Cyril Huze Blog – World's Number One Source For Custom Motorcycle News

The star lot of the sale at the annual Bonhams Stafford Sale of Pioneer, Vintage, and Collectors’ Motorcycles & Memorabilia www.bonhams.com on April 27, 2014 was ex-George Brough Brough Superior SS100 sold for US$ 425,000 (£253,500). Estimate was US$ 235,000-302,000(£140,000-180,000) Registered in 1939, the motorcycle was campaigned by George Brough himself in the London-Edinburgh Trial that same year.

A number of other great surprise results, with items far exceeding their estimates: Lot 233: 1972 MV Agusta 750S– estimated at £45,000-55,000; sold for US$ 143,500 (£85,500). Lot 173: c.1914 Henderson Model C– estimated at £40,000-60,000; sold for US$134,000 (£79,900). Lot 209: 1953 Vincent 998cc Black Shadow– estimated at £38,000-45,000, sold for US$119,000 (£70,940). Lot 245: Still in original crate, ‘as new’ condition, 1989 Ducati 888cc Lucchinelli Replica Racing Motorcycle– estimated at £14,000-18,000; sold for US$ 64,000 (£37,950). Lot 164: 1939 Brough Superior 990cc SS80 Project– estimated at £12,000-18,000; sold for US$ 62,000 (£36,800)

I re-publish an interesting article by Elizabeth G. Olson, an editor at Fortune Magazine regarding the way Warren Buffet’s Berkshire Hathaway kept Harley-Davidson financing operation afloat 5 years ago.

A business deal struck in 2008 between the two renowned Midwestern entities — Buffett’s Berkshire Hathaway (BRKA), in Omaha, and Harley-Davidson — infused $303 million into the motorcycle maker to help keep loans available to purchasers and dealers as credit markets sank along with the economy. The interest rate: 15%.

Harley-Davidson paid back the loan in February, said chief financial officer John Olin during a conference call this week announcing its first-quarter earnings. The company took the high-interest loan, Olin said, to help finance buyers and keep its production lines and dealerships operating. It was the only way, he said. This way, the company — which was founded in Wisconsin just after the turn of the 20th century — could borrow money and, at the same time, keep its ownership intact.

“It was the bridge we needed to get us through a rough time,” Olin said. Between 2007 and 2009, sales of Harley’s classic motorcycles — celebrated for their heavyweight, outlaw biker image — plummeted, down as much as 50% in the United States, as people had far less disposable income for purchases, or even for gasoline.

As the company began to climb back from the near-abyss, it wanted to repay its high-interest loan ahead of schedule, but Berkshire Hathaway struck a harder bargain, sticking with the handsome five-year loan terms, according to Harley-Davidson. No wonder, as the loan earned millions for Buffett, who already had chalked up a stellar windfall by investing a whopping $5 billion in shares of Goldman Sachs (GS) as the financial system teetered in the fall of 2008. That loan had a 10% interest rate, and, like the Harley loan, came at a key time for the investment bank, which repaid the loan in 2011 — after paying about $500 million in interest. Continue reading ‘How Warren Buffett Helped Save Harley-Davidson’