Erik Buell Article - Erik Buell Racing

INTERVIEW
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VOL. 51 ISSUE 7 FEBRUARY 19, 2014 P71
ERIK BUELL
INDIAN
SUMMER
Erik Buell’s EBR team is about to
embark on its World Superbike venture…
but that’s only half of it.
Erik Buell will see
a dream come
true when his
EBRs compete
in the 2014
World Superbike
Championship.
BY ALAN CATHCART
PHOTOGRAPHY BY KEL EDGE
W
hen the 2014 World Super
bike Championship kicks off at
Phillip Island on February 23,
among the eight different manufacturers represented on the grid will be an
all-new, all-American one – EBR. As
such, its debut will represent a personal milestone for company founder
Erik Buell, who created EBR/Erik
Buell Racing from the ashes of the
Buell Motorcycle Company after Harley-Davidson shut it down in October
2009 and whose personal goal of going Superbike racing at the highest
level will finally be achieved.
But the existence of Team Hero
EBR – as the team will be formally
known – also comprises a key step in
the repositioning and restructuring of
its primary sponsor, India’s Hero MotoCorp. The world’s largest pure motorcycle manufacturer (so, for example, no cars as well, unlike Suzuki and
Honda), Hero’s annual sales of six million powered two-wheelers has until
now been exclusively concentrated in
India, Bangladesh, Nepal, Sri Lanka –
and Colombia, in South America.
Until now it could not sell its products in the 150 other countries around
the world where its then-partner Honda was already a significant player, as
a condition of the contract with the
Japanese giant in 1984 that brought
the Munjals, the family behind Indian
bicycle giant Hero Cycles, into motorized two-wheelers to create Hero
Honda. This joint venture dominated
the world’s second largest motorcycle
market for a quarter of a century, until
Honda filed for divorce in December
2010.
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mass transportation sector with
the Leap as the first fruit of this
new focus.
Here’s our interview with Buell,
prior to him heading off to India
for the Expo, where we talked to
him about how his highly significant alliance with Hero MotoCorp
came about, and he also threw a
spotlight on his future strategy for
the EBR brand.
In October 2009 HarleyDavidson shut down Buell. We
visited you here six months after that, soon after you founded EBR, and you had five or six
people working with you in a
tiny corner of this former Buell
plant. Things have changed a
bit since then, so how did this
bigger engineering group at
EBR than we ever had at Buell,
around 60 out of the 110 employees right now. And it’s an international group – in addition to the
my own direction. The leadership core American majority, we have
at Harley could have been a lot people from Spain, Germany, Jamore obstructive about that, but pan and of course India working
they told me, “We respect you, for us here. We have one Indian
we know you want to go in a very guy who actually works full time
different direction than us, so go for me, but we also have people
do your own thing, just don’t step from India who come over and
do consultant engineering work
on our toes!”
So now I was free to be very for Hero with us, ranging from
high tech, to do a lot of engi- two to ten at a time. It’s more
neering things I wasn’t able to do like a knowledge-sharing thing
with Buell. What you saw back in – Hero has an investment in us,
2010 was the beginning of that so they send teams of engineers
process that’s allowed us to grow over, to work with us and learn
so radically ever since then. Even from us. It’s a pretty steady flow.
in 2011 there were just 10 of us They have a big apartment here
here, and just one year ago in they’ve rented where these guys
2012 only 30 – but now we have can stay.
110 employees here at EBR, and How did your link with Hero
that’s before we begin manufac- come about?
turing the new 1190RX very soon. It started with me being introWe’ll add another 25 to 30 more duced a few years ago to Pawan
people in the production area for Munjal through a mutual friend.
He’s a very bright guy, and we
that.
Against that number, how got on straight away. He has a
many did you employ when very long-term vision, and he’s
the Buell Motorcycle Compa- also an engineer, so it was a
good fit. Coming from different
ny was at its peak?
There were 185 people full- perspectives and cultures, it was
time with Buell, and although on really intriguing to me to get to
the manufacturing end not many know each other, and I think to
of those have come back to work him, too.
It must have been in the
for EBR, to those few good guys
who have done so, you can add stars that this should occur
probably about half of the engi- right on the cusp of Honda terneers that I had before at Buell minating the Hero Honda joint
who have come back here to venture.
That was actually part of the
EBR. But we’ve also added more
- we now have a significantly reason for the introduction. This
ERIK BUELL
The Munjals control 52.25 percent equity in the newly rebranded Hero MotoCorp (after buying
Honda’s 26 percent share), and
are now free of previous restrictions. Hero has already grown its
overseas presence to a dozen
countries, although currently just
2.5 percent of its overall six million sales are outside India. However, aided by the global exposure that its participation in World
Superbike racing with EBR will
deliver, Hero is slated to enter a
total of 30 countries in the next
four years – including the U.S. By
that time 10 percent of its sales
are projected be outside India,
amounting to one million units,
with its annual volume expected
to reach 10 million units by then.
Hero’s Managing Director/
CEO Pawan Munjal has said that
by 2020 his company will sell its
products in more than 50 countries worldwide, by which time
its annual production capacity
should reach 12 million units a
year, manufactured in over 20
factories of which more than half
will be outside India.
So the arrival of Team Hero
EBR on the World Superbike
stage is an event whose significance goes way beyond racing –
as, indeed, does Hero’s decision
revealed on July 1 this year to
purchase a 49.2 percent stake in
EBR for a reported $25 million.
This came after the Indian giant had sponsored the two-rider
EBR team in the AMA Superbike
series for the 2012-13 seasons,
and after the two companies had
Geoff May (99) and Aaron Yates will
ride the EBRs this week in a test at
Phillip Island and on February 23 in
the series opener.
already successfully teamed up
to begin redressing Hero’s lack
of in-house engineering capability in the wake of its divorce from
Honda.
Honda had essentially been responsible for the creation of new
models, leaving its Indian partners to adapt them to manufacture, make them, and sell them.
The acclaimed Hero Leap serial
hybrid scooter was entirely conceived and developed by EBR,
which has now taken over all of
the former 54,000-square foot
Buell Motorcycles factory in East
Troy, Wisconsin.
There, Buell’s new company
has developed two very different powered two-wheelers in the
come about?
I saw some exciting opportunities in the industry that with Buell
being gone I could now look at
doing. It was a cool company,
we did a lot of neat things, but at
the same time it was also restrictive in other ways, because when
you’re part of a really big corporation like Harley, your creative
spark has to be compounded
into the larger whole - so you
don’t have as much independence as you’d like. Sadly, it cost
a lot of people their jobs when
Buell was shut down, but Harley
had to do that because of the financial disaster that they were in
at the time. But the good news
was that this allowed me to go in
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ERIK BUELL
Buell has found the right partner
in India’s MotoCorp.
friend said, “Hey, you know that
you just split with Harley? Well,
my friend Pawan just split with
Honda, so you guys should get
together and talk!” So we met at
Daytona, when he came to watch
the racing there, and we hung
out together and liked each other
a lot. We share the same dreams.
After Honda’s exit, Pawan was
looking to build his own design
and engineering organization,
but he was also looking for out-
side companies to team up with,
which might bring him something he couldn’t get from inside.
So then we met a couple more
times, and I met with some of his
leadership, and we actually had
a very philosophical discussion
about where we think motorcycling is going. It was a totally different way to start a relationship
- we were first associated with
each other as friends, before we
began to work together in creat-
ing the Leap hybrid scooter.
Hero purchased a 49.2-percent equity in EBR for $25
million. I presume that helped
repay the chunk out of your retirement fund that you invested in getting EBR started.
No, all of that money has gone
into developing the business.
Luckily, my lovely wife Tish was
willing to keep on investing her
share of that money in getting me
out of the house, and keeping
me working here.
Did Hero try to purchase
EBR outright?
No, and that was part of the
discussion. After getting to know
Pawan, and seeing the fascinating country that is India, and the
interesting company that is Hero,
I realized they believe a lot in individuals, and in relationships. He
wanted to work with us more as a
partner than as a subsidiary. He
understands that the entrepreneurial nature we have at EBR is
more valuable to us both that way,
because we have other clients
besides Hero that we consult
for, although obviously they’re
our largest client. They have a
very good relationship with their
supply base that Pawan’s father
initiated in developing Hero. It’s
a very different mindset than a
corporate manager who likes to
grab onto companies and claim
that he’s controlling everything.
Obviously, as a minority owner of
the business with shares in the
company, the success of EBR
increases the value of Hero’s
shares. We have two Hero people on the board, and we’re also
the U.S. and Canadian distributor
for Hero’s products, beginning
next summer.
Look, while EBR is a very
American company located in the
conservative Midwest, we have a
global outlook, and so we have a
lot to share with Hero technologically - and culturally, as well, I believe. I think Pawan understands
Will you be establishing a
new Hero/EBR dealer network
to sell Hero products in the
U.S.?
There will be separate networks, but the more dealers who
can take both together, the easier
it’ll be. Then we’ll also be selling
EBR models outside the USA,
starting in Europe and Australia.
We’ve set up an EBR Europe office in the Netherlands, and its
guys are visiting dealers to show
them what we have coming.
FOR US AT EBR, IT’S ABOUT
“TAKING
OUR TECHNOLOGY TO THE
NEXT LEVEL, ALTHOUGH WE KNOW
IT’LL BE HARD.
”
what I’m doing, and I certainly
understand what he’s doing.
Hero is a very interesting company. They’re not caught up in
themselves, they’re very humble,
and while they know they’re the
biggest and the best at what they
do, they also remember that they
had to earn that. They’re used
to change, they’ve fought and
scrambled for everything they’ve
got without sitting back and resting on their laurels. I’ve never encountered a large organization
like Hero saying with such real
candor, “We want to totally reinvent ourselves, how do we do it,
and can you help us?” And that’s
what we’re doing.
-ERIK BUELL
Looking at EBR’s products,
the 1190RS was really a homologation special to allow
you to go AMA Superbike racing. How many of those did
you end up making in the end?
About 100 the first model year,
then a small batch of 30 this year.
Some are left, but not many.
But then you launched the
1190RX volume production
model at the Orlando show in
October, and this is not only
a lot less expensive than the
1190RS, but also more powerful. How did that come about?
In street form it’s indeed more
powerful, though obviously both
can be the same power in racing
trim. We just had the time to develop some more sophisticated
strategies from an engine management perspective, and also
redesign the combustion chamber. The goal with the RS was
to build an incredibly light motorcycle. Our goal with the RX was
to make it on the light end of the
series production sportbike market, while also delivering a better
powerband and emissions.
Both bikes use the 72-degree V-twin engine that came
from the Buell 1125R, which
was originally supplied by Rotax in Austria. How has that
evolved, and where will the
1190RX engines be built?
Let’s clear up some of the confusion. The 1125R engine was
co-designed by Buell and Rotax.
We were looking for a new watercooled engine at the time, and
Harley was too busy doing new
engines for themselves, so they
told me to go someplace else. So
we went to Rotax. We were also
not funded or supported by Harley to have our own engine manufacturing facility, and they didn’t
want to have to make this motor
even once it was co-designed,
because they were at full capacity, and still growing fast. So we
ended up having Rotax assemble
the engines for us, also.
But it was a unique design,
not sharing any components
with any other Rotax motor. After
Buell was shut down, they got the
engine back, and then sold it to
EBR, with Harley’s approval. We
are now sourcing all the compo-
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ERIK BUELL
The Buell RX1190 Superbike.
nents entirely by ourselves, and
assembling them here in East
Troy. Rotax makes no contribution whatsoever to their manufacture. They actually only ever
made three parts on that entire engine - they machined the
crankcases from raw castings
that they brought in from a supplier, they machined the crankshaft
out of forgings they had bought,
and they machined the cylinder
heads out of castings that they
bought. Everything else came fully machined from an outside supply source, ready for assembly by
Rotax, who did nothing else than
that. I basically just had to resource those three components
that Rotax had made, and either
work directly with their suppliers
for the parts they brought in, or
source my own. So the 1190 is a
100 percent EBR engine, and it’s
not just a bored out 1125 - in fact
it has around 140 different parts.
The cylinder head castings are
different to the ones on the old
engine, so it’s not just machined
differently, but it’s a whole new
casting. The cams are different,
the rods, crank, pistons, everything...
Team Hero EBR is now going to race in the 2014 World
Superbike championship racing with this motorcycle. Why?
We’re on our way to becom-
ing a global company, and so
is Hero, which was not allowed
under the terms of its previous
Hero Honda joint venture to ex
port its products outside of the sub-continent. But now they have
to build Hero as a global brand,
and our World Superbike partici
pation will help with that. One of their concerns is, we’re number
one in India and we have great
products, but how do we get
the brand known outside India and even there, how do we get
people talking about Hero, rather
than just having us bring a new
product to the marketplace, and
have our dealers sell the wheels
off it? Let’s get the marketplace
to start thinking about us, learning about us, getting interested in
us – and going World Superbike
racing with our partner EBR is a
good way of doing that.
Hero thinks that road racing
is going to grow in a big way in
India in the next 10 years – Indians are avid supporters of all
kinds of sports, whether it be
cricket, golf, lacrosse, hockey,
they’re very engaged, and Hero
is a huge supporter of sports in
India - actually Pawan is an immensely talented pro-level golfer.
So for them, it’s not just the technology, they’re celebrating being
there, and taking part in the sport
of Superbike racing at the highest level. For us at EBR, it’s about
taking our technology to the next
level, although we know it’ll be
hard. We’re not going to compete
in the EVO class, which is pretty
much minor league in this transition year, but we’ve gone straight
to the premier class. We know
we’ll get beaten, but we’re going
to spend 2014 learning – we’ll
have no data for the tracks, and
our riders will have to learn them,
too. But this’ll put us in good
shape for 2015.
The team will be made up
of Geoff May and Aaron Yates,
but who is running it for you?
We have a blended team based
in Italy, with American members.
It’s headquartered in Bergamo,
it’s owned by a guy named Claudio Quintarelli, and the manager
who’ll be running the operation
day-to-day is Giulio Bardi. He
was with the WSBK organization
for many years, serving on the year or so. So whatever the new
Superbike Commission as repre- Superbike rules will be, EBR will
sentative of the teams and riders, develop a motorcycle to run unand before that he was the race der them. Hero will obviously be
engineer for Fred Merkel when heavily branded on the sides of
he won the first two World Super- the bikes, which will help its debike championships for Honda velopment in export markets, but
25 years ago. So he’s used to it’ll also help present them to the
working with American riders, Indian home customer, who now
and quite successfully. He want- has an Indian manufacturer in this
ed to get back into racing, and major global series. It’ll be fun for
the World Sueprbike promoters them – especially if and when we
are pretty excited about an all- beat Honda.
Since you’ll have to manuAmerican brand with American
riders and Indian backing coming facture at least 1000 examples
before the end of 2014, your
into the championship.
Have you done any testing EBR World Superbike racer
yet with the team, and will the will be based on the 1190RX
bikes be any different than the for homologation purposes.
ones you ran in AMA last sea- When will that start production?
son?
Full production will start in JanIt will essentially be the same
bike to start with, but of course uary. We originally thought that
we’ll be developing it on a con- it was going to be in December,
tinuous basis throughout the year. but we had a few parts that are
We’ll definitely test with the other late coming in from suppliers. We
teams at Philip Island on February are setting up to manufacture in
17-18 before the race, but that’s significant volume straight away.
less than a week later, so we hope We already have a big dealer netto test in Spain in late January to work, and many of those guys
set us in the right direction.
have deposits, so they all want
You say your expectations bikes at the same time, so if I
for 2014 are minimal, and that dribble them out of the door I’ll
you’re just there to learn. But have dealers mad at me. I need
in 2015 will you have an EVO to be able to ramp up fast. We’ll
Superbike for the new rules?
build several thousand bikes for
Well, we don’t yet fully know 2014, not hundreds. Back in the
what those rules will be, exactly. days of Buell, we built 15,000
But we only want to be running units a year here in a single shift,
in the main WSBK class, what- in the same factory we have now,
ever it is, not in any subsidiary but we could actually do more
category. Let me underline that than that now. With the new facilithis is a long-term project, and ties that we have now, we can do
that we’re not just coming in for a 20,000-plus annually - but that’s
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ERIK BUELL
a few years off!
That presupposes a range
of Buell models, of which
1190RX is just the first. What
other models have you got
coming?
Fundamentally, we’re working on several other derivatives
of that platform that I can’t really
talk about, but one of them is not
far away, and that’s the 1190SX
which will be the Streetfighter
version. Then we’ll have the AX
next, which is the adventure
tourer coming a year or so from
now, but there will be others. We
have a whole range of bikes that
we’re working on, but to actually
get a motorcycle into production
takes a while. It’s only been four
years since Buell was shut down
and I founded EBR, and there’s
lots of things you have to do to
put a bike into production. You
have to design it, test it, finance
it, productionize it, validate it - it
all just takes time. But we’re getting there.
Is EBR able to develop the
entire package of a new Hero
product - including the engine,
or does the motor have to be
developed elsewhere for you?
We can develop the entire
bike, with one or more cylinders
– and we’re doing just that.
Buell was formerly the
sportbike spinoff of HarleyDavidson, which meant that
you had to make a sportbike
that Harley felt comfortable
with. Harley’s just launched
a new 500cc V-Twin cruiser
that’ll be built in India. So now
are we going to see a switchhit? Is Erik Buell’s EBR, going
to develop a cruiser model for
the Indian and other markets
which would compete with
Harley’s new mini-cruiser?
I promised Harley I won’t tread
on their toes, and I won’t - there
won’t ever be any EBR branded
WILL
“BETHERE
SEPARATE
NETWORKS,
BUT THE MORE
DEALERS WHO
CAN TAKE BOTH
TOGETHER, THE
EASIER IT’LL
BE.
”
-ERIK BUELL
cruisers. It’s not my kind of bike,
and Harley does that very well,
anyway. What we felt was that
there was this gigantic gap in
sportbikes, and that’s what we’re
addressing. I love to see Harley
succeeding again, and even Indian coming in with a new product - that’s all great. But there’s
just a whole different side of
America to that, the youthful,
young, innovative mindset that
you see with companies like
Apple and suchlike in the consumer electronics sector, and
we wanted to apply that kind of
ethos to motorcycles. It’s just a
different segment, and a different
customer than Harley, or Indian
- and we intend to succeed in
carving that very separate identity for our products, compared
to anything made in Europe or
Japan, let alone the USA.
What are your ultimate
plans for EBR? What direction
do you see it heading in?
It might be interesting to go public. There are some advantages to
doing that, and some disadvantages, too. It obviously gives you
a pool of money to grow the business with if you float the company
on the stock market. I think that
if we show a trend of success,
people will like the company and
want to invest in it, and we can
show that we’ve made good use
of the money that’s already been
invested in us so far, which makes
us pretty attractive. So I’d like to
go public. Some folks say that
they don’t like having other people messing with their business,
but I don’t think that that’s true.
Harley had their issues with that,
and they went quite a way down
but then came back up again. We
love motorcycles, but at the end of
the day, it’s a business – and to be
successful in the motorcycle business, you have to be a businessman. To be a good businessman,
you have to make money. And
there’s nothing wrong with making
money, especially when you make
it the old fashioned way - which is
working your butt off, and earning
it. And that’s what we’re doing at
CN
EBR…