Cycle News - Archive Issues - 1970's

Meriden Triumph factOry deal explained .l-o 0. -< LONDON, ENGLAND - At a meeting held March 6, 1975, at the British government's Department of Trade and Industry, a remarkable series of documents Why standard parts don't cost the same The other day a friend laid this homily on me: "You know , there's a fron t wheel bearing for a Harley dresser that the dealers get s 12 for. I can go to a Chevy dealer and buy the same part numbered bearing f r $3.50. What a ripoff!" . 0" A classic case of let the buyer be - 22 ware, " no? I've run into .th e same th ing with Porsches. The point/set on a Type 356 Porsche is exactly the same part as on a Volkswagen. In 1966 prices, th e points cost $3.75 from a Porsche dealer and $1.89 from a VW shop. Howcome? Is the dealer really ripping you off to the tune of 200% or more? Not bloody likely, if he's locked into the factory as a source for his spare parts. He , and you, and even the factory are all victims of basic cost accounting practices that can yield several different costs for the exact same off-shelf part. Here's how it works: If you build anything for sale at a profit, you generally figure your selling price to be what it cost you to make the gidget, plus a markup. Say you make fibreglass seats. You know that into each seat goes $3 worth of resin, $2 worth of chopped fibre, and (say) an hour of your time, at $5 an hour. So the seat you made cost you $10, not counting upholstery or special trimmings. Then to make it worth your while, you tum around and sell it for $15. Pretty simple, for a one man operation. Everything is just materials plus labor. Trouble is, as you expand beyond the one man, shade tree operation, per-unit costs get harder and harder to figure. In addition to the direct costs of labor and materials, you've now got overhead rent on the building, the secretary's salary, the utility bills, all these things get . paid out regardless of what you build or how many. But you've got to take in enough money through sales to cover these bills, or the business bleeds to death. Enter the cost accountant - th e bespectacled wizard who takes all these bills and figures out how much to add to the price of each unit to cover them. Actually.it's no wiz ard trick, it's simple math, and it explains at one swoop the apparent "ripoffs" in the trade. Take the Boss' salary, for instance. Say the 01' boy draws 100 grand a year. If (say) you build 10,000 bikes a year, you add $10 to the factory outlet cost of each bike to cover the Boss ' pay. If you make a million bikes a year , the Boss needs only ten cents a bike to salt his pile. See it now? You stock spare parts in proportion to your production volume, and figure the costs of those sp ares by the same fo~ula. And an unbelievable number of Items are standard parts available from any big industrial jobber. Especially standardized parts like bearings and screws and ele ctrical pieces. So Chevrolet and Harl ey -Davidson buy an SAE standard bearing from the sam e jobber at the same price. But because Chevrolet buys 100 times as many of those bearings as Harley-Davidson, Chevrolet assigns only a hundreth as much additional cost (or "burden" as accountants call it) to each one. Same goes for Porsche and Volkswagen. And also for (say) Honda vers us Ducati. Yes, many off-shelf Japanese and European parts are built to the same metric standard. This is especially true of ball and roller bearings. Say your exotic European Hoodinski just chuffed its lower end. Chances are , if y o u know your metric standards, you can walk into a Honda or Yamaha dealership and o rder most any bearing you need. Better yet, if you live in a big industrial are a, you might be able to walk into a big ind us trial be aring outlet and get th e same metric standard be aring for less than it cost the Honda dealer. This works for bearings, seals, threaded fasteners, Woodruff keys, and even things you wouldn't suspect, like tapered shafts, pins, cable firtings , D-rings, circlips an d even gears. It's all the more reason for going m etric, co mp reh ensive bec ause so . many international standards ex ist for industrial parts. If, in your travels , yo u co me across some good metric standards th at apply to hard-to-find replacement parts, let 01' Papa Wealey know and we'll pass th e word along to the rest of the readers. We'll beat th e game ye t. Lane Campbell were signed, ending a unique . lab';r dispute which began when Norton Villiers Triumph, Ltd. announced the closure of its Meriden, England factory in September of 1973. The agreement finalized th e sale by NVT of the factory to a Co -o perative formed by the Meriden fa ctory workers, and followed p ass a ge in th e British House of C ommons o f a historic resolution auth o rizing the go vern me n t t o finance t he sale . Thus ended an 18-month de adlock brought about by a "sit-in" of the Meriden workers. an d restored th e factory to full production of Triumph twins and part s. Under terms of the agreeme nt, the Meriden Co-op ac q ui re s fro m Norton Villiers Tri um p h th e factory bu ild ings a t M erid en a n d t wo -t h ir d s of t he e q uipment a n d m a chin ery - the remaining one-third to be transferred by NVT to its factories at Sm all Heath and Wol verhampton. All rights to th e Triumph n ame. however, as well as the rights to aU designs, patents an d future enginee ring devel o p men ts, are retained exclusively by Norton Villiers Triumph. In ad di t io n , lI.'VT re tains ownersh ip of all Triumph tooling, which it will lease to the Co-op on a job-by-job basis . The Co-op is under a tw o-year co n trac t to m anufa cture e x clusively fo r NVT cert ain model Triumph twin-cylinder motorcycles - mostly the Bonneville 750 - and related spare parts, which NVT will market through its existing worldwide de aler network alongside its present lines of Triumph Trident and Norton Commando motorcycles. The Co -o p h as no right to make any products under the Triumph name other than those agreed to by co ntrac t with NVT. Finally, the agreement sp ecifically stipulates that the Co-op may only serve as a supplier to Norton Villers Triumph, and cannot deal directly with either the industry at large or the public. A small number of Triumph twins left partially completed at the time of the Meriden closure h ave already begun to emerge from the reactivated assemb ly lin e. However, the Co-op anticipates that the chan ge overs n ecessary to bring its new machines into co m plian ce with current U.S. motorcycle regulations will require six to eight months to ac hieve. In th e meantime, th e fac t o ry will place heavy emphasis on the production of sp are parts. uThis agreement is an imp ortant m ilestone in the history of the British mo torcy cle indu stry , " co m me n ted Dennis Poore, Ch airman o f the Board of NVT, " and I would not lik e th ere to be any doubt as t o its sign ifica nce. The 18 'month agony that we hav e finally b ro ugh t to a close has done everyone in o u r indu str y - m anagem ent and workers alike - gre at damage both at home an d abroad. We must now set forth to repair that damage, and to find out if, on the one hand, ownership of a manufacturing facility by its workers will in f a ct re sult in heigh tened productivity , and if, o n the other, we can together build upon the hard lessons we have learned in a spirit of renewed o p t imism and shared co n fidenc e in the f u t u r e of the British motorcycle industry. I believe we ca n. And I believe • we shall." .Tiernan joins Norton Triumph Roger Stange, President of Norton Tri umph Corporation, American ' distributors of British-bu ilt Norton and Triumph motorcycles, announced an importan t addition to his co m pan y 's executive team. Effective April I, 1975, Terry Tieman, formerly Vice Presiden t/Motorcycle Division of Yamaha International, will join Norton Triumph as Vice President in char ge of marketing. Tieman, who is also now serving his second term as President of the Am erican Motorcycle Association, will be re spon sibl e f o r Norton Triumph's national sales. His duties will e nco m p ass sales, advert ising, public rel ations, an d deale r devel opment fo r bo th No rto n an d Triumph as well as th e co m pany 's To p Gear line of motorcycle accessories. I Born in Bell , Califo rnia, 43 -year·old Ter r y Ti ernan first discovered his affi ni ty for motorcycles while st ill in high s c h o o l. A n uncle owned a motorcycle sh op, and th e attraction it held for young Terry led him to start ra cing bikes at th e age of 17. He raced in amateur s cr a mbles, motocross and cr o ss - c o u n t ry e ve n t s , but admits modesty , " I just go t in the way of the pros. " His experience then began a lifelong lo ve of the sport that is in part responsible for Yamaha's remarkable success in Ameri can motorcycle racing. But it was translating his love of motorcycling into ac t ua l sales th at brought about Tieman's rapid rise within Yamaha. Beginning 12 years ago as a District Sales Man ager, Terry qui ckly d istinguished himself as a specialist in motorcycle sales at the de a I erie v el. Building on that foundation , and never losing sight of the dealers' importance to the company's overall marketing strategy, Tieman soon ad van ced to Regional Sales Manager. Continued su ccess raised him to the position of Assistant Sales Manager, then Sales Manager, a title that included responsibility for advertising and public relations. In 1971, Yamaha promoted Tieman to Vice Pres ident in char ge of the co m pan y 's motorcycle division. "I'm really looking forward to joining Norton Triumph," Tiernan said rec en tl y . " I feel there' s a real opportunity here . I first learned how to race on a great. old Matchless, so m y affection for British bikes goes back a wa y. Over the years, I've admired th e co n sist en tl y fin e British product, and have felt it 's only a matter of time until their motorcycle industry co mes ba ck into its own again in the United States. It goes without saying that I think the time has now co me, and I'm grateful for this opportunity to be a part of it. I feel strongly that we ca n put together a viable organizational team at Norton Triumph that will have great impact in the industy." Terry Tieman presently lives in El Toro, California. with hi s wife Pat and five ch ildren , ages five to 17. Joining .Tieman in the move from Yamaha will beJerry Bartlett, presently Yamaha's Assistant Sales Manager, and Bill Mason, the company 's Southern Regional Sales Manager. The two will • fill similar jobs at Norton Triumph.

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