During an economic slow down, the best thing a motorcycles manufacturer can do is to closely monitor its retail sales to avoid an overloaded factory inventory, keeping a realistic production in phase with the market. And unfortunately it can mean reducing your work force to adjust to deteriorating economic conditions. Effective yesterday Big Dog Motorcycles was obliged to cut 20 more jobs out of over 200 jobs in 2007. A total of 50 jobs were lost since mid 2007. The layoff affects all areas of Big Dog’s Operations. A low dollar is an incentive for Big Dog to try to expand abroad to Canada and other markets. The company plans to introduce 2 new models later this year. Big Dog Motorcycles.
Updated at 3.00 PM EST: After reading my post and your comments, Paul Hansen, Marketing Director of Big Dog Motorcycles wrote to me the following:
“Hi Cyril – Yesterday’s layoff was a terribly difficult, but necessary decision. You laid it out very well in your blog this morning; I know you need to cover it – as bad news as it is, we appreciate your positive tone. Some comments are concerning and negative, which should be no surprise when you consider the state of the industry and the world of the internet. However, I would like to respond to the comments from “Mike” and “Tony” regarding our liquidation of parts. First, this step is no sign of the financial state of the company. Big Dog Motorcycles is still very solid with nearly 200 employees and 100 dealers from coast to coast. In addition, we are investing heavily in new product development and testing to ensure our models meet the demands of the consumer and are increasingly reliable. Finally, in the next few months we will build our 25,000th motorcycle and launch our 15th model year of motorcycles. No other high performance, high style motorcycle manufacturer can boast such milestones.
Regarding the parts liquidation comment specifically: Yes, we are liquidating parts – and only parts…not motorcycles. In addition, these parts are very dated…the inventory of parts are those used on production models from 1999-2005. Over this period, we had developed a large amount of surplus inventory that (as you can imagine) are no longer needed. No longer needed because we have evolved into a full-fledged OEM, design our own components, have them manufactured to our specifications, and continue to improve our designs and technology year after year. I hope this clears things up for you”. Paul Hansen
We have 4 good US manufacturers. Harley/Buell, Victory, Big Dog and I hope soon Indian. That’s enough in this market to cover most needs and tastes. All will survive our tough times then thrill again in a couple of years.
The two new models will help. They are new and excitingly different. Completely new from the ground up.
It seems to me that Big Dog is there to stay. Their conservative approach is paying off, even more after the disparition of most of their competitors. We don”t really need more than 1 custom motrcycle manufacturer. Others will customize their factory bikes or build one from the ground up if they want a true custom bike. Back to the basics.
I just don’t see how a company like Big Dog can sustain marketshare in a ever slowing, if not halting, recreational industry. Harley has the funds to weather a downturn and Big Dog seems to be making a bad decision…. instead of introducing 2 new models (how new can they be if cost is a factor, tolling is not cheap), BD should be cutting back on the models they have now… they all look the same anyway.
This is not a slight at Big Dog, but gone is the day of the 30K productiuon chopper, there is no market for it, but even worse, there are less and less banks to finance the bikes they have now.
Big Dog is falling prey to the same demons that American Ironhorse did, if Big Dog were smart, they will slim down on the mgmt overhead, bonuses and inflated management and focus on building lower cost to produce, quality motorcycles with a price point under Harley… it is going to be a rocky road for the next few years and BD could very well be the next casualty, I hope not though, I don’t like their bikes, but I am impressed by their success in the market over the past 10 years.
I just got notice this morning of a Big Dog liquidation that looked very similar to the Iron Horse one a month or two back. That could be a sign….
Yep. I just checked. Big Dog selling 2 million dollars of engines and v-twin parts at a site called Liquid Asset Partners. http://www.liquidassetpartners.com/currentliquidations/liquidation219.html.
Doesn’t sound too good. Only raising cash flow? Or worse?
My guess is one of the new models will be a bobber???
They have cut back on bonuses, and models. It was just not mentioned in this blog. Most of the parts that are being sold are old non-production parts that are not used any more, or are not up to BDMs standard of quality, such as parts scratched in house, where there was no warranty recourse. BDM went from an in house built S&S engine to a fully pre-assembled S&S engine, to cut down on warranty cost both to BDM as well as S&S. If they do not use them any more, why keep them on the books? If you change vendors on parts, and do not use the old parts any more, you keep what you predict will be enough for warranty purposes, and liquidate the rest. Funny thing.IronHorse’s liquidation came after the company was already defunct. BDM is privately owned by an individual that is dedcated to making the business work. He might not have the pockets that HD has, but he is no slouch either. The conservative apporach mentioned earlier in this blog by John Panzer include these things mentioned, as well as a stringent test engineering program, to increase the products reliability, as well as more scrutinized planning, and buying practices. Not to mention changes in Marketing, a state of the art frame building shop, in house powdercoat. Add all of this to the continuing engineering of new products that cater to the ever changing tastes of the consumer. All things aimed at streamlining the manufacuring process, as well as reducing overhead, and relying on outside sources for product. HD and GM have laid people off as well, but they are not gone. BDM cut it’s workforce to bring it’s production capacity back down to a slower demand. Sounds like good business sense to me.
It might have been just last week, an article in some rag stated that the motorcycle market (world wide) was expanding at a fairly good clip.
RE: (Evo)
“….gone is the day of the 30K production chopper, there is no market for it….”
Could it be that all Big Dog needs is a more appropriate product…?
just a thought.
-nicker-
Thus two new models…
Evo, you are way off base. From the market share that Big Dog has sustained, and the “Bonuses and inflated management” that always been slim especially compared to Victory. Building “quality motorcycles with a price point under Harley”… again, you are referring to another company.
H-D makes an awesome bike for the money, and even the metric companies can’t compete with them on that level. So why would they even try because the number one selling bike in the line-up is the $30,000 K-9 (Chopper).
As well as the ownership and management between BDM & AIH cannot be compared at all. Ask any dealer that has experience both companies.
B Rock – you are right on the money.
I think the obvious is being missed here as it was missed by AIM and even HD, thier motorcycles aren’t selling because they simply aren’t attractive, and most of thier models are just plain ugly. Granted, a few years ago you could sell a custom chopper to almost anybody, mostly because of the huge exposure and easy credit, but that’s not the point… folks that want a custom bike will always want one, just not an ugly one. The guys in our industry that I know are working in thier shops like they have for years, servicing bikes and building customs, including my small shop. The reason people come around is not because they can’t afford a new Big Dog, Rucker, etc, it’s because they don’t want one. And they don’t want one because they are ugly. The only reason to customize in my opinion, is for style, performance, or a mix of the two. “Just because” is not enough of a reason to get customers to buy, and the current marketplace condition for factory customs is reflecting that fact. So again, my advice to production custom bike companies is to STOP MAKING UGLY MOTORCYCLES and you may be surprised to find there are more customers out there than you think.
Times are tough. Cyril as you know the classified ads in the newspapers, in all the major Fl. cities are full of motorcycles and recreational boats, jetski’s etc FOR SALE. They are in peoples yards, sitting on the highways with FOR SALE signs. People are hanging on their money if they have any. It costs nearly $26.00 to fill up a Fatboy. Having a bike is not most people’s priority….keeping their home is on the top of the list. I think this is a result of the economy.
Big Dog is probably one oft the best managed manufacturers of motorcycles next to the motor company……Sheldon Coleman owns it and runs it.
I have been a dealer for AIH and Big Dog Motorcycles. I am still a Big Dog Motorcycle dealer. The management is superior with Big Dog. It’s been a very positive experience dealing with Big Dog.
Big Dog is strong and I believe striving to be even better. With the economy like it is, we need to be better to stay alive. I think Big Dog Motorcycles has beautiful bikes. What’s not to love about them?
There’s a reason Big Dog is #1. They work hard at taking care of their dealers and customers.
Something quite a few manufacturers forget to do. Thanks Big Dog!
To the Dave B guy who is saying that BD makes “ugly motorcycles”. Please post of pix of your bike so that we may all be in awe of the beauty of your bike (I’ll probably puke at the site of it).
JT, apparently Dave B. has won more “Bike of the Year” honors at the VTwin Expo, than has BDM. It is only by chance that BDM has won that honor more often than not. If you like BDM, the next few months will blow you away!