Q&A with American IronHorse CEO Wil Garland
FORT WORTH, Texas – American IronHorse CEO Wil Garland recently sat down with Powersports Business to address several issues, from the company’s new production plan to its long-term future.
THE ISSUE: Why IronHorse changed its production management plan, a move that largely limits dealers to the number of bikes they sold the prior selling season.
GARLAND: “Our company has been around for 11 years now and our dealer base has solidified. When I started with the company, we were in 31 of the top 100 markets. Now, we’re in 67 and we’re also in Canada now. Our dealer base is jelling, and we got better historical data on what our dealers sell … so we can do a better job of forecasting and planning by model (and) paint design. And that allows us to do a better job of telling a dealer, ‘You know what, you’re overbuying. You need to pull back a little bit.’”
THE ISSUE: IronHorse has nearly outgrown its 225,000-square foot facility in Fort Worth, Texas. Will the company look for a larger facility in Forth Worth or move elsewhere?
GARLAND: We’re working with the city of Fort Worth and other cities on what the next step would be. Obviously, I have a strong affinity to Texas … but California is a strong bike-building market. So is Arizona. So is Florida. So in representing my shareholders, I have to look at, longer term, where the best location is. … But so far the city (of Fort Worth) has shown some willingness to work with us.”
THE ISSUE: If IronHorse plans to become a publicly traded company.
GARLAND: “That’s always a consideration, something the company is always looking at. I think, longer term, that is where the company will be. It will be a public company. When we decide to go public has yet to be determined. But certainly it’s not going to be private forever.
THE ISSUE: Will limiting production mean limiting the company’s sales for its 2007 models?
GARLAND: We’re all about profit. Shareholders want to make profits. And for the first time in company history, we were profitable in 2005. That’s what our shareholders want us to focus on. I also want to make our dealers profitable. If we’ve got too much of one model in the marketplace, then dealers start cutting margins on it to sell it because they over-bought. So what we’re trying to do is make sure they buy what the market will bear profitably. So we’re not all about stuffing product in the channel. That’s the last thing you want to do.
THE ISSUE: Why IronHorse is now focusing more on PG&A sales.
GARLAND: You’d expect this as the company matures. We’ve now been in the marketplace for 11 years so we’ve now got over 16,000 bikes on the road. So you’ve got enough bikes out there now so where we can say to dealers, ‘Look, you need to invest in stocking PG&A because you have enough demand out there to support the inventory costs.’ ”
THE ISSUE: Explain the difference in the company’s marketing plan for the 2007 models, which includes a nearly 40 percent increase in co-op funds.
GARLAND: “It’s a more sophisticated, a more accountable system than what we had before. Before, if they spent $3,000 and their fund was $3,000, we’d just send them the $3,000. So it wasn’t collaborative. What we want to do now, and this is where Brand Era (IronHorse’s marketing company) plays a big role, is helping (dealers) develop programs that really bring people into the store to buy bikes.
THE ISSUE: Why IronHorse does not manufacture its own frames.
GARLAND: “There’s been a lot of discussion about … you do 300 other parts in-house and you assemble your engines in-house, so you guys can make frames. We could probably do frames in-house without a problem, but frames are art and science combined. And that’s all that (Daytec Frames, IronHorse’s main frame provider) does. They do it better than anybody else. It all comes down to core competencies. I want to make the best or buy the best and if I’ve already got a supplier who’s the best, I’m going to stick with them.”
Read more about AIH in the August 14 issue of Powersports Business.
