Butler & Smith flooring

Butler & Smith had a flooring plan for dealers to be able to keep bikes on the floor without having to pay for them upfront.  I can understand that this might be a benefit for some dealers.

From here I will refer to Butler & Smith with the acronym BS.  We all know what that means, and many dealers of that era would consider it apropos.

I chose not to use that plan.  When I received a shipment of new bikes, I wrote out a check and mailed it in that same day.  Besides, payment within ten days and I would get an additional 1.5% discount.  To me, that is huge.   

Every manufacturer of just about anything, certainly in the field of vehicles, had winners and losers.  A dealer who used the floor plan would also get low demand bikes.  An example might be that in order to receive an R90S, the dealer also had to take an R60/6.  It also allowed BS to decide what should be on the floor of a dealership and ship it, with no notice.

As I remember, the dealer got a bike for no interest for 90 days, at which time that bike would roll over to the bank.  The bank would automatically pay for it.

That R60/6 might sit on the floor for two years, and the interest would build up to exceed any profit from a sale.  This forced a dealer to give it away to get it off of the bank’s loan list.  This meant that the dealer was “working” but not making any money.  How long could a dealer last if he didn’t make a profit?  In this sense, it worked against the interests of BS.

My banker was a personal friend, and he fully understood that I wanted no part of this flooring plan.  One day he was called by BS and asked to sign my flooring plan.  He explained that he knew that I didn’t want it and he wouldn’t cooperate.  I never knew how the flooring plan could be legal without my signature.  In any case, they didn’t get his help.  They had gone behind my back.

In 1973, the importer/distributor of Italy went bankrupt.  Imagine that, I know, it is hard to believe.  BMW repossessed over 200 new motorcycles.  They decided to dump them on the American market.  This was in early 1974, so for about six months, the dealers had some experience with the new /6 models.  We quickly found that the /6 series was beset with many serious problems.

One day, BS called me up and explained the situation. These bikes were mostly R75/5, with big tanks. They didn’t have all of the USA required reflectors, and those were tossed loosely into the crates. The dealer would install them upon removal of the bike from the packing container.

They informed me that they had “reserved” two bikes for me.  This term “reserved” translated to “PLEASE” in my book.  Since we had already discovered that the /6 were not desirable, I was thrilled to hear about these highly discounted bikes.  I said, “At that price, I would take 20.”  No comment was made, and I was suspicious. 

That evening I got a call from Eddy, the parts manager who was our inside source.  He hated BS and loved us.  He told me how happy they were because this would force me to sign for the flooring plan.  Finally, the long-haired hippy would be in their pocket.  I just told him to keep his head down and ears open.

The 20 bikes arrived, and I already had a few sold.  I wrote out the check and mailed it off with the discount for cash.  I was in heaven.

A few days later he called me to report that the check had arrived and they were pissed off.  I asked him if they were suspicious if the check was good, or would bounce.  They knew that it would be a good check.  I told Eddy that had I gotten 40 bikes I would still have paid by check.  It would have taken me 24 hours or less to liquidate an asset, but I would have had it.

I sold 19 of those bikes off in the next couple of months.  I kept one new bike just to have it.  Eventually, I sold it to a good friend for my price so that she could give it to her fiancé as his wedding gift.

I understand that that bike is now in Bob’s museum.

BS hated me.  I might have another story to tell.

Updated 19 Sept 2019