August 08 Hot Flashes

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August 08 Hot Flashes

H-D TO BUY MV AGUSTA Last minute reports that Harley-Davidson will acquire Italian bike manufacturer MV Agusta for $70 million Euros ($109 million US) were received just before going to press. According to Wall Street analysts, “MV Agusta manufactured around 5,800 units in 2007, compared to Harley’s 331,000 and represented just 0.1% of the US market. The rationale might be to acquire a brand that can bring sport product to market since that segment, particularly in Europe, is quite different from the cruiser segment. And, it may allow them to pursue younger riders and capitalize on the growing European market. We would not expect MV Agusta to be a positive contributor to cash flow for several years.”

LIQUIDATION OF MOTORCYCLE STUFF DIVISION ASSETS ANNOUNCED Holger Mohr, CEO of Global Motorsport Group/Custom Chrome, announced that after 37 years of dedicated service to the powersports industry, the company has begun the process of liquidating all inventories of its Motorcycle Stuff division and was scheduled to completely cease those operations by the end of August 2008. “Though our decision was a painful one in that it affected friends and family, it became apparent following the purchase of GMG by DAE-IL USA, Inc., that the Motorcycle Stuff division would not be part of our long-term strategy to increase our focus on our core strengths in the American V-Twin industry and grow our business,” said Mohr. Global Motorsport Group and Custom Chrome will reportedly remain unaffected by this action and will continue to operate and serve the wholesale needs of both franchised and non-franchised American V-Twin dealers.

MICHELIN N.A. TO INCREASE PRICES “As a result of continuing increases in raw material, energy and transportation costs, Michelin North America is increasing prices,” stated spokesperson Tate Hoxworth. He continued by saying, “Motorcycle, scooter and bicycle tire and tube prices will increase by up to 15 percent on Michelin brand products sold in Canada, Mexico and the United States effective Sept. 1, 2008. All two wheel products delivered after Aug. 31, 2008 will be invoiced at the new price.”

RECALLED SUZUKI MOTORCYCLES The National Highway Traffic Safety Administration (NHTSA) announced American Suzuki Motor Corp. has recalled 9,109 model year 2008 GSX-1300RK8 motorcycles. According to NHTSA, the recall was issued due to improper routing of the ignition switch wiring harness, which can cause a bent portion of the wiring harness to flex rather than slide when the handlebar is moved from right to left or left to right. “Repeated side-to-side movement of the handlebar and flexing of the bent portion wiring harness can eventually cause the ignition switch lead wires to become cut or broken,” said NHTSA. This can reportedly lead to an intermittent or complete loss of electrical power, which can result in loss of lighting and/or stalling of the engine, increasing the risk of a crash.

WASHINGTON BLAMED FOR HIGH GAS PRICES “The latest Auto Pulse survey conducted by the Consumer Reports National Research Center shows more than three quarters (77%) of consumers singling out the government’s failure to implement an effective energy policy as a root cause for high gas prices, with many also blaming oil companies (75%) and foreign oil producers (70%),” stated spokesperson Russel Datz. He told us the survey also shows a “critical tipping point” for motorists has been reached, with another important milestone just around the corner. “In the 2007 Auto Pulse survey on gas prices, Consumer Reports found the tipping point at which motorists said they would drastically reduce driving would be $3.50. And they have,” said Datz, “Year-to-date, 20 billion fewer miles have been traveled compared to 2007 for the same period.” He continued by saying already over a quarter of consumers have considered downsizing to two wheeled vehicles. “Among them, 18 percent have contemplated a motorcycle and 14 percent were drawn to motor scooters,” he added.

PERRY SANDS JOINS MAG Motorsport Aftermarket Group (MAG) President and CEO Brian Etter reported Perry Sands, founder of Performance Machine (PM), will be retiring from day-to-day activities at the company and Sands will instead be joining MAG’s management team. “We are also pleased to announce that Mark Finnie will be rejoining PM as president and will be responsible for all aspects of the business,” said Etter. He continued by saying, “I would like to thank Perry for his dedication, leadership and vision in building PM into the premier brand leader it is today. We are looking forward to working with Perry as we continue to grow all of our MAG businesses.”

COUPLE SUES GOODYEAR DUNLOP TIRES “A Brighton couple who sustained serious injuries after the rear tire of their 2003 Harley-Davidson Ultra ‘suddenly and catastrophically’ deflated on a Missouri interstate last year are suing Goodyear Dunlop Tires,” reported the Madison Country Record (IL). The paper explained Darla and Michael Green are seeking at least $500,000 in a lawsuit filed in June in Madison County Circuit Court. “They claim their motorcycle went out of control after the tire deflated and wrecked, ejecting both of them ... According to the suit, the tire was manufactured without the rubber skin stock tightly bonded to the carcass ply resulting in the rubber failing to properly adhere to the cords,” it added. Darla Green reportedly suffered severe traumatic brain injury, skull fracture, fractured ribs, fractured left clavicle, punctured lung, lacerated liver, lacerated spleen, laceration to the right eye, multiple severe lacerations and abrasions and loss of vision, while Michael Green was said to suffer from multiple severe lacerations and abrasions and extreme emotional distress.

MYRTLE BEACH MOVES TO END BIKE RALLIES The Myrtle Beach City Council has passed a property-tax increase dedicated to an anti-bike rally campaign and will begin to enact ordinances that will end motorcycle-related vending inside the city, stated MyrtleBeachOnline.com. The site explained all seven council members voted in favor of the tax increase, which will raise almost $1 million a year. “One mill equals an additional $4 in property taxes for every $100,000 of assessed value for all owner-occupied homes and $6 for every $100,000 assessed value of commercial property and second homes,” MyrtleBeachOnline.com said. The council reportedly voted to cancel all motorcycle-related facilities permits for the month of May, but that ordinance needs a second reading before it is considered official. The council will also vote to change the city’s OZ-50 zoning so vending permits cannot be issued in May, the site told us, adding, “City leaders say they want to actively market May as a family vacation month, replacing bike rally attendees.”

PIAGGIO TO PAY $107M TO CREDITORS & SHAREHOLDERS Piaggio S.p.A. reported it will pay an estimated $107 million to former Aprilia bank creditors and shareholders, informed an online news site. “Piaggio’s board decided to pay off the warrants in cash rather than issuing Piaggio shares,” it told us, and almost $97.5 million will go to 9,959 Piaggio 2004-2009 warrants that are held by the Aprilia bank, while almost $10 million will be for instruments for ex-Aprilia shareholders. “Tens of thousands of warrants were issued and the remaining 41 outstanding warrant holders have not asked to be reimbursed,” the site concluded.

MAN CHARGED WITH DEFRAUDING MOTORCYCLE CUSTOMERS “A West Allis (WI) man is accused of defrauding would-be motorcycle buyers out of more than $800,000,” said the Chicago Tribune. The paper explained a criminal complaint alleged that Scott A. Yadro, 50, was operating a business called Milwaukee Motorcycle Company and files say he told investigators that he took payments for motorcycles but didn’t deliver them, deposited counterfeit checks and wrote bad checks. “The complaint says between February 2002 and October 2003, the state Department of Transportation received about 20 complaints from people and businesses across the country claiming they were victims of Yadro’s fraud,” the Chicago Tribune told us. Yadro has reportedly been charged with three counts of theft by fraud and two counts of issuing worthless checks.

MIC EVALUATES REQUEST FOR U.S. ROAD RACING SERIES The Motorcycle Industry Council, on behalf of its 300-plus members, is evaluating whether to issue a request for a proposal that seeks a series promoter and sanctioning body for a premier professional road racing series in the United States, stated a MIC press release. “The MIC intends to consider input from key industry stakeholders, including racetrack owners, riders, interested sponsors and enthusiast and trade media,” the release explained, adding the MIC wants a series that best promotes rider safety, competition, innovation, racetrack attendance, television viewership and ridership. “The MIC also wants a championship that ultimately benefits the consumer – an exciting, popular series that develops new technology that finds its way to production motorcycles,” it concluded.

Passings

JORGE ARRUES “A legendary member of San Diego’s motorcycle business and racing community, Jorge Arrues, passed away peacefully on Tuesday evening, June 24th surrounded by his family,” a spokesperson told us. Arrues reportedly immigrated to the U.S. in 1964 and, in 1965, he opened Kon-Tiki Motorcycles in Pacific Beach. Over the years, the business became the national repair facility for Kawasaki’s first super bike, the triple-cylinder H1 model, they explained. The store is said to be under the careful management of his son, Alex, who is said to have revitalized the business after illness forced Arrues to retire several months ago.	`