MAG Files for Chapter 11

ML512 wrote:

Talked to some guys there last night. Good part, it won't affect Answer, Pro Taper or anything I know of in moto for current contracts or...

Talked to some guys there last night. Good part, it won't affect Answer, Pro Taper or anything I know of in moto for current contracts or employees. Everything they're committed to is going forward, just a restructuring of debt for them.

smit9722 wrote:

I'm sure the new owners will have something to say about that.

Gukamonster wrote:

That article is written pretty well. This part stuck out to me, in a "doesn't look good" way: [i]In order to finance these companies through their...

That article is written pretty well. This part stuck out to me, in a "doesn't look good" way:

In order to finance these companies through their bankruptcy proceedings, MAG has negotiated $135 million in what is called debtor-in-possession (DIP) financing.

DIP financing is money lent to a company pre-bankruptcy, and is typically used to continue normal business operations while the bankruptcy works its way through the legal system.

It should be noted that usually DIP loans like this are given with very strict provisions on how the money can be used. It is important to note too that DIP financing is debt that is senior to any other debt, that is to say, it must be paid back first during any refinancing or bankruptcy arrangement.

This is kind of like flunking out of college with a bunch of student debt, then running up a bunch of credit card debt to take a vacation to "find yourself".

A lot of changes for the worse are likely ahead for those that work for and deal with those companies.

While the investment groups might have altered the "vision" of the original companies, I don't know if you can assign 100% of the blame to just that. There was this nugget in that article also:

Asphalt & Rubber is predicting an industry contraction of roughly 7% for 2017 in the USA, which is noticeable after the relatively flat past years of 2015 and 2016.

This looks like a canary in the coal mine.

ML512 wrote:

Talked to some guys there last night. Good part, it won't affect Answer, Pro Taper or anything I know of in moto for current contracts or...

Talked to some guys there last night. Good part, it won't affect Answer, Pro Taper or anything I know of in moto for current contracts or employees. Everything they're committed to is going forward, just a restructuring of debt for them.

kkawboy14 wrote:

It is impossible for those guys telling you what they told you to know what’s gonna happen. In a chapter 11 all of the creditors will...

It is impossible for those guys telling you what they told you to know what’s gonna happen. In a chapter 11 all of the creditors will dictate what they do. The creditors will want most of the contracts they consider wasteful canceled to save the cash before they take a hit on the debt they are giving up. Chapter 11s are filed to get out of contracts without penalty, to cut debt they owe and to spin off unprofitable ventures, not just to “restructure debt”. Chapter 11s are filed when companies see they are in a death spiral and that is their last resort.

Xeno wrote:

I wonder what caused this fiscal imbalance...:whistle: [img]https://p.vitalmx.com/photos/forums/2017/11/16/225462/s1200_download.jpg[/img]

I wonder what caused this fiscal imbalance...

ML512 wrote:

Talked to some guys there last night. Good part, it won't affect Answer, Pro Taper or anything I know of in moto for current contracts or...

Talked to some guys there last night. Good part, it won't affect Answer, Pro Taper or anything I know of in moto for current contracts or employees. Everything they're committed to is going forward, just a restructuring of debt for them.

kkawboy14 wrote:

It is impossible for those guys telling you what they told you to know what’s gonna happen. In a chapter 11 all of the creditors will...

It is impossible for those guys telling you what they told you to know what’s gonna happen. In a chapter 11 all of the creditors will dictate what they do. The creditors will want most of the contracts they consider wasteful canceled to save the cash before they take a hit on the debt they are giving up. Chapter 11s are filed to get out of contracts without penalty, to cut debt they owe and to spin off unprofitable ventures, not just to “restructure debt”. Chapter 11s are filed when companies see they are in a death spiral and that is their last resort.

TeamGreen wrote:

You mean the Creditor's Attorney's will file a motion for said actions...or there will be requests filed with an arbitrator to trustee...etc. And it goes on...

You mean the Creditor's Attorney's will file a motion for said actions...or there will be requests filed with an arbitrator to trustee...etc.

And it goes on & on & on from there.

newmann wrote:

Amazing what happens when you remove the passion that built it and replace it with greed.

Shenzi wrote:

Somewhere in a small town called Janesville, WI, a bunch of guys are smiling and thinking "we told you so!". You can't keep going on in...

Somewhere in a small town called Janesville, WI, a bunch of guys are smiling and thinking "we told you so!".
You can't keep going on in business if you keep borrowing money to back up your unrealistic programs to beat your competitors by constantly underquoting them, extending credit without insurance, offering consignment programs just to get real estate inside dealerships and never move products on the back end.

I hate to see people lose their jobs and I hope it won't be the case but the new owners will clean house, restructure, liquidate some assets. It's a small industry and it's not growing, the pie wasn't big enough for the 3 big players.

newmann wrote:

Amazing what happens when you remove the passion that built it and replace it with greed.

wfo4ever wrote:

Newmann I totally agree with you on your statement. Greed is the passion now, not motorcycles. I am so glad I am retired. I am 55...

Newmann I totally agree with you on your statement. Greed is the passion now, not motorcycles. I am so glad I am retired. I am 55 and worked in the motorcycle industry for 30+ years and started riding when I was 5 years old. I closed my shop over 5 years ago. It used to be the industry was all owned and run by motorcycle enthusiasts. Everybody rode, raced, owned bikes and loved motorcycles. It was one big happy family for years. Then the greedy "Bean Counters" came along and started buying dealerships, companies, and distributors. Things started changing for the worse quickly. Bean counters did not ride motorcycles and were clueless except for counting beans. I know of many dealerships that were bought up, then they would fire all the long time employees. Bean counters just replace them with people with little or no knowledge of motorcycles at minimum wage. They would sell off must of the inventory of parts and then just order everything. The less inventory the better. I knew of a few dealers that were bought and did not even keep spark plugs in stock. WTF? Then Tucker Rocky and others joined up with the MAG group. Shortly after that Tucker Rocky fired a lot of their sales reps and others. Some of them were long time friends and they were Tucker Rocky sales reps. One of them was with the company for 30 years, was one of their top salesman in the country. They just fired him along with many others. A lot of upper management were fired the day before. The future is not good for the motorcycle industry. The biggest problem for the industry will be the lack of new riders and us old farts that do ride are fading away. Young people could care less about motorcycles these days. They are expensive, dangerous, and too hard to ride with a electronic device in your hand. Sad but true.

newmann wrote:

Amazing what happens when you remove the passion that built it and replace it with greed.

wfo4ever wrote:

Newmann I totally agree with you on your statement. Greed is the passion now, not motorcycles. I am so glad I am retired. I am 55...

Newmann I totally agree with you on your statement. Greed is the passion now, not motorcycles. I am so glad I am retired. I am 55 and worked in the motorcycle industry for 30+ years and started riding when I was 5 years old. I closed my shop over 5 years ago. It used to be the industry was all owned and run by motorcycle enthusiasts. Everybody rode, raced, owned bikes and loved motorcycles. It was one big happy family for years. Then the greedy "Bean Counters" came along and started buying dealerships, companies, and distributors. Things started changing for the worse quickly. Bean counters did not ride motorcycles and were clueless except for counting beans. I know of many dealerships that were bought up, then they would fire all the long time employees. Bean counters just replace them with people with little or no knowledge of motorcycles at minimum wage. They would sell off must of the inventory of parts and then just order everything. The less inventory the better. I knew of a few dealers that were bought and did not even keep spark plugs in stock. WTF? Then Tucker Rocky and others joined up with the MAG group. Shortly after that Tucker Rocky fired a lot of their sales reps and others. Some of them were long time friends and they were Tucker Rocky sales reps. One of them was with the company for 30 years, was one of their top salesman in the country. They just fired him along with many others. A lot of upper management were fired the day before. The future is not good for the motorcycle industry. The biggest problem for the industry will be the lack of new riders and us old farts that do ride are fading away. Young people could care less about motorcycles these days. They are expensive, dangerous, and too hard to ride with a electronic device in your hand. Sad but true.

newmann wrote:

You just summed up the entire motorcycle situation in my small town. All the dealers used to ride and race. They could all bore a cylinder...

You just summed up the entire motorcycle situation in my small town. All the dealers used to ride and race. They could all bore a cylinder and press a crank. The old guy at the Honda dealer was a multi patent holder for tool and die making and built his own dyno before there were motorcycle dynos. He made it from Southeast Texas to the podium at Daytona building Triumphs back in the 60's. He set speed records at Bonneville on a Can Am that he turned the cylinder around on and watercooled. The guys in the back at the Yamaha shop could weld in the gusset kit Yamaha supplied with the warranty replacement frame for your 78 YZ80 that crumbled to pieces. They could also be spotted in the movie On Any Sunday. The Suzuki dealer was a master at tuning stuff for the track. Machining, porting, tweaking...it was like there was a little bit of Mitch Payton at every dealership in town.

Now, it is all bought up and under one 50,000 plus sq ft dealership on prime interstate real estate with elevators and a heli pad on the roof. They have three spark plugs on the shelf for your 6 cylinder Gold Wing and no 1/4 inch or 5/16 bulk fuel hose on a roll. Even sadder was when I posted a mini rant here in regards to my fuel hose dilemma a good portion of the replies posted were bashing me for getting pissy over something as simple as a foot of fuel line. It just proves my point even more.

Lose the passion, embrace the suck.

Derek Harris wrote:

Dirtbikes just don't make money anymore.

Low volume and no reason for families to stick it out since not many pros can make decent money

Derek Harris wrote:

Dirtbikes just don't make money anymore.

Low volume and no reason for families to stick it out since not many pros can make decent money

project racer wrote:

Not just dirt bikes. If a smaller dealer can move 30 units a month of any type ,they are lucky. During the water craft boom in...

Not just dirt bikes. If a smaller dealer can move 30 units a month of any type ,they are lucky. During the water craft boom in the 90's, 100 unit months were the norm in the summer months here for our local mom & pop shop.

It's more of a decline in people interested in motor sports altogether. Powering up the smart phone is as much risk as many take today.

project racer wrote:

Not just dirt bikes. If a smaller dealer can move 30 units a month of any type ,they are lucky. During the water craft boom in...

Not just dirt bikes. If a smaller dealer can move 30 units a month of any type ,they are lucky. During the water craft boom in the 90's, 100 unit months were the norm in the summer months here for our local mom & pop shop.

It's more of a decline in people interested in motor sports altogether. Powering up the smart phone is as much risk as many take today.

wfo4ever wrote:

project racer you are correct and very knowledgeable. Watercraft is what helped keep a lot of dealers going back in the 90's. Unit sales are way...

project racer you are correct and very knowledgeable. Watercraft is what helped keep a lot of dealers going back in the 90's. Unit sales are way down now and are only going to get worse with the lack of no new riders. They want to all be safe and power up the latest Apple X smart phone, android phone, or some kind of electronic device. I used to work in parts at Honda Kawasaki Suzuki West in Tampa, Florida in the 80's and early 90's. We were a full line dealer but were a motocross based shop and business was great. Dade City MX and Crooms were less than an hour away. We stocked lots of MX inventory. If a customer needed a part for their MX bike we usually had it in stock, we always had the latest MX gear, and yes, we even had rolls of different size fuel line for newmann, We had a very good base of motocross customers and gave them all discounts. I used to have the pleasure of dealing with some of the nicest people that were our customers. I bet you might know a Mr. Haynes, he was always a pleasure to deal with. He was one of my favorites. We also sponsored Vince Devane, Ricky Hampshire, the Youngblood twins, and many others. I also raced at Dade City, Crooms, and lots of other places in that area. Memories...

Ferro wrote:

Is there a possibility that the positive that will come from this is that when the equity groups and bean counters that have taken everything over...

Is there a possibility that the positive that will come from this is that when the equity groups and bean counters that have taken everything over divest their interest and walk away, from the ashes passionate individuals and small businesses will rise again?

Shenzi wrote:

Somewhere in a small town called Janesville, WI, a bunch of guys are smiling and thinking "we told you so!". You can't keep going on in...

Somewhere in a small town called Janesville, WI, a bunch of guys are smiling and thinking "we told you so!".
You can't keep going on in business if you keep borrowing money to back up your unrealistic programs to beat your competitors by constantly underquoting them, extending credit without insurance, offering consignment programs just to get real estate inside dealerships and never move products on the back end.

I hate to see people lose their jobs and I hope it won't be the case but the new owners will clean house, restructure, liquidate some assets. It's a small industry and it's not growing, the pie wasn't big enough for the 3 big players.

Ferro wrote:

Is there a possibility that the positive that will come from this is that when the equity groups and bean counters that have taken everything over...

Is there a possibility that the positive that will come from this is that when the equity groups and bean counters that have taken everything over divest their interest and walk away, from the ashes passionate individuals and small businesses will rise again?

wfo4ever wrote:

project racer you are correct and very knowledgeable. Watercraft is what helped keep a lot of dealers going back in the 90's. Unit sales are way...

project racer you are correct and very knowledgeable. Watercraft is what helped keep a lot of dealers going back in the 90's. Unit sales are way down now and are only going to get worse with the lack of no new riders. They want to all be safe and power up the latest Apple X smart phone, android phone, or some kind of electronic device. I used to work in parts at Honda Kawasaki Suzuki West in Tampa, Florida in the 80's and early 90's. We were a full line dealer but were a motocross based shop and business was great. Dade City MX and Crooms were less than an hour away. We stocked lots of MX inventory. If a customer needed a part for their MX bike we usually had it in stock, we always had the latest MX gear, and yes, we even had rolls of different size fuel line for newmann, We had a very good base of motocross customers and gave them all discounts. I used to have the pleasure of dealing with some of the nicest people that were our customers. I bet you might know a Mr. Haynes, he was always a pleasure to deal with. He was one of my favorites. We also sponsored Vince Devane, Ricky Hampshire, the Youngblood twins, and many others. I also raced at Dade City, Crooms, and lots of other places in that area. Memories...

project racer wrote:

I remember Honda West. Actually have a Newman type story when I was in there about three months ago. It's some conglomerate mega brand store now...

I remember Honda West. Actually have a Newman type story when I was in there about three months ago. It's some conglomerate mega brand store now. Not the same as it was.

Wanted a 3.50-8 tube for a Honda Z50. They only made those bikes for about 50 years. I know they were very unpopular. No tube, but they got on their parts locating network, and said there was one available in Sarasota, if I did not mind driving an hour each way.

I drove down Nebraska avenue, to a little hole in the wall shop, where they had just about every size tube stocked that you can imagine.

Rode all of those places you mentioned. My older brother worked with Herbie Youngblood ,the twins dad. Herbie would drag in beat bikes for my brother to weld back together.

Underground wrote:

Man this is all pretty sad. Most people writing here remember a time of going into your local bike shop and being able to get want...

Man this is all pretty sad. Most people writing here remember a time of going into your local bike shop and being able to get want you needed, most times in stock, from the guy behind the counter who most probably knew you and didn't need to look up the computer to find the part number and it's location on the parts shelf.
Now nothing is stocked because that's how you save money these days???, requires a deposit before they will order it for you so a trip in for that at the start of the week and then there's a better than average chance the distributor doesn't stock it either because they are saving money too, so it has to go on back order! And when the darn thing turns up it's the wrong part because peach fuzz behind the counter has ordered the wrong part.
My thoughts,
Everybody discounts heavily so you have to sell 100 to make what used to be made in 10
Money is tight from tight margins so wages are tight and the guys with the experience and passion have moved on to better paying gigs
Nothing is stocked anymore. Can't sell what you don't have.
Costs are so high for everything (purchase price, maintenance, racing costs, track fees, limited free riding spots), people move on to other entertainment or sports.

MX558 wrote:

I live in N E IL and back in the 70s the dealers didn't stock shit and took forever to get . Now, there were a...

I live in N E IL and back in the 70s the dealers didn't stock shit and took forever to get . Now, there were a lot of dealers around but they sucked . Now if you need something they have it in usally 2 days . If you needed a rare part back then you were down all summer , today probably find it in 3 days online . As far as parts go I'll take today over yesteryear any day

MX558 wrote:

I live in N E IL and back in the 70s the dealers didn't stock shit and took forever to get . Now, there were a...

I live in N E IL and back in the 70s the dealers didn't stock shit and took forever to get . Now, there were a lot of dealers around but they sucked . Now if you need something they have it in usally 2 days . If you needed a rare part back then you were down all summer , today probably find it in 3 days online . As far as parts go I'll take today over yesteryear any day

BobPA wrote:

Apparently the grass was greener in the 70's. Guys at every shop could widdle a set of engine cases from an oak tree within a half...

Apparently the grass was greener in the 70's. Guys at every shop could widdle a set of engine cases from an oak tree within a half hour, and there were enough parts stocked to build 3 complete bikes, just sitting on the shelves. If I order a part from WPS or Parts Unlimited before 3pm it is here the following day. Rarely it will take 2 days. Any part from any OEM manufacturer is 2 days away, barring backorder, I find it hard to believe the 70's shops had that kind of capability.

Shops charge a deposit on parts because people order shit and disappear all the time. Then a shop is stuck with a completely useless piece of inventory. It is not rocket science.

MX558 wrote:

I live in N E IL and back in the 70s the dealers didn't stock shit and took forever to get . Now, there were a...

I live in N E IL and back in the 70s the dealers didn't stock shit and took forever to get . Now, there were a lot of dealers around but they sucked . Now if you need something they have it in usally 2 days . If you needed a rare part back then you were down all summer , today probably find it in 3 days online . As far as parts go I'll take today over yesteryear any day

BobPA wrote:

Apparently the grass was greener in the 70's. Guys at every shop could widdle a set of engine cases from an oak tree within a half...

Apparently the grass was greener in the 70's. Guys at every shop could widdle a set of engine cases from an oak tree within a half hour, and there were enough parts stocked to build 3 complete bikes, just sitting on the shelves. If I order a part from WPS or Parts Unlimited before 3pm it is here the following day. Rarely it will take 2 days. Any part from any OEM manufacturer is 2 days away, barring backorder, I find it hard to believe the 70's shops had that kind of capability.

Shops charge a deposit on parts because people order shit and disappear all the time. Then a shop is stuck with a completely useless piece of inventory. It is not rocket science.

kkawboy14 wrote:

How long until Amazon can get parts to people the same day?