Buell scraps East Troy consolidation plan

Buell Motorcycle Co. has scrapped plans to consolidate its operations into a single, new 163,000-square-foot factory in East Troy just a week after the village???s Plan Commission recommended approval of the project.

Buell, the sport motorcycle subsidiary of Milwaukee-based Harley-Davidson Inc., currently leases five properties in East Troy and had planned on moving into a new $10 million to $12 million factory that was to be constructed on a 15-acre parcel in the East Troy Business Park in an effort to reduce costs and improve manufacturing efficiency.

???Buell has decided to maintain its current facilities given the current economic climate,??? Harley-Davidson spokeswoman Rebecca Bortner said.

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The decision came after a review of the consolidation plan by Harley-Davidson???s new management team, led by Keith Wandell, who took over as Harley-Davidson???s president and chief executive officer on May 1, replacing the retired James Ziemer, she said.

Towne Investments, Milwaukee, had planned to develop and own the property, which it planned to lease to Buell. Towne Investments is the trade name under which Zilber Ltd., Milwaukee, markets its commercial business interests.

East Troy village administrator Judy Weter said Towne contacted the village Monday and verbally requested that the item be removed from the agenda for Monday night???s meeting.

???We are very disappointed that this project is not going forward at this time,??? Zilber spokesman Mike Mervis said. ???We were surprised by Harley-Davidon???s action at such a late hour when everything was set for construction to begin. Both parties have discussed the issue openly and frankly and have agreed to seek an equitable and prompt resolution regarding their relationship.???

Construction had been scheduled to begin in late May, pending final approval. Buell had expected to move into the new facility in the first half of 2010.

Mervis said it is Zilber???s position that a valid lease is in place between Towne and Harley-Davidson for the new building that was to be constructed.

Bortner said she wasn???t familiar with the particulars of any lease agreement or whether a lease had been signed, but said Harley-Davidson is ???committed to resolving??? any issues with Zilber.

???We want to move promptly and amicably,??? she said.

The East Troy Plan Commission on May 11 recommended approval of a certified survey map, site plan and conditional use permit for the project. The Village Board was expected to take action on the recommendations at its May 18 meeting, but the item was removed from the board???s agenda.

The move to consolidate Buell production was aimed at ???cutting costs and improving efficiencies,??? Harley-Davidson informed East Troy officials.

Harley-Davidson???s Bortner said that by staying in its existing facilities, Buell will be better able to ???prudently manage??? its capital expenditures and avoid incurring moving expenses at this time.

???It allows us to remain as flexible as possible,??? she said.

Buell, which has about 200 employees in East Troy, also recently announced that it plans to cut 10 jobs, or 5 percent of its work force, due to cutbacks in sport motorcycle production.

Buell produces sport motorcycles, motorcycle parts, accessories and apparel, including the 1125R Superbike, the 1125CR Caf?? Racer, and air-cooled XB-series Ulysses, Firebolt and Lightning.

Buell management will continue to monitor market conditions, she said.