The Norton Motorcycle Company, originally founded over 120 years ago, in 1898, and relaunched just twelve years ago, in 2008, has gone bankrupt once again. It’s owner and CEO is catching a lot of heat from the motorcycle media. Was this a case of fraud?
(just unmute it in the bottom left corner)
How many people or businesses have owned Norton?
Stuart Garner is roughly the tenth person or business to own the Norton Motorcycle Company, since the company was founded by James Lansdowne Norton in 1898. Since it’s inaugural year, Norton was successful, despite increasing competition from the Japanese manufacturers, until the 1960s when parent company AMC went bankrupt.
Over the next several decades the company would continue to be bought, renamed or merged, and flipped or declared bankrupt. It seemed like everyone was trying to make a fast buck off Norton’s namesake. At one time, Norton was even acquired by a Canadian, Nelson Skalbania, a real estate flipper from western Canada who also flipped second-tier sports teams.
- Fun Fact 1: Skalbania was the first person to sign Wayne Gretzky.
- Fun Fact 2: Skalbania was convicted of criminal fraud (though not related to Norton) in 1997.
After that, Norton went to America, to some good dudes from Oregon with the best of intentions, led by Kenny Dreer. Dreer’s team couldn’t quite fulfill what they hoped to make happen. His team was running on a budget of $12 million US, but $7 million went to legal fees alone, according to Mark Gardiner at BikeWriter.com. In the end, everyone got their money back from Kenny Dreer, he’s one of the good guys.
When did Stuart Garner come along?
That’s when Stuart Garner came along. As a high school drop out, Garner got a job as a gate keeper at a prep school. Mark Gardiner at BikeWriter described the prep school as “a great place to study upper class twits and learn how easy they were to scam.”
By the time Norton was up for sale, as Dreer and the Oregon boys couldn’t make it work, Garner had already leveraged his 50% share to secure a loan that he would use to buy Norton. He offered the entire company he only half owned as collateral.
Two of Garner’s associates, who had lent Garner £1 million were convicted of fraud, although there was no dirt on Garner. Still, we have to wonder…
What’s been going on with Norton in the last few years?
For years, Norton owner and CEO Stuart Garner has been telling us everything is hunky-dory. Garner turned Norton into the first centenarian company to turn to crowd-sourcing. The goal was to raise £1 million to put towards new Norton models with V4 engines in the 650cc range, which according to Insider Media had £30 million in bookings.
The crowd-sourcing plan was quickly shut down, after Garner announced that a single, anonymous, investor had put up the entire million pounds. Interesting…
Later that month, Garner also tried to offer new shares in Norton, with investment levels in the company from £50-£100,000, and dangling a carrot on a stick mention of the possibility of a future initial public offering (IPO).
It sure seems like Stuart Garner was in a hurry to find a lot of money in a short period of time, and he sure was finding it. So what’d he use the money for?
Pension funds being used for personal shopping
Garner used money invested in hundreds of senior’s pension funds to put into Norton, and into a place called Donington Hall. Donington Hall, on paper, was to be the headquarters of Norton, but in reality, it was a huge mansion that became Garner’s personal home.
How grand of a mansion are we talking about? Remember Louis XIV, XV, and XVI (the Bourbon family) and the Versailles Palace in France? Well, when the Bourbons were being hunted during the French Revolution, those that could get out of France left Versailles for Donington Hall.
If you’re still on the fence about whether or not there was something corrupt happening at Donington, consider this: For some reason, the Norton Motorcycle Company needed to buy six Aston Martins.
And that’s when the pyramid scheme revealed itself
Norton produced several hundred motorcycles under Garner’s ownership, but many more put up deposits or paid in full for motorcycles which were not delivered.
When payments to suppliers began to be so delayed that suppliers would no longer deliver the parts needed to build new motorcycles, Norton got downright Ponzi-like: There were reports that when customers sent Nortons back to Donington Hall for warranty work, the company would strip parts off of their motorcycle and use them to finish and ship new machines. Gardiner called it “a Ponzi scheme done with fuel tanks and wheels instead of money.”
Norton’s board of directors were always changing, as new members came in, and we can only hope that they resigned soon after realizing what was happening.
@NortonClub please share. This is what Norton did to my bike, which was in to have their poor paint finish corrected. Stole parts to get payments from those whose bikes had not been delivered. Blatant theft @Notnorton_Moto pic.twitter.com/DzOLtdcoJt
— John Hamilton (@Cripticjohn) February 10, 2020
There’s speculation that Garner may have sold certain intellectual property to a Chinese company. If that’s the case, not only has Norton’s name once again been burned, along with seniors and customers shafted, but even Garner even sold out Norton’s future, as the value of the brand will take a hit from the sale of intellectual property to the Chinese.
Stuart Garner is expected to return to South Africa where it’s believed he owns a game ranch and has millions stashed away.
The Norton brand will be bought up again sooner or later, maybe even by Chinese investors, and this is yet another sad chapter in the company’s long story.
Today we learned that, after some speculation, the Norton Motorcycle Company has been sold and is now under Indian ownership. Norton was purchased by TVS Motors, India’s third largest motorcycle manufacturer. Read that story, here.