Hero MotoCorp technology partner Erik Buell Racing shuts its doors

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ebr-1190

Erik Buell Racing, the American technology partner that was helping our very own Hero MotoCorp with the development of some of its sportier future products, has declared bankruptcy, forcing the layoff of 126 employees at its Milwaukee, US factory.

Erik Buell Racing was born from the ashes of the Buell motorcycle company when it was dropped by owner Harley-Davidson back in 2009. Its eponymous founder Erik Buell has since struggled to keep the company afloat, before Hero came to its rescue. The Indian manufacturer bought a 49.2% stake in EBR for $25 million in July 2013, lending the latter a healthy cash inflow and newfound direction.

EBR 1190 RX (2)

But it seems like Hero’s involvement hadn’t been able to save EBR from its fate. The company initially struggled to sell its $40,000 superbikes in the American market, facing tough competition from the Japanese big four and even the revived European brands. Despite that, the company raced in AMA Superbike series and then World Superbike and received a lot of publicity for the new 1190RX sport bike. Under Hero’s ownership, EBR co-developed smaller capacity motorcycles like the HX250R and Hastur.

EBR was seen by Hero as its key to penetrating the American market. While Hero still hasn’t released an official statement, this news makes it pretty conclusive that Hero has severed its ties with the company. It remains to be seen how this new development will affect the R&D and subsequent launch of the new line of Hero motorcycles.

2015-Hero-HX250R-To-Be-Launched-Post April

EBR, for its part, has more than $20 million in outstanding liabilities, according to its attorney, and is seeking court protection from creditors. The company is seeking protection under a state statute that is similar to federal bankruptcy law. Bids will be solicited for the company as part of the Chapter 128 process, with the winning bid to be determined by a state court.

“The turn we recently took, after we thought we were moving forward, was unexpected. We thought we had secured funding, but in the end, we were not able to get the funding in place. Therefore we need to do the best we can under the circumstances for all parties in interest,” Buell said in a statement. “To say this setback is a disappointment does not begin to express what I feel right now. I am personally grateful for the support of our outstanding workers, customers and vendors. While this is a sad ending, I personally hope for a new and better beginning.”

Hero Hastur Concept Auto Expo 2014 (15)

“To see them go down like this is just awful,” said Rod Copes, a former Harley-Davidson executive who is the current president of the North American division of Royal Enfield.

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