Originally Posted by Torrot NA - Mark Berg
Very true Mr Hadfield. The "managing directors" at the time were taking the profits of the 2018 model line up and using that money for other entities that they continued to purchase while the whole time the investing company BTC sat by and watched. It was crazy.
2017 (model year 2018) saw 40 million in sales (30 million in GG and 10 million in Torrot (Muvi, Ekids). However, the Muvi wasn't ready for market and had over 2 million in warranty claims (that isn't a good percentage). Plus out of that 40 million, they transferred over 6 million to a helmet project in Atlanta (my blood pressure still rises over that one as many of us told them time and time again....don't do it!). That project has had ZERO return of investment.
They paid a pro basketball player to be an ambassador, they sponsored a southern Spanish soccer team, they sponsored the Electric Formula one racing. The list goes on and on, all in an effort to create a Torrot Electric Europa hot commodity ripe for new investment.
After the fire (and a dislike for the Catalonian movement happening) they moved the parts warehousing/distribution to the middle of Spain. So ready for this? Bikes produced were shipped 3 hours inland to their new 3rd party warehouse, then loaded in shipping containers only to be shipped the 3 hours back to Barcelona to the port. They set up retail showrooms in both Barcelona and Madrid for the Torrot Muvi's. One bike model for an entire store..... They acquired or bought several other entities that are now in bankruptcy or closing.
Their thought was to make the entire company look "tech" and attract investors. Some financial institutions valued the company at 150 million plus so they proceeded to grow the entire tech side using GG money in the thoughts the "new investment money" will come. Guess what....IT DIDN'T. All the San Fran tech money didn't want to be involved with a "motorcycle manufacturer" that was also into tech and green energy.
By the fall of 18 when the original investment company BTC realized there was no new money coming it was too late, way too late. Bills had stacked up, the helmet company in Atlanta had HUGE issues with no sales, the other companies were stagnant or dead and the Torrot Muvi was now a product 3 years old with no changes or revisions. No money was left to pay bills, or buy parts to build GasGas bikes that were marketable and profitable.
Spanish labor laws and unions make it VERY difficult to lay off or fire people, quckly. The employee has GREAT coverage over there. Unlike here, if a company is struggling and you decide you need cutbacks, it isn't that easy and takes months plus pay. The company continues to get in deeper financial trouble while negotiating with the government.
There is more to the story on the KTM "collaboration" but i can't elaborate on that segment.
I tell my team to hold our heads high here. We did everything we could with the tools and what little financial help from Spain we had. 2016, the first year we did 2.5 mil in sales, 2017 we went to 5.2 million with only trials and two displacements in enduro. 2018 orders were for over 6.5 million but the bikes never came.
Sadly by Aim Expo of 2018, things weren't looking too good and we continued to hope and pray Spain would figure out a way so we could rebound. Jubal went a different career direction as we didn't have enough for him. By midsummer of 19' Rod saw the writing on the wall and took another position (don't blame him at all, he held on as long as he could).
The 2019 racing season saw us "limp" along and all of our riders were VERY good about it and understanding of the situation but it stunk. Stunk not being able to give 100%. Our regional program was a huge success and we had championships all over the USA. Our School of Champions riders did great too, plus our 3 pro riders on the enduro side, and 4 on the trials side did a GREAT job with very little budget. Now to see all of them on different product and gone....its heartbreaking. We created some great relationships with all of them. I honestly do wish them the best success with their new brands, but dang does it sting!
Seeing dealerships we worked with now taking on the competitors product is even harder to swallow, but business is business and we are in no position to make those dealerships profitable.
KTM will do things differently for sure, they have the marketing tools, the financial backing and the team to make it happen. No, it won't be the same GasGas...at all, but i think it will succeed.
There will be a different manufacturer that steps into the current "GG Enduro platform". I met with one of the two contenders last week. Parts for enduro will NOT go away. Announcements will be coming in the months to come.
We can't change the past and all the mistakes that were made but we learn from the experience.
We want to THANK EACH AND EVERY PERSON that has supported GasGas through the years. Without you, we wouldn't have loved our job so much!
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