Indian Gone For Good?
INDIAN GONE FOR GOOD?
LOOKS LIKE INDIAN MAY HAVE made its last stand. When an investment deal fell through in September, the company was forced to cease production and fire 380 employees.
The announcement came just days before Indian’s 2004 dealer meeting, where, ironically, the company was set to unveil new, significantly improved models and announce a $1000 price rollback across the board, amid good news that sales had picked up from 3800 units in ’02 to 4500 this year.
“To build your own manufacturing system and do your own R&D takes tremendous amounts of cash,” Indian Chairman Frank O’Connell told reporters, “and the process always needs more.” Audax Group, a Boston-based investment house that had already
pumped more than $70 million into Indian’s resurrection, wasn’t prepared to fund the company any further, and an alternate, unnamed source of money dried up at the last minute, forcing the factory to shut down.
“The company was on a good trajectory,” said Audax co-CEO Geoff Rehnert, “but we just couldn’t get from here to there.
We had to stop the bleeding.” Restarted in 1999, almost 50 years after the original Indian went bust, the firm’s rebirth had been difficult, starting with the protracted court battle over trademark rights, then wildly optimistic production claims, changes in management, poor build-quality, excess inventory, lay-offs, an expensive new engine and the incessant need for more money.
In total, more than $145 million had been invested.
About 1200 unsold bikes remain in the dealer pipeline, some of which will be snapped up by collectors. Others will be a tougher sell.
“We’re not doing any warranty work right now, and spare parts are a big question,” said Norm Zabala, sales manager at Indian of San Juan Capistrano in Southern California. “I’ve got recent buyers who are extremely distraught over this situation.”
A glimmer of hope remains that another investment group could purchase Indian’s assets for pennies on the dollar, but an insider warned bargainhunters that it will take serious capital to make the company viable. “Bring at least $50 million,” he said.
David Edwards
