What Can Motorcycle Companies Learn From a Furniture Maker?

Let's talk furniture. Well, let's talk about a certain, almost bankrupt, furniture maker and how the company was transformed. If you look at what happened, we might see a few lessons for some motorcycle companies struggling through the slump.

Norwalk Furniture from Norwalk, Ohio, was having a really tough time due to the housing market being in the dumps, fewer new homes meant a lot less new furniture sold to fill them up, plus a lot of imported furniture was taking an increasing share of the market, squeezing the company from two sides. Just before the company slid into Chapter 11, Dan White and a group of investors, bought the choicest assets of Norwalk Furniture and started fresh with no union, little debt and a simplified business plan.

The new Norwalk chose a niche, custom furniture. Customers placing custom orders usually expect delivery within a month, tough for imports to do considering ocean shipping times of a couple of weeks.

Norwalk Custom cut costs by reducing the number of fabric choices to about 850 from 2,200 at its predecessor. It prices most of its sofas in a range of about $1,000 to $1,800, the lower end of the custom market.

Unlike the old company, the new one doesn't own or franchise retail stores, and it no longer owns the trucks that deliver its furniture. The furniture is sold through about 350 dealers scattered around the nation. ... the new management is better at consulting dealers before product launches.

Dan White knew nothing about the furniture business which helped him avoid the "that will never work" thinking often found when industries need to transform quickly. He did promote some veteran managers because you need some real experience to keep things moving but they were willing to look at everything. Employees needed to reapply for jobs at the new company and they're down to 120 from 325 workers at the former company.

Mr. White says Norwalk Custom's sales this year will be about $20 million, or one-eighth of the predecessor company's five years ago. But he says Norwalk Custom should be able to make a modest profit this year because it has stripped away so many costs.

What I found interesting was the civic pride among the investors and many Norwalk natives involved who wanted to preserve as many jobs as possible while producing a great product. Instead of setting up shop out of state or in another country, they asked, "How can we do this right here?"

In the previous article about motorcycle trends, Richard Pollock commented:

Which takes me back to my Triumph Bonneville of the 60′s theory. A starting point for any direction the owner cared to take it. Perhaps what’s needed is an OEM neutral chassis platform delivered to a shop where you sit down and discuss the style of ride you want with a build consultant. Order up a Cafe’ tank or a peanut chopper style tank. Choice of wheels, seat, bars and get the bike you want. An entire aftermarket could support variations on the basic bike package. As it is now, aftermarket companies have to select a niche and hope the fad lasts long enough for them to stay in business or they have to be able to leapfrog to the next niche.

Richard says a "universal bike" probably wouldn't appeal to anyone, which may or may not be true, but what he describes in his comment is a niche manufacturer, the niche is custom builds based on a common platform.

I read an interview recently with one of the bigger name custom builders of a couple of years ago, he said they used to build customer bikes the way they wanted to, not how the customer wanted it built. They charged high prices for their big name customs because it was so hot and trendy and customers just paid the tab. Unsurprisingly, they're pretty much out of the custom business these days. Gosh, what a shock.

If some of the smaller "custom" (which really means "chopper") manufacturers were willing to go more universal with a base motorcycle or frame and then present the customer with real choices, they might have something. They could also, as Norwalk now does, consult dealers before launching a new product to find out what customers really want. Who knows what might happen?

The point of all this is a slow economy requires some really creative thinking that goes beyond "cut costs and hold on until it gets better." You can only cut so long before you have nothing left, maybe you need to cut as much as necessary and then change direction. Narrow your aim with a niche and serve it really well. If the option is going bankrupt or trying something new, the positive thinking doers get their company down to fighting weight and move forward. Bad economy, no credit, government out of control, those are just excuses for sitting still. It's a great time to adapt to new conditions, especially while your competition is in disarray. Let's all get moving.

Link: Wall Street Journal

Comments

  1. Steve says

    I have to say that maybe too many products contributed to GM and some other carmakers current woes, or at least compounded it. In the old days, you could buy (order) your car and select the options to make it the way YOU wanted it, not being forced to buy a package that had other options you didn’t want.

  2. Will13 says

    For the most part I can agree with this article. For far too long manufacturers have told the public what they will buy. In my experience with Triumph, they have done better at listening to their dealers and getting first hand feedback on what the customers are looking for. Case in point, the 2010 Triumph Thunderbird. This did take North American dealers a considerable bit of time to lobby the manufacturer into building a bike that filled the gap between the 865cc Speedmaster and the 2300cc Rocket III, but it did get done. Another note on Triumph’s outstanding success is that in the early 90′s they started with a modular platform that they could expand off of in different tangents and kept overall costs down. Today, in a slumping global economy, they continue to move ahead in the market.

    US Highland was approaching things in a similar way to Norwalk Furniture from my understanding. Dealers were to be issued a demo fleet and customers worked with dealers to create a bespoke version of the bike they were interested in. This is nice for the manufacturer allowing excess waste to be eliminated by only building the exact number of units that are demanded. However, my experience in sports cars tells me that this would no doubt be pricey on the retail end for the customer. Still, I would love to see US Highland recover from their loss in June to become the motorcycle company that they envisioned themselves as. I think the current market in North America would embrace such an endeavour.

  3. scritch says

    Congratulations to Dan White and the investors for saving a company, even though greatly reduced in size. What I would also like to know is how much less the new hires are being paid compared to the previous union workers. It’s becoming an unfortunate reality that in too many companies it’s a race to the bottom, with the workers taking compensation cuts while the owners get increasing compensation. Henry Ford realized that in order to sell cars to his workers he would have to pay his workers enough to buy his cars. I wonder if Norwalk workers can afford Norwalk custom furniture?

  4. kneeslider says

    Will13, I agree about US Highland. I hope they can get the momentum back because they were on the right track.

    Steve, GM is also making sure they build only what customers want. I’m sure their dealers reported how many customers have been clamoring for a $41,000 electric car.

  5. Cycleguy says

    One of the unfortunate realities of today’s economy is that there is simple not enough demand in the market to sustain anywhere near the production capacity that has been built up over the last decade. Motorcycles in this country are considered recreational vehicles rather than basic transportation, as they are in other less developed countries. The first thing people do when they are struggling is to cut spending on their toys.

    What makes the downturn in the motorcycle market even more dramatic was the artificially inflated housing bubble, and cheap available credit that made it all too easy for people to use their ever increasing home values to purchase their toys. This led to an artificially inflated motorcycle market that spawned many small volume custom manufacturers. Unfortunately, it’s going to be extremely difficult for these companies to survive no matter what they do. In a market that is still suffering from too much capacity, these small manufacturers are competing against a sea of left over and discounted vehicles from the big boys. Anyone who is still fortunate enough to consider purchasing a new toy is certainly going to take advantage of this, and is not likely to be looking to pay more than they have to.

    I certainly wish these manufacturers all the best, but I’m afraid most will not survive this. Getting through a couple of bad years is tough enough, but our current recession is much more than the typical boom and bust cycle, it’s the final result of a systemic failure of the foundation of our economy, and is going to take at least a decade to rebuild. That is providing we take the bold action that is necessary now, which is not very likely.

    I don’t want to be negative, and would prefer to keep a positive attitude and hope for the best, but, I’m good friends with someone who has a small custom manufacturing business, despite all their efforts in reducing overhead, restructuring the business model and introducing innovative new products in various niches, the phones remain silent. i just can’t ignore the stark reality, and the seriousness of the situation we are in.

  6. says

    Steve I think you’re right, GM is probably a great example of what not to do. Keeping with the auto industry theme though, I think Subaru is a great example of what can be done with the right business model. They are a really niche manufacturer which is only considered mainstream because it has enough of a market share.

    To make up their 5 (or 6, if you count the WRX) distinct models, they use only 2 platforms and essentially one engine (plus or minus a turbo or 2 extra cylinders). The large majority of parts can be swapped from one vehicle to another, cutting costs and improving reliability. R&D costs go a long way, because if you can improve one model, you improve them all.

    The end product is a vehicle with exemplary safety, reliability, fuel economy, drivability, and standard features, all for a competitive price. Consequently it has been breaking sales records for almost two years in the US, Canada, and Australia. Plus, a large portion of the cars sold in the States are made in Indiana, employing almost 3000 Americans.

    By sticking to their niche of “versatile family vehicles for people who live in the snowbelt,” they are on track to setting their best sales year ever, recession be damned.

    Not that motorcycles can specialize in AWD or anything, but by offering 2 frames, 2 engines and a range of different body styles, you could keep R&D and inventory costs low and still satisfy a range of stylistic tastes, all while building a reputation for quality.

  7. Justin says

    Isn’t this a description of Harley? Two or three motors,two or three frames and a large range of styles and a huge range of aftermarket accessories. :)

  8. Mick says

    Great insight Justin, I agree. I wish the Japanese manufacturers would see this and offer something I can afford and to my own tastes.

  9. Don H says

    It seems to me someone like Motus could take this concept, and make two or three frames, and that nice V-4 engine and get a few dealers to finish out the bikes to fit what the buyer wants.

  10. Jim says

    BSA was in the same boat during the later half of the 1960s — too many models, intense overseas competition, high labor costs. One thing it didn’t face was a worldwide recession; in fact, American consumers were snapping up bikes as fast as they could. However, unlike Norwalk, BSA did nearly everything wrong. They did reduce their offerings to a manageable few, but even in the early days of the crisis, when they had the resources to make the necessary changes, they stuck with their 19th-century business model because “That’s the way we’ve always done it.” Meanwhile, Soichiro Honda was developing a business model based on what worked, and we all know the sad results for the British motorcycle industry. I applaud Triumph for its innovation and willingness to adapt to changing business conditions. Norwalk is also to be congratulated, although I’m sure its payroll has shrunken drastically and wages at its factory probably are just high enough to keep its employees from applying at Wal-Mart. Still, the American furniture industry has mostly disappeared, and I’m gratified to see at lest one survivor.

    Cycleguy is correct in that the inflated housing bubble enticed too many homeowners to buy toys using equity on their homes. The housing market, indeed, much of the world’s economy, was a huge, elaborate Ponzi scheme that worked just long enough for gullible consumers to believe we had found the magic formula for continued prosperity. One needs only to read a condensed history of the 1920s to realize the folly in that kind of thinking. We’ve been here before, and a history of the 1930s demonstrates that we have a long road to travel until we’re back on track. Considering how the 1930s ended, with half the world shooting at the other half, we’re in for a rough ride.

  11. oldtimer says

    I agree with kneeslider. If you build something people either want or need, and do a quality job of it, your product will sell. You may sell fewer in a down economy than in a booming economy, but quality and need always sell.

    Jim, if you are seriously comparing todays economic woes with the 30s, I think your condensed history of the 20s may be a little too condensed.

  12. Cycleguy says

    Oldtimer, I agree with Jim’s comparison, what caused the great depression then are the same things that caused our current depression. Monopoly capitalism, policies that favored large corporations and the complete disregard for the importance of maintaining a strong and prosperous middle class. The difference between then and now, is that we still had a large manufacturing base to fall back on once it got jump started. Today, our manufacturing base is a hollow shell of it’s former self, which makes a recovery all the more difficult. A strong and prosperous middle class is the foundation of a strong economy, and rebuilding it will be the only way forward.

    Merlin, I would hardly consider Subaru a niche manufacturer, they are a huge global company with very diversified interests that has little in common with our small furniture manufacturer mentioned in the article. I think the point of this post was how can other small niche manufacturers learn from the success of the small furniture manufacturer.
    The bottom line is the same for both though, if you create a quality product that people want to buy at the price you are selling it for, and that price is enough to sustain your business, you will be successful.
    In this economy, obtaining those three objectives for a small volume custom manufacturer is extremely difficult. How do you compete with large manufacturers on quality? How can you offer a competitive price? How do you offer a product that people want, that is not available from the large manufacturers, or from other small volume guys for that matter. This is the key. If you do offer such a product, will the market for it be large enough to keep you in business. During a healthy economy, the chances are pretty good that you will find enough people to buy it, because it’s unique and special enough for someone to pay a premium for it. But, in this economy, those folks are few and far between.

  13. todd says

    I have a similar story but with a different ending.

    I worked as a design engineer for a world class, niche office furniture company manufacturing in and around San Francisco for over 100 years. First thing that went wrong: Bought by Steelcase… Next, remove all direct sales people – basically anyone who had skin in whether or not the furniture sold – and consolidate sales forces across all companies. Now, ask these sales people what should be built; answer, what gives them the highest commission – high-volume commodity cube farms. OK, now to build high volume cube farms, take a company used to building custom, high-end products, and make them buy a bunch of very expensive high capacity machinery, hire more people with less experience, and eventually lay all those people off and out-source production to Mexico and Canada. No one ever heard my suggestions of configuring the company to focus better on high-end, small volume custom builds. I jumped ship not long before the shut-down was announced.

    Short story, asking dealers what they want to sell does not replace good old fashioned market research.

    Now I’m a design engineer in the low volume, specialty vehicle industry. It seems to be working (as I sure still am…).

    -todd

  14. says

    Mule the Pophet says: Just like GM did, stuff that is the least profitable and/or doesn’t seel well and at the worst…loses money year after year, will disappear from the market. So sit back and watch or to entertain each other, you can debate what will happen and in a year or two from now the market will be vastly different.

    On another note, Harley may be the smart ones. They build 3 different motors on 3 different platforms and just change the gingerbread that attaches to it/them. For them to downsize and eliminate some models from the line up, all they have to do is cut out 4-6 paintjobs! Instant downsize.

  15. zyxw says

    I keep reading people lamenting the lack of manufacturing in the US., yet we are still the world’s leader in that category.

  16. The Heretic says

    I’d just be happy to see a Standard offered between 200cc and 500cc, with 350cc being preferred. You have to find an old Suzuki or Honda from the early 80′s for one of those, and parts and such may be problematic. A modern affordable Standard motorcycle in 350cc’s, fuel injected, naked, simple, elegant design has the most possible ways to be modified or tweaked into some specialized function (cafe racer, board tracker, dual sport, etc) or it can simply be ridden as a Standard. If the current govt in office decides to reimpose the 55 MPH max speed limit, that would open up the highways to motorcycles of a lot lower displacement and make motorcycle commuting a lot safer. At that point, a bike stops being a toy and starts being a real vehicle.

  17. Cycleguy says

    zyxw, yes, that is understood, however because we are the largest market in the world, we have to be, otherwise we loose our ability to sustain our economy. 30 years ago, manufacturing accounted for over 45% of GDP, last year that figure was 11%. Other than selling our natural resources, manufacturing is the only way to generate new wealth. There is a big difference between making money and generating wealth, one just moves money from one pocket into another, manufacturing creates new wealth. For example, taking a bunch of minerals (dirt), adding technology and labor to create a computer chip that has far more value now than the minerals it started from.

  18. Cycleguy says

    The Heretic, Hyosung makes a beautiful little bike, the GT250, twin cylinder DOHC with fuel injection for under $4000. Royal Enfield is also offering bikes in that range for under $6000, not to mention Suzuki’s GS500 and Kawasaki’s 250 ninja. All these bikes fit your criteria and are easily modified to your taste. Why isn’t one of those in your garage already?
    It’s all too easy to blame the manufacturers for you not buying a bike, because they just don’t build the bike I want, they don’t listen to the customers needs…..

  19. Scotduke says

    Some dealers also offer a ‘speed shop’ service. My local Guzzi dealer does that. A customer can order a bike from the dealer with non-standard parts and paintwork.

  20. says

    ZYXW, We are the world leader in manufacturing? It’s obvious you don’t work in that field. We are cartwheeling backwards by leaps and bounds!

    Cycleguy, Where is a Hyosung made? The problem is, it looks like it was made there. It says Walmart all over it. The Enfield is still kinda quirky for most buyers, not counting all those cool specials that were featured here a month or so ago. The standard ones only appeal to a small minority outside India I think. Are GS500′s still made? The 250 Ninja is pretty pricey new as I recall too.

    Scottduke, Your Guzzi dealer obviously wants to sell some bikes! Good job whoever he is!

  21. Derek Larsen says

    This is pretty much how the bicycle industry has worked for the past 2 decades. same thing with computers–at least PC and Linux based designs. Even if you buy a complete off the shelf $500 dollar entry level bike, there’s still an expectation to tweak the componentry to the user. Looking at a distributor catalog like BTI or QBP there’s dozens of manufacturers who sell framesets and nothing else. And with the big guys, like giant, trek and specialized, they make a frame for a specific riding discipline, and sell it at different price points reflecting the level of components it’s equipped with. The competition–the striving for that unique source to profit from–comes from the retailers, and their quality of service. Their commitment to genuine front-level service has allowed them to thrive and coexist with big-box and internet retailers who only have price point to keep their sales up.

  22. joe says

    Triumph already offers a service where you can pick from thier range of custom parts online and they will assemble the bike of your choice, once you have made a financial commitment. .Yamaha tried another path in 2004.They asked the motorcyling public what sort of features they would like in a large capacity motorcycle.They took the data and went ahead with a mockup /prototype. When the bike did the rounds at the worlds motorcycle shows the crowds circled and drooled over the bike, pleading withYamaha to put it into production so they could buy one.Yamaha got all excited and started manufaturing the bike.That was the MT-01 that came out in 2005. In 2009 you could pick up a 2005 model off the showroom for half thier original price.The bike was a totaly impractical machine that nobody bought, and it cost Yamaha millions.( A bit like Homer Simpson’s car ).The lesson here seems to be ,if you are going to build a motorcycle that the public asks for,make shure you get thier money in hand before you start building.

  23. says

    The GS500 is still made, but it rides little different than a heavy 250. I rode one for a summer, and it was fine, but not a very comfortable ride for more than 45 minutes. It’s fairly upright, for a sporty bike, but a standard it is not. My wrists were always sore riding it from having to rest my weight on the bars instead of the seat. Plus it’s still carbureted and air cooled. Moral of the story is that I sold it and wouldn’t buy another. I prefer my ninja 250 (except on the highway, really cant take it faster than 55, comfortably).

    I would definitely jump on a bonneville-type bike with a 450cc motor in it though. And I’m not in the market for a bike built in china or india.

  24. todd says

    I built up an old XL350 that would scoot along fine on the highway, even with 65MPH signs posted. The bike would easily top that speed with another 20 plus to go, I don’t ever remember spending much time riding that slow. Those things have, what, 25HP at best? I always see good running XL350′s and 250′s for around $1000 and I don’t think you’ll ever have much problems with them – not like my friend’s $17,000 BMW that had to stay in the shop for a week because of some brake problem.

    I’ve ridden a Ninja 250 around 100 mph. I don’t recall it ever having any problems with that. Now it might be interesting to build an EX250 Streetfighter or an EX250 Adventure Sport…

    Funny thing with the GS500 mentioned; it used to be a standard and appealed more to me. Now they’ve gone and stuck the ugliest looking fairing on it in a half-assed effort to “categorize” it as a sport bike. They were comfortable too, with the dropped bars, but now with the fairing keeping the wind off your chest I imagine it would start to hurt your wrists after a while.

    Though I’m always interested to see what the Big Guys have to offer, hoping that something will eventually make me decide to take out a big loan, I always find myself browsing Craigslist for the various DT400 or SR500 that I can turn into whatever the heck I want for very little money.

    I’ve been thinking of turning my R75/5 cafe bike into a GS/ISDT style with knobbies…

    -todd

  25. says

    @ Merlin:
    Subaru’s automobile division might count as a very well run privately-held company if looked at as a stand alone entity, but you’re right that niche might be pushing it just a tad.

    The GS500/GS500E standard is probably what cycleguy was talking about, great bike but out of production since 2003-ish.

    Hyosung is Korean, and a longtime partner with Suzuki. The GT250/GT650 (same frame makes it easier for great big westerners to ride the 250) are not Korean copies of the SV650 naked, which is out of production itself, but they are extremely similar in style -Hyosung was involved in the SV as a supplier to Suzuki – and lack only in the area of suspension and weight, which is pretty much what the magazines, both paper and electronic, say about every bike from every manufacturer unless it’s a carbon-framed unobtainium sportbike with Ohlins tuned to the purchaser on delivery.
    Hyosung is not the cheap crap you suppose it is, but it’s not quite at the level of the Japanese big four, either.

  26. fraz1 says

    GS500′s are still sold new here in Australia. I personally did over 180k kilometre’s on mine.They are one of the most popular learner/commuter bikes in my area.As for Hyosung they make many parts for a wide variety of Suzuki models as i found out when looking for parts for my Bandit 1200s.

  27. Cameron Nicol says

    Did someone completely miss the huge dual-sport rebirth? They are the new standards. 200cc – 650cc, easy to ride anywhere, lots of aftermarket, cheap, highway capable, tons of fun. Quit whining and go ride.

  28. Cameron Nicol says

    Now, if I could get a 75hp 500cc 2 stroke dirt bike with lights, street tires, oil injector, and plates on the street for $5000 I’m in. The KTM’s are real close to getting my nickel.

  29. chickenflaps says

    Interesting. This link seems to swing from the original niche build to “what’s the ideal bike” although there’s a big overlap on these two topics.
    For me, it would be the bike that hardly anyone builds along the lines of this one which kneeslider has featured before.
    If I describe myself as a rider for 35 years wanting an all purpose bike that’s quick, comfy, torquey, economical, shaftdrive, twist and go, then there only seems to be one quite expensive choice.

    Surely there must be many riders who’d want something like this?

    http://www.youtube.com/watch?v=atdFiRcbc3o&feature=related

  30. Jim too says

    Cameron Nicol – your part of the problem on the consumer side of the MC market with totally unreasonable expectations as to what can be purchased for a given amount of money.

  31. nortley says

    What Can Motorcycle Companies Learn From a Furniture Maker? Perhaps how to build a more comfortable seat.

  32. Greybeard says

    The furniture manufacturer example is actually just downsizing, centralizing and streamlining manufacturing and sales without actually giving carte blanche to the buyer.
    Not an appropriate model.
    The proposal is definitely warm & fuzzy and compelling.
    Walk into a boutique and walk out with a tailored bike. Who wouldn’t love that?
    Problem is, do you source the components or manufacture in-house?
    Either way, tooling, equipment and talent are going to cost you money.
    LARGE money.
    Who sits on that debt, even in good times?
    So let’s say you out-source.
    Brembo, Tokico, Showa, etc., etc. et al probably won’t cut you any wicked deals on JIT production until you’re really rolling, so your customers will soon recognize that this isn’t Home Town Buffet.

    So how much do you charge for all this and make it attractive for ….OK, “Joe the Plumber”?
    Let’s ask MULE, he’s the best authority we have here.
    Richard, could you build a $12-15k motorcycle sourcing all brand new components?
    (If you can, we’ll talk!)

    I’m re-doing a ’97 Sportster 883 as we speak.
    Let’s do that from a boutique.
    Frame? Cool but probably $2500-$3000 to start.
    Base 883 engine?
    mmmm…no thanks. 1200 and stage 1 minimum. $4-5k.
    Tank? A “G” easy.
    Wheels, forks, brakes…….
    Cost of the loan to pay for all this, IF I can get written?

    Maybe next year.

  33. Rich says

    This sounds like the BMW LoRider concept of year before last. It would take a while to go to a dealer and wait for the factory to build and ship but could work (also assuming they’ll have some of the better sellers in the depot ready to go).

    As may have said, becoing a niche builder seems a problem of either doing “one of” as Oracle Pollock does, or trying to do what the Highland-Tulsa thing seems to be going for. There’s also Bimota which hasn’t exactly been a rousing success of late. I think Mssr. Pollock’s business model looks like the best way to go.

    And as others have commented, this “we saved the furniture company” story may sound great to the anti-union crowd, but from the stories I’ve read, the unions are the scapegoat for poor management. Look at how H-D was on the verge of collapse due to the decision to go big in the subprime loan market and lose their ass. Now they want to move – probably to a “right-to-work” state – and the guys who’ve worked their for years – who in no way caused them to move to subprime lending – will suffer the consequences. That’s – well – wrong.

    But what else is new? I dunno’ whether to scream or cry.

  34. Grumpy Relic says

    Remember the first Mustang car and everybody wanted one just like the neighbour’s? Soon they all had to be “different” and bigger. Then came the Honda Civic…
    Remember when everybody bought a Honda 305 (man were they the same…) Of course they didn’t drip oil like my BSA 650 ‘cause they were better made…
    Do bikes have to be all different? No, but like furniture, they have to be well made.
    So, does custom matter? Not when you are looking for a concours Vincent.
    I would venture to guess that the furniture company, unencumbered by union rules, hired the best workers and custom or not, the product was good. As a union man for 32 years, I am certainly for unions as they do a lot to protect workers but when the business is dying it is hardly the time to intransigent and the new investors can’t afford to take chances. Perhaps the union will be needed in future but I hope not because I am also tired of seeing the dead wood protected. A lower salary is better than welfare unless you have no pride in what you do.
    Now, about the Vincent, if it was so good and sought after, why aren’t they still building it? What about BSA, Triumph and Norton? In today’s market they are now old unreliable junk.
    We had a new ‘56 Belair Chev. It was a rusty piece of junk at 35,000 miles. Today the fools fight over them and they are still junk. My 03 Monte Carlo has 120,000 miles, doesn’t burn oil and is much safer, reliable and more comfortable to drive.
    So what do we want a bike to be? Safe, reliable, comfortable, quality built, affordable good performance, low depreciation. Notice that custom is not in the list.

  35. says

    What I love about this site is the provacative topics and interesting opinions. We don’t all agree, but it’s all valid stuff. Everytime I voice my version, I wonder if I really know what the hell I’m talkin’ about.

    The furniture company sounds like somebody did some quick thinking and scrambled up a redesigned business plan. Not even the same company any more. Not all jobs were saved, but some were. That’s gotta be a good thing.and better than the whole thing going to China or down the drain completely isn’t it?

    I’ve been in a Union for 22 years. So I know enough about it to comment. I love it and I hate it. Where I work, we (labor) are about 1% of the overall cost, but we are treated liked were are 50%. If you do exceptional work you are not rewarded. If you suck, you are not punished or fired, you just haven’t been trained enough. Everyone is equal, like it or not. But as I’ve heard in Japanese culture, everyone is NOT equal. On the other hand, you can’t be screwed over by intent or neglect as you’ll always have a voice.

    On building a custom bike per Greybeard’s comment: Sourcing all the components to build a custom bike from scatch is really expensive and requires experience to learn where to get decent stuff. They had an article in Dirt Bike about 30 years ago I recall where they built up a CR250 Honda from individual parts. Retail for a CR at a dealer was like $2200.00. Built from parts, it was about $6500.00!

    Now fast forward 30 years, add lights, disc brakes, make it a 4-stroke twin, Ohlins shocks, nice forks and you just spent $13-18K. Now put it together with a bunch of custom designed and fabricated or machined “Interface” parts, throw in wiring, tires and somebody’s labor ($?) and oh yea, it has to all work together and make some guy in another state or country happy from the git-go. What’s all that worth? If you’re doing it yourself, there are a few scenarios. First, it could be your dream bike! That’s cool, Second, you may not possess the psychological and emotion traits to see it through OR even handle all the obstacles, road blocks, screw-ups, failed promises or even have the drive to start. Not as desirable a situation. And lastly, you may not know what the hell you’re doing and end up with $18K in a piece of shit that all your buddies laugh at. What then? Divorce, get new friends, take your own life? Or you just go buy something you can live with down at the Yamasuki shop. And do small mods that are within your skill set and budget.

    One thing I always chuckle at is comments about what things need to cost and what all the factories should build. “Oh the factories should just do this, it would be easy for them.”

    I had a long conversation with a bigwig from Triumph in England today. He said they have an ungodly number (I won’t repeat) of engineers whose entire job is developing new products. That would be to please “Us” based on market research. The number of eng heads working on these product will continue to climb to an even higher number. That said, I can’t imagine any company is sitting still during this slack economic period. They’ve been pretty darn busy for a few decades and I wouldn’t think selling 50% less units sits well anywhere at any company. Can you imagine any Japanese company saying, “Screw this, we give up!” I don’t THINK so! So once again as entertaining as all this banter is, I’m excited with anticipation to see what all the different companies come up with. Except Harley. They’ll just come out with a couple new paintjobs. I’m kidding. They’re probably working feverishly to save their ass like everyone else is. And the smaller companies have less to lose I would think.

  36. Tinman says

    The Furiture Company in the post is IMHO an example of what is wrong in the USA today. The new investers are very happy about their profit potential and are full of “civic pride”, well you get rid of your best workers and force dramatic wage cuts on the remaining few to “save” a company, what a crock!! Typical of the explotation that brought on the Unions in the 1st place. In the old days the Unions would have blocked the driveways and busted heads before putting up with this, I predict a return to Labor violence once enough people realize what is going on, We had the Era of Robber Barons dead and buried in this country, now do to the “New Economy”its suddenly a good thing??

  37. Paulinator says

    Tinman, I had a neighbor who worked for his union (local ???), at the local Chrysler plant. He could give a $h!t about the plant, though it paid an enormous salary relative to his skills. He laughed when he told me that he was working 70 hour weeks doing a re-fit that was going to get ripped out anyway. He also had no problem shopping at Walmart to stretch his massive paychecks. And he had a lot of time to shop, too, because of his enviable holidays/ paid days off / personal days / training days …and so on. Well, needless to say his world got rocked.

    Is there a union-type out there who can approach a small custom furniture manufacturer to assist them at improving productivity while reducing costs? THEN PLEASE STOP SHOPPING AT WALMART or at least stop bitching about it when everybody else does.

  38. Cameron Nicol says

    Jim too -$ exchange problems- able and willing to buy a KTM- miss the sychotic fun of the old 2 stroke street bikes. Looked at the cr500 in kneesliders previous post and thought street bike! Can’t buy a new one for any price.

  39. Cameron Nicol says

    It would be nice to be able to go into a dealer and order from 3 different platforms a variety of different bikes and have the basic parts interchangeable for many model years. Harley has done this successfully. They just don’t have a true entry level platform.

  40. Cycleguy says

    Tinman, well said! The first thing that needs to happen before the people will revolt is a clear understanding of who to revolt against, and that’s where the elite, those that want it this way, have done a great job in propagating a campaign of misinformation, deception and outright lies, that cloud the issues to a large enough portion of the population, which countesr the smart ones that know what’s going on. It’s the old divide and conquer strategy.

    Mule, a great description of how it really goes. I think a number of folks don’t have enough of an appreciation of the miracle of modern mass production, and how much they benefit from it. Until you actually build a bike with you own hands, and purchase or make each piece, you can’t appreciate what a miracle modern mass production really is.
    We have to spend $2000 for an Ohlins fork, Honda spends about $150 for a similar Showa unit because they purchase 10′s of thousands at a time from Showa. Multiply that by every part on the bike, over every model and it gives you an idea of how much money is invested and risked by the major manufacturers for each model to produce it cheap enough for someone to want to buy one. This only works for them if they sell almost everyone they make. That’s why it’s very hard for them to branch out into niche markets, the numbers are going to be smaller, which means the price will have to be higher, because they won’t be purchasing in the same volumes.
    I guess value is a relative term, but when you compare the cost of a mass produced bike vs. one you’ve built yourself, value takes on a whole new meaning, unless you’ve built something so unique that you can’t buy anything like it elsewhere.

  41. woodco100 says

    Wether or not you approve of the process, this is what saved HD. Rearange the top staff, cut staff, sell of non producing assets. Focus on the core market.

    they hit a few bumps, but there numbers look good and thier bikes are selling.

  42. Greybeard says

    Damn.
    Wish I’d said some of that stuff! ;)

    Hey Cycleguy!
    Rather polished, professional; writing style there.
    Care to play “What’s My Line Mystery Guest”?

  43. says

    Re: subaru, not niche in terms of sales volume, but certainly in terms of what they offer. AWD only vehicles. no trucks, no econoboxes, no luxury.

    Re: harley, yes, does sound like harley. Didn’t we hear recently that they as of recently have the biggest market share in everything? hm…

    Re: GS500, I was talking about the old, naked gs500. mine was a 96, still hurt my wrists. The only thing that changed between the 500E and the 500F was the seat and fairing, i believe. As i said, it still wasn’t a standard so much as a mellow sport bike.

    Re: dual sports, i wish, but my inseam is too short to even ride a 250 comfortably. 450 is WAY out of my range.

    Re: R&D/tooling/labor costs, how could 8 different bikes from 2 frames and 2 engines cost more in R&D than 8 different bikes with 8 different frames and 8 different engines, with most of the same components (brakes, gauges, tranny, switches, levers, etc.)

  44. Jim says

    While we’re discussing niches here, we should bear in mind that in this country, motorcycles ARE a niche. On my daily commutes aboard my BSA B50 (a niche within a niche with a niche), I see one or two other riders in the space of a mile of highway; this amid hundreds of cars during good riding weather. Most motorcycles truly are expensive playtoys. On hot, humid Illinois days I even forego the bike for the air-conditioned comfort of my truck, and some days I need a vehicle for hauling groceries, etc.

    The point here is that motorcycles in the United States have been, and always will be, a tiny slice of the consumer market, and whenever the economy turns down, that slice gets even tinier. When the refrigerator fails or the TV goes out, a household budget finds money for replacement. But a new bike, especially an expensive custom bike, has to find buyers with the disposable income to afford it, and in today’s economy, most prospective buyers already have disposed of their income just paying the mortgage or car payments, it they’re lucky.

    I last bought a new motorcycle in 1976 — a ’75 Yamaha XS650. I rode it 14 years but sold it to thin the herd for a move to the Midwest. Had I kept it I’d still be riding it, fixing it as necessary to keep it safe and on the road, and maybe spending some cash on occasional upgrades. The beauty of motorcycles is that they will last nearly forever if properly maintained and stored. In a down economy, riders will hold on to their bikes rather than buy new ones, further depressing the market for new machines. The longevity factor also provides a ready supply of good used bikes at reasonable prices — the vaunted high resale value of used Harleys notwithstanding — so that pushes the demand for new bikes even lower.

    So marketing a niche within a niche is a chancy proposition. The big manufacturers have the best shot at succeeding in this strategy, but even they are suffering. I don’t see a bright future for niche bikes in general; they were a product of an artificially superheated economy that won’t return in our lifetimes.

  45. MCVTriumph says

    To Will13s comment about Triumph responding to “dealers” request with the new Thunderbird. Point in fact is that that US management requested a big bore, 1200 – 1600 cc, vertical twin cruiser in 1999 and was told that such an engine could not be built at that time. A V-twin had been suggested, but declined because it would then be just a “me too” kind of bike. The upshoot was the development of the Rocket III.

  46. zagger says

    Chapter 11: they “bought the choicest assets of Norwalk Furniture and started fresh with no union, little debt”
    Having been on the other side of this situation let me explain the terminology – what they are really saying is that they removed all of the assets which might have be used to pay the overdue bills, screwed everyone who trusted them and sent them product expecting to be paid, and reorganized under a new name with the blessings of the corrupt bankruptcy court so that more unsuspecting suppliers can be screwed at the next “economic downturn”.
    Wonder how your glowing article would read if all the companies and individuals who lost money in this scam had been interviewed.

  47. kneeslider says

    zagger, “Wonder how your glowing article would read if all the companies and individuals who lost money in this scam had been interviewed.”

    The company was going bankrupt before these investors got involved in an attempt to salvage something. Some of their suppliers may have been paid with the money the new owners spent buying those assets, the WSJ article doesn’t say. The end result of this “scam” was a new company still employing some of the employees of the original firm instead of a closed company with everyone out of a job. I’d call that a plus.

  48. says

    Jim, Although I’m sure you’re a super nice guy, the manufacturers probably dread customers like you. You bought a new Yamaha XS650 in 1975 and rode it for 14 years? And if you hadn’t sold it, you’d still be riding it? I’ll give you this, you’re loyal to a fault and you don’t get bored easy or perhaps ever!

    To bring you up to date though, while you had your 650, Yamaha came out with 2 versions of the RD350, an RD400, the Daytona Special, the XS750 triple, the 850 triple, an 1100 4 cyl, and a shaft drive 650 4-cyl cruiser. And that was just Yamaha. There was just as much from other manufacturers too. A Rotary Suzuki, 6-cyl Honda and Benellis, GT750 triples etc, etc. The manufacturers tried like hell to build something to pique your interest and it was all for naught.

    What’s my point? The only opinions on what manufacturers should build or how they should conduct business that matter one iota are those of the buyers! The people that go down to the dealer and write a check to keep everyone in the food chain in business.

    You say you ride a B50 everyday to commute? Cool. I like those a lot, but when I bought mine new, it was the last year they were manufactured and that was 1971. We’ll call that 40 years ago in round numbers.

    So what should everyone do or what could anyone do to sell you a new bike?

  49. zagger says

    Kneeslider: “The end result of this “scam” was a new company still employing some of the employees of the original firm instead of a closed company with everyone out of a job. I’d call that a plus.”
    I call it theft from the people who were owed money and received nothing. US bankruptcy laws are simply legalized theft. The lawyers do well – but their pay is a protected part of the settlement. The “new” owners do well – but they are typically the exact same folks who drove the old company into the ditch. The employees do well – but they had nothing at stake other than their next paycheck and a job working for a defunct company. The ones who pay for all this are the suppliers who receive nothing from the final Chapter 11 court ruling. The suppliers are real people working at real jobs who need customers to pay real invoices that are owed. This is not fiction, or screwing “the Man”, this is dishonest dealing plain and simple. We should be ashamed that we allowed this to happen in this country.
    zag

  50. zagger says

    Kneeslider: “Some of their suppliers may have been paid with the money the new owners spent buying those assets”
    That is not how it works. Every attempt is made to remove assets which are actually worth anything BEFORE the Chapter 11 case goes to court. In court, the company has little or no assets and therefore pays little or nothing to all the people making claims. I can tell you from personal experience that absolutely ZERO effort is made to settle outstanding claims for losses due to the bankruptcy. The “new” company emerging from bankruptcy seems much better off because they retain ownership of the stuff which they took at zero cost from their suppliers. In my personal experience, the bankrupt company continued to sell the inventory that they stole from me for another entire year while paying nothing. It does not seem right and it is not right – but that is how it really works.
    zag

  51. Cycleguy says

    I wonder if anyone ever performed a study on how many companies have been hurt financially and had to cut their workforce because one of their major customers went Chapter 11 and never paid them?
    Somehow, I don’t think you can just not pay someone that supplied a product or service and have no repercussions. I would guess that for every job saved through bankruptcy another is lost somewhere else down the line.

  52. kneeslider says

    zagger, it sounds like you were on the wrong side of a bankruptcy when one of your customers went under and I understand how you feel about it. Bankruptcy in this country has become far too common and is sometimes (often?) the easy way out for people who have made a lot of bad or thoughtless decisions. I could write a lot about how the process has gone wrong, but that is not the focus of this post. I pointed out what the new company did to succeed, choosing a niche, keeping expenses low, asking dealers about their customers, I did NOT focus on the bankruptcy as some kind of great business strategy. As noted above, the new owners got involved after the company was already finished. They saved some jobs in their community and may be able to build the company back up. Was it a perfect outcome for everyone involved? Certainly not for suppliers who lost out, not for employees who lost their jobs, but better than the complete closure and loss of all jobs.

    Your experience as a supplier is all too common today and perhaps the bankruptcy laws can be changed to reduce the likelihood of that sort of thing happening again, to make bankruptcy a less appealing alternative with more repercussions to the filer, but right now, the laws are what they are.

    Focus here on what worked out right, not on what might have been or should have been. Focus on the lessons learned.

  53. Vibeguy says

    I work for a large corporation and so often now we see products from foreign markets, but every so often a US company (usually a small machine shop will come through with a part that is done well and within cost….it can be done with some creative thinking.
    As far as bikes are concerned it seems a good example of a universal bike would be a current Royal Enfield single, I have seen them as cafe racers, dirt bikes, touring bikes, sidecar rigs…etc. Turn them into whatever you want and an outstanding aftermarket support network.

  54. Vandal says

    If a small American company would build a simple “custom” swingarm style bike that could compete with the dyna, I’m sure they would sell fast.. Built for durability, dependability and aimed at club riders.. We are all getting sick of the HD factory BS…

  55. Jim says

    I suppose I am a manufacturer’s nightmare — I don’t buy fads, I simply like to ride. Bored? Riding is my enjoyment, and I don’t feel the need for a new bike as long as the old ones do their jobs. The same goes for my other vehicles; I keep them an average of 10 years. If more consumers thought this way, maybe the world’s economy wouldn’t have overheated and crashed.

    By the way, the B50 locked up this morning, so it’s back to the bench for a new jug and piston. The folks at Baxter Cycle in Marne, Iowa can fix me up with parts and information. For riders like me who love the old English iron, they’re the best. Maybe I’ll have to look for a good used Yamaha so I can ride while the Beeza is being fixed.

    As for the situation with Norwalk, it’s a double-edged sword. On the one hand, the company stayed in business and kept folks on the payroll. On the other hand, the field is tilted toward a company that pulls a few fast ones to stay in business. It’s the American Way, and like it or not, it’s how things get done. The thing to do is tell your elected representatives that they should work harder for the people and not the corporations — roll back NAFTA for starters and enact legislation to protect American jobs instead of allowing manufacturers to ship it all overseas. Prices would rise somewhat but more Americans would have jobs to buy the products. A nation has to make something — add value to a product or a process — in order to keep a strong economy. You can push money around and skim off the top only so long before you get what we have.

  56. rohorn says

    Does anybody remember Studebaker and the Avanti? And how that business model went? It did go on for a while.

  57. Jim says

    Studebaker was a venerable firm, starting out in 19th-century Chicago building horse-drawn wagons (the Budweiser Beer Wagon is a Stude) and moving to automobiles and trucks in the early 20th century. It survived the Great Depression and prospered for a while, but, despite dark hints of a conspiracy, the Big Three simply outcompeted them. Studebaker was known as makers of solid, dependable, boring cars, but drivers in the 60s wanted something with a bit of flash. The Hawk was an exception and was a decent, high-performance sporty car but never gained traction. The Avanti was too much of a niche car; its styling a little too far out for 60s tastes with an expensive fiberglass body. And when consumers could buy a Thunderbird or Corvette for less, Avanti couldn’t hold its own. Too bad; the styling that seemed so far out then holds up quite nicely now.

    By the way, the Studebaker building in Chicago’s South Loop area has been the Fine Arts building for decades. It’s a real gem and anyone visiting the Windy City should make time to step inside and walk around. Inscribed over an entryway are the words “All passes, Art alone endures.” Food for thought, considering the high level of art that goes into most of the bikes we see in The Kneeslider.

  58. rohorn says

    The Avanti was produced quite a while after Studebaker shut down. Serving that niche didn’t ensure their survival, either.

  59. says

    Hey I am with you here. Lots of great insights and some not so great.

    The econ is where it’s at because of so many things: 1.Revoking of specific laws which were enacted in the 30′s after the first crash. 2. Failure to understand cycles – called market corrections. 3. Buying things you can’t afford and should never have bought in the first place. 4. A government which has yet to downsize to match the downsizing of private sector. Belt tightening by all is in order and thats why a lot less people are buying anything these days.

    That said, companies who innovate, consolidate and work smart always fair better. The furniture company sited is a good example – of course we have yet to see where they will be in 5 years. I would say Indian is another company who is seeing slow but steady growth – yes on a small scale as compared to Honda but growth is growth none the less.

    The old days as in the 60′s and early 70′s the big three were willing to offer you one car with 6 or more engine options, you could also get various interior and specialty trim packages. All on the same base car. 1968 Chev Maibu/chevell/elcamino perfect example 6 banger to 375HP 396 and in some cases 425HP corvette motors specially built by various Dealers, Yanko being one of them. They also made a mean looking car – where as much of today’s cars all look pretty much alike as do most Sport bikes and various cruisers. Paint them all red and strip away the emblems and stickers and most of us will not be able to tell the difference between bike makers and bikes. So that being said why not three to four platforms with options to pick?

    Good article.

  60. bojo says

    The furniture company in this post promised a strong voice in the future of the company and the direction it was headed to the employees it wanted back. They promised profit sharing, equal representation in it’s board meetings, essentially a company working with the employees to build a better, stronger company.As soon as the old union was voted out all those promises disappeared and the direction of the company was higher profits for it’s investors, not the work force. Now they are on course to drive the work force into the ground by trying to enforce unrealistic production standards and cut wages. Not such a warm fuzzy ending to that story.