By Rich Duprey (The Motley Fool)
As Harley-Davidson’s (NYSE:HOG) sales enter their fourth year of decline, investors should ask whether the motorcycle maker needs a shakeup. The problem may not just be the soft industry in which it operates, but rather also the front office in Milwaukee. Maybe instead of 100 new models in 10 years, Harley-Davidson needs a new CEO and board of directors.
A long way down Investing legend Warren Buffett once noted, “You only find out who is swimming naked when the tide goes out,” which is another way of saying that everyone looks like a genius in a bull market.
When times were good in the motorcycle business, it was easy for CEO Matt Levatich and the board to appear to be geniuses, but now that the tide is running out on the motorcycle bull market, the CEO and his board are increasingly looking like they’re swimming naked.
During Levatich’s tenure as CEO, which began in May 2015, total motorcycle sales fell 5%, U.S. sales are down more than 6%, foreign sales are off over 1%, and Harley-Davidson’s stock has tumbled 11%. Over that same time frame, the S&P 500 has gained more than 25%, and rival Polaris Industries (NYSE:PII) has seen sales of its Indian Motorcycle brand soar (its stock is down over 9%, but it has been dealing with a massive recall situation in other divisions of its company).

For investors, Harley-Davidson’s stock trades at the same price it did 17 years ago. It’s had ups and downs over that time, rising and falling beyond that threshold, but the fact remains there has been no value creation over nearly two decades.
While Polaris CEO Scott Wine agrees with Levatich that there are significant challenges facing the motorcycle industry today, he’s still managed to keep Indian sales growing at a double-digit rate. To get Harley-Davidson to start growing again, too, maybe it’s time the company had new leadership at the top.
Where are the motorcycle people? Levatich came to Harley in 1994, serving in a variety of capacities, until being elevated to the position of president and COO in 2009 before being appointed to his current position of president and CEO. Continue reading ‘Does Harley-Davidson Need A New CEO And Board?’