack1]

My friend JUST (I mean in the last three weeks) opened three Indian dealerships...

OUCH!! That's gonna leave a scar!

[Hildy]

It's a catastrophe.

[JoeSixPack1]

Well, thinking beyond rent or mortgage deposits, utilities deposits, license fees, showroom merchandise, counters & shelving, clothing stock, aftermarket stock, signage, business contacts, advertising, employees, bikes for the showroom, shop equipment (lifts, tire stuff, compressor, oil & filter & battery disposal, special tooling, etc. etc.), probably a grand opening party and new customer give-away doodads,

for 3 stores !!!!!

Has he called suicide prevention hotline yet?

[HamiltonJay]

Frankly anyone starting up a manufacturing facility in one of the highest priced labor and housing markets in the country has to have not done their homework... plus I think they may have financed themselves out of business. They'd finance ya for 7-8 years on a motorcycle!!! What's up with that... wouldn't suprise me in the least to find they were repoing a lot of those financed a year or two after they were bought.

[Hank Rearden]

Yeah, too bad. As a Harley owner, I like to see competition for them.

Their "new direction" will no doubt be T-shirt and fake-biker leather jacket catalogs.

[archy]

Free motor with purchase of Slushee and on your next visit a six hour tumbled hot dog with your choice of chutney, curry paste or pomodroms.

Ooops, wrong continent.

FTW

Not really. In the late 1940s-1950s, Indian picked up the owner of the British Royal Enfield marque as an investor, who rebadged some of the Britbikes as Indians and flogged them in the USA as *starter bikes* to less financially endowed purchasers, particularly first-bike buyers who might have found an eighty-inch Indian Chief a bit much for their first time out. Most observers feel the British financial interest did the Indian cause no good, and may have actually contributed to the demise of the American firm, though the combination had certain possibilities.

But the Royal Enfield marque lived on in production of the old design, more or less unchanged in India, and those bikes are now doing rather well in the retro-bike niche market. And that earlier Indian-Enfield connection has not gone unnoticed, either....

[archy]

Frankly anyone starting up a manufacturing facility in one of the highest priced labor and housing markets in the country has to have not done their homework...

And competing with Harley in their particularly desirable centennial model anniversary year, with no model comprable to Harley's entry-level 883 *Hugger* Sportster, nor without a model in the size/price range of Japanese and returned-from-the-dead Triumph sportbikes.

The just-in-time engineering feat of the ho-hum *coinhead* engine for the big Indian was a good start, but a day-plus late. But it might have been, and there are at least some interesting individual examples left as desirable clay for some individual sculpturing in metal to be done.

-archy-/-

[archy]

Don't know anything about motorcycles, but I really like Del McCoury's version of that Richard Thompson song.

Check out the link to Richard Thompson's original version on my FReeper profile page. And note the lyrics with the added two extra verses the McCoury's didn't cover.

-archy-/-

[jonefab]

WHY would anyone open an operation in Klifornia when soooo many are hussling to leave that great social bastion. Its no wonder they are going under, thay should have at least opened a factory in the heart land.

[archy]

"...if anyone could have competed with H-D it would have been..."

The Vincent

Patrick Godet is doing just fine with his, thanks.

[jonefab]

Native American, I mean Indian

[archy]

If you really wanted one, for that kind of money, you could get a real Indian, one with a flathead, 3 speed, left hand throttle and right hand spark advance. Matter of fact, my bud has a 47 Chief in the showroom, semi-restored and running. The owner will take 20 grand for it.

You can do a little better than that for a powerplant, whether trying to find one for one of the pre-'53 Chiefs or looking for something more reliable and more interesting to drop in one of the *New Indians*.

As for the handling, I know of at least one of the new bikes that's had an original Indian '47 spring fork fit on it, kinda like the *Heritage* Harley's with the repop springers.

Hey, lookit the pushrods on the Indian...flathead?

[biblewonk]

It's the name, it's too un-american. And there is no way to take share away from Harley unless you offer a really nice v twin for half the money.

[chemicalman]

Shame they going out of business. Really liked the T3 Specil Edition they have. Too much money for something I'd like to ride everyday.

[stop_fascism]

Thanks! Rollie Free must of had cojones of solid stone. Do you know what became of him?