It's been around six months or so since thing began to precipitate in the case of Spanish trial and off-road bike manufacturer Gas Gas. First starting to accumulate debts, and then laying off some workers, going bankrupt and finally entering liquidation, Gas Gas hasn't been faring too well in the last year or so.
Listing the business for sale and trusting that the liquidators will be able to find an investor is now the only hope to see more Gas Gas bikes in the future.
Several employees at the Salt plant simply refused to give up and asked the liquidator to allow them to try and sell the bikes that had already been manufactured, and maintain a flow of spare parts for the existing customers.
Since this effort IS aimed at trying to ease the burden off Gas Gas' shoulders, permission was granted, but this will not put the company back on the floating line. Gas Gas needs around €30 million ($32.5 million) to cover the money due, let alone provide funds for operational costs.
It's not the first time when KTM says they WON'T do a thing, only to do that very thing months later, sometimes even having had this secret very well kept for a while. Can't blame the guys, it's a tough world out there, and the less the competition knows about your plans, the higher the chances to catch then wrong-footed.
However, this story is not entirely about KTM, but about "certain Asian investors." KTM has its own role in this, of course, but I sincerely doubt that Mattighofen will buy the whole Gas Gas business.
It is known that Gas Gas has been contacted by Asia potential investors/buyers. Whether they are Indian or Chinese is a less important detail. What REALLY matters is the fact that we can already see the same pattern in Husqvarna's case.
Provided Gas Gas does not just lie down and die because nobody makes a move to save this business, two interesting scenarios come to mind.
Even though we don't know what Hero bought exactly, it's easy to assume that they got whatever EBR was already working on in the small-displacement and middleweight segment, the very ones Hero makes the most money out of.
The rest of the company is still up for grabs, and for a smaller price, that makes it even more palatable for anyone willing to take a shot at motorcycle glory. If the stories are true, EBR is still ready to rock'n'roll and start producing bikes right away. The new owner(s) can even decide to create new machines from scrap, trying to add as much profitability to the business as possible.
If such a scenario comes to fruition in Gas Gas' case, we can expect that the brand and its name get under the KTM umbrella, with the Austrian manufacturer adding trial bikes to the range. The new Gas Gas bikes are being manufactured in Mattighoffen with a wide range of engines to choose from.
Casting new covers with the Gas Gas logo and installing them on a suitable KTM or Husky engine is a stroll in the park for KTM.
The Spanish factory is closed, and together with the rest of the assets and the workforce that's already been laid off, the guys in Salt (Gerona) can only wait for other investors willing to pick up the leftovers and build a new motorcycle.
And this is where the Asian investors might step in. The Chinese maker Shineray bought everything KTM left behind in Varese and employed the former workers once more. Shineray got hold of the old Italian brand SWM and is now preparing to launch no less than SEVEN new bikes this year.
Husqvarna technology with SWM badges and Chinese money might be a new kind of successful recipe. If the bikes manage to retain the European spirit and don't go cheap and crappy, SWM might just make it.
And since Gas Gas doesn't seem to be exceedingly happy with KTM around, we can anticipate that, if the Spaniards still have a say in this, KTM will have a hard time laying a hand on anything. After all, setting tires ablaze, hanging a KTM mannequin outside a window and displaying big signs reading, "KTM, this is not your home" says pretty much all there is to be said...
Again, if Gas Gas has anything to do with the sale of the company, they are clearly going to try and keep things in their backyard. Spain is already confronting one of the highest unemployment rates in Europe, and the Catalans will battle until the end to retain the jobs at Gas Gas.
They might even convince the liquidator to see this goal as a most important one for the whole region, which is, erm... true. If an Asian investor has the money to buy Gas Gas and promises they will retain the facility and jobs in Girona, this might weigh quite a lot in the negotiations.
The Gas Gas facility is also ready to roll, and more than Husqvarna's was before Shineray revived it. This might not seem too important to some, but try to imagine the huge difference between these two scenarios.
On one hand, the troubles of finding a suitable place o building one, equipping it with the necessary tools, hiring and training personnel and then start production. On the other hand, notifying all the workers previously employed that they are expected back to work and greeting them in one week's time with a cup of coffee for briefing. Sort of makes sense now, doesn't it?
The brand's notoriety also helps the investors push bikes around as if nothing happened (more or less), and if the machines prove to be reliable and are offered for affordable prices, few customers will care where the money comes from.
Seeing how patriotic the guys at Gas Gas are, I tend to believe that the second scenario has better odds. Of course, this is all speculative anticipation, and only time will tell if and in which way the motorcycle world retains Gas Gas.
Several employees at the Salt plant simply refused to give up and asked the liquidator to allow them to try and sell the bikes that had already been manufactured, and maintain a flow of spare parts for the existing customers.
Since this effort IS aimed at trying to ease the burden off Gas Gas' shoulders, permission was granted, but this will not put the company back on the floating line. Gas Gas needs around €30 million ($32.5 million) to cover the money due, let alone provide funds for operational costs.
KTM said "no," but we know better
The initial rumors saw KTM stepping in to acquire Gas Gas, but Mattighofen officials denied them, saying that there was no interest whatsoever in clawing even a part of the Spanish manufacturer.It's not the first time when KTM says they WON'T do a thing, only to do that very thing months later, sometimes even having had this secret very well kept for a while. Can't blame the guys, it's a tough world out there, and the less the competition knows about your plans, the higher the chances to catch then wrong-footed.
However, this story is not entirely about KTM, but about "certain Asian investors." KTM has its own role in this, of course, but I sincerely doubt that Mattighofen will buy the whole Gas Gas business.
It is known that Gas Gas has been contacted by Asia potential investors/buyers. Whether they are Indian or Chinese is a less important detail. What REALLY matters is the fact that we can already see the same pattern in Husqvarna's case.
The Husqvarna pattern, simplified
Well, Husky was first bought by BMW, who then sold it to KTM. The Austrians retained the brand and whatever engineering, know-how and intellectual property they thought they needed, closed down the factory in Varese, Italy, and laid everybody off. The new generation of Husqvarna motorcycles are being built in Austria, in KTM's facility at Mattighofen. Case closed.Provided Gas Gas does not just lie down and die because nobody makes a move to save this business, two interesting scenarios come to mind.
KTM buys the juicy part of Gas Gas, leaves the rest
One is closer to what happened very recently in the first auction for the Erik Buell Racing assets, itself a manufacturer in receivership. Indian giant Hero Motocorp showed up, picked up certain intellectual property that belonged to the EBR R&D department, and then took off. They also said they had no future claims on EBR.Even though we don't know what Hero bought exactly, it's easy to assume that they got whatever EBR was already working on in the small-displacement and middleweight segment, the very ones Hero makes the most money out of.
The rest of the company is still up for grabs, and for a smaller price, that makes it even more palatable for anyone willing to take a shot at motorcycle glory. If the stories are true, EBR is still ready to rock'n'roll and start producing bikes right away. The new owner(s) can even decide to create new machines from scrap, trying to add as much profitability to the business as possible.
If such a scenario comes to fruition in Gas Gas' case, we can expect that the brand and its name get under the KTM umbrella, with the Austrian manufacturer adding trial bikes to the range. The new Gas Gas bikes are being manufactured in Mattighoffen with a wide range of engines to choose from.
Casting new covers with the Gas Gas logo and installing them on a suitable KTM or Husky engine is a stroll in the park for KTM.
The Spanish factory is closed, and together with the rest of the assets and the workforce that's already been laid off, the guys in Salt (Gerona) can only wait for other investors willing to pick up the leftovers and build a new motorcycle.
And this is where the Asian investors might step in. The Chinese maker Shineray bought everything KTM left behind in Varese and employed the former workers once more. Shineray got hold of the old Italian brand SWM and is now preparing to launch no less than SEVEN new bikes this year.
Husqvarna technology with SWM badges and Chinese money might be a new kind of successful recipe. If the bikes manage to retain the European spirit and don't go cheap and crappy, SWM might just make it.
Another Asian group, not necessarily Shineray, could replicate the scenario with whatever is left of Gas Gas after KTM buys what they need.
But that is only in case Gas Gas is willing to sell anything to KTM! Of course, decision is no longer 100% in Gas Gas' hands, since they sort of called it quits prior to entering liquidation, but if better prospects are in sight, the liquidator may lend an ear to the Spaniards.And since Gas Gas doesn't seem to be exceedingly happy with KTM around, we can anticipate that, if the Spaniards still have a say in this, KTM will have a hard time laying a hand on anything. After all, setting tires ablaze, hanging a KTM mannequin outside a window and displaying big signs reading, "KTM, this is not your home" says pretty much all there is to be said...
KTM is denied acquisition, and Gas Gas is sold in its entirety to an Asian (or other) investor
MV Agusta seems to have tried to buy at least a piece of Gas Gas, but reports say that the house of Schiranna got more or less the same hostile response from Gas Gas. No tires burning mentioned, but this Pantera song is what comes to mind. (https://www.youtube.com/watch?v=E929gqIcwwI)Again, if Gas Gas has anything to do with the sale of the company, they are clearly going to try and keep things in their backyard. Spain is already confronting one of the highest unemployment rates in Europe, and the Catalans will battle until the end to retain the jobs at Gas Gas.
They might even convince the liquidator to see this goal as a most important one for the whole region, which is, erm... true. If an Asian investor has the money to buy Gas Gas and promises they will retain the facility and jobs in Girona, this might weigh quite a lot in the negotiations.
The Gas Gas facility is also ready to roll, and more than Husqvarna's was before Shineray revived it. This might not seem too important to some, but try to imagine the huge difference between these two scenarios.
On one hand, the troubles of finding a suitable place o building one, equipping it with the necessary tools, hiring and training personnel and then start production. On the other hand, notifying all the workers previously employed that they are expected back to work and greeting them in one week's time with a cup of coffee for briefing. Sort of makes sense now, doesn't it?
Asian manufacturers are looking for open gates into the Western markets
Getting hold of a respected European brand in difficulty is the easiest way for Asian motorcycle manufacturers to enter the Western markets. Bankrupt companies are easier to deal with and they also bring their own R&D to the game, and this is a major boon for the Indian or Chinese manufacturers, which are, truth be told, sort of lacking in this matter.The brand's notoriety also helps the investors push bikes around as if nothing happened (more or less), and if the machines prove to be reliable and are offered for affordable prices, few customers will care where the money comes from.
Seeing how patriotic the guys at Gas Gas are, I tend to believe that the second scenario has better odds. Of course, this is all speculative anticipation, and only time will tell if and in which way the motorcycle world retains Gas Gas.
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