A Bailout For Harley-Davidson?

The mother factory and its competitors in the heavy weight motorcycle market are preparing themselves for a big drop in 09 sales. In addition to the biggest contraction in US consumer spending since the 70’s, it is probable that Harley-Davidson international sales, which had grown by double digits in recent years, will no more be enough to compensate for the decline in the U.S. If the dollar continues its recent gain against the Euro, it will make things worse by depriving Harley from these last years favorable exchange rate. Harley-Davidson already acknowledged that 5.6 percent of its motorcycle loans were delinquent 30 days or more and no doubt that delinquencies will continue to rise along with unemployment. Any company relying on consumer credit is in for a long road ahead. Let’s be realistic. Practically everyone needs a car and many can’t buy one. There are a lot of people who want a motorcycle, but most don’t need one, especially motorcycles costing as much as a car. A lot of stock analysts already downgraded Harley stock to “Sell.” And the Harley share price continues to drop closing yesterday at $13.70 down from a high of $48.05 a few months ago. Meanwhile, the CEO is leaving and the CFO already left. in 2009, will Harley-Davidson ask for a bailout to avoid bankruptcy?


30 Responses to “A Bailout For Harley-Davidson?”

  1. 1 Scott Jan 18th, 2009 at 9:26 am

    Harley Davidson may wish they could get a bailout along with every other industry in the nation. Unfortunately, the mortorcycle industry is viewed as recreational and not vital to the welfare of this country. The government of this country will not even entertain such a thing. The motor company’s best chance is to spin thier consumer lending off and plead it’s case as a bank. It worked for GM.

    Bankruptcy for HD would not have as far reaching impact as the Automotive industry. Many would still suffer if it were to happen. A chapter 11 filing would most likely not end in liquidation for them. Simply, a restructuring early on would prevent disaster in the future.

  2. 2 DonV Jan 18th, 2009 at 10:21 am

    I think the new Sportster trade in deal will spur some sales but the credit market is weak for sure. Harley should have seen it coming and protected itself. They focused to much on sell sell sell and all the inane boutique items and trinkets they sell.
    Harley should have concentrated on the Quality of their motocycles NOT the Chinese crap they sell at their boutiques.

  3. 3 BadMonkeyMW Jan 18th, 2009 at 10:51 am

    The chickens have come home to roost. Harley’s arrogance has come around and bit them in the ass and now they have to deal with the mess they’ve created for themselves.

    Harley seemed to believe they would be able to continue selling 200,000+ motorcycles a year forever. I don’t feel the least bit sorry for them, but I’d like to see them pull their heads out of their asses and restructure their company so they can keep building bikes well into the future.

    Here’s a hint: Coming out with a $30,000 trike is NOT going to insure your companies future.

  4. 4 Dave Mann Jan 18th, 2009 at 11:22 am

    Some riders want something other than a cruiser or a touring bike.

    Given a corporate marketing strategy that was less close-minded, a version of the Sportster could evolve into something along the lines of the Ducati Sport 1000S.

    Picture: http://www.totalmotorcycle.com/photos/2009models/2009-Ducati-Sport1000Sa.jpg

    Blurb: http://www.totalmotorcycle.com/photos/2009models/2009-Ducati-Sport1000S.htm

  5. 5 Lyle Jan 18th, 2009 at 3:10 pm

    Didn’t they just buy MV Augusta for millions and millions? Using MV August engineering maybe they
    are going to evolve the Sportster or Buell. The bad thing is when HD tried marketing the XLCR in the 70’s and times were hard for the company, nobody was buying them. I really like those Dunstall looking bikes. That Ducati linked to above and Guzzi has one as well. I vote HD does it too. Regardless of the market!

  6. 6 ROCK STAR Jan 18th, 2009 at 3:23 pm

    while your bailing out Harley, Ima bailout your wife

  7. 7 Dave Mann Jan 18th, 2009 at 3:42 pm

    My prediction is that MV Agusta motorcycles will remain what they are, and the changes will be in the company’s operating capital and dealer network.

    The market is there, but H-D chooses to ignore it. One possible reason for that is they don’t wank to risk alienating the hard-core Harley riders. But most riders I know can at least appreciate bikes along the lines of the old Norton Commando and Ducati mentioned earlier.

    Look at what the Sportster was when it was introduced back in ’57. Like the Norton, it was a relatively light bike that was all business. Over the years its progression has been one of conservative refinement, with its main styling change being a sixteen-inch back wheel. To see the Sportster’s potential, we need only look at the work of Steve Storz and WAKAN.



  8. 8 Nicker Jan 18th, 2009 at 3:59 pm


    Spot on Dude……


  9. 9 Boss Hawg Jan 18th, 2009 at 4:07 pm

    Harley Davidson will survive although they my restructure and, quite possibly, may be forced to file Chapter 11 to reorganize.

    However, if Dennis Hof’s World Famous Moonlite BunnyRanch gets the $1,000,000,000 Bailout money he is asking for to secure Nevada’s oldest profession, then Harley Davidson should be able to secure some bailout monies also.

    Boss Hawg

  10. 10 Strada Jan 18th, 2009 at 4:36 pm

    At some point H-D made a decision to lower their credit standards to move iron. The financial markets caught on and the stock price is taking a beating. At the same time the outgoing president is aware that the Boomer joy ride is over. Leading edge Boomers are in their late 50’s early 60’s, and their kids in many instances don’t want to ride the same style of bike as their father.

    H-D has a superior dealers network compared to other bike manufacturer, although the dealers are unfortunately selling H-D branded items and accessories, instead of focusing on how to generate a higher customer base for the Buell line of bikes.

    Nobody in his right mind would go to an H-D dealer to buy an MV Agusta.

    H-D has a few challenges in their immediate future, it will be interesting to see how they overcome the challenges. Looking at how they design their bikes, and place their future on serious, huge, heavy, and identified by many as unreliable Milwaukee iron, they will get their behind kicked in a few times before they learn.

    Hopefully they will learn, and execute the changes they have to make.

  11. 11 Dave B. Jan 18th, 2009 at 5:00 pm

    I don’t think HD needs or expects to receive any bail-out funds, but is angling for any “free” money that might be available to manufacturers. HD has endured a century of wild economic swings and can survive more of them if they choose to do so.
    And for those that skoff at HD’s trinket sales, you should remember those trinkets create revenue when bike sales don’t.

  12. 12 James (Kiwi) Jan 18th, 2009 at 7:28 pm

    I agree with Dave B,a hell of allot of the non riding and riding public buy those trinkets.
    Things like Tee shirts and all of the trinkets have a good margin and need very little (If any) R&D monies.
    Personaly I like the Tee shirt asking when it became a fucking fashion show.
    Or the one I still have that says “This is Harley country on a clear night you can smell the rice burning”.

    Guess the world is too damn politicaly correct now,personaly it gives me the shits.

    I hope HD prospers and continues on, over my riding life of 30+ years I have bought 5 new HD’s and a number of second hand ones and apart from the first one which had a faulty crank pin,they have all been sound bikes which have given me one hell of allot of enjoyment.


  13. 13 Drew Jan 18th, 2009 at 8:14 pm

    I think it would be a damn shame to see HD go under. But, I also get really torqued at you bikers that think HD is the only cycle a “real biker” can ride. Hell, some of you even say the Buell isn’t a true motorcycle because it’s not a true HD.

    That’s the kind of closed minded arrogance that ha HD in the current situation. Being a biker is a helluva lot more than riding a HD. It’s about people who love the open road, have a spirit of individualism and freedom.

    To me, HD has compromised that over the past several years. They build that same style bike, charge a fortune for it, and perpetuate the idea that true bikers ride only HD cycles.

    That’s just bullshit.

  14. 14 Dave Mann Jan 18th, 2009 at 9:36 pm

    Before the Easy Rider movie came out in ’68, there were a lot of guys who rode British and Italian bikes that I don’t remember hearing being accused of not being real bikers. On the race track, there were some real heroes who rode the likes of BSA, Ducati, Moto Guzzi, and MV Agusta.

    Enjoy this brief symphony performed by Moto Guzzi: http://www.youtube.com/watch?v=XOjtSd8lXv4

  15. 15 Mike Greenwald Jan 18th, 2009 at 10:16 pm

    Should Harley Davidson decide to take another restructuring at government expense, what will be the trade off this time? Seems as though the CARB legislation went through and the other madatory equipment bills went through unscathed. However, I also recall that all of the dealers had to meet a different standard shortly thereafter. Additionally, I recall that owners of older versions of Harley Davidson motorcycles were treated like red headed step children and just pimped out for the clothes or colors they wore vis-a-vis H.O.G. “patcholders” and the infamous “MotorClothes” division. THis does not even begin to address the amount of chrome accessories that they mhave marketed and sold while never paying attention to the motorcyclews themselves.

  16. 16 Lyle Jan 18th, 2009 at 11:25 pm

    Mr. Mann. that symphony was pure music. I’ve got enough Guzzi parts to put most of two machines together and I really needed that video for inspiration. I’ll put the shovel rigid and 57 sportster chop projects to the back of the line. I’m probably not a real “biker” though.

  17. 17 Dave Mann Jan 19th, 2009 at 12:10 am

    All right, then here’s one more.

    Some heavy rock, played by Ducati: http://www.youtube.com/watch?v=8ZQgNZ3gBmM

  18. 18 BikerDATA.com Jan 19th, 2009 at 7:18 am

    HEY ROCKSTAR: How’s the treatment going with the case of HERPES and various other STD’s you contracted?

  19. 19 madpuppy Jan 19th, 2009 at 7:46 am

    BikerDATA.com : That’s the same question I was gonna ask rock starr ! I was wondering if he read my post from yesterday ? Sure hope he gets to the Doctor FAST ! After he admitted to banging all our wife’s and girl friends, I thought it only fair to let him know my wife has full blown A.I.D.S. and Gonorrhea . And as he is so cool and such a lady’s man, I wanted to let him know also that the “wetness” he felt was just the scabs and sores popping ! So again rock starr run, don`t walk to your closest Doctor !

  20. 20 Fab Kevin Jan 19th, 2009 at 8:40 am

    Perhaps if HD hadn’t quit buying parts from their AMERICAN vendors, their would be a few more potential customers to buy bikes around here. as few as 5 years ago, almost everything they sold on the wall was made here. Record profits year after year didn’t cause them to stop buying domesticly – it was pure greed.

  21. 21 Kephas Jan 19th, 2009 at 9:35 am

    Remember when Harley was special? Remember when you couldn’t buy a new Harley without a trade-in? Remember when delivery of a new Harley could take six months? Harley doesn’t. Greed set in and Harley saturated their market.

    In 2005 the once a month weekend riding professionals started selling their garage ornaments. In 2006 the number of pre-owned Harley’s spiked driving down the pre-owned prices. In 2007 you could buy a 2004 accessorized Road King with 3000 miles for $14,000.00 or less. All of the sudden the consumer did not see any advantage of going to the dealer. They were buying their new/used bikes on ebay, craigs list and the local classified adds.

    The market is still saturated and will be for at least a decade. Attendance at the rallies was down 40% in 2008. The yuppie weekend rider has found a new get-away that does not include a Harley Davidson. Daytona, Sturgis, Myrtle have lost their appeal to the yuppie which has ended the party for Harley and thousands of rally vendors.

    Dealers will shut down and the markets will respond to demand. Harley isn’t going anywhere. Unfortunately, there could be a foreign owner in the crystal ball.

    Keep you eye on Indian. They are set-up to survive.

  22. 22 BigHand Jan 19th, 2009 at 9:45 am

    Question for you James (Kiwi) ?????
    Does Indian manufacture all their parts in the US or does Indian buy parts from foreign vendors to build the Indian ? We know you will give everyone a honest answer….want you James ?

  23. 23 Biker Bob Jan 19th, 2009 at 11:46 am

    First big bike I ever had was a Harley Davidson Super Glide, 1978 1/2 . First thing I did was put some drag pipes on it and an S&S carb, tune it up and change the oil and filter. It was used and had 2300 miles on it, I got it in 1980. It was time for that bike to have someone own it that apprecitated a big motorcycle, you see I had already had a Cushman Eagle, then I graduated up to a Mustang with aluminum wheels (wish I still had that one) and then I went on to a Bridgestone and the list goes on and on. I very quickly transformed my Superglide into my own custom chopper with a new front end, cut the frame and gave her some rake, how much?? I don’t know, then some fat bob tanks, king and queen seat with a custom rear fender and home made bitch bar. I put acorn nuts everywhere that I thought looked good and added a kick starter kit to the tranny. Pulled the head light off and put a custom one on, (one I made). Last thing I did was some ape hangers, remember how hard it was to come up with longer cables, and brake hose back then?? No catalogs filled with custom parts to order out of back then.
    I will never forget what it was like having that bike, the sound, the feel of the power coursing through the frame to the seat and bars. It felt great, I felt like I was finally me, being one with my machine, and it was a Harley Davidson. Gotta tell ya, I hope they hang on some how and beat these hard times, they’ve done it before.

  24. 24 Dave Mann Jan 19th, 2009 at 12:12 pm

    Here’s another example of creative thinking applied to a V-twin. Take a look at what Walter Roehrich has created with a supercharged 1250cc Revolution engine in his own chassis. His bike weighs 432 pounds and has 180 horsepower.


  25. 25 James (Kiwi) Jan 19th, 2009 at 2:05 pm

    Hi Big Hand,
    To be honest I would have no idea and no way of finding out.Things like electical fittings,cable ties,wire,disc brake pads,chains and all manner of things may not be made in the USA.
    I hope they are though, and that Indian do well.
    Me, my first bike was a BSA Gold Flash and it was probably all made in England though I am not completely sure. I bought a new Triumph Bonny in 81.It had Paoli rims and French instrumentation but I loved both of them just the same as my Shovel with the Showa front end.
    I bought HD’s when it was very un trendie to do so and will be still buying them when the Trendies wash away with the other flotsam.
    I respect and enjoy the company of many Motorcyclists that ride many unusual and not so unusual machines. That is part of what makes this way of life fun.We all have the enjoyment of motorcycling in common and because of that common thread often become very good friends with people from walks of life you may otherwise never meet.

    Me,ever since I heard a 74” Shovel with open pipes I have been hooked on Harleys,But If I could buy back my old sprung hub Thunderbird I would at the drop of a hat.
    I buy my motorcycles on emotion not on Tech sheets or what I read on the internet.

    I just want Harley Davidson to go on and all the other manufacturers to survive as well!!


  26. 26 Westside Willie Jan 19th, 2009 at 3:56 pm

    Dave Mann is right on. Drew too. I’ve ridden Harleys for more than a few years and rode a Triumph Bonnie before that. I’ve still got a ’79 Shovelhead I’ve torn into a few times, and a Twin Cam Road King. But I also appreciate Ducatis and other cool bikes, and I’ve got two more in my garage that aren’t HDs. Both are Moto Guzzis, an old Ambo and a newer cafe racer type bike. But I guess I’m not a biker either.

    My point is that HD needs to think broader, market new types of bike. I love the new Sportster and hope they’ll do more with that, Buell and MV Augusta too. Some of us who love Harleys need to be more open minded about our fellow bikers and what they ride. Two wheels is what’s cool. If they make a cool bike in Japan, China, Thailand, Europe, I don’t care. A cool bike is a cool bike. Enjoy them.

  27. 27 Luke Jan 20th, 2009 at 1:46 am

    We’ve seen bad times come and go. If Harley Davidson dosen’t make it I can assure you that there will be plenty of investors lined up with money in hand to re-open the factory just like they did with Indian (twice). If this happens, and they are smart, they will keep production low so demand remains high. Stick with classic design and forget investing untold millions in poor selling units like the V-Rod. As greedy as we think the suits are I hate to see American workers lose thier jobs. Thats why I have always and will continue to buy American, even if it does cost me an arm and a leg. Now, if Harley does go under I guess the value of my 07 Road King Custom (no longer in the line-up) will only go up in value. Could I part with it? Make me an offer that offset the downward spiral that is the value of my home and you’ve got a deal!

  28. 28 Marc Mazerolle Jan 20th, 2009 at 11:00 am

    It’s incredible to me how intelligent most of these comments are. We all seem to know so much about the industry and the sport we all have such a passion for. I just wanted to add my two cents, from a Canadian perspective.

    I remember the first time I went to the Harley dealer with my Pop to actually consider buying one. It was 1978, I was about to turn 16 and I wanted a Super Glide real bad. The price? Well here in Canada, in the late 70’s our dollar was actually worth more than the US dollar and the price on the bike I wanted was just a little over $3200.00 on the road. Being young and dumb, I ended up going to a Yamaha shop and buying something else for less. I eventually did get my HD, A 1983 1/2 FLH with one of the last shovelhead motors. My comment is on how even back then, as a fussy kid looking to buy, I went with a Japanese bike because it was cheaper and seemingly more reliable. Have things changed that much?? I teach school and run a Chopper Class after school program, many of the kids I work with want Harleys, but simply cannot afford one so they go with others just to get their asses on bikes. Nowadays, being a “Biker” is a state of mind and it’s not what you ride, it’s why your ride. Old guys like me never really called themselves “Bikers” other people called us that, we were just guys that rode bikes.

    Like many of you have mentioned, HD may have lost a little bit of sight of that and should consider keeping up with the times. You know what? Sure there will be some “die-hards” get angry at HD for building a crotch rocket or a street fighter but most of us will still go to them. Hell, look at the V-Rod, I still won’t call that a Harley!! I say, do whatever it takes HD!! Stay open, reconnect with your public and fans and mostly your past and future loyal customers.



  29. 29 mc Jan 28th, 2009 at 6:06 pm

    Union workers at Harley put a lot of pride into their bikes.
    Everyone knows the quality is extremly good.
    Its to bad that people bash unions but, the real problem is outsourcing-freetrade. Just think how many people could buy products made here if they worked as some of these companies vendors. Instead of bashing company Unions at GM, Harley, etc, go after these companies that don’t pay crap. No wonder no one can buy anything.
    The US needs good livable paying jobs and no free trade. Think how much everyone could buy if they made a decient wage like union workers.

  1. 1 Official. Harley-Davidson Asks For Federal Assistance at Cyril Huze Blog Pingback on Jan 20th, 2009 at 9:27 am
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