Wisconsin State Gives Harley-Davidson Millions In Tax Credits

It’s confirmed. While Wisconsin workers were debating their new seven-year labor agreement, Harley-Davidson had already secured a 25 million dollars tax credit to keep 2 of its plants in Wisconsin.

The credits, spread out over nine years are linked to keeping jobs in the Milwaukee area and Tomahawk, along with capital investments by Harley and purchases from in-state suppliers.

Forcing its Wisconsin labor unions to accept a cut of 325 employees replaced by “casual” workers as needed and to agree on wage and benefit concessions by threatening to move manufacturing out of the state is one thing.

Now that cost-cutting has been done almost everywhere it was possible, Harley-Davidson must change its aspirations and fight to acquire a younger clientele. Harley’s core customers get older to the point that more and more can’t no more lift a leg over their bike. Women represent just 11% of buyers, and penetration in the African-American and Hispanic markets is very limited. Brand loyalty can’t be used to fight demographics. So, what is the solution? New cheaper models will say most observers. Is it enough?

Zipper's

25 Responses to “Wisconsin State Gives Harley-Davidson Millions In Tax Credits”


  1. 1 bigitch Sep 19th, 2010 at 3:50 pm

    Harley’s core customers get older to the point that more and more can’t no more lift a leg over their bike.

    wow what a slap to the people who have supported the motor company through it boom. so what’s next???
    harley gonna buy “the scooter store”?

  2. 2 deadwood1783 Sep 19th, 2010 at 4:34 pm

    Too many folks don’t seem to realize that HD is in a struggle to survive. They will continue to cater to the old guard as best they can but they also must look forward. Brand loyalty is not what it used to be and won’t ever be again. The days of 5k above MSRP alienated many of the old guard and unfortunatley some Dealers still fail to recognize it. Look at V-Rod, not a bad engine but riduculous styling decisions, too high of an MSRP at launch and Dealers were still in the fat, dumb, and happy stage at the launch and added 3-5k above the already inflated price making it almost stillborn. Whether or not you like Keith Wandell and maybe think he’s paid too much, no one from inside the Company could or at least would have made the cuts he has. I don’t think all his decisions have been on target but that can always be said of anyone. Probably 70% of the cost cutting actions he has undertaken would have been done even if Jim McCaslin (who many thought would be Jim Zeimer’s replacement) had gotten the top slot. The other 30% were tough calls only an outsider would have made. I was disapointed when Keith got the job but as time has passed and we can now see his directional goals starting to come into play, I see the wisdom in bringing in an outsider. HD still has a helluva long way to go to climb out of pit they dug for themselves. The recession just brought the crash on a little sooner as the aging demograhic they tradionally catered too spends less on their product. The best hope is that new exciting product to bring in younger riders is underway. Another Sportster is the wrong answer…again… it’s time to get innovative or prepare for life without Harley-Davidson. I hope and believe we will see real innovation in the not too distant future. And I hope the MoCo and the Dealer network have learned some valuable lessons. HD, unlike AIG or GM is not “too big to fail”.

  3. 3 fredp Sep 19th, 2010 at 5:39 pm

    The tax credits gives both H-D and Wisconsin time to appease the inevitable. Loss of jobs in Wisconsin and time to build overseas. MHO.

  4. 4 X harley rider Sep 19th, 2010 at 5:57 pm

    SO will they give Polaris tax’s credits to keep them working????????
    I’ll bet not

  5. 5 David Sep 20th, 2010 at 1:11 am

    Tax credits only mean that Wisconsin will have to tax the rest of the states population to make up for the loss. Again it takes food and housing away from the general population as they end up paying for this. It makes everyone have a lower standard of living with the increase of property taxes and and state taxes (if wisconsin has state income tax), right down the line.
    What would have it really cost the state to have lost what ever H-D would have moved or was it just a ploy to buy time until the end. We all know that they will never change their model or style or namesake aircooled V-twin design.
    Maybe they will go to Flat silver paint instead of black or maybe flat green……
    Or just maybe they have a backroom deal on the table(like this one) for a big Obama takeover of Harley -Davidson.Kind of like G-M, The Banks, and dont let us forget Health Care !!!!
    Come on guys give me a break……

    Same Shit Different Day ; David

  6. 6 Scott Sep 20th, 2010 at 7:46 am

    Here is a new and novel approach to keep the motor company afloat.
    1. Keep It Simple Stupid.
    2. Quit trying to sell some elusive image of bad assness.
    3. No matter how hard you try there is no such thing as a custom straight from the manufacturer.

    H-D needs to drop the arrogance, and simplify their business philosophy. Quit looking for government tits to suck on. Return to the values that the founders embraced in the early days when they had real competition. Re-examine the strategies that carried them through the depression. Put the customer needs in front of the share holder’s wants. (No customers = No company)

  7. 7 Busfreak Sep 20th, 2010 at 8:27 am

    How about Harley wheel chairs.

  8. 8 fuji Sep 20th, 2010 at 10:33 am

    Scott, stated.
    Re-examine the strategies that carried them through the depression.
    ———————————————————————————————————————————————————————————
    Scott, you want HD to sell the Japanese [ as during the depression ] another manufacturing facility and move it to Japan with engineers. ? Hmm, You may be on to something.

  9. 9 WOW Sep 20th, 2010 at 10:36 am

    Bottom line is that Harley-Davidson said pick A or B. A) We more out of state and you are all out of work, or B) you, the employees take the hit. The employees voted to keep the plant in Wisconsin. I hope they made the best move for themselves as well as the company.

    Some will be losing their jobs, but many will be keeping their positions. If Harley-Davidson moved out of state All of them would be out of work, that is unless they were to relocate. Just ask GM Janesville employees how they feel about their plant moving out of state.

    As part of the tax credit, H-D will be purchasing more from Wisconsin suppliers. Let’s hope this helps offset some of the loss.

    GM employees are out of work, with little prospects. Many of the Harley-Davison employees will be happy to bring home a paycheck.

  10. 10 Robin Sep 20th, 2010 at 10:43 am

    The CNN/Fortune Magazine interpretation of Harley’s situation:
    http://money.cnn.com/2010/09/17/autos/harley_davidson_fall.fortune/index.htm?hpt=C2

  11. 11 Woody Sep 20th, 2010 at 11:19 am

    The workers give up a lot, as a Wisconsin taxpayer I get to give up more, and the top dogs will reward themselves shortly with huge rewards for “saving the company”. yeah, life is good 😉

  12. 12 bigitch Sep 20th, 2010 at 12:15 pm

    x-qqqq’s me. but if green bay bought the packers

    why don’t the citizens of wisconsin buy the motor company???

  13. 13 mike Sep 20th, 2010 at 3:31 pm

    It would take 5% of the effort of vrod to come out with a orange and black mx bike that can be competitive. The technology is already there , its a no brainer. no, not a jap or austrian engine!
    racing builds passion.

    they need to build youth brand loyalty from the bottom up and it will make them continue to buy harley in old age.

  14. 14 Hank V.O Sep 20th, 2010 at 5:41 pm

    Tax cuts are simply a temporary fix, Harley will be in the same situation down the road. The only true fix is to get rid of the UNION’S!!!! Why can’t people understand that, It’s not difficult. It’s no secret what the union’s ultimate goal actually is, just look at the auto industry. I have news for you, their goals have NOTHING to do with all the chumps that pay them their dues.

  15. 15 Brett Sep 20th, 2010 at 6:03 pm

    ohh, God…Bigitch…1st the comments about Harley’s customers getting older were Cyrill’s not Harley’s. 2nd, the Packers FROM DAY 1 were owned by Green Bay. They never purchased them. The Packers never had 1 owner & the city said, hey let’s buy them.

    x harley rider…..if Polaris needs a tax credit, then they need to talk to Minnesota, as they are a Minnesota company, not a Wisconsin company.

    As for this tax credit, it’s nothing different then what Wisconsin just did for Mercury Marine to keep them in Fon Du lac Wisconsin.

    I can tell you for sure, Tomahawk Wisconsin is a TINY town. They have a population UNDER 4,000. If Harley leaves, not only does Tomahawk shut down, but many of the towns around it. If you are making money in Tomahawk you are connected to hunting, fishing or Harley.

  16. 16 gravey158 Sep 20th, 2010 at 8:06 pm

    how come its slways the union’s fault when things go wrong. the boys up stairs at Harley decide what hapens. Not the unions. do they control what bikes a built and how they are priced etc.

  17. 17 Hank V.O Sep 21st, 2010 at 10:26 am

    gravey158, you are right, it is the the boys up stairs that decide what is built. The price however is determined on many aspects, and one major contributor to the price of a bike is the cost of LABOR to build it. And thanks to these wonderful unions labor is grossly inflated. Why do you think everything is going overseas??? the cost of labor in the US had gotten WAY out of control, therefore we can not produce things that are affordable to the rest of the world or even to ourselves for that matter!

  18. 18 Pete F. Sep 21st, 2010 at 9:12 pm

    You know the corporate elite continue to cry poverty while they plan to povertize the masses. The governments are run by these corp payoffs and the story remains the same. The middle class boat has a big hole and is sinking fast. I remember a time when a man could make a decent living and buy a home on a factory wage. The top 2% of Americans own over 85% of the wealth, and they also own the politicos! And they arent happy! They Want More! Hence bring in more illegals(Brings down the wages) , offshore the jobs(further dilutes the middle class) and ask for them massive tax breaks(Thats why they pay to have their man in State and Fed Government) If this is not the case, you watch to much Tell – A – Vision.

  19. 19 just my opinion Sep 23rd, 2010 at 12:15 pm

    Pete F; The so called corporate elite cry poor because they too are paying huge amounts in tax and barely making a living. I too remember when a man could buy a home on his factory wage but remember back then a average home was about 1000 square foot with one black and white TV and no dishwasher or air conditioning.
    Now days the average home is 2000 square foot and people think they need a dishwasher microwave and four TV’s with x-box and wei , just about every home comes with AC and most have sprinkler systems to water the lawn. And lets not forget that over half of all Americans don’t care about buying American or supporting American jobs or companies unless it is their job lost. And that erodes our jobs more than anything else. The reason that the top 2% own 85% of the wealth is because the top 2% were willing to risk everything they have to start up their businesses. Or they had worked hard and saved their money and invested it wisely. And Illegals don’t come here by invitation of the corporate elite they come here for a better life for sure but they do it because your government allows it and encourages it by giving them welfare and foodstamps and free schooling for their kids and lets not forget the free medical that pays for the next generation that is now a legal citizen because the wifes and girlfreinds are giving birth here in our hospitals all paid for by our tax money. If you have a problem with the illegals then vote out your politician’s that allow them to come here and stay. As far as the tax breaks, remember those corporations are paying a hell of a lot more than you do as an individual. The problem I see is the politician’s not the corporations trying to survive. By the way what brand of car or truck do you drive? Me I only drive Fords by choice. And I do vote against politician’s that allow all these freeloaders to suck money out of America. I hope you will do the same.
    Have a nice day.

  20. 20 Jeff Nicklus Sep 23rd, 2010 at 1:01 pm

    JMO,

    CAREFUL!!!! You are starting to sound like me! Maybe you have seen the light at last? Who know?

    Over & Out,

    Jeff

  21. 21 just my opinion Sep 23rd, 2010 at 3:31 pm

    Jeff Nicklus; LOL
    Is there a cure for that?
    Are you doing Bikes Blues and BBQ’s? if so maybe we will see you there.

  22. 22 Jeff Nicklus Sep 23rd, 2010 at 3:36 pm

    JMO,

    Nope … Contracted for Thunder Beach in Panama City Beach, FL.f

    Over & Out,

    Jef

  23. 23 Woody Sep 23rd, 2010 at 10:27 pm

    FWIW, Green bay does not own the Packers. They are the ONLY publicly-owned team in in the NFL. Stockholders do not recieve any dividends or other monetary returns, only their vote for officers as stockholders.
    Best regards from a “team owner” 😉

  24. 24 Leif Sep 26th, 2010 at 5:28 am

    Mr. Wandell –
    Cutting costs is one thing, but when are you going to drag H-D kicking and screaming into the 21st century? I see an awful lot of innovation coming from Triumph and BMW BUT Harley just puts a different color lipstick on the pig every year. I have no reason to ever trade in my ’06 Road Glide because it’s still a current model!

  25. 25 Topnotch Oct 21st, 2010 at 3:03 pm

    http://dailyreporter.com/blog/2010/03/12/harley-davidson-ceo-gets-64-million-pay-package-in-2009/
    Harley Davidson wants to save itsself even though its top executives won’t cut their own allowances short and are still making profits even now. They may have dipped at the scare but that was because a lot of people tightened their purses at the same time. They are doing fine now., and still the top executives are being money pampered. http://badgerherald.com/oped/2010/09/22/harley-davidson_deal.php

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