Harley-Davidson. Caught In A Trap?

Of course I am aware of rumors of a potential leverage buyout of Harley-Davidson (HOG) reportedly by private-equity firm Kohlberg Kravis Roberts (KKR). True or not, we will know very soon. But in any case, we can wonder about what can be the new strategy for the Milwaukee factory. Will a better economy stop the Harley-Davidson motorcycle sales decline? Maybe slow it down if many get back a  job or feel confident they will keep it. But in my opinion, it’s not enough because Harley problems, although hidden, like those of many other companies, were present before the economy turned sour. I know that many of you think that the strategy of lower prices is the magic pill. Is it? Let’s look at the past.

In the 70’s Harley-Davidson problems were created by a deterioration of the brand image due to poor quality & reliability of its motorcycles, absence of innovation and very poor customer service. The big 3 Japanese brands, Honda, Yamaha, Suzuki offered much better quality for much lower prices. Harley-Davidson’s market share shrank from 39% in 1979 to 23% in 1983. Harley legendary image could do nothing to protect the brand. The company could either lower its bike prices to maintain its market share or hold prices but continue to give away market shares. Because of fixed costs, neither of these strategies could work without destroying the balance sheets. Like today, future was grim.

In 1981, after a management buyout of owner AMF, Harley’s leadership turned the company around by re-branding the company around the mix iconic/rebel image. Although there was some progress in reliability, it’s this new fabricated image who attracted new buyers, making the Japanese motorcycles advantage in reliability less important. It was the marketing demonstration that quality/reliability of a motorcycle may be for some less important than its image, in this case riding the symbol of the “American Outlaw”. Later, Harley-Davidson evolved this image from outlaw to rebel, from adventurous gentle bad boy to self-expression then to weekend warrior, continuously re-shaping and coloring its image to stay in tune with a growing population of former and new bikers turned white collar baby boomers.

To acquire these successive “biker personalities” while on your motorcycle you needed to buy not only the bike but the gear, the tees, the bandanas, the leather jackets and stock on some “collectibles” to clearly state who you were to family and friends. The fact that Harley was not able to produce fast enough in the 90’s, making buyers wait 6 months or more to get their motorcycles arrive on the dealer floor amplified the desirability of the brand. Harley boom peaked 2 more times during the 95th and 100th Harley Anniversaries. in 2003 the company announced its absolute best revenues of $4.6 billion, 13% more than the year before. It didn’t matter that a Harley-Davidson bike offer more than its direct competition. Image was (almost) everything and bikers were paying big bucks for it (market studies at that time said that a potential buyer was ready to pay up to 35% more to get a Harley versus a comparable model from the competition…). So, Harley-Davidson spent hundred of millions working and re-working its image. Custom builders, through their works, reinforced these successive images for the benefit of Harley capital image…

Baby Boomers got older. Some went to the comfortable touring motorcycle, spending much less in genuine or after-market custom and/or performance parts. Others went for the 3rd wheel or abandoned motorcycling for reason of poor health or age. More gray beards on the road amplified the perception by young Americans that Harleys are for their parents, not for them. Then the economic recession hit hard American families. The fear of depression remained the main topic of these last 4 years. Signs of recovery are still weak. Baby boomers are older and started to retire fearing for their last years financial well being. Young graduates and junior executives are looking for first jobs. Harley-Davidson, as painful as it may be for too many long time employees, is doing the right thing by trying to get lean & mean by closing unefficients plants . But it will never be to the point of being able to produce bikes in America at a lower cost than its competitors, or Harley will go very fast in the red.

Harley is pursuing the right strategy in organizing “Women Garage Parties”, but its big twins line-up and macho image has already intimidated too many women who, since many years, have already opted for competitors. Harley trying to “talk” to youngsters with blacked-out Sportsters and trying to seduce minorities is also the right approach. Problem is that Harley’s iconic status and image of these last 20 years is now irrelevant to these targets. If people have no discretionary money to spend, if young people refuse to consider the Harley brand because considered old, if women are already faithful to other brands, and if the Harley past iconic image can’t no more justify the price paid for their motorcycles, what is the solution? I am not sure that anyone in Milwaukee knows for sure.

During these last 3 years Harley has multiplied its incentives and dealers have discounted to the point of no profit just to maintain their sales objectives, keep cash flow positive to prevent going out of business. Sounds to me like a desperate temporarily strategy because Harley is structured such a way that there is no more room for discounts. Trying to preserve market share with lower prices has run its course. Harley-Davidson is caught naked without a strategy to attract generations X & Y. Harley sales have always been supported by image, much less by products and never by lower prices because it can’t compete on this criteria. But which image when you have to address so many different markets with different profiles with a potential clientele in majority new to motorcycles or very recent bikers? And this without alienating your core clientele and altering your iconic American image. Interesting marketing problem, isn’t? Harley-Davidson is caught in a trap. How to escape it? Many top Harley-Davidson executives are subscribed and read my Blog. Share your ideas with them…(pictures copyright Harley-Davidson)

Zipper's

69 Responses to “Harley-Davidson. Caught In A Trap?”


  1. 1 James Pratt Mar 18th, 2010 at 9:44 am

    Innovation. That is what is lacking with Harley Davidson. I love their rebel image, buy some of the clothes myself, but their bikes, short of the vrod, are lacking in innovation. They are big, heavy, and underpowered. I think people are wanting lighter weight bikes that have more power. Harley could still keep their image but by bringing us lighter, more powerful bikes they would appeal to younger buyers and women. And get back into racing. That is what leads to innovation and helps keep the brand fresh and young and gives you a performance image. Your drag racing program is decent, but you need to be in other forms of racing.

    Right now I wear a very nice and expensive Harley Davidson racing jacket on my BMW R1200GS Adventure. People always ask me why. I tell them “I love the Harley image, they just don’t make a bike I like right now.”

  2. 2 Magnumbob Mar 18th, 2010 at 11:15 am

    Interesting that Harley is trying to promote to women, when they don’t offer a suitable bike to any but the most advanced riders.
    A close woman friend decided she wanted to start riding, and started as you should with something small, in her case a 250cc yamaha v-twin. The bike was not only small and unintimidating with it’s very low seat height, but it also was a nice looking and sounding little bike with it’s V-twin engine. Of course Harley had nothing to offer unless you count the now MIA Buell Blast, but she wouldn’t have gotten one of those anyway because she likes the look of a cruiser, not a sport bike.
    Fast forward a couple of years and she was now ready for a bigger bike. Her only Harley option was a Sportster. She tried riding one and was immediately turned off by the tall seat height and overall heavy feel.. She ended up falling in love with a 750cc Honda cruiser. You know, I rode that bike, and it was tighter feeling than any Harley I’ve ever ridden. Note that this story spans about 4 years now, and you know, she never had a mechanical failure of any kind on either of the bikes in that time.
    If and when the time comes that she feels she wants a full sized bike, will she feel the need to spend the extra money for a Harley to acquire the “image”? Or, will she stick with one of the Jap brands that have served her so well?

  3. 3 hpierce Mar 18th, 2010 at 12:44 pm

    i love my country, hate my goverment. love harley-davidsons, hate their management. not too long ago they decided to abandon Buell, which was my first quasi-harley. I previously owned crotch rockets but always liked the harley lifestyle. the buell was an easy transition. i still liked the knee dragging riding but wanted to fit in a bit more at the rallies. I have since sold that buell and i’m looking at a softail. This should be harley’s approach to attract market share from the Japanese market. I don’t understand why harley would buy the majority of buell, but never seemed to support the product. the bikes were always stuck in the back of the dealerships i visited, if they had any at all. And when they stopped production, had no idea how much money it would save the business. are you kidding me? that does not build shareholder confidence at all. why make a move if you don’t know how it impacts the bottom line? quote – Discussing the decision, Harley CFO John Olin says, “We have not quantified the benefits of increased focus on [the] Harley-Davidson brand as a result of discontinuing Buell nor included any potential savings in our restructuring estimates.” wow John, really? making decisions by ouija board or crazy 8 ball? but on a t.v. show, i saw a tour of the factory and saw a very fancy audio chamber just to listen to how the harley sounds. that room had more support than buell did. and why in the world did harley need to buy MV Agusta? I still don’t understand that one. but i’ll finish on a bright note, Harley, you should go with a new marketing strategy. don’t measure your product by the numbers sold, not by market share, measure your sucess by the value of your product after 5 years. compare your rate of depreciation on a similar 5 year old japanese product. I haven’t looked at it other than shopping for a softail, but i feel it would be very favorable. That should make people want your product a bit more with everyone looking for vaule in todays economy.
    sincerly
    hp

  4. 4 Marc Frantz Mar 18th, 2010 at 1:15 pm

    Cyril,

    Thank-you for the great summarization on Harley’s last four decades, and
    the challenges they face in our contemporary market. As I love the brand
    and everything it stands for, I felt compelled to respond, in the hopes
    that I may contribute some insight and help this American iconic brand.

    Having been a GM at a Harley-Davidson dealership, I have two perspectives
    to offer to the executives at HD, whom I’m sure, know who I am and what I
    have contributed towards their success in the past.

    First: We live in the 21st Century, where we see Generation X & Y
    spending an exorbitant amount of time in the cyber world. This is
    evidenced by the explosive growth of social media, and the health
    reports on our overweight younger generation. As a child, I played
    street hockey and rode my bicycle from dawn to dusk. Young people
    today spend their time on-line, whether it be Facebook, Twitter,
    X-Box, or what have you.

    In the past, young people could be categorized to a few demographic
    groups. Either you were a rocker, or a disco guy (don’t laugh), or a mod
    (British) or a jock, or a biker. These demographic ‘handles’ were easily
    recognized by what they wore, as they lived the lifestyle they associated
    themselves with, as it’s human nature to want to belong to a group
    (pack mentality).

    Today, it’s quite hard to categorize a generation of individuals that
    basically live in a global, electronic neighborhood. As well, Gen X & Y
    have radically different value systems than us ‘older’ people. These two
    generations are also described as the ‘entitlement generation’ due to us
    parents telling them through their early years that they are the best,
    the smartest, the most important, etc. Us boomers created a generation
    of people who really don’t value anything in the way we do. Everything
    to them is disposable and for the gratification of the moment. Just ask
    your teenager what is valuable to him/ her. A week later, ask them
    again and you will get a new set of things that are valuable.

    So how do you reach Gen X & Y? This is the million dollar question.
    Companies & organizations are embracing social media in the hopes of
    generating revenues, and the marketing arms of companies are setting up
    their own twitter and Facebook accounts to try and reach this electronic
    generation. In my humble opinion (“What the hell do I know, I’m just a
    dumb biker”) Boy, will this bite them in the ass in the future. Young
    people use social media to be social, and most would tell you that they
    see companies invading ‘their space’ to sell them something as intrusive.
    I had a twenty something guy tell me that “one can’t even use the
    bathroom without being inundated with ads to sell something.

    Gen X & Y will simply tune you or your ad out, and they are very good at this.
    We’ve all heard our children quip “Yeah Whatever”. Cynical & distrusting of any
    form of authority, Gen X & Y’s trust definitely needs to be earned.
    Trust is the key!!

    Gen X & Y may not have the loyalty of their parent’s generation, but they will
    never forget a negative experience, and will ‘punish’ the company by not
    patronizing their stores again. Soon social media will become commercial
    media, and it will have a negative polarizing effect.

    As there is so much variety out there, one can see how not patronizing a
    brand or store again is quite possible, and this leads me to my second
    perspective: Variety.

    There are way too many iterations of motorcycles out there.
    Manufacturers have created so many models out of the same base unit,
    that it becomes daunting to make a choice. Many a time I have seen
    people come into a dealership with a bike in mind, and find 10 different
    iterations of that model. This confused them so much, they couldn’t make
    a decision and actually ended up buying another brand of motorcycle.

    Manufacturers need to stop pandering to every whim and desire from the
    fickle crowd. Carve your model line-up down to a few choices on each
    line. You can’t be everything to everyone. Saturization is another
    problem. Over production leads to burgeoning inventories at the dealer
    level and numerous used product just sitting in the marketplace. There
    are only so many motorcyclist out there! This also drives the price of
    product down due to the vast array of non-current product available.

    Lean & mean is the name of the game. Keep the demand greater than the
    supply like in the old days. People like to have something exclusive and
    in relatively low numbers. If a manufacturer can align their business
    model to reflect this theory, and still make a modest profit, they will
    continue to prosper. We really need this paradigm shift as the days
    of multi-billion dollar profit reports are over.

  5. 5 Magnumbob Mar 18th, 2010 at 1:19 pm

    Hey hpierce,
    I agree with everything you said except the last part about the 5 year value.
    per NADA:
    2005 FLHTCUI new retail-$20,405.00 average retail-$14,010.00
    2005 Honda Goldwing GL1800A5 ABS New retail-19,299.00 average retail $14,655.00
    2005 Sportster XL1200C new retail-$9915.00 average retail-$5470.00
    2005 Honda VTX1300C5 new retail-9399.00 average retail today $5500.00
    (Note also that in 2005, many payed over retail for a new Harley, or had grossly overpriced options rammed down their throat, while most Honda buyers were able to buy at retail or a discount)
    I can tell you this from my experience selling them for a living, the Harley market is in the toilet. I believe actually worse than the metric market. When I look at those prices from NADA I feel like I would have a better chance getting the Honda prices than the Harley prices.
    Please note I’m far from a Jap bike fan boy. ‘Just telling it as I see it.

  6. 6 hpierce Mar 18th, 2010 at 1:37 pm

    magnum bob, i see what you mean, i didn’t look too far into it since i wasn’t looking to purchase a used Jap bike. point taken, but i did find this today about the closing of buell instead of trying to figure out a dollar amount and selling it. seems like they had 2 offers to buy it.

    http://hellforleathermagazine.com/2010/03/report-harley-could-have-shoul.html#more

  7. 7 Magnumbob Mar 18th, 2010 at 2:30 pm

    Hpierce,
    Wow, I was not aware of that. It would seem there were a lot of US workers thrown under the bus for no good reason.
    ‘Never been much of a Buell fan until the 1125. That bike showed promise.

  8. 8 Da Trump Mar 18th, 2010 at 2:30 pm

    KKR is the king of leveraged buyouts . . .

    That means they borrow the money to purchase usually ailing companies then they fire most of the employees, wiggle out of any ongoing pension plans, and sell off all the company’s assets. In Harley’s case that would be the inventory, tooling, and properties. They will also acquire Harley Financial and sell off the debt. In total this is called “pump and dump” and it makes KKR millions but leaves noting but wreckage in it’s wake.

    You can defend this as capitalism in action but the problem is when you, the little guy, borrows money to buy a business you get to pay exorbitant interest rates plus you get taxed to death. KKR will throw 300 lawyers at the buyout of Harley and get every tax break and sweetheart low interest deal imaginable.

    At worst these lawyers will stall any payout on KKR’s behalf until they can dump the company. KKR doesn’t dismantle every company it buys. They do hang onto the ones they can turn a profit. With Harley this will probably mean moving it completely offshore (KKR has a large presence in India) and operating on the Harley name and reputation until they run that legacy right into the ground.

    So far this potential buyout is only a rumor, but everything on Wall Street starts with a rumor. And Harley just oozes with everything KKR looks for in a buyout. If you take the time to look at KKR’s website they list as “achievements” the many leveraged buyouts they’ve completed. To them it’s just so many stuffed and mounted heads on a wall. And they’d love to hang Harley Davidson up there too.

  9. 9 alby Mar 18th, 2010 at 3:04 pm

    if Harley wanted to expand it’s business and get the attention of of gen Xand Y in my opion they need to bring back the cafe racer of 1977 and 1978 look with 1125 buell motor and frame design or v rod motor ,that appears to be doing 100mph plus, standing still and you’ll get the attention you need and have a winner for all the people who love there crotch rockets

  10. 10 tremor Mar 18th, 2010 at 3:27 pm

    Good thoughts / comments here. I have a different idea.

    If HD wants to spark profits they need to introduce a bike that

    1) Clocks in at about $7k
    2) Has real street credibility.

    No cookie-cutter Sportster can do this (and HD lack of imagination is to blame).

    Harley needs to look to the DIY chopper and bobber builders and give them what they need. A Sportster kit.

    Sell the parts, dammit. You know HD has them sitting around.

    Sell me the frame, the engine, some none-crappy wheels. Let me mix and match to the point that no two Sportsers are the same, but are made from available parts.

    Yes, this will initially only appeal to wrench fanatics, but eventually rolling your own Harley could inspire new riders / customers.

    Shake up the market. Stop trying to give us the bike you think we want. Let us show you the bikes we know we want.

    Secondly, cut the price on accessories. Take the hit, HD. Your margins on accessories are probably up in the 60-100% range (if not higher). Spark buying by lowering the price of accessories, creating a run on small sales. Get people into the dealerships (or, better yet, on your site).

    Third. Allow dealers to differentiate more. These are Starbucks’ or movie theaters. Crack it open a bit.

    WTF? Is there no one at the Motor Company who could think of these things?

    Oh yeah… and stop dolling up every leather object with studs and tassles. Seriously. Stop.

  11. 11 tremor Mar 18th, 2010 at 3:29 pm

    Sorry, I meant to say These are NOT Starbucks’ or movie theaters.”

  12. 12 doc Mar 18th, 2010 at 4:13 pm

    I submit the high end market dissolved like the 401k’s of the boomer generation. Folks we are in a depression and the government is spending like they are printing money. Thye bottom line will take years to restore, if ever. Therefore the top line must be adjusted to have any hope, layoffs, factory closings, dealership closings, etc. The discretionary money is just gone, poof.

  13. 13 Dana Mar 18th, 2010 at 5:37 pm

    Marc Franz has hit it square on the head when he talks about simplifying product lines and streamlining the message to the new generation. Do a few things VERY well instead of trying to be everything to everyone. Look at companies like Apple who have been turning record profits throughout this downturn and you’ll see that very strategy working very well.

  14. 14 john reed Mar 18th, 2010 at 6:07 pm

    Da trump
    Is that the same that cerberus did to CCI?

  15. 15 Steve Bohn Mar 18th, 2010 at 6:52 pm

    John Reed How The hell are you?

  16. 16 Chris Hunter Mar 18th, 2010 at 7:07 pm

    Most people who are buying motorcycles these days simply don’t like the bikes Harley builds. And they don’t like the image of the typical Harley rider—which is either a greybeard, or an asshat in a half-hat helmet. The problem is compounded by many of the custom builders who specialize in Harleys, churning out flashy, identikit Hot Wheels-type choppers.

    What Harley needs to do is start building bikes that people want to buy. Most Harleys look bloated, they’re technologically archaic, and they are universally overweight.

    Part of the solution is to look at how other people interpret Harleys, notably the top Japanese builders, people like Roland Sands, Grand National and Mule Motorcycles in the USA, and Deus in Australia. The rest is in the image department, via social media and PR. Whether you like it or not, companies that know how to work Gen Y’s space in the right way will succeed.

    Harley needs to get its mojo back, and a few blacked-out range extensions here and there is not going to cut it.

    Chris Hunter | editor | bikeexif.com

  17. 17 J Mar 18th, 2010 at 7:09 pm

    LOL- no, Harley is NOT what “KKR looks for in a buyout”, actually- Harley has a long way to go before its balance sheet is even a discussion for LBO money. The basis for an LBO is an actual core asset, and Harley is already too leveraged- ask Buffet, who is licking his chops while collecting 15%.

    This isn’t 1998- there isn’t enough junk paper available in the marketplace to enable a Harley leverage-on-leverage deal- and certainly not thru just KKR.

    The KKR thing is just another silly rumor started by someone who wants out of the stock- pump up the price, squeeze the shorts to throw in their towels to buy back in, and liquidate your stock into the action- happens every day.

    Dropping prices on bikes won’t work? When was the last time Harley tried it? Fixed costs on a balance sheet become remarkably pliable when a strong management team dictates terms; As it stands, Harley’s balance may not have long to survive, anyway- that’s what 30% drops in revenue do for you.

    No builder or manufacturer wants to hear the term “deflation”, but we’re in a brave new world, kids- Harley overproduced their product, effectively diminishing their exclusive brand image; Yes, this affects Harley, but it also affects every builder on this board, who still wants to get 2004 prices for their stuff- it’s a tough pill to swallow, no question.

    Harleys choices now are to innovate product, cut supply, or cut price- dress it up all you want, but those are the only three possible choices. Despite trimming some brand lines, it doesn’t appear that Harley is doing any of these things, so don’t expect any different results going forward.

    Fact is, the real value of Harley is so hazy at this point, no one is willing to assign a buyout value to it- it will take a few more quarters to even guess at a value, but I guarantee, it ain’t gonna be now.

  18. 18 Bob Walker Mar 18th, 2010 at 9:27 pm

    James Pratt said what I brought up several months ago on this blog…Harley needs some innovation. That said, I am inspired by the intelligent and thoughtful input our community has offered here. It gives me hope. I just hope the people at Harley are listening.

  19. 19 john reed Mar 18th, 2010 at 10:48 pm

    steve bohn.
    ok,

  20. 20 Kber Mar 18th, 2010 at 10:58 pm

    As long as the new owners can supply a steady stream of do-rags and overpriced T-shirts no yuppy should notice.

  21. 21 American-V magazine Mar 19th, 2010 at 5:25 am

    Right now, Harley needs a broader range of motorcycles for the minimum investment to increase their market penetration – especially having closed Buell, which was ideally positioned to do that if only it had had the marketing investment it deserved – and the trick I reckon they’re missing is what used to be the Buell Blast motor: a simple single that could do what the Aermacchis should have done in the seventies but without the retooling, overseas factories or – god forbid – the later two stroke motors.

    It doesn’t have to be stupidly fast as much as it needs to accessible, repairable, customisable and cool, and with things like the Mac Motorcycles concept providing a ready-made platform for a great looking range of street machines, and the experience of what Japanese youth are doing with ageing SR400/500 Yamaha single, there is certainly the potential. And God knows there’s not a shortage of XL/XB parts out there. (http://blog.mac-motorcycles.com/)

    As much as I love V-twins, cheaper re-focussed Sportsters aren’t always the answer: my other half has over-wintered on an old FT500 Honda and has never been happier or more engaged by a motorcycle she’s owned, and I’m sure she’s not alone … might have done similar myself, except the XL500 that came in the deal needed too much work, and they really are delicate motors when they’ve got a few miles and the wrong set of spanners applied to keep them on the road.

    A range of bikes under Harley’s XR branding – an visually independent sub-brand – based round the Blast motor could be street, dirt or Supermoto styled, pitched strongly at the young and not as gangly as the original Blast, which wasn’t the sexiest of 500 singles, might not resurrect Harley’s fortunes overnight but would give a new generation of riders something to cut their teeth on.

    With normal Harley branding and styling, it could even make a stunning drop-seat chopper to compete with the smaller Japanese and increasingly Chinese custom bikes; and with a manic grin, an XBRR top end and a supercharger or low boost blower where the rear pot would have lived, a worthy successor to the glory days of the big single, as defined by such boring sluggards as the Manx Norton, Rocket Gold Star and Velocette Venom Thruxton. And a generation of riders who are already familiar with Sportster technology to make that leap in the future.

    No, it’s not necessarily innovative, but they haven’t got time to wait for the market to accept innovation – as the V-Rod bears witness. It’s not about innovation: it’s about desirability, accessibility and availability.

    Of course they’d need to learn the lessons of Buell and market it properly, but with a bar and shield on the side, and the XR heritage to draw on, they should be able to understand it better than they did the bikes from East Troy.

  22. 22 Chris Hunter Mar 19th, 2010 at 6:40 am

    Wise words and well said, American-V Magazine.

    And on the subject of XRs, the key is the 750 bit as much as the XR bit. So listen up, Harley product planners: strip down and analyse an original XR750, uprate the frame and suspension to modern specs, and slot in a reworked 883 motor with a useful power boost.

    Most importantly, make the whole caboodle tip the scales at 190 kg max. Take out every single component that does not serve a purpose. (God forbid, make it kickstart-only if you’re feeling brave!)

    Reveal it at the next EICMA or Tokyo motor show. And within a year, outside America they’ll sell so fast you won’t be able to keep up with demand.

    Chris

  23. 23 Steve Kelly Mar 19th, 2010 at 6:51 am

    Cyril, what a wonderful box of worms you opened up with this one. Can’t think I have ever seen so much written in response to one of your blog posting, and most of it on the money too! You were 100% correct when you wrote ‘Images was (almost) everything.’ How do I know this? Well, because it is the exact same problem that has hit all of the celebrity bike builders, check their custom bike prices now, they are nowhere near what they were attracting a few years back. What’s the answer? Well, I’m sorry, but it will take a smarter man than me to work that one out, but, Andy Hornsby, the editor of American-V, has put forward some very interesting ideas in his response. I hope that someone from Harley-Davidson’s management get to read them.

  24. 24 Hondo Cat Mar 19th, 2010 at 7:30 am

    Granted, the MoCo has it’s problems. However, the American economy is NOT going to get substantially better any time soon! There are some deep cracks in every aspect of our economy and the current administration in DC are only aggravating the problem by a facade of quick fixes such as printing “funny money”.

    I’m not an economist by vocation, but I do read my share of economic reports. From what I gather, the very foundation of our economy is seriously unstable. I feel we’re doomed and it won’t be just a motorcycle company like H-D that comes to an end. It will much more wide spread.

  25. 25 Buck Private Mar 19th, 2010 at 8:14 am

    Why are softails etc. built to fit someone that is Willie G’s or Chris Maitas height. Bought an 02′ Deuce. It took about five years to replace all the black plastic crap ugly black cables etc. I’m 6′ 5″ and when I had a passenger on people said why do you have that little bike? Then the 96ci came out and the price of the 88’s tanked like lead. My neighbor got a 110 motor and sold the bike less than a year. It had 3 different things go bad in the motor. Got a Big Dog K-9 and the bike fits me like a glove. I took it in for service and got back on my Deuce and was like “why am I on a mini-bike and where in the world is the power? When I pull up to a red light on the K-9, even the 80 something year old guys give me a thumbs-up or a head knod of approval. Why do all Harley’s look the same to me anymore………….
    Because they all look the same. I think that kid from OCC that does the CAD designs could design a better bike than whats coming out of Milwaukee or Pa.’

  26. 26 Dave Blevins Mar 19th, 2010 at 8:16 am

    My advice to Harley is simple, and I have stated it before… stop making ugly motorcycles.
    The main reason the aftermarket exists is a direct response to this point. Harley has historically made a couple of classic bikes and they are timeless, (the Flathead-Knucklehead era bikes and of course the HydraGlide Panhead), and pretty much everything else was just butt ugly until the Softail came along and they have effectively managed to ugly it up over the past few years.
    A good looking Harley can be produced, but obviously no one at the motor company can design it… examples:
    V-Rod = ugly and has no real market in style or performance
    Buell = not good looking or performance enough to compete in the marketplace or on the track with other production sportbikes
    Sportster = ugly, heavy, overpriced

    So my advice to Harley is simple, and won’t require a lot of research or development to produce bikes that might satisfy a broad range of riders… like this,

    Build a bike using the late model rubber mount Buell (not Rotax) engine, put it in a good looking Softail style frame, 200 rear tire. Essentially a stripped down bobtail look. Wouldn’t take long to bring to market a ridable, reliable, 90 HP, sport-cruiser with Harley sound and style… do it for around 10 grand which is very do-able, and you couldn’t build em fast enough. A low seat and lower center of gravity would mask the weight, offer the 883 engine for a less intimidating model to allow entry-level riders and women a viable choice. This model could satisfy half the Harley riding market in my opinion.

    Ditch the wide tire crap, and make the FL Softail in Heritage fashion (Springer and Hydra Glide) for the more traditional or “purist” buyers. Keep the classic Harley look without mucking around trends… hence the “classic” moniker.

    Design a new Softail, strong engine, 250 rear tire, agressive lines, low and powerful with all new sheet metal. Basically an all new machine built for the Harley rider that wants to stop making excuses to his riding buddies on topic of power, handling, and style of his pride and joy.

    Leave the Road King / Electraglides alone for now, they have thier audience already… keep the 3 wheelers too, they are a niche market unto thier own.

    Toss the Duece, the V-Rod, and the Dyna out. Whether ugly, unsellable, or just outdated, get rid of ’em. Nobody wants them, so stop making them.

    See how easy that was, all you had to do was ask. I’m also available for backyard BBQ advice, it is equally good!

  27. 27 industrial biker Mar 19th, 2010 at 8:22 am

    Speaking as a Brit living in the UK I reckon Chris Hunter has the right idea. In Europe the super motard bike is very popular and HD could capitalise on the XR heritage.

    Sportsbikes are the big thing in the UK [even though most blokes who own them don’t have the ability to use them fully] and most guys will tell you that they love the whole image of the XR flat tracker but hate the big V Harleys.

    HD should make a genuinely great XR range to really compete with KTM etc. At the moment the XR1200 is not even close to the ability of a true super motard. I’ve ridden a couple of KTMs and they destroy sportsbikes on real world twisty roads. like Triumph and Ducati, Harley has a great heritage and image to sell and guys do buy into it as long as the bikes back that image up.

    There will always be a big market for the big V Harleys because even though they aren’t the best engines or the best bikes the Japanese have never got close to building a bike that is that raw.

  28. 28 industrial biker Mar 19th, 2010 at 8:24 am

    Oh, and build a great sports-tourer bike using the V-Rod motor to compete with BMW and Honda.

  29. 29 Seanny Mar 19th, 2010 at 8:41 am

    I’ve always felt that what was missing from the line-up was a bona-fide starter bike that is undeniably a Hog. I know lots of “Gen X & Yers” who love Harleys, but feel that the expense is just too much for them. They don’t want Sportsters, they want “big” twins. At least, that’s what they THINK they want.

    Not to flog a dead horse, but what was said above is really important.
    The Sportster is not a good starter bike. I LOVED my Sportster. I have always loved them, from the time I was 12; but it’s a shitty bike to learn to ride on. One weekend at an MSF course then a shiny new Sporty will an unhappy rider make! They’re heavy–top heavy. The Dyna Low Rider was probably a better starter bike, but just too intimidating for a new rider.

    Now Yamaha has a really great starter bike in the 250 Virago (V-twin, no less). That’s what we’ve been putting our newbies on. Great little bike. There’s a reason there are always 250 cruisers on craigslist. People who know real bikers are always going to suggest that route to a new rider. My first bike was a Rebel 250 and you know what? I LOVED that little scooter. Absolutely loved her. Still do…

    Why can’t Harley make a cool bobber with a retro panhead engine that displaces about 500cc and is light and nimble? Price it at about $5000 and throw in a helmet and jacket?

    This gives the young rider an entry point into the biker lifestyle that has some cache with the older bikers, and allows them time to mature. That’s what they need. They don’t want to roll up on an Iron 883 and have older bikers give them a hard time for riding a “girl’s bike,” (no offense ladies)!

    I rode my Sporty hard & fast, which is really the only way they like to be ridden. But the vast majority of your Sportster riders out there are riding them as new riders, and probably quite tentatively.

    I believe there are plenty of young folks who love the history, culture and beauty of American motorcycling at its finest…but The Motor Company has to give them a way in. Do that, and continue to improve the existing line, and I think they’ll pull thru the recession.

    I sure hope KKR isn’t successful at this….

  30. 30 Mike Zabel Mar 19th, 2010 at 9:38 am

    I’d reduce the number of cycles offered. Each model brings about additional tooling and inventory that requires financing on all ends. Eliminate the Trikes. Your business model is aimed at the “bad-assery” clique so these are not a good fit. I would take those employees on that line and create a deal with a firm that you respect that does those conversions, license any IP to them on the basis that they hire these workers.

    Eliminate your funding arm. You are not a bank, your brand is MOTORCYCLES! Too much risk exposure in flooring costs, financing, etc. This debt servicing is going to kill you as easily as no sales at all. With no sales at least you are not on the hook for returned inventory, and noncollectable debts.

    Eliminate as many other choices as possible. Most everyone pays service to the “Custom” craze. Fine. Offer only the Dyna, Softail and tourers in Black. Keep it simple, basic with all customization offered at the dealer and you can speed up deliveries, and reduce the overhead with all those options that may not be moving. Eliminate the overhead associated with the painting, etc. This sort of thing can actually be better for the buyer and the dealer because you can always get the model you want (as long as its black) the model goes to the dealer where the buyer can truly get a custom look within two weeks of delivery, and the dealer retains a new business line for customization. Just take a quick look at what is on your shelves. Each of those pieces carries an associated cost in storage, transportation, labor, overhead etc. This sort of turnaround would increase the purchasers while adding painting services to the tool bag for the dealers.

    On the topic of dramatically reducing your overhead in tooling, etc, you should think about removing the Sportster and VROD motors/transmissions from your offering. Yes sacrilegious to some, but you are vulnerable. You will eliminate tooling, stocking and exposure based on borrowing for those investments. You can create a separate division, say wholly-owned subsidiary for these engines, or license the IP and tooling along with those on the Sportster line to the new operation. Perhaps do the same with the VROD. These are not a CORE product. Let Honda have their market, you have the cruiser market and you must kill off anyone attempting to intrude on your turf. You cannot compete on the same levels of the other manufacturers for this segment. You also have to reduce manufacturing to perhaps a single plant. Overhead is going to KILL you. Down to one plant and then get very aggressive with the locality in obtaining extremely aggressive and favorable tax rates, services, custom rails lines, etc. I mean citing history for all you do will quickly make you just that, History.

    I’d recommend if you want to retain commonality, reducing the overhead, then perhaps eliminate the sportster and VROD engines, and reconfigure the frames that you offer over to the standard engine. The dynas will be configured along the lines of the new dark look like the forty eight and 883. You might go all the way and say 5 Dynas, four Softails, and three tourers. I know the common complaint is that you eliminated my favorite model. That’s ok Mr. Buyer. Are you going to buy a new one right now? Well the answer is no because they already own their favorite. Yes a fan base is good, but they do not replace their motorcycle like clockwork every year. Almost all of them have added so much paint, custom add-ons that their bike is not really what it started out as. In fact, market that fact. Advertise that this is the LAST YEAR you can ever get the … model.” Its limited to these twenty remaining models, so all else is now a collectors item.

    Eliminate the CVO line. Unproductive and you no longer have that market, same as I said for the sportster and VROD.

    Keep the Motor clothes. Yes, this is productive and a item that I believe keeps many a dealership afloat. When you take what used to be a motorcycle catalog, and turn it into a clothing catalog, or at least you devote at least half the book to the statement that this clothing makes, you may have jumped the shark in the motorcycle sales department.

    Any savings that you incur you must apply to three tracks. The first and most important is to buy back the stock and perhaps take HD private so the threat of a hostile buyout can be removed. Remember you have to always protect the brand. These are harsh times, and I know much of what I track about may mean firings. Lay-offs would be a best case once you get your bearings again.

    Secondarily after trimming the offerings, dramatically reducing your tooling, stocking, and all that goes with having too much unfocused material, going all black, you can get back (harshly some may say) to your roots. Look, the gloves are off, and our fists are in the wind. Get back to the basics of having dinner at home with your family, save the expensive dinners for the rich. You ride your own way, so we allow your to design your own bike at your Harley Davidson Custom Motorcycle Shop (Old dealerships).

    Thirdly, apply much of the savings to reducing ( I mean by as much as 2-3k a model) the costs of all models, while perhaps applying more of the styling that you are now working on the 883 and Forty-Eight and move them to the basic Dyna. Go to the single advertised price, not all that haggling involved. Its not a lesson in who screws who, you are in the business of selling bikes. Look If I wanted to go through all that dance, I can buy a Vette. Simple bikes for a simpler America. The bikes of the working man and woman, built by and for them. Perhaps get RSD onboard as consulting designer. This third track is simple. You MUST MOVE THE BIKES OUT THE DOOR. You can cry history, selling out or other things I have heard posted. Get back to the roots, produce high quality made in America, basic affordable bikes that most in America can afford and you can stand a chance if you achieve the other reduction measures.

    Look I understand business, with 26 years of experience MBA, and a MS in Engineering, etc., but you must:

    FOCUS!!! Get back to your roots. Expansion, twenty different models, three engines, accessories galore, etc are fine to expand. You CANNOT afford that now with the risk of hostile takeovers. You guys are probably cash-poor and cannot afford to extend at this point. Get back to basics, circle the wagons, offer a good basic product made entirely in the US at a COMPETITIVE price and you can find buyers.

    The above will ruffle feathers. However, what most are going to miss is that the Motor Company is not sacrosanct. It can disappear quite quickly. In fact its quite easy to buy controlling interest and kill a company. You must take these drastic steps to save the Brand. Yes jobs will be lost, but many jobs are created when times and forecasts are good. Yes, many of the same that were hired during these periods must be let go, and of course look hard internally, many that are vested are not vested in the aggressive thinking and work required to resurrect a company in these conditions.

    Very Respectfully, Mike Zabel

  31. 31 Jeff Nicklus Mar 19th, 2010 at 10:11 am

    Mike Zabel,

    Excellent lay out! Well said! Now if Harley will only listen.

    Over & Out,

    Jeff

  32. 32 jim Mar 19th, 2010 at 10:23 am

    dear Mr. Huze, thank you very much for your awesome page, keep up the great work…
    ….

  33. 33 houston Mar 19th, 2010 at 11:57 am

    Harley-Davidson – great story and great history, but enough already! Attention spans don’t exist, and nobody cares anymore! Yes, you have made vast improvements in your engines and reliability over the years, but those improvements just narrowed the gap between HD and its Jap competitors (with HD still behind). I am in my late 20’s and have been in love with bikes my whole life, and I am part of a huge demographic of motorcycle fans who, like the younger generations in the 1930’s to the 1970’s, want to set ourselves apart and establish our own customer history and identity. If HD is not going to change to meet this new customer’s demands, why should they assume that the younger demographic will just buy their product anyways? Just because my dad’s generation thinks HD makes the best bikes, doesn’t mean they do. I have owned two bikes and one was a Honda, and my current bike is a Yamaha. The reasons for both my purchases were simple – getting more bike for less money, and feeling like the bike was a reflection of my personality. If Harley-Davidson can figure out how to do this, maybe I’ll think twice before passing by my local HD dealer.

  34. 34 Robin Mar 19th, 2010 at 12:16 pm

    Some truly inspired commentary here and I sincerely hope Harley is listening. It is clearly time for The Motor Company to move on (and there are some excellent strategies offered in this thread). The senior management should remember that all glory is fleeting and the aging Baby Boomers are riding off into the sunset.

    “For over a thousand years Roman conquerors returning from the wars enjoyed the honor of triumph, a tumultuous parade. In the procession came trumpeteers, musicians and strange animals from conquered territories, together with carts laden with treasure and captured armaments. The conquerors rode in a triumphal chariot, the dazed prisoners walking in chains before him. Sometimes his children robed in white stood with him in the chariot or rode the trace horses. A slave stood behind the conqueror holding a golden crown and whispering in his ear a warning: that all glory is fleeting.”
    – Gen. George Patton

  35. 35 Mike Greenwald Mar 19th, 2010 at 12:21 pm

    Here is another viewpoint that I found this morning.
    http://www.ultimatemotorcycling.com/Harley-Davidson_KKR_Berkshire_Hathaway

  36. 36 Gary Bang Mar 19th, 2010 at 1:27 pm

    I have to say about the only thing we can be sure of that is always going to last is “Real Good Looking Women”. Harley-Davidson now has the best looking line up of Motorcycles I have ever seen even you guys who do not like Harley must agree they are really the best any one has seen.

    This is really about the times not the Motorcycle. None of us will ever be where we are now and we sure are not where we were 10, 20, 30 or 50 years ago. Like I said Good looking Women will always be in other things may not last the times.

    Harley I will be with you forever for how long forever is. Gary Bang

  37. 37 raycwheeler@gmail.com Mar 19th, 2010 at 2:01 pm

    Having had the Harley Davidson addiction since the late 50’s, I”m committed to the end.

    Best of Luck Harley Davidson and all of its followers.

    raycwheeler usa

  38. 38 just my opinion Mar 19th, 2010 at 3:48 pm

    I have been riding Harley’s for some 38 years now. I still like the bikes but have always thought that HD selling the legend would be their downfall. The younger riders of today don’t care about some made up glory of owning a Harley. You just cannot fool young people into thinking that HD is somehow better just because the Factory say’s if you own a Harley you to are a bad ass biker.
    The young guys riding today laugh at that bullshit. Today’s tough guys ride at speeds in the 200 mph range. The only way a Harley will do that is if it is riden off a cliff.

    It is time for HD to either get into the game of making a super fast reliable and most importantly ridable bike or accept the fact that their lifespan is very short.

    Look at what [ houston ] said above ” He is a typical young rider ” he bought both his bikes based on value.
    MORE BIKE for LESS MONEY. I have talked to many young riders and they all say that same thing. Why buy a Harley when they can buy a Jap bike that will out run, out last, out perform and cost less money than the HD?

    The problem HD has is that they have built their business on the legend of being an American badass if you own a Harley. The only way to compete with the Japanese bikes is to use cheap labor just as the Japanese do. But you cannot claim to be the American legand if your made in Japan. They truely are between a rock and a hard spot.

    I wish them well but have not seen any reason to believe they are headed in the right direction for lasting success.
    I believe we will see one of two things happen in the next five years either HD will be building crotchrocket type bikes that these young riders want in addition to the old school style we all like or they will be a small company selling less than 50,000 bikes per year. Time will tell.

  39. 39 DEADWOOD Mar 19th, 2010 at 6:16 pm

    Harley-Davidson needs to wake up and smell the coffee. Why would any Board of Directors hire a man who had never worked a day in his life in the Motorcycle Industry and pay him Six Million dollars while there is plenty of Motorcycle Industry experienced talent available. This man has NO passion for HD or the motorcycle industry and no vested interest. HD keeps building overpriced, underpowered motorcycles and wonders why customer loyalty is waning. Loyalty is a two way street. Yes the economy is bad. We all know that. However it is past time to update the antiquated powerplants. It says something when Dealership employees, and a lot of them, ride other brands or older machines because they are not interested in the latest product. Why, because another boring CVO or another Sportster with upside down mirrors doesn’t do it. We need real innovation, not slick marketing. Try this for a marketing brainstorm HD. Give dealership employees an economic incentive to buy new bikes. Not a token either, a real rebate similar to what you offer suppliers only better. These are your “frontline” sales forces. And no I’m not talking about motorcycle sales people, but parts and service people. The people who make this thing work. The people who have dedicated their lives and careers to this brand and this industry. Customers will be more likley to follow the lead of an energized, enthusiastic Dealership workforce than all your big ticket advertising can buy. Take it to Main Street and Wall Street will take care of itself. OOPS!! What was I thinking, lets just do another “Ride Free” deal!! Right Mark Hans. Haha

  40. 40 Woody Mar 19th, 2010 at 6:20 pm

    Take a hard look at why the “Great American Motorcycle” has so many imported parts. I think you lost your way and forgot what you were. Pretty hard to charge someone $20k and while he’s spouting about somebody’s “Jap Crap” his own ride is damn near Chinese. At least Walmart cuts the prices in half while destroying the country one job at a time.

  41. 41 AntiNicklus Mar 19th, 2010 at 7:33 pm

    Most here are telling HD what to do as they seem to be in the industry. I am not a marketing person and I am certainly no economist, but I am a 36 years old consumer. And I am going to simply tell you why I didn’t buy a HD last year. In January 2009 I was looking to buy a bike with $20K cash in hand. I wanted an american v-twin with a cool image (that perhaps HD helped to create). I researched for months and visited the HD dealer near me. In the end I bought a BigDog. Why? Because the HD bikes didn’t move me. I could hardly tell them apart standing next to them and the bikes had all these plastic parts and covers. The product line simply was not cool to me as cliche as it sounds. Not the image I wanted to project riding around town – another one of the masses. Wish HD the best of luck. I have always liked an underdog story.

  42. 42 Brett Mar 20th, 2010 at 6:35 am

    Have to disagree with Magnum Bob about women’s bikes.
    My wife is a rider. Her 1st bike & still the one she rides is the Sportster 883L. When she is on it, it does look like it was made for her. She fits perfectly on it. As far as intimidation, women need to take classes & learn to ride. Once they do, they will find bigger bikes are better handling. Yes, in the case of a tip over, she is in trouble, but in all other cases, the bigger bike is better.

    Another thing to consider for 1st time bikes is price. If you get an older bike, no matter what kind, people have all jumped on the Harley bandwagon of thinking bikes are worth a ton of cash. When I was in high school, I remember you could easily find 250’s for a few hundred dollars. Not anymore. When we went looking for my wife a small starter bike, we found nothing under $1,500.

    There is also an issue with how these older bikes operate. Usually they are very hard to shift. My friend’s wife has her license, but she has the older smaller Honda bike to try riding. It shifts very hard & more then anything, that is what stops her from riding. Being intimidated by traffic when she snubs it, not being intimidated by how it handles.

    That brings us back to buying a new bike. So you look at a Honda Nighthawk 234, Honda Rebel 250, both around $4,000. Then there is also the Kawasaki Vulcan 500 which is $5,500. Well this gets right back into the whole false idea that Harley’s are over priced. Her 883L was $6,400 (it was a new 2006 boughten in 2007 so the price drop from the normal $6,9995), for $1,000 more, she got more bike then she would with the Vulcan 500. Now if you move up to the Vulcan 900 series, which they market to be like the bigger Harley’s, but in reality they are like Sportster 883’s, well then you are going to be paying between $8,100 for the Vulcan 900 classic up to $9,400 for the Vulcan Classic LT. They could be a bit lighter then a Harley, but honestly, if they need something smaller then for sure a 500, then they should be scooter shopping.

    So getting back to the prices, checking out Kawasaki Dot Com, there Price range is Vulcan 500 for $5,500 to $17,300 for the Vulcan Voyager which looks alot like an Electra Glide.

    Honda Dot Com will show you that a Shadow 743 (staying with bikes comparable to what Harley offers) is $6,995 to the Goldwing which is $22,899

    & the Yahmaha Star bikes range from V Star Custom 650 at $6,790 to the Royal Star Venture S at $19,690

    Harley is NOT out of line with the bike prices. The Sportster 883L is $6,995 up to the Electra Glide Ultra Limited for $24,995.

    For all those companies, that is a giant price range, & Harley IS NOT out of line with their prices.

    I didn’t get into bikes like Triumph, although I think the new Thunderbird is an awesome looking bike & I want to ride one.

    Also, I just was back in school, graduated in 2008. For one of my classes, we had to a report & get companies sales facts & market shares & all of that. What I can tell you is Victory barely has a notch in the motorcycle market share. If not for Polaris & their ATV & Snowmobile sales, Victory would cease to exist if everything depended on their sales.

    BMW is not a cruiser, so while their sales, no matter how big or small, can take away from Harley sales…it is a different market. People wanting a BMW are more the sport bike crowd, which Harley is not making bikes for, well other then the V-rod, but I don’t really see it as a sport bike.

    So that really brings you back to Harley, Honda, Yahmaha & Kawasaki for the real market share of the cruiser bikes. However, total sales for the Japanese cruisers are far below Harley & they are saved by again, their other products, like ATVs, Hell, Honda makes everything from lawnmowers to cars…….so again, as only a Cruiser Motorcycle company only, Harley is the only one that there is. There are 2 types of bike people, sport bikes or cruisers & no one is really touching Harley in the cruiser market. If any of the other bike companies were relying on their cruiser sales, they would be out of business & probably a long time ago.

    So it comes back to what does Harley do? 1st quit playing it safe. Embrace the Outlaw image if that is what is needed to keep the younger crowd. Don’t hold a huge rally & surprise everyone with ELTON JOHN as the big surprise music act.

    If that isn’t the way the company wants to go, well then get rid of the little skulls also, but really getting into other things maybe what you need to do. If you can’t make the younger crowd think a Harley is cool & badass, well then it’s because they simply don’t see any cruiser that way & maybe some Sport bikes are needed.

    I am not a bagger type, so no clue what that whole space shuttle dash board is supposed to do on the Goldwing, but again, it’s a bike. If you are on a long trip, I can see the need for music, but for me I don’t ride so I can have coms to talk to people next to me in their helmets or the person on the back, or heaters or AC or whatever all that other stuff on a Goldwing is, so I see that stuff as a waste. The only use I’d ever have for a fairing is if I wanted music on my ride, so a speaker system can be put in the fairing.

    Bottom line, Harley has changed little over the years with their bikes. While that is alright for the appearance, it MUST stop for things like performance. The bikes need to be more powerful, not in bigger engines, I think a 96 or 101 is plenty big enough, the things HAS to go when you twist the throttle. Also better braking is a must. Every time you see bikes compared in magazines, it’s always the same, “the Jap bike has better handling & braking, but if your a Harley person, it doesn’t matter.” Well being a Harley person shouldn’t excuse bad performance. Better performance could also be what it takes to sway some people.

    What I do see though is alot of dealerships that just had about 2 decades of great times & now the change from even 2 years ago is HUGE. Far less employees. Not many happy faces, especially after all the dealers had to build their new Harley shrines…..what may really be needed again is the lists like in the 90’s with people WAITING for a new bike. Get the demand back. Don’t have dealerships with hundreds of bikes on their floor. In the 90’s I remember alot of clothing & parts & maybe 3 bikes on the floor & if you wanted a new one, well here is our waiting list.

    While I don’t think the image of Harley will ever be as bad as it was in the 70’s, it will be very hard to get things back to where they were in 2003, if it is even possible. People are changed because of the economy & who knows if they will ever go back. There was a time in US history when almost everyone had a cabin up north. Very few have that anymore. Same with boats & yes, motorcycles. Bike will never be a main mode of transportation in this country, so it’s not something people need, which means hard times right now.

  43. 43 Boss Hawg Mar 20th, 2010 at 7:13 am

    Fadder fadder fadder….long yawn….Do any of you here really care? Didn’t think so…that is the problem now all out for themselves and to place blame on others…no team work it is all, I, I, I,…no we, we , we. Wandell will do what he wants so either buy or don’t buy. A fresh set of eye looking form the outside in is better than an old set looking from the inside out sometimes.

    Hang in there and ride…after all that is all we really care about.

    It is a beautiful day here in SE Georgia, made my post, and I do just believe that you no-brainier know it all keyboard commandos here should have a fun day here solving HD’s issues cause I am outta here.

    Vroom vroom vroom
    Boss Hawg.

  44. 44 Paul Mar 20th, 2010 at 7:26 am

    All things come to an end.
    To big, not enough cash to substain it.
    Simple as that.
    The CEO’s will now milk it for what they can before
    the doors close for good.
    The Good Old American way !

  45. 45 American-V magazine Mar 20th, 2010 at 9:29 am

    A lot of good constructive stuff here with only the odd doom-monger to bring it down.

    Not sure I’d seriously consider stopping production the Sportster or VR ranges, which would smack of repeating he mistake of closing Buell: the VR isn’t everyone’s cup of tea but the development work has been done and it is slowly establishing a foothold in its own market. And there’s still plenty of life in the XL, as the XB demonstrated: I’d love to see an XB-engined XLCR-style Cafe Racer: think the 1125 or VR motor would add an unwelcome mechanical complexity to the otherwise clean lines.

    I really do see ultimate performance as a side issue: motorcycle engines still haven’t finished evolving yet in terms of raw power as each successive generation has proved, but Harley have always managed to trade against every generation since the first CB750s and Z1s. On our small island we’ve been obsessed with performance for generations, but with increasing numbers of speed cameras which can’t exercise discretion but merely raise revenues using road safety as a justification, and with the rising price of fuel, people are naturally slowing down … and as the riding population ages – not just Harley riders but all motorcyclists over here – the ergonomics of a crotch rocket starts to be a problem with backs, knees and wrists.

    If you want to argue for innovation, start thinking about an alternative fuel to drive an internal combustion engine, because whether climate science is right or not, we need to be focussing on some other means of shifting a piston than heating air quickly with gasoline. Without that, personal transport as we know it will be legislated off the road no matter what shape, style or category it falls into.

    It’s hard to argue against better brakes, except in that they just move the problem around: make them better and you reach the tyre’s limits,. then the road surface’s limits. But long before you hit either of them, you’ll hit the riders’ limits: learn to look ahead more and you need brakes less. Sadly, that doesn’t account for the other guy who is intent on driving into the side of you, but nothing will stop that short of educating him. Training is going to be play an increasingly important role in tomorrow’s world.

    I can see a very strong argument for Harley taking a leaf out of Victory’s books and producing a minimal finish austerity model: the Street Bob’s price point over here was instrumental in establishing the second generation Dyna as a desirable model range. It doesn’t need to be an overstyled bike, just a simple unadorned one – probably black because it works well and doesn’t look cheap – with the production costs savings passed to the purchasert. Doesn’t need a name other than Dyna, Softail, Tourer, Sportster or – and this is an important one – the VR (maybe a new departure from current practice, using a prefix of Bobbed: Bobbed Dyna, Bobbed Softail etc, and even BFXD, BFXST, BXL, BVR to keep them together as a family). It would be interesting to see a stripped down V-Rod at a markedly reduced price to grab the attention of those looking for a high tech Harley, and who will buy on price.

    There is a strong case for a VR-engined Sport Tourer, as long as people get over the idea that the FLHT should have a VR motor: way too fussy, way too busy. It feels like it’s doing 80mph when it’s actually doing 60 which isn’t good for a lazy tourer. It’s also thirsty. Don’t know that the money or the will is there to develop the new frame that a VR Sport Tourer would need, though: the Street Rod demonstrated that it needs to be more than a jacked-up VR frame.

    Do I get the impression that the CVOs aren’t selling in the US? They seem to be shifting here, but that’s possibly because we don’t have as many of them, so there is a still an air of exclusivity about them. Don’t stop making them, just make fewer.

    And ugly bikes? Beauty is in the eye of the beholder (“Get it out, with Optrex”: Spike Milligan, 1970-something). There are less than half a dozen bikes in the current range that I’d want to see parked in my garage with my name on the title. There are more than half a dozen that I wouldn’t thank you for: the rest I’m ambivalent about. Big deal: I’m one person. My other half will have a different idea of what floats her boat. All credit to the Motor Company for managing to produce such a diverse range of bikes with so few fundamental components: and bikes with quite different personalities.

    But you can’t please all the people, all of the time. If you don’t like what Harley build, buy something else: that’s your choice to make. Don’t bitch that Harley don’t make the bike you want if the bike you want is an R1: do you really think Harley could make an R1? Why would they want to when Yamaha do that perfectly well already. It’s a slightly different argument if you’re talking about a Star, a Vulcan or a VTX, but I’m sorry to say that if you can’t tell a Harley from the metric cruiser standing next to it, you don’t need a motorcycle: you need an optician. Have you seen the Honda Fury in the … err, metal?

    Thankfully, people like Big Dog do make alternatives to Harley-Davidsons for people who want something different but still over-engineered in the classic American style and long may they continue to do so: remember that if Harley decided to make bikes Big Dog and co, we’d be up in arms that The Big Bad Motor Company were bullying the little guy.

    And it’s great that Victory are in the market: no, they haven’t got the market penetration yet, but they are making an impact – largely at the expense of Jap cruisers but also a few disaffected Harley fans are switching. And that’s good. Competition is healthy. It stops a market leader from getting complacent. You shouldn’t buy a Harley because it’s a Harley, You should buy a Harley because it’s the bike that you want: it’s then up to Harley to make sure they make the bikes that people want to buy.

    Incidentally, don’t forget that Polaris are in a very secure financial position: they could probably afford to buy Harley-Davidson if they didn’t mind borrowing a few bucks. Now that would put the cat among the pigeons.

    Good too that Indian are back, albeit on a small scale for now.

    Let’s just hope that the battle for hearts and minds is fair, and fought on the showroom floor with motorcycles to tempt hard-earned dollars/pounds/euros from enthusiastic would-be owners’ pockets rather, than in component suppliers’ offices.

    And thanks to Cyril for the forum to air these views.

  46. 46 ian Mar 20th, 2010 at 10:10 am

    Well said Andy (American V-Twin), and I have to agree here in the land of the Sportsbike and our own homegrown (if not totally built) Triumph, the decision to ride a Harley is not an easy or sometimes accepted one. For instance many other bikers will not acknowledge you on the road when you ride a Harley – they just don’t get it.

    Having said that my experience here and elsewhere in Europe is that HD seems to be doing well, and bikes are selling well. A local dealer had its first Sportster 48 arrived yesterday – they have now sold out their allocation for the rest of the year, and as Andy said CVO’s also sell – I think in the UK we get about 20 of each type – they are exclusive, and still maintain their resale value on Ebay. Whatever anyone thinks about HD in India – its probably a good business decision and they will sell there. So to get to the point I don’t think Harley is a broken business, but one needs to address its home market first as that seems to be the problem lies today – and I cant answer that.

  47. 47 Buck Private Mar 20th, 2010 at 10:13 am

    Bring Back the Lists?????? Must of been a dealer posting. Those lists turned-off more people towards the dealer than most think. Waiting lists blew-up the baloon. Has anyone ever thought the pipeline of inventory could be full? It happened to cars. It cost US 5 billion to burst the baloon (Clunker program)and get all of those Palin stickers off the road. Wait til all the repo’s hit the used lots from the people who really couldn’t afford a payment in the first place. The pipeline(cars) will fill again. Not to get away from bikes, but there is a lesson here, and you and me and H-D and the dealers had to pay for it. If Budweiser can be bought in a hostile takeover (BUD had cash), H-D is low hanging fruit. Time to redesign and improve and offer a better cost-friendly product like the Ford business model. Berkshire Hathaway was the #1 Bud stockholder. Are you thinking what I’m thinking?

  48. 48 Tim Hanlon Mar 20th, 2010 at 12:50 pm

    Most industry leaders will agree with this statement “Innovate or die” It is cool so many people have taken the time to propose some well thought out ideas, sort of like a free focus group for Harley. Perhaps Cyril’s site can be a vehicle for change. No one wants to see HD go down, at least not in this industry. That would be an American tragedy.

  49. 49 David Mar 20th, 2010 at 2:34 pm

    Dont you guys know that KKR is just a shell company for Honda …….just joking but I had you going!!!

  50. 50 Checkeredbob Mar 21st, 2010 at 7:57 am

    Mr. Huze I think your bikes are awesome and wish I could afford to have 10 or them in my garage. This is a good blog opening up an impassioned discussion about something many of us Love, Motorcycles, Harley Davidson styled motorcycles, that and Harley Davidson the corporation. DA Trump, how awesome is this “The Donald” blogs with Cyril Huze, is right it will be a blood bath if KKR a GE styled chop shop, gets ahold of Harley Davidson.

    The down side of this is that Harley rarely has done the right things,

    Building a VROD to avoid the EPA sanctions.

    Dismantling Buell when they still had a market and were beginning to bring in the younger riders, streamlining the Buell production down to one bike the RR1200. That was the hook that was starting to get noticed.

    Using your old Sportster line and trying to massage it into a ladies bike, look at what they are buying, Suzuki 800’s – they are lighter, with a lower center of gravity, an easier bike to ride. Maybe you don’t kill the Sportster line, but maybe they needed to. Either way building a new factory to produce something you needed to fix first, didn’t make good sense.

    Why redesign a touring bike you’ve been very successful with for a million years, personally I am all about the Geezer Glides, but won’t buy a new one because of their “409 improvements.”

    It’s a shame the world has gone the way it has, everything Harley sells except a portion of their bikes is made in China. That makes me angry because they are selling Leather at Made in the USA prices with Made in China hang tags. When what makes you money alienates your customer base it’s a much harder sell.

    Vote all the career politicians out of office, get a good President , stop NAFTA and all the other incentives the inept politicians used to promote a world economy while destroying ours, get Americans back to work and Harley, with some head from rectum removal surgery, could stay in the game and even gain an major share of it again.

  51. 51 Chainsaw Mar 21st, 2010 at 8:48 am

    Maybe I’m just another traditionalist dinosaur, and think in those terms on this topic.
    I too lean heavily into the FLH way of life.
    Always have, even though they were referred to Geezer Glides, Road Sofa’s etc.
    To myself and a bajillion other hearts, souls, and eyes, an FLH said Harley, sitting still, or rolling down the superslab.
    To the shareholders, the CEO’s, the Davidson family or whomever runs the show this quarter I ask;
    “How many models of Sportsters do you need in your line? Dynas, Softails, V-Rods, and yesTourers”?
    Yeah, I guess I answered my own questions and at the same time realized that the horse is already out of the barn and all that can be done is stand on the sidelines and watch H-D, as I knew it, flatline.

  52. 52 Grayhawk Mar 21st, 2010 at 10:35 am

    All above has some merit from eachs standpoint OF comment.

    Yes they/HD rode a wave OF VTWIN air cooled early century technology and nostaligia expanding and yes ever evolving from IOE forwarded and shifted gears from FXR then Evo mindest/timelines forward with model and quantity growth and then caught the big one/fad wave going from just under 200k units in the late 90’s and cresting to above 350k when weekend warriors joined the fun and like most American interests slipped off its feet on its overextended loan paperwork/financial wing amist a subprime rupture of packaged mortgages.

    HD scrambling like most in the industry and other entities worldwide themselves reducing back to around 200k again and still leaning down cutting layers as well as main and secondary product lines,and quantiries, etc.

    HD had an interrupted and yes not a perfect plan like most of us but was not completly relying on us spoiled baby boomers to ride off in the sunset on three wheels to help are wobbling legs and taking a couple of weak shots at our and Euoropean overheadcam minded youth segments all the while buying time for the developing emerging markets over time to keep size and quantity numbers and yes shareholder numbers up; the worldwide financial flat tire did not allow the evolution of that change to painlessly transition over time nor for most to adjust in a manner of ease.

    And no they do not think the cradle to crave OEM approach is profitable to branding generations, yea I wish they made a Thumper for starters but not in the profitability margin of the cards I guess.

    But fix America where its lost it way and you fix or should I say allow HD/others to transition most of it’s stress from a corporate viablility standpoint no matter who has the controlling votes of majority stock power but like all entities will never satisfy everyones point of preference nor product deires but there are/were, and may again be other types, brands/customs, self builds etc. to quinch the different tastes amongst us as always or should one say should be always within eachs/ones means.

    Long live antiquated vtwin air cooled air compressors.

  53. 53 burnout Mar 21st, 2010 at 3:00 pm

    Right on Grayhawk, Long live em! I make my living fixing these things. My local dealer will not work on bikes older than 10 years which is sweet for me. “If I ran HD………………?” Downsize everything, ESPECIALLY all the trinkets, concentrate on bike design and take care of the customers that are buying. peace

  54. 54 bp Mar 21st, 2010 at 3:54 pm

    Working in a dealership, and having been immersed in the Harley Davidson lifestyle all my life, I have learned things about the way things are, and how they could be better. In the 1970’s, things got bad for Harley with their sellout to AMF. In order to get the product selling again to gain the capital to buy it back, Harley desperately needed innovation. The result of this was the birth of the FX. Willie G created a whole new line of bikes out of parts the company already made. What is stopping this from happening again?
    We all know that Harley markets bikes to men and motor clothes to women. Why can’t there be a decent cruiser that could be marketed to women? Harley had a great start with the Blast, but what if you don’t want a pseudo crotch rocket? It wasn’t overpowered, but it was set up on a bike that people who want the Harley style didn’t want. Now is the time to go back to the 70’s where Harley needs to make a new bike using the existing parts.
    Back in 1948, Harley decided to make a no frills bike that was small, cheap, and prfect for the new rider. Later, it became known as the Hummer. A single cylinder 125 that was a great get-around-town bike. Here is the opportunity to make a new bike like that. Take the sportster frame and setup, put a 492cc Buell Blast motor in it, and set it low to the ground. Sell it for the price of the Blast, and maybe you’ll have a bike that women and first time buyers will have the confidence to ride and the ability to purchase. Make a new bike out of existing products.
    What was really wrong with Buell? They made a great American sport bike with the promise of the availability of parts and dealers willing to work on it. But instead of supporting the brand, Harley made it the stepchild that was hidden away. The marketing for Buell was lacking. Unless you were an existing owner, you never saw ads for the Buells. But once again, here is the ability to take existing products and go in a new direction. Instead of dumping Buell, support the bikes and take the high powered angines and use them in the Sportster. Make a model that is lean, mean, and affordable. Cut the crap off the bikes that isn’t necessary. Make the bike lighter, and give it more power, and people will buy it.
    Another issue I’ve seen is the Ultra Glide series. Here is a bike that has all the ammenities of a car. Heaters, CD players, XM satalite radio, plug ins for GPS (among other things), cup holders. If you fill up your dealerships with these bikes, then your “badass” image is shot to hell. More than once, I’ve seen someone who has never ridden before drop $35,000 on a bike like this because they don’t have to give up any of the creature comforts of their luxury cars. If you want a Lincoln, buy a Lincoln. You aren’t going to be a rebel riding a motorized La-Z-Boy with $5,000 worth of accessories. When times are hard, you need to cut the fat. Two words have shown to be successful in the custom motorcycle industry, Bare Bones. If you want to get the new generations, don’t market a bike that costs $35,000. I’ve been on a motorcycle, and have been riding my own bike since I was 16. Never have I needed to have a cup holder on my bike so I could get my triple upside down carmel macchiato and drink it while I ride. Riding is about riding, not just a way to get from A to B. Start making a trimmed down version that is inexpensive to produce and easier to sell.
    Bottom line, Harley needs to get their heads out of the sand and start looking at a way to expand their market. Women and new riders are the future of the industry, and they need to be counted when the advertising dollars are spent and the bikes are produced.

  55. 55 Geno Mar 22nd, 2010 at 8:56 am

    Hard to get their necks out of the sand when HD forced all the dealers
    to get rid of the linoleum floored shops and build Bloomingdales.
    They were able to weather or whether the storm in the late 70’s
    cause they could somewhat control OVERHEAD in the shops they owned outright back then.
    Those days are gone.
    Getting rid of Buell and MV was also a mistake. They should have
    played up MV’s quaility image and built another 305 Honda styled/$7,000 bike
    for the younger crowd thats needed to help Harley out of the rut. This coupled
    with a stripped down and dirty but cool looking Softail trike with tiny fenders, exposed rear end assembly, Sportster style tank, short apes, skinny spoke wheels
    a cool king and queen seat for under $15,000 would also bring in some excitement and help
    the dealers who can hang in there.
    And put Willie in as president.

  56. 56 KHD Mar 22nd, 2010 at 10:19 am

    Very passionate arguments and factoids on this topic. History lessons, marketing ideas, and speculation as to what turns a motorcycle rider into an H-D rider. The key component missing is the simple version, one that is repeated over and over every day and in every market imaginable.

    People ride motorcycles. More folks are licensed to operate a heavyweight machine than at any time since the 1970’s. Not just in the USA, but from all over the globe.

    There is really only one action that will make a difference to a consumer (or enthusiast, if you will), and that is to GET BUTTS ON SEATS. This is not guesswork or a rant from someone who has a loyalty to H-D, promoting his or her own feelings. This is a factual representation that can be assessed in real time market studies, unknowingly conducted every day.

    Hundreds of folks rent Harley-Davidson motorcycles at one of over 1,000 locations worldwide every single day. These consumers / enthusiasts have a few things in common. They all have motorcycle licenses, and they all have the ability to post between $1-2,000 on their credit cards as a security deposit. Why does this happen? Because they overwhelmingly admire the H-D brand, that’s why.

    How many Honda – Suzuki – Yamaha rental locations are in existence? Of those, how many are successfully putting their motorcycles on the street with regularity? Seriously, nobody ever contacts us looking for a Victory motorcycle rental or a Suzuki T-shirt. It’s not science, it is brand image.

    Sure, we can all dig deeper into the quality content of the H-D machines (which is pretty darn good, by the way). We can theorize or demand a more acceptable power to weight ratio result, or even focus on the lean angle vs. front fork rake on the Dyna chassis, all the while keeping the left brain sector available for future discussions on Brembo brakes vs. the next innovation in stopping power.

    Point is, none of it matters. Not one bit. When folks that have never been aboard a Harley-Davidson motorcycle take a day-ride on a Street-Glide or E-Glide, they are almost overwhelmingly sold that instant. The Heritage Softail, for all of its antiquated technology, still delivers (to both young and old) the ride of a lifetime. Again, this is not an opinion, this is an actual real-time study being conducted without government funding (thank GOD). The conversion rate of H-D first timers has been mildly reviewed. The results are not verified nor put out there for public consumption. This may well be part of the answer, and H-D has begun to recognize this phenom. Unfortunately, with all of the efforts at the Riders Services division on Juneau Avenue, it still remains a challenge to actually locate the “Rent One” portion of http://www.harley-davidson.com

    Bottom line thinking says build upon what works. All the marketing in the world cannot replace the guy from Somewhere, USA (who owns a Honda VTX) taking a ride on a 2010 FLHX and returning 9 hours later with his very first words out of the saddle being “Wow, I’m going home and buying one of those”.

    Personally, I really do enjoy the imports as a throw away ramp to an H-D machine. We are a Honda-Yamaha-Kawasaki-KTM dealer as well. The bikes are well engineered crap. The parts are light duty, the feel is that of a mini-bike, and the quality really is not very impressive. The engines do run well and last, but that is the only component that has anything going for it.

    Our biggest challenge with Import to H-D conversions is what to do with the trade in unit. Financing the H-D with a trade balance owed is also unforgiving. “Sir, you will need to come up with $3700.00 to bail out of your Honda” has very little appeal to someone struggling to make their monthly budget fit.

    The H-D brand is successful on its own. There is no chance of imports outnumbering the H-D models in Sturgis this year, or anytime in the foreseeable future. The challenge is (as mentioned numerous times in the posts above) getting H-D bikes into the garages of untapped markets.

    Seriously, the only way to market the best machine on two wheels is to put the bikes on the street with new riders. The bikes sell themselves. Our job is to present the product in an intelligent manner.

  57. 57 Rock Mar 22nd, 2010 at 2:15 pm

    I have ridden Harley-Davidsons for 40 years. I have purchased a new Electra Glide each year for the past 10 years, averaging 30,000 miles per bike, per year. I have logged well over a half a million miles on HDs. I now have a 2009 Electra Glide Classic with the updated frame and larger back tire. It is a good motorcycle, but it is not a high tech motorcycle.

    Being an avid tourer and wanting some real performance I added a 2008 Gold Wing to my stable. It has more power than you know what to do with and the bikes usually go more than a quarter million miles without any engine overhauls. It handles like a sport bike in the mountains, yet it is very comfortable. It is a couch rocket and resides at the top of the touring food chain!

    I love Harleys, but they have done all they can do with their touring bike with it’s current engine. I will not buy another unless I see some major innovation. I would like to see the V Rod water cooler engine in a touring frame with a more sophisticated suspension. Then maybe they could keep the Gold Wing in their sights.

    Yes, I’m an old fart, (62), but I’m still a year round motorcycle rider. The days of “cool” are gone. Now, I want to ride out front on the highest technology available. I’d love to be doing that on a Harley, but that’s simply not possible with today’s models.

    Before you start, don’t make fun of my Wing unless you’ve ridden more miles than me. Anybody can ride to Hooters.

    As far as Harley’s market share and future I agree with many of the previous posters.
    Rock

  58. 58 Buck Private Mar 22nd, 2010 at 4:33 pm

    Geno you’re right, Make Wille G President so he’s not designing bikes anymore. Hire some young guy/gal that can do a totally new CAD design of a motorcycle. The only thing good that came from the V-Rod extensive $$testing. was the technology gained from it. You gotta be a midget to ride one of those and you get to look like a teenager on a crotch rocket in Daytona gridlock, what fun.

  59. 59 Magnumbob Mar 22nd, 2010 at 6:14 pm

    Ok, since I’m feeling even more cynical than usual today, let me interject my gloom and doom on this topic.
    Exactly as Cyril stated in his wonderfully written article, we are all getting older. This whole generation of Harley riders that watched the anti-heroes of Easy Rider are dropping like flies. If Harley can’t replace us, they will die too.

    And there’s the problem. How does Harley entice the younger folks to start riding a Harley?

    THE LEGEND?

    You and me and most of the other guys on this board ride Harleys because we love them. We love the sound, we love the look, and mostly we love them because, well, we’ve always loved them.
    Some here have been cutting them apart, sticking them back together and riding them since before they were cool the first time.
    You remember…Back when HD and many “citizens” hated our chopper riding guts. (Which has fueled the hate part of my love/hate relationship with the motor company ever since.)
    BUT….
    We remember when Harley was a force to be reckoned with in almost every form of motorcycle racing.
    We remember when Harley actually tried to compete with the other manufacturers to build the best bike in the world.
    We remember when the Sportster was the baddest bike you could buy, and when the Electraglide had no peer as a touring bike.
    This is the heritage and reputation Harley has been coasting on for the last 40 years.

    Unfortunately, the younger folks don’t have those memories.

    THE “COOL” FACTOR?

    Harley has cashed in on the “cool” factor that we, as custom builders and societal outcasts invented.
    40 years ago, most custom bike builders were varying degrees of hard core gearhead, artist, social misfit, and common criminal. Building a bike was an expression of artistry and craftsmanship. Virtually nobody would ever pay someone to build a bike for them. That would just be weird. Even the most prolific builders would only build 1 or maybe 2 a year. Remember when everybody waited to see Arlen Ness’s latest bike (not bikes) at Daytona?
    By the early 80’s, all the true riding enthusiasts had long ago abandoned Harley in favor of bikes that actually performed and didn’t self destruct in 20k miles. All that were left were the hard core Bikers, the very people Harley had been trying to distance themselves from for years.
    In a moment of brilliance (and possibly desperation), Harley embraced the full on ridged frame chopper look, coupled it with a new reliable enough engine, and the Softail was born.
    The gamble was a huge success and then the party really got going.
    Over the next 25 years or so, Harley would attempt to lay claim to the “biker” culture as its own, all the time stealing styling ideas for their bikes from the custom builders. They would sterilize it, pasteurize it, and Disneyize it. They would remove all the rough edges and turn it into a great big corporate costume party that anybody could get into if they simply bought a genuine Harley Davidson $20,000 ticket.
    Of course Harley wasn’t the only one cashing in. If owning a Harley was all the rage, owning a custom built Harley was even cooler. (Wow, after years of trying to fit shitty Taiwan parts on greasy old junk, there are wealthy people who will actually pay good money for a brand new custom motorcycle? Who’da guessed?) No longer were custom Harley riders considered outlaw biker scum. Movie stars, sports stars, doctors, lawyers….Everybody was in on the act. Television shows depicting custom builders were even a huge thing for about 15 minutes.
    ‘Funny thing about fads though.
    They end.
    It’s tough to stand out as the “rugged, free spirited individual”, when you are lost in a sea of people that all wear the same basic uniform and ride the same basic motorcycle. That whole corporate managed biker image is just a little absurd, is it not?
    Hey, did you see that commercial on TV where three graying, middle aged guys ride their Harleys up to an outdoor party where ZZ Top type music is rocking the place and then much laughing and partying with good looking ladies follows? It all seems pretty cool till you realize that it’s an advertisement for man diapers.
    This is where we have come to?
    So, let me get this right… I’m sure the man diaper company spent a lot of money researching their man diaper market. Apparently when you think of a Harley, you think of men so old they need diapers?

    Oh yeah right, if I’m 18, I am so thinking Harleys are “Cool”.

    So, what does Harley do? For the last 35 years they have based their entire business model on an aging fad.
    How do they attract a new generation of riders?

    Hell, I don’t know. I’m just another everyday gearhead/artist/social misfit/common criminal.

    I do have a few simple ideas though.
    How about a bike that doesn’t only look and sound bad ass, but actually IS bad ass by any practical measurement. (And not just in a straight line). Build it and they will come.
    How about a touring bike that blows the Goldwing off its golden pedestal.
    How about some good looking, competent smaller bikes that younger and/or less experienced riders can start on and build some brand loyalty based on today’s reality and not just past glory.
    Sure these ideas are a whole lot easier said than done, but how about some godamn American ingenuity for a change?

    Yeah sure, like that’s going to happen when the motor company’s “fearless leader” is just another grossly overpaid spreadsheet reader who doesn’t know his ass from a hole in the ground when it comes to motorcycles.

    Aww hey, don’t mind me. These are just the cynical ramblings of an aging biker longing for the good ol’ days when every ride was sunny and warm, everybody had at least one neighbor with an old Knucklehead in their barn they would sell for a couple hundred bucks, and every woman we ever dragged out of a bar at closing time looked like a movie star.

  60. 60 Shooter Mar 22nd, 2010 at 7:46 pm

    about time the greedy bastards harley davidson die, 60 anemic horsepower, but 35,000 dollar cvos’if you want a lil more power, every bike should come stock like a cvo without the extra price tag!!
    crash and burn, there are enough used bikes and parts around to last my lifetime

  61. 61 Axel Mar 24th, 2010 at 6:20 pm

    I have to laugh when I continually hear people moan about “Harley’s aging demographic”. Harleys have ALWAYS had a higher percentage of older riders. Older riders are much more likely to be able to afford more costly motorcycles. Harley has lasted over a century this way, so having older riders is the very last of Harley’s problems they should worry about.
    Another thing you continually hear, whether it’s Harley or GM, is that they need to close factories and lay off employees. This is usually referred to as becoming “lean and mean”. If you do it well enough it becomes, “going out of business”. If it’s such a good idea and will result in higher profits, why not go ahead and close all your factories and lay off all your employees? A competent businessman should not adhere to the philosophy that buildings and people, factories and employees, are the enemies of profit.
    Instead Harley should base their recovery on the rock-solid foundation of building a high-quality product for a reasonable price and offering the best possible service after the sale. No more building frames (the first Dyna), engines (Twin Cam cam bearings and then lack of bearings, inadequate crank bearings, and so on) or transmissions (six speed noise and general design) on the cheap. No more claims that there’s nothing they can do about the underhanded things their dealers do. No more pressuring dealers to build Taj Mahal dealerships that turn profitable enterprises into empty buildings. Establish an email address – for crying out loud!- so customers can easily communicate with the Motor Company.
    I agree that Harley-Davidson needs to have a smaller, lighter, cheaper, entry level bike in the lineup. There’s nothing wrong with bringing more young people and women into the fold. In fact, I’d like to see both 350cc and 650cc air-cooled V-Twin cruisers added to the lineup
    I disagree with the insinuation that Harley-Davidson has never been on the same level as the Japanese when it comes to reliability. The Evolution engine, the five speed transmission and the FXR frame were the equal of any competitor. If the Motor Company has the will to do it, that success can be repeated.
    Ultimately, if you run any business competently, with emphasis on quality products and honest business dealings, at both the factory and dealer levels, then the sales, profits, labor relations and stock prices will follow.

  62. 62 Rigid Shovel Rider Mar 25th, 2010 at 1:52 pm

    Interesting view points, Cyril, but I have a few contentions with some of your points.

    First off, I wonder how much profitability per square foot dealers make between motor clothes, parts, and their service departments. I haven’t seen anyone wearing HD apparel on the streets in years, cheap WalMart WCC shirts killed that market off. I’d wager that the service department makes much more per square foot than the others, followed with parts, then motor clothes.

    HD forced their dealers to become malls instead of bike shops during the boom-a costly mistake that screwed those who carried the brand for years before.

    The custom motorcycle boom that you mentioned both helped HD and started its demise at the same time.

    The biggest thing that irks me and everyone that I know is the stupid marketing that HD does.

    It’s truly gone beyond ridiculousness with that embarrassing “dark custom” stuff of recent years. Secret handshakes? “Dark” books? Please, HD, that kind of buffoonery is better aimed at 10 year old boys in a tree house. Whoever thought of such embarrassing things should be sent packing.

    Now we have the great charlatan marketers at HD trying to pitch $16K bikes to punk rock kids. Yeah, metal flake helmets, flannel shirts, skate boards, slipper shoes, work pants and flipped up caps, bro! Not a single one of those hipsters that they’re trying to market to would be caught dead on a new HD in its current incarnation.

    Shovels and Pans with home made parts is what they’re into.

    The ridiculousness of this ploy only hits home harder when one walks into a dealer that’s forced to play whatever HD tells them to. Yeah, it’s really not smart trying to get people to buy your wares with one marketing tactic and then have them walk into a dealer and bombarding them with lame music for the mullet hair set.

    LISTEN UP, HD. If you REALLY want to market yourself to a younger crowd you need to compete with the bikes that the young guys that want new bikes are buying: stripped down Ducatis and retro Triumphs. Very few people are buying “irons.”

    Use the 1200xr platform for something neat: a big alloy gas tank, rear sets, clip ons, high mounted XR style exhaust, etc….Just don’t adorn every single part with the bar and shield and you’ll sell a ton of them for $12k. Give them performance improvements to buy instead of derby covers to buy. Bar end mirrors, carbon exhausts, maybe a choice of fairings stretching from 70’s Ducati style to small 50’s Isle of Man inspired offerings…things like that….and don’t write HD on everything-people know what they hell it is that they’re buying and riding.

    If you want the new generation of riders you need hide the tassells and chaps, turn off the irritating country music in your dealers, and offer them something cool that they actually want-not that stars and stripes fake WalMart purchased patriotism stuff that you constantly try shoving down peoples’ throats.

    Of course, since the honchos over at HD aren’t young (or even riders) and would rather be golfing with their fraternity brothers from 26 years ago at the country club instead of hitting the road or bar blasting around town with friends on bikes this will fall of deaf ears.

    Good bye, Harley. It was nice knowing you before you were killed by mismanagement, poor marketing tactics, and corporate greed.

  63. 63 Bart Mar 26th, 2010 at 8:42 am

    Biggest problem I see is HD is competing with itself in the bike market. All those bikes that sold from 00-06 that someone refinanced there house for then turned into someone’s garage jewelry are now for sale on Craigslist or eBay. There are tons of low mileage bikes out there under $10k. Why spend $18-$20+k when you can get one for half off or more?

    Not sure if anything based on Sportys or Dyna is an answer. No one I know would ride a Sporty and I am in the demo HD wants.

  64. 64 Rigid Shovel Rider Mar 26th, 2010 at 12:23 pm

    Bart, no one in your demographic would buy a sporty because of the way they’ve been marketed-girls bikes, starter bikes, etc.

    Put out a retro cafe bike with power and sound and the hipsters and wanna be hipsters would swarm to them.

    Offer the bodywork, suspension, and exhaust in the HD catalog, and people would buy up every used XL out there to do it.

  65. 65 Scoutnchief Mar 29th, 2010 at 5:16 pm

    Cyril,

    Best article I’ve seen about H-D’s business. Well said.

    My two cents: For the past 15 years the rest of the motorcycle industry has been involved in just that… the motorcycle industry. While H-D has been involved with a weekend grown-up dress-up fad which just happened to also involve a motorcycle.

    By the way, I’m in no way knocking that either. For 15 years, hitching up to the baby-boomers and riding this fad made HOG a wonderful “stock” story for Wall Street, with 15 years of very consistent revenue and income growth. We also know that Wall Street doesn’t care much about how well a company is run, how good their products are or even how profitable the company is; What Wall Street cares about is growth; and for 15 years HOG delivered for Wall Street like clockwork.

    Only one problem… the average age of H-D riders grew by one year every year for the past 15 years, and unlike golf, or vacations to Hawaii, or even collecting vintage cars, motorcycle riders get to an age when they just stop riding. In 4 years the youngest baby-boomer will be age 50… Thus the product and image trick-box that many of the above posts referenced.

    Lastly, Wall Street wouldn’t have been much interested in H-D as a MOTORCYCLE company instead of a company riding the wave of a fad. Because a mere motorcycle company has no pretense of being a hot growth stock. That’s why I believe H-D will become (again) just a motorcycle company, which to us motorcyclists might be a step in the right direction, but for Wall Street, a nightmare.

  66. 66 Paul Mar 29th, 2010 at 10:05 pm

    Okay, here’s the deal…

    I went looking for a bike and checked out some used Harley Davidsons only to find that they were two times the price of similar Used Japanese Cruisers and the returns in favor of the Harley were Marginal at best…

    The two Models that I was most interested in when I was shopping were a 2001 Fatboy and a 2002 Intruder VL LC 1500… Honestly, I settled on the Intruder because not only was it $6000 less, it had Dual Front Disc Brakes (the Harley had a Single Front Disc), had a Hydraulic Clutch, Had Hydraulic Valves, Dual Combined Hydaulic Brakes, Oil Cooled, More Horsepower (67 to the Fatboys 64) and weighed 5lbs less when Dry… The only place the Harley won out was the Fuel Injectors because everything else was pretty much equal or better on the Intruder.

    I get the whole Harley can’t compete thing but it’s a load of junk because a lot their parts are made over seas and assembled hear! Also, if the garden variety Harley owner can fix their own bikes then why in the heck to they have to Pay Harley Mechanics more than a Metric Mechanic? Basically, Harley has put a premium on their name and people are calling them on it!

    Think about this, which bike is better, the Harley Sportster 883 or a Honda ACE 750 (lets say 2003) well, I’ve seen the ACE with more than 100,000 miles on it but I’ve never seen a Sportster 883 anywhere near that many miles on them! So for basically the same price you’re getting better performance from the Honda and better Reliability.

    Of course, Harley isn’t going to lower the value of their name but in reality that is exactly what they have to do because people are tired of paying twice as much and getting equal or lesser value and nobody can afford that in this day and age!

    Wait, here’s another Example… I bought one item that says Harley on it… Their Boots! Why? Because I bought them at a flea market for 40% off and they were better than the other brands out there (not 50% better but better) so why is there such a large discrepency in pricing of even apparel? Truth be told, Harley could pull out of the red in apparel sales if they were more competitively priced.

    Now here’s another way they can pull out of the Red! Are you ready for this, trade patent technology for the Sportster 1200 with Suzuki for Patent Technology for the Hayabusa! At this point you rename the Buell Division HD Racing and use the Busa technology to bring that line up and get kids buying those bikes (they will buy them believe me, they’ll buy them!) and Suzuki will get the boost it needs to rebuild from the raping that GM gave them. Hell take it one step further and have Suzuki build the Busa for Harley and Harley build the Sportsters for Suzuki.

    Anyway, to sum this up market your gear closer to the competition and sign a licensing agreement with Suzuki but only on the models that I mentioned and Harley will be back selling bikes in no time!

  67. 67 Major May 10th, 2010 at 6:38 pm

    HD has a tough road ahead. Let me preface that I have always owned bikes of all sizes, off-road and on road. I have been riding over 35 years. I have marketing ans technical degrees. I have admired HD for their amazing marketing prowess, but never felt the need to own one.

    Here are the problems I see. HD has sold the nostalgia theme to their customer for years and this boxes them into designing bike that make it difficult to add performance. The engine designs (except for the Porshe Vrod) are very outdated. People saying they want metal parts because plastic is cheap, when others are using carbon fiber, just like fighter jets for strength and weight savings. The “throw-back” marketing theme makes it difficult to create modern bikes.

    The point I ma making is that these ideas are good for older riders, but younger riders don’t know who Marlin Brando is. The younger generation associates Harley with Viagra….. not a good perception of old guys that can’t get it up. The other problem is “made in America” does not mean much to the younger generation. They do not have a link to Pearl Harbor, Korea, or Vietnam. To them the Japanese make great cars like Hondas and Toyota’s. HD could play the “made in Japan” card to the baby boomers because if you said “made in Japan” in the sixties it meant CHEAP lighters and toys that broke. To the gen X & Y, they know Honda, Toyota, Sony and many other products that are best in class. Also many of the Japanese cars have been produced in the US of A all THIER lives. They may even know people who work at these plants. To my twenty-something kids, these vehicles are world class products and technologically advanced to Harley type products.

    The Harley “lifestyle” may not be a need for the younger generation, as many have already mentioned, they have social networking where they don’t have to go to the HD dealership (clubhouse) to ride to another dealership on Saturdays. Many see the HD lifestyle for old people and do not want to be associated with the theme.

    HD will be able to market to the older generation with trikes as the baby boomers age. I believe many of the kids will gravitate to the Asian cruisers when they can’t ride sport bikes in the future.

  68. 68 Donny Aug 9th, 2010 at 8:56 am

    Build an over priced peace of junk thats a death trap,and market it to the world and wonder why it won’t sell,a 55MPH bike in a 75MPH world. Who would buy a bike with no rear seat or a seat that will end a relation ship,They do have the night rod special if your into cruisers,but it has a nazi engine,and the harley davidson dealer ship to deal with,and i guess baby boomers love verbal and mental abuse,and being robbed.They have no good street fighter bike,or sport bike in the 2010 market,and there old school bikes are real old school bikes,and that makes them death traps,Triumph has old school bikes,in look’s alone,for example the (thruxton se) (bonnieville se)looks old but is not,its a modern motorcycle and there street fighter line,and sport bike,and cruiser line are all modern bikes.(PS) harley davidson people have to under stand other people ride to,other kinds of bikes,and we talk to each other to and ride together ,hell some are even harley riders,but most into cruisers ride victory cruisers now.

  69. 69 Jenn G Sep 18th, 2010 at 5:24 am

    Fantastic website, I truly love your posts. I find them to be entirely good value. I’ll be checking back here before long! terrific

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