Erik Buell Racing ceases operations

Erik Buell Racing (EBR), the technical partner of Hero MotoCorp, has ceased operations. With outstanding liabilities exceeding $ 20 million, the company is seeking court protection from creditors under a state statute that is similar to federal bankruptcy law. The development will see 126 employees rendered jobless.

While EBR's bikes did well on race tracks, the company struggled to sell them in the market dominated by Japanese and European marques. Additionally, the company has not been able to receive the necessary funding to secure its future.

EBR was founded in 2009. In 2013, Hero MotoCorp Acquired a 49.2% stake in the East Troy, Wisconsin (USA) based company for a sum of $ 25 million. According to the agreement, EBR would sell Hero's two-wheelers in USA through its dealership network.

With EBR shutting shop, Hero's plans to develop high-end performance motorcycle could be dealt a severe blow, since the Indian two-wheeler giant was sourcing technology from the American company.

Source: JS Online