Harley-Davidson Facts Check

1- Harley-Davidson Dealerships. At the end of 2009 the company had 1,340 dealerships worldwide. Last year, 28 U.S. dealerships closed and 6 closed in the first quarter of 2010. Because of the down economy the company is encouraging dealer consolidation in all markets. “Contraction right now is healthy to strengthen and protect the dealer network overall” declared Harley-Davidson spokesman Bob Klein. So, expect more closings in the coming months. U.S. retails sales of new Harley-Davidson motorcycles are down 35 percent compared to 2007.

2- MV Agusta Sale. More details are surfacing regarding the transaction. The agreement signed July 31, 2010 shows, as I reported, that a “nominal consideration” of €3 was received by Harley to return MV Agusta to its previous owner. But in addition Harley-Davidson paid Claudio Castiglioni €20 million to take MV Augusta back, and then forgave a €103.7 million loan that The Motor Co. made to MV Augusta while they were under common corporate ownership. The Motor Company bought MV Augusta for $109 million in July 2008. At the current exchange rate, the transaction buy/sell back had cost harley-Davidson $136 million.

3- Harley-Davidson Workforce. As part of the 2010 company restructuring plan hundreds of full-time workers were laid off or agreed to early retirement. More lay-off will occur in the next few months and the company plans to create pools of independent workers to be called for work when they have full-time workers out on vacation or sick leave. In this economy, flexibility of workforce is a key element for Harley-davidson survival.

12 Responses to “Harley-Davidson Facts Check”

  1. 1 Fredp Aug 21st, 2010 at 11:43 am

    “Independent Workers” ? Do they mean as 1099 employees? No former payrate, no insurance, no vacations? Job goes to the lowest bidder to come and work for H-D.
    My best guess in the years down the road.
    Headline reads: Due to the unavailability of “sufficient pool of workers” ( meaning cheap) we are moving our production/assembly to India, China, Thailand,etc.”
    Welcome to the new world order!

  2. 2 Brett Aug 21st, 2010 at 4:41 pm

    1st I don’t see an issue with dealership closings. Milwaukee itself has about 15 of them. The rest of Wisconsin has 1 every 30 or so miles. Start at 1 dealership & drive in any direction for 30 minutes & you will see another dealership…..I highly doubt that many are needed. The Dealership In Green Bay, McCoy’s, has to be 1 of the worst dealerships in the country. They have absolutely no customer service. They sell everything for at least $5,000 more then the other dealers. They will tell customers if they think they can find a better price, go do it. They are not in touch, they think it’s still 1998 & they are buying up all the bikes from dealers in the south so they are the only one with new bikes on their floor while the rest have their waiting lists.

    As far as employees HD is going to use…..1st, Unions are a thing of the past. Whether it’s the unions fault or not, companies are blaming them for the company being in the red. 2nd to anyone who complains about pay, guess what? In today’s economy I’m sure Harley could start hiring replacement workers & find many who are more then willing to do the job for around $13 to $15 an hour instead of $20 to $25. It’s a fact of life now & also in Wisconsin, you can live alright making $13 or more an hour.

  3. 3 Brother T. Aug 21st, 2010 at 5:21 pm

    I have no idea where Brett is actually from, but in the metro Milwaukee area, if you extend it out somewhat liberally, we have Ukes, Racine HD, The House, Hals, Milwaukee HD, and Suburban. That would be six dealers, nine less than the 15 that Brett is running his pie hole about. Living in this area, I think the dealership spread is about right, not every 30 miles.

  4. 4 Brett Aug 21st, 2010 at 6:19 pm

    Sorry Brother T, I was being Sarcastic about the Milwaukee dealers, however I live in Green Bay. There is McCoy’s in Green Bay & I’ll use that as the starting point. Stock’s in Manitowoc is 34 miles away, Harley Davidson of Appleton in Appleton is 36 miles away, Doc’s in Bonduel which is 32 miles away, Vandervest in Peshtigo is 53 miles away.

    Then you can keep going from each of the dealers outside of Green Bay & find other dealers pretty close. Like Route 43 HD in Sheboygan, Open Road in Fon Du Lac, West Bend HD…& all of these start getting pretty close to the Milwaukee area dealers. So again…drive a half hour in any direction & you get to another dealer.

    I know for a fact there are at least 28 dealers in Wisconsin. Considering that Milwaukee, Madison, & Green Bay are the only cities of over 100,000 people, it seems pretty ridiculous to have that many dealerships. With this economy, no way they are all doing well. I would say even when times were great, if it wasn’t for clothes & other crap with the Bar & Shield on it, many of these dealers wouldn’t make it anyway. People aren’t buying bikes like they are buying cars & trucks, so the need isn’t there. Consolidation is a good idea.

  5. 5 Zyon Aug 21st, 2010 at 6:22 pm

    I hate to see dealers and employees losing their ability to put food on the table but in a market where imports and custom builds (I own a custom built) are dominating the market, Harley has not reinvented themselves in a favorable manner. Nothing can beat the V-Twin as far as I’m concerned but I quickly passed up a Harley for a custom bike stuffed with a Revtech.

    If Harley ever fails, it is only due to their own decision making and their inability to design anything the public wants to ride now.

  6. 6 Tommy Boy Aug 21st, 2010 at 7:31 pm

    How unfortunate for the HD franchisee. As true American businessmen and women, they complied with their franchise agreement, built a multi-million dollar big box boutique and now cannot crack the monthly overhead nut . The Motor Company cut back on production so they can’t get bikes and our state and federal representatives destroyed the economy and their customer base. So what are they to do????? I say they need to remember us their loyal customers and 1) cut their overhead wherever possible and 2) cease and desist thinking we the customer, does not have options. I lived in Milwaukee for most of my life and my recollection is there are only 4 dealers in the greater Metro-Milwaukee area. So, the options are limited, buuuuuuut a call to each dealer will quickly reveal which one wants your new bike & parts business. My current location has 15 dealers in the area. I approached 4 when I was ready to buy a new Touring bike last fall. Despite the economy, none would come off of MSRP. Three insisted on dealer prep charges on top of MSRP. The worst part was all 4 had dusted off their Motor Company mid-90’s sales script – “Harley Touring bike production is down and Touring bikes are in demand. We get so few bikes we have to charge MSRP”. I was bummed. I had $20 large and in this economy the dealers wanted the “whole hog”! As an aside in the last 5 years, the shop labor rate went up $25+ with most now charging $90 – $95 per hour. I recognize the palaces they built and the competition for qualified techs were the drivers, but $150 bucks for an HD 20w50 oil/fluid change is a bit much. So what’s a loyal Harley owner to do??? I say shop around. I did and in less than 2 weeks I found an appreciative dealer who had the Street Glide I was looking for – and at a very fair price. This dealer earned my 1000 mile service and next week his shop will complete my 5000 mile service. Others have obviously heard of his customer oriented sales & service as 3 certified HD techs with 60 collective years of experience book appointments two weeks out. I really do feel for the dealers who are upside down. I also feel for the American worker. But good business owners with an attitude of consistent fair profit will always be successful and provide great paying work for their employees. Living in Milwaukee most of my life, I have many friends who are or were gainfully employed at “The Motor Company”. Most tell me the true Harley Davidson enthusiasts are moving on or are being moved out. Their replacements are not always motorcycle enthusiasts; some come from “Corporate America” and are only interested in the GM Management /Business model – counting the beans and driving up the value of their stock options. Let’s hope Willie G’s attitude of balancing the interests of the company, the employee and the customer continues to live at Harley Davidson. Ride safe my friends……….

  7. 7 Brother T. Aug 22nd, 2010 at 6:40 am

    Brett thats fair enough. In the spring I took a little vacation, drove from Milwaukee through Fon du Lac, Appleton, and stayed at Onieda. I took some day trips to Docs, McCoys, Stocks, and then returned on 43 to Route 43 and home.

    I would agree, in looking at the dealer locations in a HOG atlas, that there are some areas that appear over saturated with dealers. I guess I just disagree that it’s in Wisconsin. If I lived in Manitowoc, unless I had poor service at Stocks, I’d be disinclined to drive to Green Bay. I don’t drive to Hal’s, but to Milwaukee where I purchased from. I may be way off base, but I don’t think that’s too different fro a lot of riders.

  8. 8 Brother T. Aug 22nd, 2010 at 6:44 am

    And, dealers will be located in the population centers, that’s where your buying population largely comes from.

  9. 9 Woody Aug 22nd, 2010 at 1:03 pm

    I agree, brother T. With the population of the greater Milw area and the thousands of bikes on the road, there’s not too many dealers IMHO. A big problem really is the overhead of the huge “palace-ships” that the dealers had to build or lose their licensing. It is a shame that many of them have been unable to figure out how to sell a Harley like Chevy dealers have to sell cars. Keep the customer happy with the lowest possible price and provide good, solid support afterwards. Give me honest value in the shop and I won’t want to go elsewhere. I don’t think 30-40 mile spacing is too close together, that’s a pretty good distance when you’ve got a dead bike, a flat tire, whatever. I’d want someplace close if I’m going to drop off a bike and have to catch a ride back with someone else-hate for them to do a pair of 1hr. + shots to there & back.

  10. 10 Joshua Aug 23rd, 2010 at 12:45 am

    The truth is that Harley Davidson will survive, bring mney to its management and shareholders at the expense of the dealers and workers not responsible for the bad economy and the stupid decisions made by the executives. Capitalism at work,

  11. 11 jim Aug 23rd, 2010 at 11:46 am

    …hope things improve… spent a lot of $$$ going to mmi and can’t get a job…

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