SPEARFISH — A half built Crossbow trike sits in Lehman Trike's workshop. It's sat that way since the March 9 announcement that the Spearfish-based manufacturer would suspend production, but it may not sit idle for much longer.
On Tuesday Lehman Trikes was sold to California-based Champion Trikes for an undisclosed sum.
“Lehman will be producing the same, if not better, quality products before it closed its doors,” said Craig Arrojo, the president of Champion Trikes. “It was not because of quality of products that it closed its doors. It was some economic decisions that went awry.”
Officially the company will be named Champion Investments Inc. doing business as Lehman Trikes USA.
Lehman Trikes was a publicly traded company, but with the sale, which was finalized Tuesday afternoon, it is a privately owned business.
“Our position was that it would be too expensive to operate as a public company. The reporting fees would be somewhere around $500,000 just to report on a public company,” Arrojo said. “The fees and reporting to the board of directors were some of the things holding back Lehman. They had great marketing people, great engineering people, all of the right stuff. They just got themselves in the wrong direction.”
Champion Trikes is no stranger to the motorcycle industry. It began in 1990 when it created the Escort sidecar with a staff of three. Now with almost 100 employees, the diverse company produces sidecars, saddlebags, trailers and reverse gears.
“We spend a lot of time and money in engineering,” Arrojo said.
“Lehman will be a good mix for the Champion group of companies,” he added.
Once in full production, which should be within three to six months, Arrojo said he expects to employ about 50 people in Spearfish, and will bring back as many former Lehman employees as he can.
“Whoever wants to come back and is available, we're going to bring them back,” he said.
For the last month Arrojo paid for employees to staff the phones and answer customer's questions. Nearly 2,000 voicemails had been left and he said it was critical to not let Lehman's customer service decline any further.
Arrojo began to investigate an investment into Lehman Trikes about two and a half months ago.
“We knew there were about six people looking to buy Lehman, so we thought we'd throw our hat in the ring and see what came out of it,” he said. “When we came out here we didn't know what we wanted to do with the company. All we knew was it was at least worth looking at. When we came out here and were introduced to the staff … we found the caliber of people out here was exactly what we were looking for.
“The other thing was the city of Spearfish. The city of Spearfish and their willingness to negotiate and make this happen was a huge influence in keeping this company here,” said Arrojo.
And with that, he reiterated that Lehman Trikes would remain in Spearfish.
Lehman announced it would reduce the scope of its operations in November 2011. At that time, CEO Ken Hines said that an investment firm had expressed a significant interest in the company, however with the transaction uncompleted the company lacked capital to continue its operations. In March came the news that Lehman would suspend its operations. Hines will remain in his position.
“The first product we will resurrect will be the Storm for Kawasaki. Then we will resurrect the Monarch after that. But we're going to do it one product at a time,” Arrojo said. “We're not going to try to get them all done at the same time. We're going to bring one product on line at a time. We're going to do it right, and we're going to try to cost reduce the product as we go.”
This, he said, should lead to less expensive trikes to consumers.
Arrojo said he expects the first trike to roll off the assembly line in less than three months, and as quickly as possible, an independent suspension will be produced.