Thanks

It’s so easy for someone like you to throw rocks from behind the “blog curtain”. Not sure who you are and don’t care, but I doubt that you have ever “worked with” me. I was never part of AIH management, I was an investor and Board Member, neither are considered “management”… management gets paid!

You should learn to read before you try and write. No where in my letter to the AIH Dealers did I say that I had been appointed to any council. I said I had been asked by AIH to be one of 5 Dealers on the Dealer Advisory Council, and that I would only consider it if a “significant majority” of the Dealers agreed or elected me. Seems fair to me?

My business is running fine… If you don’t want to hear my “rantings”, try another blog thread, this one was started by me in regards to “consumer financing”, might try focusing on that if you know what it is.

Real IH #1?
Another real Einstein, talk about someone “smoking and coking…”. By the way, I don’t smoke or “coke”… sip a litlle Crown now and then… but leave the hard stuff to idiots like you!

Charles

Let’s give HD credit too for putting out products that make it increasingly difficult for a consumer to justify spending an extra $10K to $20K for a factory custom. HD now has 6spd’s, fat tires, big motors, reliability and quality chrome. I’m sure HD put some thought into their marketing strategy and I suspect they have a few more ideas up their sleeves.

And the factory customs all started to look the same. So they won’t sell on “one offness” alone and they stepped all over each other in competing. HD has a weakness that factory customs can exploit but none of the companies have jumped on it yet.

I have been the number one dealer of American IronHorse Motorcycles for 5 years running. I deal at least one, sometimes two, every single day. That’s at least 365 a year. Hell, I dealt one about an hour ago. And since I’ve had mexican for lunch for the past three days, I can tell you it was a rare beauty.
I believe in quality so I always eat plenty of fiber. Sure it makes it more of a struggle when dealing, but it will be solid and not just break apart when you flush.

As for the rest of the comments made here by Strand. Buying down interest rates for people who can’t afford a bike is just one of a million things that Ironhorse actually did wrong. The actual effect wasn’t near enough to offset the cost of servicing the debt that Ironhorse incurred doing it. It also didn’t help the actual buyer, who wanted the loan he couldn’t afford, since inflation has continued to erode his already thin buffer between liquidity and financial ruin. As you can see on eBay and elsewhere many of these bad loans have since gone south, flooding the market with low mileage bikes for a fraction of the MSRP, further harming the market as a whole.
I was thinking of addressing all of the points, but that would be pointless. Strand just needs to stop smoking and coking it up before he logs onto the internet.

and once again,

I’m number one.

Don’t agree with what you said, but at least you said it in a civilized manner.

The point of my letter, was to try and wake some of the “high volume” “factory custom” manufacturers up. I’ve been on both sides and heard Dealers bitch about manufacturers and Manufacturers bitch about dealers for the last 11 years. A lot more bitching going on now that most are making less money. We are doing better than ever, mainly due to getting better finance sources for our customers.

For companies like AIH, Big Dog, Saxon and a few others that went after the “factory custom” market with business plans that called for 2000-3000 bike sales a year to be profitable, sub-prime financing is a must. Ask any boat dealer, RV dealer… or even a Harley dealer! It’s not the same market as a Cyril Huze, Ness, Desporado, etc… that mostly make one-off customs and cater to a very elite and specialized customer.

Rick Fairless is primarily in the bar business, that’s where he makes his money. To comapre him with what we do is a joke. We are a “reatil motorcycle dealer”, not a builder. We don’t care what brand we sell, how famous the manufacturewr is or what anyone thinks about us other than our customers. I kept providing warranty work for all of my AIH customers, and Rick’s as he stopped when the factory stopped paying its bills, for nine months without pay, out of my own pocket. Don’t really blame Rick, but no one can say he takes care of his customers like we do/did.

Rick sold 16 AIH motorcycles in the Dallas market last year, we sold 121 out of our store, 151 counting Sturgis sales, and we are in a territory with 1/3 the population and 1/5 the money.

If you were AIH, who would you pick for a Dealer?

The “point” of my letter was simply to stress the importance of non-prime financing. Anyone that deosn’t understand it, must be in a different business or market. 60% of our sales are to people with C&D credit. FYI; C Credit is considered a 640-680 score with most lenders… the average American consumer is below a 680 score, but most often still a good customer!

At least this thread got a lot of attention and opinions expressed… 55 comments in 1 week. More than any other “headline” on this blog. Can’t argue that it’s not a worthy point of discussion.

Charles

I’m just a guy who rides, but I wish Charles was still responding. WHAT EXACTLY IS THE POINT OF THE LETTER? He mainly seems to be lashing out at manufacturers and “industry icons”. Is the point of this to assign blame? I wonder if he is getting a daily dose of mad customers complaining about AIH and he needs someone to vent at, complain about, etc. I admit, I don’t know why he is doing it, but oh well.

Ok, let me get on with this.

One of the first statements I read in his letter….
“In the 5 years that I’ve been on the retail side of this very unsophisticated industry, I’ve seen an evolution that any good business person could have predicted many years ago.” So let me get this straight. He is a good business person, therefore he must have seen this coming years ago, yet, he still opened up a AIH dealership, & sold 250-300 bikes a year to customers even though he, a good businessman, knew that troubles were in the future. That is the short sided attitude that I would assign blame to for the industry woes. I certainly wouldn’t assign all the blame to any one man, but it appears to me as if this is the short sided, do for me now, make a profit, and run attitude that did hurt the industry. I don’t fault Charles for his attitude, hell, go out and make your dollars. Just don’t try and make it like it is the other guy, the industry icon, or manufacturers fault. Take your fair share, no more, no less, of the blame and shut up about it.

In regards to the Sturgis situation, Charles is trying to compare selling off bikes at deeply discounted rates to GM clearing it’s inventory. Hey I wasn’t there, but using his statements of what happened if I was a AIH dealer, I’d be pissed too. Yes auto manufacturers offer specials to clear their inventory, but they offer incentives through ALLof it’s dealers to do so. They don’t go to the Detroit auto show and start selling off previous years inventory directly to the end consumer at or below what their dealers had to buy them at. No, they put together dealer incentives and programs that are offered to ALL OF their dealers to try and move their product. Again, I’m not a dealer, but I guarentee that if I was a dealer, and the manufacture set up shop at some place and undercut me, hell yea I’d be a little pissed too. JFC, what kind of manufacturer would do that to it’s dealers? Oh don’t answer, I can answer that myself. A manufacturer that probably saw that in the next few months it would need to declare bankruptcy……

In regards to financing C&D credit scores, maybe, just maybe, Loud Financial and the other lenders understand that lending to C&D credit scores so they can purchase $30K plus bikes might not be the most sound financial decision. When AIH started, I seem to remember that most of the bikes they sold were $25K to $30K. Pricey, but given the state of the price of Harleys, not that far of a reach. Sure you could buy a Harley for a little less, but by the time you did nothing more than put on bolt ons, you were going to run the price of a HD near what you could get a good looking, semi-custom, bike. I think in the last few years, AIH lost site of that. Their bikes jumped in price to levels that didn’t make them competitive. AIH didn’t have a bike under $30k. Hell if I had over $30K to spend on a custom bike, I’d get a custom not a manufactured custom. I’m not sure what the resale value of an AIH is, but I am guessing not too good. So it seems to me, before you can get legitmate financing sources to fianance to C&D bikes, you are going to have to manufacture bikes that maintain their value better, and also are less expensive. Let the A&B customers buy the $30K plus bikes. I’m not sure if Charles would agree, disagree, or simply modify this thought, but my point is I don’t think you can simply blame the manufacturer for not finding sources for C&D financing for the industry woes. There is more to it than that.

Finally, the blasts against the “industry Icons”. Total shame on you Charles. Again, it seems like you are simply trying to blame others for the state of the industry and I’m wondering what the motives are for this. Jealousy? Sour Grapes? Based on his 36 mile reference, and a subsequent post, one of those “industry icons” he is lashing out at is Rick Fairless. If Rick is mad about the Sturgis deal, well like I said, I’d be mad too. I think he has a legitmate reason to feel that way. And your remark about Rick believing himself to be an industry icon is out of place. Rick works hard and why shouldn’t he benefit from the fruits of his labors? But the thing that gets me is that I’ve never seen Rick cry out it is all about him. Rick will host a major party and you’ll see all sorts of vendors at his place. Many of them selling prodcuts or services that compete with his products or services. But Rick allows them there. WHY? But because Rick understands that it is not all about him. Rick now has a radio show. Listen to his radio show. Almost every week he has on motorcycle industry people, some of whom sell the same products and services that Rick sells. But still he lets them come on his show, talk about what they are doing, give out their websites, the locations of the next rallies they will be at etc. WHY? Again, because Rick understands that the state of the industry is the most important thing. That if the industry survives, he’ll get his fair share of the business. Others will get will get theirs fair share too, but he’ll be happy working hard and earning what he gets. I think by lashing out at the “Industry Icons” Charles is showing his true colors…..

Your mothers would be ashamed of you, just simmer down now. I say let’s all be friends and go down to the local titty bar, get a good buzz on and watch our favorite stripper jiggle and wiggle her way into our hearts. Some of you more up tight dudes may need a session or two in the VIP room.

Iam not saying this will work for everyone but Iam willing to bet it would do more good than commenting on old wind bags opinion, cause let’s face it, nobody gives two shits what the other guy thinks anyway. Only a stripper and enough alchohol can make you think what you have to say is important. Now,…. am I right or am I right????

See ya at the Strip Club

bob

My basic response to Charles went as follows:

It’s only fair to preface these remarks by admitting they are a perspective from an earlier era and so may no be particularly relevant to many. As i told Charles i go back to the days when Bob Monroe was Arlen’s “manufacturing process.”

I did confess to being totally amazed at what people like Arlen (and i presume he) have been able to do with this “cusdom industry.”

Growing out of an area where each scooter was unique and the trademark of the owner’s talent, artistic expression and skill, to today’s “productization” of “custom bikes”, it’s taken one Hell of a leap forward.

So, the emergence of an industry to service what was historically, at best
a niche parts market, is especially surprising………. to me anyway.

In an earlier time (in this neck of the woods), anyone who would sell his scooter was looked upon as something of a “traitor.” Your skill as a technician was the price of admission to “custom bikerdom.” Getting help was acceptable, but everyone know how much of “you” actually went into your project. And your “street-cred” was established accordingly.

Here’s the reality check: what does anyone who bought his bike have to contribute to a bench-racing session…. (“ya man, i really had trouble writing that check”)?

I realize that up to this point “the industry” has had a great run. But i believe that this market has been an anomaly based on the convergence of a certain baby-boomer demographics, media images (many galmorizing) of the 60’s gang culture, and some B-grade Hollywood flicks.

I’m certainly not disparaging Charles’ commercial achievements, by any means.
From a business perspective he has my admiration. I simply believe that this “mass-chopper-market” has been a bubble waiting to burst, sub-prime loans or not.

A business model like that of the Art Auctioneers might provide another path forward.
TV coverage of a “true Custom” build (not a bling-assembly), where a retail customer could buy a serial-numbered, limited edition “copy,” might give the top end custom market some legs. But beyond that, i simply don’t see the current business model as being any more than marginally viable.

Lets tell face it, “manufactured customs” is a diminishing market. There are only so many people who will try to “buy their way into being somebody” (certainly not at these prices)! Moreover, the boomer demographic is rapidly running out of money, time and energy. Florida is tired of tawdry behavior. The older ya get the worse ya look in a thong. And the young kids couldn’t give a rosy rat’s ass about Easy Rider.

Yes, there will always be a bikers. We’re like fungus in the bathroom, dammed impossible to get rid of. But that 1% will simply not sustain this house of cards. And $7+ a gallon gas will sell a bunch of MX-bike-riding kids $8k street trackers, when they become drivers.

The dynamics and makeup of this Industry isn’t a new issue and you-all have touched on it:
re: -Pirate-
“… Unfortunately way too many of today’s riders do not know the difference between a phillips head screwdriver …”

When the EPA and the Green movement get through with us we’re gonna need more than a screw driver and a hammer.

RE: -Hoyt-
“… If you’re going to go custom, there’s a lot to be said in finding a good local builder for a
Well, yes, if it’s more than a simple assembly of OTS parts.

RE: -Charles-
“…Signing off for good as there is too much bad attitude and too little common sense going around here…”

Excause me?… “…too much attitude…” exactly how long have you been involved with Bikers?

RE: -Chris c.-
“…I hate the fact that self reliance has almost completely been removed from this culture.
I grew up riding with cats that knew a hundred and ten ways to fix a Harley with bailing wire…”

Spot-on Chris…! “self reliance” is what being a Biker was once all about.
So why do some (in this blog even) see no contradiction in “being a biker” and also suggesting the
“national guard should supervise bike events.”

From a broader perspective, isn’t that what freedom is (was?) all about.
It shure as hell ain’t about nationalized health care, or the nanny-state making “bikers” feel safe at
Datona Beach.

-nicker-

Mr. Strand, FYI: It is my understanding that Conrad Nicklus started “helping” in the shop at Desperado at 8 years old. I first met Conrad at Bike Week when he was 10 years old and on Spring Break from Grade School. Just thought you would like to know that.

You missed the point. The “Sale” in Sturgis last year was NOT “my” sale. AIH asked me and 5 other Dealers to help them sell off 100 “2005/2006″ bikes (no 2004s) that had to be sold or they would be out of business. We did… none of the bikes belonged to me.

I have communicated with your Dad, had many good conversations with Arlen Ness and Roger Bourget… I have nothing but respect for all of these guys and was not directing my Idiot/Icon comment to them, I appolagize if it seemed like that. The comment was primarely directed towards Mr. Fairless who made such a point of misinforming everyone that “I” put on the Sturgis Clearance sale last year. And, it wasn’t whoring out anything… it was selling 2-3 year old inventory at whatever the market would pay… normal business!

I’ve been in the MC business for 11 years, 6 on the manufacturer side and 5 as a “Top Dealer”… guess that means you got into the business at 10 years old?

I’m doing OK in this business and have no plans of going anywhere… the market your Dad is in, Arlen is in, Roger Bourget is in is a lot different that the “Factory Custom” program AIH and Big Dog were in persuit of…. 3000-5000 bikes a year was the target for each. My comments were that for anyone to reach those levels, sub-prome consumer financing woiuld be needed.

Signing off for good as there is too much bad attitude and too little common sense going around here.

I will not be commenting anymore on this blog, so go ahead and take all the cheap shots you’d like. If you want to talk as a real person, Charles@IHOT.us, is where I’ll be.

Charles Strand, Iron Horse Of Texas

I love the part where Nicker said

“Look at the difference in the price of an art original and the litho-copies.”

That’s almost a perfect definition of the deal here but I think what AIH would have you believe is that they offer Giclee Reproductions, a much higher quality re pop than a litho, but not quite an original.

Anyway, the real reason I am posting now is to comment on Pirate’s last statement.

“The problem in having either the back yard builder or the guy down the street who has a bike shop build a bike for you is that they are impossible to get titled, insured and financed. Also where do you go when something goes wrong?”

It seems to me you do what we have always done in this case as motorcycle people, you go back to that cat, if he will not help you call the manufacturer and if that doesn’t work you grab your service book and fix the thing your damn self.

I hate the fact that self reliance has almost completely been removed from this culture. I grew up riding with cats that knew a hundred and ten ways to fix a Harley with bailing wire, soda pop cans and super glue. What happened that gave us this “What if something goes wrong” fear. Something always goes wrong man, it’s how you adapt and overcome that gets it done right?

Ok, on deadline and even know I’d love to keep writing, I have to split. Thanks Cyril for such a creative environment for conversationalists!

“I oversaw a “Prior Year Model Close-Out Sale” at the Sturgis Rally where we sold over 100 motorcycles in 8 days. I’ve heard remarks from some of our “Industry Icons”, “Industry Idiots” would be more accurate, as to how we “prostituted the market” by selling new 2005 & 2006 models at $6000 to $8,000 off normal MSRP when 2008s were being released. This demonstrates the ignorance that dominates our industry. During the same time frame, you could buy a new 2007 Hummer (1 year prior model), Corvette or Cadillac for $10,000 to $12,000 off MSRP, 2006s at $15,000 Off! It is the common practice of smart Dealers and Manufacturers to clear out old inventory at discounts. We were selling bikes that were 2-3 year prior models at discounts less than car, boat and RV Dealers were selling 1 year prior models for. Only an imbecile would call this bad business!”

Ok, SOOOO, Mr Strand, now that you whored your services at Sturgis last year, Let me tell you about something people have been saying about you and the otherdealers. I heard nothing but “wows” about how “cheap” you can buy a 2004.05.06.07 AIH for down by Main Street. Many questions were” why are these so cheap”, “what do we get with this cheap price” (answer is basically a LOT of problems and disappointment) and best of all “Would you buy a Texas Chopper”fully loaded” for $_______?” my answer was always “HELL NO”. AND as far as dealers there with you Mr. Strand selling their bikes as well. That is way different than a dealer having a big sale. Dealers dont get together all at once and liquidate models that are old liek that. SORRY.

“”“Industry Icons”, “Industry Idiots” “”

Sir, you are an INDUSTRY IDIOT. Im 21 and have been here since way befor eyou and I can tell you that YOURE THE IDIOT Sir

“The industry suffered a “popularity overdose”. Good business practices were thrown out the window. Almost everyone involved in this industry over borrowed, over leveraged, over estimated and under achieved. Now the entire industry is poised for one giant enema, a cleansing long overdue!”

I thank you sir for using ALMOST in this comment. My father has not recieved a single loan while in this industry. He believes that expansion is paid for by sales not by loans. I cannot tell you how many people do not understand this. We are a debt free company unlike YOU or anyone around you. We are privately owned and will always be. The cleansing, if you are not careful with your business practices and remarks, will include you sir.

“I don’t expect too many manufacturers or Icons in this industry to agree with this reality, but it won’t matter as most of you will likely not be around much longer anyway… I will!” Charles Strand”

Sir, you will not be around much longer. You are talking smack about the ICONS that keep YOU in business. Watch the way you speak about them for this can bite you in the A$$ and send you to the gutter. My father is an ICON, Arlen Ness (Uncle Arlen as I call him) is an ICON, Mr. Cyril Huze is an ICON, Roger Bourget is an ICON. You sir are a nobody.

DO NOT DOWNTALK THE HAND THAT FEEDS YOU. Learn something about business.

Conrad

So the selfworth that Mr. Strand shows is nothing more than a lame excuse to put his name on this blog and feel like his worth is so much more.

I do not mean to rant and rave on Mr. Cyrils blogs but I feel my point must be shown to all who read, I can tell my dad holds some emotions back on this subject which I will not do. I have been told by my father to keep it in as much as I can but sometimes, when it comes to such ignorant posts and comments, I must take the time away from my studies and voice my thoughts. Sorry Dad.

I have been with this industry for a long time and am happy to say I will stay with it for a long time. Through all the downfalls and the uprises in sales I will stay. I love riding and I love designing and building, hell I even love the pictures and questions people ask about the bikes my dad (Desperado employees included) and myself build. On the other hand I do not like the over indulged ego maniacs that are in this industry today and I will watch them leave as I make my presence known through Desperado and HOPEFULLY Jeff Nicklus Customs.

I love reading through this and reading my fathers comments as well as others comments. I live 300 miles from home so my only contacts with my dad are usually email (your typical hilarious emails and business related stories) telephone, this blog, and the occasional visit home (like stated occasional, once every few months).

Conrad

LOL– way to invalidate your credibility AND insult your audience, all in your very first sentence!

Sorry- I didn’t bother to read much beyond that gem, but a little tip? Sub-prime financing- or any sort of financing- is easier to find when credit facilities are dealing with known risks, such as Harley and Polaris- companies with either 100+ yrs of product history, or a widely diversified product line.

I can’t imagine the response when Iron Horse is asked to lay out 2,5 & 10 yr market share forecasts and resale depreciation tables for prospective credit facilities; You just can’t generate any meaningful numbers, so don’t even bother to try to compare yourself to Harley and Polaris, let alone GM. A 2008 Hummer, for example, was substantially improved over the 2007 model, hence the large discounts on the 2007’s; Can Iron Horse make that same claim?

As the saying goes, “follow the money”. Had sloppy subprime credit never existed, Iron Horse never would have grown to the size it is now- that’s reality. No one is going to infuse capital into your business model soley on the basis of “well, that’s how it used to be during the boom”;

B of A isn’t talking about YOUR bikes when they mention “american built bikes”, they are talking about Harley and Polaris- entities that absorb financial risk by selling their OWN paper to facilitate credit financing. These are very sophisticated business relationships, actually;

Where is Iron Horse paper? What symbiotic relationships does Iron Horse have with any investment banker? This is the reality of sub-prime financing, and if Iron Horse can’t play in that arena, they should have NO expectation of access to sub-prime financing in the future;

None.

You can personalize it all you wish, but the reality of the situation is this: Too many Iron Horse bikes, too many Iron Horse dealers, and no matter how you try to “market” the mix, too few qualified buyers, ergo demand. Just like every boom/bust cycle since the beginning of time, things will rebound when there is blood in the streets, and good people go out of business and lose everything- sad, but true.

BTW, I see that you do more than sell motorcycles- so good point, you’ll be in business for a long time, but probably just not the Iron Horse business….. Good luck to you in all your ventures, Sir.

-Disclaimer- I worked as an investment banker in a previous life……..

Clark – I worked for one of the larger “Custom Production” companies a few years ago. I was a senior member in the purchasing department of this company and I can assure you it is not possible to build a new motorcycle using all new parts for under $12,000.00. NO WAY. That cost does not include overhead, insurance or labor either. Neither do the materials cost 20K.. Joe Blow on the street buying all new materials at retail prices couldn’t build a bike comparable to a Big Dog, Ironhorse or Desperado for under 25K.

A crate motor for a hot rod car costs the same or less than some of the v-twin motorcycle motors?