GILROY
–– From all over the country, Indian Motorcycle riders, would-be
riders, dealers, former employees and creditors are anticipating a
new owner for the iconic American brand, expected to be announced
this week.
There’s hope among interested people nationwide that the new
owner will be one who plans to restart motorcycle production.
Beyond that, however, opinions differ on who should win an auction
for the company’s assets.
GILROY –– From all over the country, Indian Motorcycle riders, would-be riders, dealers, former employees and creditors are anticipating a new owner for the iconic American brand, expected to be announced this week.
There’s hope among interested people nationwide that the new owner will be one who plans to restart motorcycle production. Beyond that, however, opinions differ on who should win an auction for the company’s assets.
Fourteen people – dealers and Indian owners – responded to an informal Dispatch questionnaire seeking opinions on the future of the storied motorcycle company.
Many – especially here in the company’s home town – are rooting for Rey Sotelo, a Gilroy resident who brought Indian here in 1998 after joining it to his California Motorcycle Company. The former Indian president/CEO – often billed locally as Indian’s “founder,” despite the fact that the company began in 1901 – is now trying to buy the company with a group of investors. Keeping production in Gilroy is one of his top priorities.
“He’s a biker himself,” former Indian paint-shop worker Johnny Pe’a, of Gilroy, said Monday. “What better person to build motorcycles than a biker?”
“Mr. Sotelo is a very straightforward type of guy,” Jim Greaney, who sells Indians at a dealership in Corona and rides one from his home in Chino, wrote in an e-mail message to The Dispatch.
Many of these Sotelo supporters find resonance in his comments that Indian failed because slick marketers took over from motorcycle people. Many agree with Sotelo that the company would be better off if it stuck to producing quality bikes and left marketing at a more grassroots level.
Others say they won’t feel comfortable with the historic brand again in the hands of a start-up business. They say an established company with infrastructure and deep pockets would have a better chance of keeping Indian alive – a company like Harley-Davidson or Polaris, the two major, surviving American motorcycle makers.
“Two hundred million dollars pumped into Indian over five years and still not within spitting distance of profit! Were it otherwise, I’d hope Rey Sotelo’s Matrix Capital group (possibly in partnership with bike enthusiast Bill Melvin) would recapture ownership of Indian,” Ray Seidel, an Indian rider from Temecula, wrote via e-mail. “No, best that its old rival Harley-Davidson be the winning bidder, with Indian now in a safe and happy home with people who truly have a 100-year history of making quality, historic American iron.”
“It would be best for America if (Polaris owner) Tom Tiller would buy it and merge it with Victory (Polaris’ motorcycle line), maintain both brands, both styles and produce the product at his facilities,” Kurt Mechling, an auto and motorcycle dealer from Seneca, S.C., and a voice on Indian’s Dealer Advisory Council, e-mailed.
Others disagree angrily.
“If Harley were to be the lucky bidder, they would simply put the Indian product line in a bank vault, never to be built again,” wrote Mike Dreon of the San Jose Indian Riders Group.
“This is a stand-alone company, not a stepchild,” wrote Angelo Pacilio of Bayonne, N.J., who rides two Indian Chiefs: a 1948 and 2003.
“I would rather see the Indian name die than to see HD get it,” wrote Wade Dickens, an Indian enthusiast from Austin, Texas, pulling for Melvin, a retail liquidator from Grand Rapids, Mich.
As the decision approaches, unsubstantiated rumors swirl more fiercely that Harley and Polaris are among the bidders. Harley officials resolutely declined to comment on the matter Monday and a spokesman for Polaris – which also makes snowmobiles, all-terrain vehicles and personal watercraft – has denied his company is involved.
Monday marked a month since seven companies – five of them anonymous – entered bids for Indian’s trademarks and its Gilroy factory. Officials from Indian and Credit Managers Association of California – hired to handled Indian’s liquidation – have since sent the bidding into subsequent rounds, driving up the price. CMA Estate Manager Chuck Klaus said a week ago he expected to announce a winner by Thanksgiving. He hasn’t returned phone calls since.
Sotelo’s Matrix Capital and Melvin are the only bidders to acknowledge their aims. Both said Monday they’re still in the running, despite rumors they’ve dropped out.
In Gilroy, the city Indian called home until Sept. 19, when it shut its doors without warning, there’s strong support for the local man, Sotelo. Employees like Pe’a, who worked for CMC before Indian came to town, say Sotelo treated the workers better than subsequent managers. Former Indian welder Victor Valdez Jr., also of Gilroy, said Sotelo appreciated workers’ craftsmanship more than later managers.
Others here say Sotelo’s ownership would be the best outcome for the local economy, which took a blow when Indian suddenly laid off 380 workers, approximately 100 of whom lived in Gilroy. Sotelo has said he’d like to hire back at least some of those workers, many of whom are still languishing on the unemployment rolls.
“I think that if there’s anybody who has the knowledge and ability to get it started again, he’s the one,” said Bill Lindsteadt, executive director of the Gilroy Economic Development Corporation. “I’m hoping that it’s not another motorcycle company like Harley that’s just trying to buy out the competition.”
Not every former Sotelo employee hopes he takes over again. Gilroy resident Daniel Tice, who was a test rider for CMC and then Indian, hopes Polaris takes the prize.
“I think if someone tries to reopen the factory making motorcycles in Gilroy, they’re just going to throw away several million dollars,” he said. “I think we proved that. The cost of doing business in California is too high.”
One thing most Indian enthusiasts agree upon is that the company shouldn’t be sold to a foreign firm. It was only six years ago that Harley was the lone American motorcycle maker and when that company showed signs of strain in the 1980s, bikers across the nation were scared.
Many Indian riders don’t care who wins; they’re just waiting to see who will fix their bikes. Indians had a reputation for unreliability, fed largely by a host of part recalls. While riders agree the company made improvements in recent years, there are still repairs to be made on new bikes.
“I purchased my (2003) Indian in June 2002 and no longer have a warranty as a result of the closure,” Kevin Donoghue wrote from Thousand Oaks. “I am currently facing a warranty repair costing over a thousand dollars. My (dealer’s) extended warranty will not start until June 2004, so now I need to decide whether or not to wait it out or pay for the repair myself.”
Dealer Richard Keck, of Evansville, Ind., felt “totally left out in the cold” by Indian and said several of his customers are angry over warrantee failure.
“We have had several people jump ship and want to get rid of their Indian, not knowing what was going to happen,” Keck said.
Indian officials have confirmed that among Indian’s numerous debt creditors – who will inherit the proceeds of the auction – are many warrantee claimants.
