Confederate's Collapse

How The Roof Fell In On Confederate Motorcycles

North America's most significant natural disaster thus far in the 21st century had a devastating impact on the residents of New Orleans, as well as on the Crescent City's businesses that employed them, of which Confederate Motorcycles was one. Matt Chambers was forced to watch the terrible force of nature represented by Hurricane Katrina unfolding at long distance, then cope with its aftermath. Here's how, in his own words.

"When Katrina hit, thank heavens the prototype Wraith was away from New Orleans, safe and sound on display in New York. But J.T. Nesbitt and I were in the Middle East, talking to one of our customers who was interested in investing in the company. I'm not at liberty to tell you his name, but he was - is - a very significant personage in a country that's a good friend of America's, and a satisfied Confederate customer who'd invited me over to discuss this business opportunity. J.T. was going to do some work on his Hellcat, while the investor and myself talked business, and around 11 a.m. on August 27, a Saturday, we shook hands on a deal that gave me what I was looking for, with the assurance there was up to four times more money available as and when we presented a case for needing it. You find your angel based on the caliber of your product, and this particular person unquestionably has every single spectacular motorcycle available today, as well as many cars - yet he told me that when he wants to unwind, his favorite machine that he takes out to ride is the Hellcat!

"We wanted to hit the town that night, and celebrate coming to an agreement which would significantly strengthen Confederate's position, without however any change in ownership; it's still an American-owned company. This gentleman can't really go out and do stuff like that, because of the kind of celebrity he is, but he insisted we go out to rip it up with his friends instead. So we went out that night to this outstanding Lebanese restaurant, and then some other places, and I'm learning so much about this part of the world and having a great time doing so. Other than fantastic moments with my family, I had more fun that night than I've ever had. It's such a relief after so long fighting against the odds to get Confederate established, to have someone come aboard whom I believe to be the perfect partner for this venture, who understands where we're coming from, is a satisfied customer and wants to help us expand the company. I can't tell you what a release from anxiety it was, because what this relationship did was to give us seven times more liquid working capital than I have ever had before, at the moment we most needed it, to take Confederate to the next level.

"So, after this great night out I get back to our luxurious bungalow in the palace grounds around 2.30 a.m., grab a beer and light up a cigarette, and switch on the TV. It goes straight to CNN, and I remember being rooted to the spot, unable to move. The Gulf of Texas is this enormous great swirl of red, and what started out as a lil' ol' tropical storm is now a Category Four hurricane headed straight at my hometown - at my family, my friends and my factory. I get this flood of emotion like I've never felt before: panic, fear, concern, frustration that I'm here and it's happening there, all of that. I understand at once the way things are in my hometown, and I know there are a lot of people that aren't going to make it out. Of course, half a day ahead because of the different time zones, I made contact with my family right away, and I knew they were going to be OK, living up on the North Shore of Lake Pontchartrain, and I was in touch with everyone in the company through my manager Karen. But we did not have time to evacuate any of the contents of the Confederate factory. I don't know what I could have done more had I been there, but on Saturday New Orleans time they built like a pyramid structure inside the factory to try to stop things from getting wet. We were more worried about flooding than anything else, in case the levees broke, which seemed probable. It wasn't projected in anybody's mind that the building would come down.

"Katrina hit on Monday morning, while I was still in the Middle East. It was such a roller coaster of emotion, going from such a zealous high to such an anxious low in the space of just a few hours. I saw my investor that next day, and told him I didn't think we should proceed any further because it didn't look like I had a business any more for him to invest in. We hadn't signed a written contract, so he was within his rights to terminate. He looked me full in the eyes and told me that when he shook hands on a deal, his word was his bond, and that as far as he was concerned, the arrangement still stood. He said he knew we would survive and grow strong again, and he wanted to be a part of a renovated Confederate. That's the word he used, and that's the name we've given to our new generation motorcycle: the Renovatio.

"It took about a week to consummate the deal with lawyers and paperwork, and another four days to get home. But on the seventh day I was with my family again on the North Shore, and on the 10th day we had a meeting there with all the employees of Confederate, save a couple who were still stranded in the city. At that stage we still did not know what had happened at the factory, because there was no way of getting into New Orleans; we tried to get a picture from some of the aerial shots on the TV, but it wasn't close enough to see anything. We decided to send J.T. and his colleague Edward Jacobs to our development associate Brian Case's shop in Pittsburgh to finalize the production Wraith, and since it was evident we'd have to relocate away from New Orleans, and four out of our nine employees who owned a house were on the North Shore which wasn't wiped out, it was a no-brainer to relocate there. Even so, when I got back home, North Shore was so much worse than I thought, if only in the short term. It was set up to have 100,000 residents and now it had more than 300,000. Everywhere's a bottleneck, there's no food, you can't get a cup of coffee or groceries, you have to wait in line for hours for gas, debris is everywhere, you get a nail in your tire every day ... it was just a mess, but infinitely better off than New Orleans, where people were living in penury, waiting to be rescued.

"But J.T. would not go to Pittsburgh, even in the short term, and that was a major factor for us, since he would not move to the North Shore, either. He'd already told several people that New Orleans was never going to be the same, he couldn't believe the looting, and he never wanted to go back there again. He thought that we should move to Shreveport, which is where he's from, but that was not an appropriate area for Confederate to move to; there's no buoyancy like there is here in Birmingham, which J.T. also declined to move to. In the end he decided to remain in New Orleans, in the French Quarter where he lives, once it became apparent that this had survived more or less unscathed. But it meant we had a parting of the ways, and his assistant Ed took over responsibility for sending Confederate in a new direction in terms of product, being already familiar with our design-driven ethos.

"We had to get on track with the inventory and see what it would take to start production again - though it was already evident the North Shore was not an option. The place would take months to come back to normal, buildings had been marked up 50 percent to rent or buy, and availability was very restricted, anyway - it's mainly a residential area. It was around six weeks before we could get into the city, when we found out what had happened to the factory. We drove into New Orleans, parked outside, opened the door, and the lights were on and the air-conditioning was blowing - it was surreal! But the shop was totaled, even though the flooding was relatively light. What had happened was due to Katrina's wind force; the whole of one wall had collapsed when the wind blew it in, and that, of course, brought the roof down on the contents. When I looked at it, my first thought was that we're not going to get anything out of here; it looked like a coal mine in there. But some of the guys convinced me it was possible to get some of the frames and other inventory out, and they did by lifting part of the roof up and extracting what lay beneath. This means a Confederate frame is strong enough to have a roof fall on it, and still survive! We lost some paper on the business side, computers and files and stuff, but our hard drives were intact. We qualified for disaster relief, but the application for the loan is still out, more than a year later. We had some insurance, but it was only $150,000, and anyway the real loss to the company was the business interruption; that's what was killing us. I knew we would have an absent cash flow until January at the earliest, which was doubly frustrating because we has so many orders to fulfill for the Wraith and Hellcat - more than a year's production was already under deposit. That's why I'd signed a lease on a much bigger factory, which we were planning to start moving to as soon as I'd returned from the Middle East.

"Confederate's purpose for being is to create, perpetuate and lead a new American vehicle design initiative, and to design and craft the best motorcycles possible. In terms of where we were going to relocate to, these were the things that were driving me to make my decision, and to derive a positive benefit from this Act of God. Birmingham was very high on my list, which is why George Barber was my last call - I'd decided I would make no firm deal anywhere else until I'd talked to him, but I wanted to be armed and dangerous if he started quizzing me, to be in the position that if he was interested in Confederate relocating to Birmingham, I could demonstrate there were other places which also had an interest in bringing us there. But it didn't come to that.

"I feel that George Barber will be historically viewed as one of the greatest motorcycle identities of the present day in North America. I've known him since 1994, and what he has done with his magnificent display of motorcycles is not only to provide a unique window on the evolution of the motorcycle, but also to create an environment where a non-motorcycle person would come out of there and say, `I'm going to be careful when I see motorcycles on the street now.' I had been there several times, and each time admired even more what'd he had created and was expanding on.

"So I called Mr. Barber, and immediately started getting calls and e-mails from what is essentially his lieutenancy. We met in the Museum auditorium, and they made an extremely professional presentation to me that was very aggressive in seeking to attract Confederate to Birmingham. Classy and courteous, but hard-headed and businesslike, it was George Barber all the way. And thus began what I would call a perfect courtship, culminating in a press conference where we made our commitment, which made the front page of the Birmingham newspaper under the headline `Motorcycle Company to the stars chooses Birmingham.' Mr. Barber has given us the use of one of his buildings in downtown Birmingham to restart manufacture, where we will likely be for two years, while we build a new factory out at the track, adjacent to the museum. George already has the legislative stuff done on that; there are no governmental problems and the green light is on. We're going to start with a 25,000-square-foot facility in a state-of-the-art building in its own right, with the possibility of future expansion, as necessary.

"But the crucial reason we want to be here in Birmingham, with Barber, is a part of reasserting American design excellence. We're exposed to every important motorcycle design that I'm aware of, to study and learn from its design and craftsmanship. And, secondly, we have access to a fantastic array of suppliers and component furnishers in this region, thanks to Alabama's position as the 21st century Detroit. And because of this location; because of Mr. Barber's support in providing us with facilities to get restarted in Birmingham, in allowing Confederate to be a component in the new high-tech automotive center of excellence he's establishing at the track, and to have access to his collection; because of the financial resources my honorable investor has insisted in maintaining on the basis of a handshake; and because of the great vision and hard work our team is devoting to re-establishing Confederate as the finest American company building small-batch motorcycle products, I feel we're stronger now than we were before Katrina, with a bright future based on a firm platform. But we've been to hell and high water getting here. Please God the City of New Orleans comes out of it as well as I believe Confederate Motorcycles has done." -MC

Matt Chambers
President, Confederate Motorcycles
Confederate factory before hurricane Katrina.
Confederate factory after hurricane Katrina.
(Left to right) Matt Chambers, George Barber & Governor Riley of Alabama.
Motorcycle company to the stars: Tom Cruise tests the Confederate Hellcat in front of his adoring fans.
New generation motorcycle: the Renovatio