GILROY
– Bill Melvin has all but given up on this town, and this
state.
The Michigan businessman used to say his goal was to build new
Indian motorcycles in Gilroy, as was done for the past five years.
Now that’s changed.
GILROY – Bill Melvin has all but given up on this town, and this state.
The Michigan businessman used to say his goal was to build new Indian motorcycles in Gilroy, as was done for the past five years. Now that’s changed.
“It’s very unlikely that we would be operating in Gilroy,” Melvin said Tuesday. In the midst of selling the former Indian factory’s contents and trying to buy the Indian brand, Melvin and his investors came to the conclusion that California is the wrong state to open an industrial business.
“It’s the workers’ comp, it’s the cost of living, it’s the ecological problems. It’s the bureaucracy of the state of California,” Melvin said. “From the time we’ve been in Gilroy, we haven’t been approached by anyone who was interested in helping us keep the business in California.”
It’s no secret that Indian executives, in the first half of 2003, looked at moving the company to Alabama and South Carolina. Melvin said Indian executives also looked at Indiana, Kentucky and Minnesota. These and other states would welcome Indian “with open arms,” Melvin said.
“In the state of California, there are many roadblocks placed in the way,” he said. “They find it difficult to offer the kind of incentives … that other states do unthinkingly.”
“If at some point we are able to acquire the intellectual property (i.e. the brand’s trademarks and logos), I would be more likely to restart the company in the Midwest,” Melvin said. “(But) we don’t have a definite plan that says, ‘Hey, were going to open a factory in Michigan.’ We’re going to go wherever the incentives are best, and the workforce is there. … California would still be considered.”
California Gov. Arnold Schwarzenegger, in his State of the State address last month, acknowledged that California is scaring away businesses. Schwarzenegger, who rides an Indian, promised to change the state’s business climate and actively “sell California” to businesses.
Melvin hasn’t approached the state for help, however, and it hasn’t approached him.
“Certainly it would be difficult for us to talk to the state or the state to talk to us since we don’t have the (brand) yet,” Melvin said. “I really admire the changes (Schwarzeneg-ger) has in mind. They’re long overdue. … I just wish we could get all the pieces of the recipe in place to make that happen.”
Melvin has until May to sell off the factory’s contents and vacate the premises, based on a use agreement he signed with Indian’s liquidation brokers at the Credit Managers Association of California. Sales are going well, he said, and he hopes to be out by the end of March.
Melvin has been withholding the equipment someone would need to make new motorcycles. Now he has scheduled a March 18 auction for it. He would keep some of this equipment if he buys the brand, he said, but not much.
In December, CMA told dealers it would be selling the factory and its contents piecemeal, separate from the trademarks and logos.
Melvin’s understanding is that the sellers weren’t offered as much money as they wanted.
“The predecessors … have had a lot of problems,” Melvin said. “I don’t fully understand those problems, … but for some reason they have chosen to sell the assets as separate items. I have never been able to understand that. … In the end, it doesn’t appear they have been able get any more money for it.”
Chuck Klaus, CMA estate manager, disagreed.
“The offers that we had on the table for the pieces were greater than for the whole,” Klaus said. “It was very costly to continue to hold this until someone stepped up with a better price.”
Klaus said CMA won’t announce who won the trademarks this month, as earlier promised. But he wouldn’t say when the announcement would be made
On Jan. 21, CMA sold Indian’s 200 E. Tenth St. factory for $3.35 million to Ken Gimelli, a Hollister developer and vineyard owner who was the only live bidder at an auction.
Melvin has never built motor vehicles before and wouldn’t move quickly if he bought the rights to Indian. Prior Indian executives “tried to be too much, too quick,” he said.
Those executives included Gilroy resident Rey Sotelo, a former Indian president and CEO who brought Indian to Gilroy but later resigned in frustration. Like Melvin, Sotelo and a group of investors also want to buy the Indian brand. Sotelo has said he wants to build bikes here in his home town, but he and his team did not return phone calls Tuesday.
