September 24, 2007 – The business behind the OCC personas

By Steve Bauer
Managing Editor
TV viewers know them from their popular TV show “American Chopper,” which features fiery but humorous verbal exchanges, moody personalities, crazy antics and special-design custom choppers. But the architects of Orange County Choppers (OCC), Paul Tetul Sr. and Jr., know it’s their unique bikes that will continue to make OCC a success long after the show is gone.
Still, glimpses of their infamous personalities were apparent when Powersports Business interviewed them to learn more about OCC’s development as a company.
Powersports Business: How did you come to the decision that it was time to create a production line of bikes? And how much does a production line affect your ability to create specialty bikes for large clients or your custom bikes?

Paul Jr.
No, we’re not shifting our focus from custom bikes at all. We always wanted to do a production bike that was more affordable for people and be able to go to dealers. With the success of the show and the way everything took off, all we could focus on were the high-end bikes, the TV show bikes. But now we’re in a position where we have enough equipment and enough employees where we can handle both.
The nice thing about (the production bikes) is they look like one-off customs, but they are a production bike, and the reason we can give it that look and do it that way is because of the technology and capabilities we have in-house.

PSB: Now that you’ve come out with a production line of bikes, what are your sales expectations for 2008 and beyond?

Paul Sr.
Since we really took our time to research the market before ramping up the bike line, we’re optimistic that we’ll be able to increase our percentages each year. We also see the value in that “wait-and-see” attitude; by keeping our ears to the ground in the industry, we’re better able to monitor the trends and better tailor our sales and marketing efforts. The custom chopper market is in a soft period but the bounce-back will come and when it does, OCC will be ready.
Right now we are in the process of designing one more bike at this time, a pro street, which we don’t have. The low seat bikes are coming back, so we’ve been in that for the past three months. That’ll be the next bike we come out with.
But going back to the subject of the market being soft, this has been our best year as far as building bikes, and I think that we really took a lot of time and research into building these production bikes as far as EPA regulations. We did everything right, and the other thing is that we are in 160 countries, so we’re internationally recognized, which is a big advantage for us.

PSB: How have you gone about choosing which dealers carry your bikes, and is it your desire to grow OCC to the size of a Big Dog, etc.?

Paul Sr.
Concerning production and sales, OCC plans to create an initial network of approximately two-dozen dealers for whom we will manufacture approximately 50 production bikes. Within three years, those numbers are expected to increase, with a projected dealer network of more than 40 businesses and the manufacture of 300-350 bikes per year.
The other thing that is very important to us is that we’re going to keep a tight control on how our dealers represent us. That’s very important to us because you can’t have people have free range, and you can’t have stuff that’s out of order. Everything has to be designed the same and everybody has to be on the same program. That’s part of the requirements and quality control as far as our dealers.

Paul Jr.
And that goes from floor layout, which we have a nice uniform plan for. Anybody who goes into a dealership, it’s going to look just like the next one. We also have a requirement of so many square feet of floor space as well as maintenance programs. We’re going to send guys out to train the mechanics at each individual dealership on how to work on the bikes because all bikes are slightly different. Also with our wiring process, we’ve gone with Harley-Davidson’s color code, so most mechanics can work on the wiring without having to do guesswork. We’ll also have a standard amount of apparel dealers will have to keep in the showroom. It’s a pretty nice setup.

PSB: How much longer do you believe you will continue to stay involved with “American Chopper,” and how much do you think your popularity and sales will be affected once the show ends?

Paul Sr.
The show has played a big part in what we do, but the bikes are also, and I think we’ve been successful in all our strategies we’ve had so far, in merchandise, bikes and everything else. At this point we’re preparing ourselves because some day the show will go away. But at that point, we’ll be established enough to succeed without it. The one thing I believe we’ll never lose is our fans, regardless of whether we’re on TV or not.

Paul Jr.
We’re cornering the quality and innovation is the big thing that always kind of streams through with what we do, so we have validity in the bikes we’re building. So without the show, we’ll still always have the name for being known for quality and innovation. That’s definitely what we’re going to be working on for the future. As far as the show goes, most likely we’ll be on for another 3-5 years. It seems like a long time.

Paul Sr.
It is a long time.

Paul Jr.
Yeah, considering we’ve already been on for five years.

PSB: I know OCC has plans to expand its dealer network internationally, what are your expectations for the overseas market, and do you have any other business initiatives in the works?

Paul Sr.
I think the oversees market is going to be phenomenal. We’re going to be in South Africa next month. We just came back from Brazil where we met with the president of the country there who’s definitely interested. We have bikes in Australia, and we’ve received a lot of interest from Russia and other countries. People are coming from these countries to our shop to develop programs with us. I think it’s going to be a big success. Like I said we’re in Canada, and I think the person we have doing that already has close to 20 dealerships lined up, so I see it as a big part of our future. Another big project for us is the creation of our own parts line, which will be out in the near future, so that’s exciting.

Paul Jr.
You know, going overseas the challenges are obviously next for figuring out ways for that all to make sense. Every country that you go to is a little different from the next. We’re trying to work it out. We did get a somewhat of a handshake agreement with the president of Brazil, so that’s encouraging.

PSB: Where do you envision OCC to be in 10 years? Are your plans to continue it as a family run business that caters to a niche market, or do you foresee it growing beyond that?

Paul Sr.
You know what, I started out in the steel fabricating business and I probably did it for 25, 28 years, and I then I handed it down to my son Dan who’s doing a phenomenal job with it. And hopefully he’ll pass it down to the next generation. So first of all I see it as something that was a passion for me, and I still enjoy it.
My hope is that my sons, when I’m not able to do it anymore, take it over and pass it down to the next generation. That would be my hope.

Paul Jr.
As soon as my father leaves the company, I’m going public to sell it.