Feb. 8, 2010: Hot News
February 8, 2010
Filed under News
‘This is not the fall or demise’ of Lehman Trikes
Harley-Davidson Motor Co. is making a significant change in its trike business, taking the production away from supplier Lehman Trikes and bringing it in-house later this year.
The move has not prompted immediate change at Lehman, a public company with headquarters in Spearfish, S.D.
Lehman CEO Ken Hines told Powersports Business that he met recently with his staff and offered a largely optimistic message. “We’re pretty darned upbeat about it,” he said. “I met with all of our employees and said, ‘Hey guys, this is not the fall or demise (of Lehman). We have several other major players in the business that we’re in discussions with. And there are some indications that the economy is turning.”
The relationship with Harley, which started in 2008, obviously has paid off for both companies. Lehman posted revenue of $10.5 million in its second quarter, a 58 percent increase over the year-ago period. Plus, Harley obviously has seen enough positives from that side of the market to move the production into its York, Penn., operations.
“Our decision to move trike assembly is based purely on the restructuring of Harley-Davidson’s York operations, which now provides the opportunity for us to build trikes in-house and streamline trike assembly and distribution,” Julie Chichlowski, director of the trike platform at Harley-Davidson, said in a press release.
Hines said he and Lehman certainly understand Harley’s decision from a business standpoint.
“It makes absolutely no sense not to include trikes in that reorganization,” he said. “So for a business rationale, absolutely God bless them, they did the same thing I would do.”
Hines said the company has a number of options it’s currently considering to replace that Harley revenue, noting he has a “high confidence level that we’re not going to be doing any major layoffs.”
Hines also noted the company has seen positive results from its Victory product, the CrossBow that was derived from the Victory Vision and introduced to the market last summer.
“The orders are going exceptionally well on that product,” he said.
Lehman also does turnkey trikes, conversion kits and accessories for metric products, including Honda and Suzuki. Could that side of the motorcycle market be something the company focuses on when the Harley relationship ends this summer?
Hines wouldn’t get into specifics, but notes the company believes the current trike marketplace is “still underserved and growing.”
In the press release, Chichlowski of Harley-Davidson noted, “It has been a great pleasure working with Lehman Trikes on this program. They have proven to be a responsive, high-quality supplier to Harley-Davidson for trikes, and we would welcome the opportunity to work with them again should we have other needs in the future.”
— Neil Pascale
KTM North America restructures sales department
In an effort to refocus its dealer network and sales department, KTM North America announced two promotions within the company. Brad Hagi, former vice president of the KTM Street Division, will move to vice president of sales. Former Canadian National Sales Manager Tom Etherington will be the sales manager for KTM North America, according to a company press release.
Hagi is an accomplished motocross racer, an avid off-road rider and he has domestic experience working for Yamaha Motor Corp., and most recently international experience living in Europe working for Ducati Motor Holding.
“Building our dealer network is the key to our long-term business health,” Hagi stated in the release. “As I transition into my new position, the spotlight will remain on the dealers with our goal to help further develop the existing KTM dealer network while re-evaluating key markets where KTM may need to restructure.”
Joining Hagi at the KTM North America headquarters in Southern California is Etherington, who has worked at KTM since 2003 where he started as national sales manager for KTM Canada. Etherington will oversee the KTM regional sales managers and work with Hagi toward the new vision for KTM dealers.
“KTM is determined to make the best of the current economic situation and a restructuring of our dealer network and sales team is in line with this goal,” stated KTM North America President Jon-Erik Burleson in the release. “Hagi and Etherington have the skill set to bring our sales team and dealer network to the proper level to increase KTM’s market share during this economic downfall.”
Company reports misappropriation of funds
Cycle Country Accessories Corp.’s board Chairman Bob Hancher Jr., admitted to a misappropriation of funds and resigned from the board, according to a press release.
The misappropriation was discovered through an audit of the company’s financial statements for the period ending Sept. 30.
In October 2008, Hancher recommended a repurchase of some Cycle Country shares and indicated that he would handle such repurchases through an affiliated company and a company whom he had worked with in the past. These entities were paid a total of $570,000. However, after irregularities were discovered, Hancher acknowledged that he had received the funds but did not use $400,000 of the funds to purchase company stock.
As a result, Cycle Country won’t be able to file its annual Form 10-K report on time and also will need to restate its financial statements for the first three fiscal quarters of 2009.
An investigation is continuing and Cycle Country said it intends to recover the amounts due to it as a result of these events.
Kawasaki executive leaves the company
Kawasaki Motors Corp., U.S.A. executive Bruce Stjernstrom has resigned from the company and will be taking a position with Monster Beverage Co. Stjernstrom has been responsible for Kawasaki’s image and outreach activities since being appointed as director of marketing in 2005.
“Bruce has served as an integral part of our management team, and he will be missed by the entire KMC family,” said Tak Teranishi, president of the powersports distributor and marketer.
Kawasaki has since hired Chris Brull to replace Stjernstrom. Brull has been with Kawasaki since 2004 and was previously the senior advertising manager at Kawasaki.
Congressman joins Motorcycle Caucus
U.S. Rep. Randy Forbes (R-Va.) joined the Congressional Motorcycle Safety Caucus in December. He joins a bipartisan group of members of Congress, including Caucus Co-chairs Rep. Michael Burgess (R-Texas) and Gabrielle Giffords (D-Ariz.), committed to improving and advancing the safety of motorcyclists.
Duane Taylor, Motorcycle Industry Council’s director of federal affairs, stated in the release, “We know that Congressman Forbes will be a valuable addition to the caucus.”