Since Norton Motorcycles’ inception in 1902, the brand’s history has been glorious at times. This is not one of those times.
The eventful history of Norton Motorcycles (U.K.) Ltd. – owner of the U.K.’s most historic sporting brand – took yet another twist on Jan. 30, when the Castle Donington-based manufacturer was put into administration (similar to Canada’s Companies’ Creditors Arrangement Act [CCAA] filing or Chapter 11 bankruptcy in the U.S.). The insolvency process was triggered when Norton was taken to court by Her Majesty’s Revenue and Customs (HMRC, the tax authorities in the U.K.) for payment of £300,000 (approximately $516,000) in outstanding taxes. The case was adjourned until Feb. 12 after the HMRC learned that Norton had already reduced that sum from the initial £600,000 ($1 million) outstanding and still was making regular payments.
However, on Jan. 30, BDO/Binder Dijker Otte, an accounting firm, was appointed administrator for Norton (a publicly traded firm) and is presently assessing the chances of the company being reconstituted for sale as a going concern after attempts to save the business failed to secure the financial backing needed to continue trading. The undercapitalized firm had previously launched a crowdfunding venture last November with a view to raising the cash required to fulfil its apparently healthy order book, but the supposed lure of a single investor (who has never been identified) withdrew an offer. This left Norton unable to resolve its cash-flow issues, and thus the company is in the hands of its administrators.
This event prompted Norton CEO Stuart Garner’s statement on Jan. 31: “I’m devastated at the events over the last 24 hours, and personally have lost everything. However, my thoughts are with the Norton team and everyone involved, from customers, suppliers and shareholders, at this truly difficult time. Without [any] dialogue Metro Bank appointed BDO [as] administrators yesterday. We are now working positively and proactively with BDO to ensure Norton has the best possible chance to find a buyer. [Manufacturing in the U.K.] has become increasingly difficult, with a growing tax burden and ongoing uncertainties over Brexit affecting many things, [such as] tariffs, exports and availability of funding.”
Garner personally owned 86 per cent of Norton Motorcycles’ equity, with the balance held by three long-time friends, each with a small single-digit percentage shareholding.
Besides Norton, two other Garner-owned companies have entered administration. One is Donington Hall Estates, owner of the 229-year-old stately home adjacent to Donington Park MotoGP/F1 racetrack, in which Garner has been living. The other company is the adjacent 42-bedroom Priest House Hotel, comprising a converted Norman-era mill tower and adjoining 17th-century cottages.
The 80-acre Donington Hall property houses the 55,000-square-foot Norton factory and a 12,000-square-foot extension recently built to accommodate volume production of the range of newly launched 650 cc Atlas twins. However, that new space has not been fitted out with machinery. The Norton workforce formerly numbered around 100 people, but this head count was substantially reduced in recent months as the cash-flow problems Norton suffers began to take effect.
Garner, age 50, is the man who in October 2008 bet big on being able to revive Norton when he acquired the rights to the historic British marque from Oliver Curme, an American investment banker in Boston. Curme had consolidated the global rights to the previously diffused Norton trademark, which had been regionally owned by such diverse entities as a Canadian entrepreneur with links to organized crime (who later served jail time for fraud), a Chinese trademark troll and Joe Seifert, Norton’s German distributor, who’d been farsighted enough to register the company name in most European countries in order to safeguard it.
In 2006, Curme reached an agreement with Claudio Castiglioni, owner of MV Agusta at the time, for Castiglioni to acquire the Norton name as a volume production twin-cylinder brand to generate profits and cash flow alongside MV Agusta’s low-volume, higher-cost motorcycle engine range of fours (and later triples). But this sale was aborted by Gevi SpA, the investment bank then holding a controlling interest in MV Agusta, refusing to countenance the deal – although not before Massimo Tamburini, MV Agusta’s legendary designer, had created the makings of a born-again Norton Commando.
Instead, in 2008, Curme sold Norton to Garner, a former gamekeeper turned property investor who’d become the U.K.’s leading importer of fireworks from China. Together with the Norton brand came the prototype air-cooled Commando 961 OHV parallel-twin streetbike that Curme had commissioned from Kenny Dreer, Norton’s
No. 1 techical guru in the U.S.
Early Production Begins
Simon Skinner, Norton’s current executive director and head of design, joined the new incarnation of the company in February 2009. Skinner, recruited from Triumph Motorcycles Ltd. by Garner, was one of the latter’s first appointments. After the current incarnation of Norton was established in a compact 8,000-square-foot factory alongside the Donington Park race circuit with a dozen employees, Skinner began work on re-engineering the Commando 961 for series production. Deliveries began in 2010, but problems with lack of development and with Garner’s commitment to employing mostly U.K. suppliers unequipped for series production brought Norton close to collapse.
But thanks to the determined commitment of both Garner and Skinner – and financial support from Santander Bank and the U.K. government, the most significant such aid (obtained in 2015, when Norton was awarded a £4-million ($6.9 million) development grant) – the Commando 961’s various technical problems were gradually resolved and production steadily increased. However, apparently no Norton model built during Garner’s ownership of the brand has been type-approved in the U.K. to date – all deliveries have been individually homologated via the U.K.’s near-unique SVA (single vehicle approval) system. Meanwhile, in 2013 the company expanded massively when it moved to Donington Hall, where several limited-edition models based on the 961 platform were built alongside the core sport and café racer versions of the Commando. The limited-edition bikes carried historic names from the Norton back catalogue, including Dominator and Domiracer. By then, Norton was exporting around 80 per cent of its production, which was claimed to be creeping toward 1,000 units annually.
Norton’s Modern Race Bike
Coinciding with the move to Donington Hall, Garner took Norton racing again for the first time in two decades by entering the Isle of Man TT exactly 20 years after Steve Hislop’s legendary Senior TT win on a Norton NRS588 rotary. To do so, Garner employed a 1,000 cc Aprilia RSV4 superbike engine in a custom-built Norton frame constructed by Spondon Engineering, the legendary frame specialist located in nearby Derby, which Garner had acquired.
The SG1 Norton racer was presented as the first step toward creating a range of modern 1200 cc V4 Norton models. The SGI was raced in the Isle of Man TT for six years running, with Aussie riders David Johnson and Josh Brookes both lapping the 37.75-mile TT course at over 130 mph in 2017. This resulted in top 10 finishes for each rider in both the Superbike TT and Senior TT races on the Norton SG6 race bike fitted with a factory-supported version of Aprilia’s three-time World Superbike champion RSV4 motor. Brookes finished fifth in the 2018 Senior TT with a best lap of 131.745 mph.
Norton launched its limited-edition (200 units) V4 SS and series-production V4 RR at the Birmingham NEC Show in November 2016. The latter was the first hypersport road bike with all parts sourced in the U.K. to reach the marketplace. That model was powered by Norton’s Euro 4-compliant liquid-cooled 16-valve, 72-degree, V4 engine with a chain-driven DOHC that produced over 200 hp. This engine was installed in a chassis design closely derived from the SG6 IoM TT racer and mostly developed by Norton at Donington Hall after an initial collaboration with U.K.-based Ricardo PLC, a leading design consultant, was terminated.
The limited-edition V4 SS apparently sold out quickly at the £44,000 ($75,700) asking price, forcing those not fast enough to order the V4 SS to opt for the lower-spec V4 RR at £28,000 ($48,200) instead. However, the cash flow needed to acquire the necessary parts to build the models to satisfy that demand simply wasn’t there, and the company did not have sufficient capital to fast-forward production to generate the required cash. The first such bikes weren’t delivered to customers until late in 2018 – just as the 84 hp 650 cc parallel-twin Atlas Nomad and Ranger models were unveiled at the NEC Show. (Unfortunately for Norton, production of those two models reached production readiness just as the company was placed in administration.)
Norton’s high-performance 102 hp twin-injector Superlight version made a promising début in the 2019 Lightweight TT, when Peter Hickman rode a brand-new street-legal bike to finish eighth in the race after some minor problems, having lapped at over 120 mph on a 650 cc bike he’d never ridden before race week. A supercharged carbon-framed Superlight RR prototype of the same model was unveiled at the NEC Show last November.
New Atlas Models
The three Atlas models were intended to underwrite Norton’s growth, finally providing the needed cash flow to underpin ongoing development of the smaller production-volume V4s. According to Skinner, the Atlas models were developed in conjunction with China-based Zongshen, with the extremely compact parallel-twin engine with 270-degree crank developed in-house at Norton. However, the commercial existence of this engine was linked to a deal that Norton had made to supply Zongshen with a lower-performance 650 cc twin-cylinder engine design for volume manufacture in China. As part of that deal, Zongshen was to supply certain key parts to Norton for production of the latter’s more powerful version of the engine – including the horizontally split crankcases, the eight-valve DOHC cylinder head and both camshafts and crankshaft – but Norton had to source the other parts necessary to build the engine in the U.K.
This deal meant that Norton had found a dependable Asia-based supplier of key parts at affordable prices without having to copy Triumph, which established a factory in Thailand, to achieve this. Now, the deal is in doubt due to Norton’s collapse into administration.
Norton’s insolvency has been an ever-present risk since its fiscal year ended March 31, 2018, when the company reported total revenue of £6.7 million ($11.5 million) and pre-tax profits of £33,701 ($58,000). In that annual report, Norton’s auditor warned: “A material uncertainty exists that may cast a significant doubt on the company’s ability to continue as a going concern.” Indeed, HMRC submitted a winding up order on Norton in March 2019 prior to Norton going into administration, as did DHL International in August 2019. Both orders were subsequently withdrawn – presumably after payment of the amounts in question.
Too Much R&D, Not Enough Income
At this time, Norton lacks the cash flow required to manufacture the truly excellent motorcycles it’s developed. Norton’s situation is a classic example of spending too much on R&D without commensurate income or capital to support that R&D.
(I am the only person outside Norton to have test-ridden both the 1200 V4 SS and the Atlas 650 Nomad and Ranger models in production-ready guise. I can only applaud Skinner and his R&D team for having produced two excellent platforms on the most slender of resources.)
BDO’s task is to find a buyer for the company that is able to produce the Nomad and Ranger models. Sadly, the V4 platform is likely to be consigned to cold storage.
Plenty of Potential Buyers
There is no shortage of suitors. Among those investigating the acquisition of the Norton brand are three India-based manufacturers and Timur Sardarov, a Russian investor who recently completed his outright purchase of MV Agusta from the Castiglioni family.
Sardarov says he’s primarily interested in obtaining the use of Norton’s 1200 V4 and 650 Atlas engines, presumably for use in a range of MV Agusta models to bracket the forthcoming 950 triple, which will form the basis of the MV Agusta family of bikes in the coming decade. Having access to the Norton trademark is less important for Sardarov than MV Agusta is – but with Massimo Bordi, formerly the boss at Ducati Motor Company SpA, now running MV Agusta, Sardarov’s mind may change.
Another entrepreneur who remains nameless but who has an outstanding track record over the past 25 years of revitalizing historic brands for stock-market flotation, is working on acquiring Norton and making it a going concern. However, if he acquires the company, he’ll focus on the parallel twins, which he’s identified as the Norton brand’s mechanical trademark, with the intention of developing a separate family of 1,000 cc to 1,200 cc twin-cylinder models to complement the 650 cc Atlas family.
Yet another suitor, Japan-based Kawasaki Heavy Industries Ltd., which recently acquired Italy-based Bimota, may well consider Norton attractive, given the company combines a historic brand with leading-edge technology.
From Asia, Zongshen may consider acquiring Norton, given the obvious benefit to the China-based supplier of Norton parts.
As well, billionaire Li Shufu may be interested in adding Norton to his collection of historic brands. Among those he owns are Volvo Group, Lotus Cars Ltd., the London Taxicab Co., Zhejiang Geely Holding Group Co., a 9.8 per cent
holding in Daimler-Benz AG (a.k.a. Mercedes) and, on two wheels, Benelli QJ. Li, Mercedes’ largest individual shareholder, is highly likely to be a candidate for acquiring Norton. He is a visionary investor who’s unafraid to roll the dice.
Siddhartha Lal, an Indian industrialist who owns the former Enfield Cycle Co. Ltd. (a.k.a. Royal Enfield, or RE) via his majority holding in Eicher Group, also may be a suitor for Norton. However, Lal is unlikely to be interested because of RE’s growing capacity problems; RE has terminated production of its 500 Classic single, seemingly in order to concentrate on meeting the steep demand (both in India and abroad) for its 650 cc Continental GT and Interceptor twins.
Instead, expect interest in acquiring Norton to emanate from Rajiv Bajaj, Lal’s counterpart at Bajaj Auto Ltd., KTM AG’s India-based partner, which recently announced a non-equity partnership with Triumph.
Legends Together Again?
For history buffs, the thought of Triumph and Norton cohabiting once again in the same family of brands is an enticing prospect – and the same goes for a BSA and Norton collaboration. India-based Mahindra & Mahindra Ltd. (MML) is about to relaunch the historic U.K.-developed BSA brand later this year after acquiring the trademark in October 2016. Adding Norton to MML’s roster of U.K. brands may be appealing to MML – if only to prevent any of its local rivals from obtaining it, although since MML split from Honda Motor Co. Ltd. in 2011, the former company has maintained its market leadership in its home market – albeit without any branding other than its own.
Hero Motocorp. Ltd. could be the leader among MML’s rivals in seeking ownership of Norton. Adding Norton’s 650 twins to Hero’s roster as a means of rivalling RE’s local leadership in the superbike segment may entice Pawan Munjal, Hero’s boss, to make a bid for the Norton – especially as Hero’s efforts to add significantly to its seven million-plus annual Indian deliveries via increased overseas sales is still struggling to get off the ground; renaming its products with a prestigious and globally recognized brand such as Norton could help resolve those overseas efforts.
Customers Out of Pocket
Garner has worked tirelessly to put Norton back on the map. So far, under his ownership about 5,000 motorcycles have been built and delivered to customers around the world. However, his time at Norton appears to be over, especially with potentially serious issues surrounding the company’s pension plan under investigation.
Now, as Norton’s future is called into question, more and more of its British customers who have either parted with a deposit on their chosen model or paid in full up front, but have not yet received what they paid for – in some cases, years after making their payment – are coming forward. Sadly, those customers are likely to be left out of pocket as BDO’s management team hauls over the embers of Norton and tries to establish a means of keeping the company afloat rather than liquidating its assets.
Still, given that Garner, Skinner and Norton’s team of engineers have created two excellent model platforms (one potentially with large-scale marketplace appeal), the product-led future for Norton – even after being placed in the U.K. equivalent to Canada’s CCAA – still looks healthy.
Any bets on who’ll buy it?