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  1. #1
    hors category TandemGeek's Avatar
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    Burley Inc., Sold To New Owner

    Based on information from reliable sources, Burley Design, LLC (formerly Burley Design Cooperative) was acquired by a local Eugene, OR, investor this week.

    The new owner began implementation of a restructuring plan Friday, Sept 8, which includes work force reductions and scaling back product offerings to focus on Burley's original core competency, trailers.

    Again, according to sources, Burley Design LLC. will terminate its non-trailer business activities including bicycle, recumbent, and tandem fabrication as well as the production of soft goods like rainwear.

    A press release will likely be forthcoming in the near future.
    Last edited by TandemGeek; 09-09-06 at 01:24 PM.

  2. #2
    Sore saddle cyclist Shifty's Avatar
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    Press release is out with details in the Eugene newspaper today. I'll post it as soon as it comes up on their website. The new owner is a good guy, should make the most of this bad situation. Article confirms the end of Burley bicycles, business will focus on trailers only.
    Those voices in your head aren't real, but they have some great ideas

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  4. #4
    chromoly
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    trailers only

    Participants in this forum will probably be interested to hear that the new Burley will manufacture trailers only. I wonder if the new owner realizes that the profit margin for Burley trailers was obliterated by the same folks who dismantled the cooperative from within? You can read a brief bio of the buyer at the following site:

    http://www.summitbankonline.com/abou..._of_directors/

    I will be among those interested to see if the rest of the Burley line, including tandems, trailercycles and recumbents, reappears somewhere, sometime. It seems doubtful, and that counts as a real loss to the cycling community.

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    Wow, we probably have one of the last Tosa tandems ever made , having taken delivery on Aug. 25th.

    I wonder what this means for Burley's lifetime frame warranty? We're greatful to have the bike, as it's an amazing value, but I wonder if Burley Design LLC and it's trailer only business will honor any warranties. Seems like they won't have the equipment or staff to fix bike frame issues, and would only be able to replace broken frames if they had overstock on hand?

  6. #6
    hors category TandemGeek's Avatar
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    Given that Burley has been acquired instead of going out of business or bankrupt, I would expect that the warranty should still be valid but, as to how it might be satisfied, more details about the extent of the restructure would need to be known.

    On the surface, the new owner's strategy is sound but conservative... pretty much what I'd expect looking at his background. It's a back-to-basics approach that will likely be accompanied by further streamlining, leveling throughput, and focusing on the supply chain and dealer network noting that I think they've still got a pretty handle on their customer service. In many respects, this will be facinating to watch and -- fingers crossed -- will be just the next chapter in the Burley story.

    Again, in my perfect world, I'd would very much like to see Mr. Coughlin's projection of returning to profitabilty by next March pan out. I'd also like to see him hold onto at least the tandem production assets with an eye towards re-entering the made in the USA tandem market with fewer models and a more rationale (and sustainable) pricing strategy in the future once the trailer product line is fully recovered.

  7. #7
    pan y agua merlinextraligh's Avatar
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    Quote Originally Posted by TandemGeek
    Given that Burley has been acquired instead of going out of business or bankrupt, I would expect that the warranty should still be valid but, as to how it might be satisfied, more details about the extent of the restructure would need to be known.

    .
    I wouldn't be too sure about that. The brief article above says he purchaed the assets of Burley, which is different from simply buying the company. Depending on how the deal was structured the new owner of the Burley name may not have acquired any of the liabilities, including warranty liabilities. As you point out, you need more details before you could give an actual legal opinion, but sales of assets usually are structured not to include liabilities. Given that my Burley is 14 years old, I don't have much skin in the game.

    However, even if the asset sale was structured to allow the new owner to avoid Burley's liabilities, the new Burley may choose to continue to honor warranty claims as a customer relations matter.

  8. #8
    hors category TandemGeek's Avatar
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    Quote Originally Posted by merlinextraligh
    I wouldn't be too sure about that. The brief article above says he purchaed the assets of Burley, which is different from simply buying the company.
    However, if you read further in the article it goes on to note, "Coughlin bought Burley's equipment, receivables and payables, assumed all liabilities and paid off debts with its major creditors. He said he also paid off the debt on surplus property Burley owns near its manufacturing building."

    The "flavor" of his acquisition is truly that of a "white knight", noting that he wasn't even in the picture until July, which was after rumors of Burley's acquisition discussions with Upstream21 were circulated. He's put a lot of personal equity into Burley, even going so far to make sure at least a portion of the $2M in withheld dividends could be addressed through the sale of real estate holdings that he also secured as part of his acquisition. Although not mentioned in his bio, I'm told Mr. Coughlin is also a cycling enthusiast.

    Again, time will tell what the future holds.
    Last edited by TandemGeek; 09-12-06 at 01:59 PM.

  9. #9
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    so does this mean that my burley fox hollow is worthless? with what i paid for it (and it's a lovely frame) that would be disheartening! and is the paso doble tandem i've had on order for 5 weeks actually going to get built or did i just waste my summer waiting? if they cancel THAT on me, then i've bought my last burley product. my loyalty to a bike brand goes as far as they are willing to help their customers.

  10. #10
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    Quote Originally Posted by DerRuder
    so does this mean that my burley fox hollow is worthless? with what i paid for it (and it's a lovely frame) that would be disheartening! and is the paso doble tandem i've had on order for 5 weeks actually going to get built or did i just waste my summer waiting? if they cancel THAT on me, then i've bought my last burley product. my loyalty to a bike brand goes as far as they are willing to help their customers.
    I was very worried something like this was going to happen to us, with the Burley rumors floating around the time we placed our order in early July. With this said, Burley delivered our tandem in just under 6 weeks.

    I'd give your dealer a call, and have them find out from Burley if you can expect your tandem. I'd imagine that if you've been waiting for 5 weeks there is a good chance the frame was made, ect. However, the article basically said they've shut down everything non-trailor related, so I guess it really depends on how far along they were with your bike.

    If anyone hears about their frame warranty, please let us know. While I'm not really expecting it at this point, it sure would be nice if the new owner honored it, as it's good for the lifetime of the original owner (if I'm correct?).

  11. #11
    hors category TandemGeek's Avatar
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    Quote Originally Posted by DerRuder
    so does this mean that my burley fox hollow is worthless? with what i paid for it (and it's a lovely frame) that would be disheartening! and is the paso doble tandem i've had on order for 5 weeks actually going to get built or did i just waste my summer waiting? if they cancel THAT on me, then i've bought my last burley product. my loyalty to a bike brand goes as far as they are willing to help their customers.
    I don't know why your (Edit: fox hollow) would be worthless. The intrinsic value certainly hasn't changed and, if you are basing the perceived change in value on what it might be worth at resale, that really shouldn't be adversely affected either, noting that a Burley lifetime frame warranty (and almost all other bike manufacturer warranties) is only valid for the original purchaser and not transferrable.

    As for the Paso Doble, you'll have to contact your dealer on that one and I certainly wouldn't write off the Burley brand in the future. Notwithstanding the recent business problems, their products and customer support have been excellent for as many years as I've paid any attention to the tandem industry.

    Again, be patient and take all of the breaking news in stride. No sense in getting worked up over things you have absolutely no control over.

    Edit: Originally mis-identified the fox hollow as one of Burley's recumbent models, not an upright road bike. Of course, with 16 different non-tandem models in their former line-up and no rhyme or reason to the naming regime, it's easy to lose track.
    Last edited by TandemGeek; 09-09-06 at 09:12 PM.

  12. #12
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    At this point, please keep the rumors to a minimum. More information should be avail on Monday and Tuesday. There is no information on what Burley will do with all of the open orders that they have in the system. Also, dealing with the warranty issue. There are basically 2 choices to offer. 1) to cover the warranty with a new frame. 2) give the dealer a credit to pass onto the the customer. Either way the consumer will be taken care of.

    Give Burley a chance to figure out these details out, then call your local dealer to get accurate answers.

  13. #13
    Two at a time is more fun
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    My wife and I took delivery of our Tosa 5 weeks after being ordered, a week ahead of schedule, on August 5th. So far have 560 miles on it, and adding 62 more tomorrow. We got the tandem bug on a vacation to San Francisco, where we rented a Burley tandem and biked the bridge and some of the surrounding area. We certainly hope Burley gets back into the bike business sometime in the future due to the great value for the money in their products.
    Out of all the things I've lost, I miss my mind the most.

  14. #14
    pan y agua merlinextraligh's Avatar
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    Quote Originally Posted by TandemGeek
    However, if you read further in the article it goes on to note, "Coughlin bought Burley's equipment, receivables and payables, assumed all liabilities and paid off debts with its major creditors. He said he also paid off the debt on surplus property Burley owns near its manufacturing building."

    The "flavor" of his acquisition is truly that of a "white knight", noting that he wasn't even in the picture until July, which was after rumors of Burley's acquisition discussions with Upstream21 were circulated. He's put a lot of personal equity into Burley, even going so far to make sure the $1.2M of the former cooperatives membership's withheld dividends could be addressed through the sale of real estate holdings that he also secured as part of his acquisition. Although not mentioned in his bio, I'm told Mr. Coughlin is also a cycling enthusiast.

    Again, time will tell what the future holds.
    the Devil truely is in the details. If he acquired the liabilities as well as the assets, that's obviously good for current owners. As a business decision, it seems rather stupid however, on his part. Arrange an asset acquistion either through a bankruptcy or otherwise and you get the assets and avoid the liabilities, if you structure it correctly. I can't imagine there were so many suitors that he needed to jump in and acquire the entire company liabilities and all, as opposed to scarfing off the assets in a liquidation.

  15. #15
    GO Floyd Landis, Go! Linda & Lew's Avatar
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    Burley buy

    Quote Originally Posted by DerRuder
    so does this mean that my burley fox hollow is worthless? with what i paid for it (and it's a lovely frame) that would be disheartening! and is the paso doble tandem i've had on order for 5 weeks actually going to get built or did i just waste my summer waiting? if they cancel THAT on me, then i've bought my last burley product. my loyalty to a bike brand goes as far as they are willing to help their customers.
    As for myself....I'm glad to see that Burley still exists.....I'm really getting tired of all the jobs going
    outside the USA.
    If I were in your shoes I would check with Burley and see if another dealer in your area has your size
    etc....My wife and I just did that with our Cannondale Tandem (thank you TandemGeek and Tandems
    East). We will pick up our new tandem in about a week. I hope your dealer comes thru for you.

  16. #16
    hors category TandemGeek's Avatar
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    Quote Originally Posted by merlinextraligh
    As a business decision, it seems rather stupid however, on his part.
    Classic white knight... and I suspect it has nothing to do with being ill advised or short sighted.

    A cursory review of his bio and past SEC filings suggest that he has the wherewithal, knowledge, and experience to generate a healthy ROIC in Burley Design LLC through a disciplined approach to restructuring the business.

    Moreover, his motiviation and early actions suggest that he is also interested in "doing the right thing" for past and current employees of Burley and the Eugene community.

  17. #17
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    Burley situation

    The new owner of Burley sounds like someone that might be able to make a difference after several years of very poor management. He brings to the table some very impressive academic and business credentials; he also seems to be off to a good start by being forthright with the media (again, something that was sorely missing in years past). And as a added plus, he does understand the passion of cycling (the bank he owns has a Senior Financial Officer that is a rabid cycling enthusiast).

    Regardless, a very sad situation for a large group of people in the production end of things - I understand probably more of the same to come in terms of layoffs (one ex-sewer told me that many of the remaining sewers for trailers are now considered 'temps', with a limited time of employment). Like a lot of these kinds of deals in corporate America, it always seems like it's the wrong group of workers that get the ax, while a few at the 'other end' of the business continue to take advantage of the 'worker bees'. In fact, this was a compelling reason for the original formation of cooperatives - it's just too bad the model, in this case, was derailed and led off-track.

    I don't think anyone should sweat the warranty end of things at this point with their Burley product. At least with new capital, your chances of getting problems resolved are much better than the outlook was 6 months ago. And I don't think anyone in the history of these 'Burley' posts over the past year were ever critical of bad product; I don't think this was ever an issue. Burley products could always be counted on to be some of the best "Made in America" cycling product(s) you could get your hands on - I rarely heard of people having issues with the longevity of their Burley products (which means you probably won't ever need to take advantage of a 'warranty'). It'll be interesting to see what the next few years hold in maintaining the "Made in America" label, regardless of current promises.

    As for the post by one member of the group that felt like they owned a "worthless" Fox Hollow (which is a single bike; not, as TandemGeek called it, a 'bent'), I would think your bike (and others owned by members of the Bike Forum) would now be 'worth' more because of their rareity!

    Ron

  18. #18
    Co-Mo mojo
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    Ron is correct

    I'll second Ron's observations about Burley quality. We are in an active hunt for a new tandem, and if a new Paso Doble of the right size shows up we will seriously consider it regardless of the current situation in Eugene. Our Burley rain jackets are second to none, and our five year old trailer is absolutely the best product on the market and seems nearly bombproof. As cynical as we have become these days, I am optimistic.

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    I will have to call my dealer Monday and hopefully I can still get the tandem. Maybe we can get a clearance price! I'd like to think my Fox Hollow still has value, well the parts on it certainly do, but really I suppose it's going to depend on how they keep up the warranty? It's not quite the same as if the company went under - I owned an Ibis when they went, and had a hard time selling it about a year later, that's why I freaked a little. The Burley's had great value - great frames, great craftmanship, very reasonable prices. My Burley road bike is as nice as or nicer than any other steel frame out there, bar none.

  20. #20
    Senior Member zonatandem's Avatar
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    Even without a warranty your Burley product (whether tandem, single, 'bent, yurt, trailer, raingear or Piccolo) will continue to have real value. They were noted for quality and folks remember that.
    Hopefully the 'white knight' will have continued success with the trailers. Statement was that Burley would be out of the bike business *for now*, which leaves the door open a crack for the future.
    In the meantime, other manufacturers will be taking up the slack created by this change in ownership.
    We wish them the best!

    Rudy and Kay/zonatandem

  21. #21
    Junior Member 24theroad's Avatar
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    SEPTEMBER 11, 2006 -- EUGENE, OR (BRAIN)—All 104 employees at Burley Design learned on Friday that the company had been sold to local businessman Michael Coughlin, and that under the new ownership, they were being—at least temporarily—laid off, according to The Register-Guard.

    Sixty-five will return to their jobs today, while 39 positions will be eliminated.

    Terms of the sale were not disclosed, though Coughlin did discuss his plan to refocus Burley on bicycle trailers and move away from tandems, recumbents and road bikes. He said that the financially troubled company can be profitable again by March.

    Burley converted in June to a privately held corporation after 28 years as a worker-owned cooperative. Former members of the co-op were issued stock certificates, though it's not yet clear how much the shares are worth.

  22. #22
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    Burley situation

    I tried to call Burley on Friday and this Monday, but the phone just rings ... any others had luck getting through? Also, a friend in sewing that was one of the 39 employees that won't be returning after being terminated Friday, said that many of the remaining sewers, etc. were told that they would be temps, and can expect to lose their jobs by the end of the year as well. But it sounds like they want to try and keep some of the business in the Oregon area.
    Ron

  23. #23
    Senior Member mtbcyclist's Avatar
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    Truely a sad day.... I can understand getting out of the standard bike market becuause there are SO many manufactures of good road and/or mountian bikes. I don't understand getting out of tandems and recumbants. Both are nitch markets where Burley made a heck of a product. I am the proud owner of a 05 Rivazza and I love it, and is one of the best made bikes I have owned. I have owned a few bikes in my 17 years of cycling.

  24. #24
    hors category TandemGeek's Avatar
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    Quote Originally Posted by mtbcyclist
    I don't understand getting out of tandems and recumbants.
    At least with the tandems, and in particular the higher end models like your Rivazza, I suspect (and have for a long time) that they were most likely taking a loss on every one they sold once you factored in their total unit cost.


    Latest news item from the Register Guard:
    http://www.registerguard.com/news/20...ction=business

    Nothing Earth shattering, mostly minor clarifications to the first article and some additional "perspectives".
    Last edited by TandemGeek; 09-12-06 at 12:58 PM.

  25. #25
    on your left...... steelboy's Avatar
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    here's the deal from the horses mouth,(i made all frames there, recumbent, tandems, single and commuter...)we, the bike team was lead to believe that the new owner would continue with bikes, hell we broke a possible sale to another source because we believed this guys would still be making bikes...no so,, as for your warranty...good luck, all alignment fixture's, welding and brazing, powder coating, raw unfinished frames all will be sold, we knew it was coming, but the way they did it was very screwed, i just got done with a touring bike and was told to leave it and go upstairs, "your layed off" , and escorted out of the building.... no folks, only the trailers are there...sorry about this, my self, if my frame needs warranty(it wont) but if it did i might just toss it at the new owner...i feel proud knowing that you are all very happy with your bikes...i wish i felt the same pride a had a week ago.....again thanks for choosing a american built bike even if it was such a short ride...........

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