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Archive for October, 2009

Talladega“Shake ‘n Bake”…  as the Harley-Davidson financial wizards turn off the Speedway lights and come on cost savings ideas like a spider monkey. 

I blogged in October 2008 that H-D reached an agreement with Chrysler to use part of the Arizona Proving Grounds facility. The facility is located about 25 miles south of Kingman, AZ on the old Yucca Army Airfield.

Given the dismal Q3’09 financial results and closure of Buell, they have now decided to further reduce operational expenses by closing the test facility in Talladega, Alabama, eliminating about 100 jobs. The testing facility was opened in January 1981 and had performed several kinds of vehicle tests including high-speed performance tests on Talladega SuperSpeedway.

The companies operational plans had previously committed to cease testing in Mesa, AZ (the GM Proving Grounds) by July 2009 because the testing ground had been sold for a variety of planned developments.  Consolidating test operations from Talladega; and Naples FL., to the Arizona Proving Grounds in Yucca, AZ., is new information.

Clearly the company is aggressively cutting costs where it can and must be necessary to align cost with the new economic reality of reduced sales. I’m truly starting to wonder if H-D has lost its way and offer up the movie opening title card as a reminder to H-D management: “America is all about speed. Hot, nasty, bad-ass speed. – Eleanor Roosevelt, 1936.”

Photo courtesy of Sony Pictures.

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debrisIt happens this Saturday, October 31st.  Halloween falls on a Saturday this year and it’s a particularly deadly night due to impaired drivers.

The ODOT Fatality Analysis Reporting System (FARS) data reveals a startling fact.   It turns out that 90% of the fatalities (10) on Halloween night (6:00 p.m., October 31st to 5:59 a.m., November 1st) between 1998 and 2008 in Oregon occurred in alcohol and/or drug-involved traffic crashes.  And according to the National Highway Traffic Safety Administration (NHTSA), in 2008, 58 percent of all highway fatalities across the nation on Halloween night last year involved a driver or a motorcycle rider with a Blood Alcohol Concentration (BAC) of .08 or higher, which is illegal in every state.

Now let’s add the fact that Eugene and Corvallis will see a significant traffic increase associated with UO and OSU home football games.  All of this mixes with excitable trick-or-treaters, and costumed party-goers — we have the perfect storm of people taking the party to the roadways.

Everyone plays an important role in keeping the kids and roads safe.  Please be safe out there and enjoy the weekend.

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Keith Urban

Keith Urban

Whoa!  My two previous posts on the current state of the Harley-Davidson state was clearly like a sad country song in an old rundown coffee shop, yup one of those “bummer zones” so, we need a change of scenery.

Speaking of, have you been to Nashville?  If you haven’t been to the Country Music Hall of Fame and Museum you’re the worse for it.  Yeah, you may think you don’t care about boot-kickers, but you’re missing out on the history of America.  From slavery to the Dust Bowl to Elvis and the tragedy of the Williams family.  To go to the Country Music Hall of Fame and Museum is to become a fan.  And to insure that it lives on, Vince Gill proposed a “All For The Hall” event where every artist cough up one night of revenue for the Hall.

Keith Urban is one who took him up on it and at the Sommet Center (the Staples Center of Nashville), he hosted some of country music’s finest as they raised money for the Hall.   Keith and his band played one my favorites, “Who Wouldn’t Wanna Be Me“:

“I got no money in my pockets
I got a hole in my jeans
I had a job and I lost it
But it won’t get to me”

That’s the power of music.  It crowds out all the negative and replaces the bad thoughts with joy and inspiration.  And when you watch Keith Urban ride his Harley and hear him wail on his guitar, you’ll smile with a good feeling.  I don’t know about you, but after yesterday’s jaw-dropping news from H-D and the layoffs at Buell I needed some “sunshine blown up my skirt.”

Life.  It’s full of hopes and dreams.  And victories and losses.  What gets you through is your friends, family and the music.

Photo courtesy of Keith Urban.

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HD_MCThis is the question I’ve been pondering over after having an opportunity to spend a couple of hours with “No Barriers” founder Neal Petersen.

To save you some time the short version of Neal’s story is — He is a black South African who grew up poor and disabled during apartheid yet achieved his dream of racing/sailing solo around the world.  He now does motivational speaking and is involved in peace talks in multiple countries across the world.  During Mr. Petersen’s speech he routinely ask the audience; “Does what I do on a daily basis at work have a positive impact?”

This resonated with me and while I personally reflect on this I can’t help, but ask the question of Harley-Davidson’s CEO, Keith Wandell.

Today, Harley-Davidson reported out the Q3’09 quarterly results and announced a massive 21.3% decline in revenue for the 3rd quarter and an 84.1% decline in net income from a year ago quarter.  Apparel and general merchandise represents 23% of H-D revenue to date.  Then the news got interesting.  They announced that 14 dealers have closed year-to-date and set the expectation that 15-30 additional dealers will close in the next 6 months as the company reduces inventories to match sales.  They discussed the HDFS bad loan/delinquencies and financial progress.  The Harley-Davidson brand value (note: its moved down from 43 to 71 position) and the more important announcement was to shutter the Buell product line as well as divest its MV Agusta unit.  A busy day of spin as Mr. Wandell went on to discuss the going forward 4-piller strategy of: growth; continuous improvement; leadership development and sustainability.

On the Buell front I can’t say that I’m not surprised because it was reported a couple weeks ago in the Milwaukee Journal-Sentinel that Erik Buell didn’t renew his employment contract with the motor company and there were a number of rumors circulating as to what that might mean.  I want to personally thank Erick Buell and the Buell employees.  I believe what they did on a daily basis at work had a positive impact.  They should be proud of what they accomplished.  They are an American innovation poster-child and represent what passionate and inspired people can do through engineering and manufacturing some of the best-handling bikes in the world.  But, in biker speak… it’s WTF?  An American designed and manufactured motorcycle that out performed Asian manufactures all year in the AMA Pro Roadracing circuit and Mr. Wandell dumps it?  This is forward thinking?  2009 marked the first year H-D had a non-motorcycle enthusiast running the company and I have to ask if he really got out there to see what all that (Harley) race stuff was about and how it enhanced the brand?

Since I was rather harsh in a blog post last year about the $108 million MV Agusta deal and describing it as a train wreck, I agree with the decision to abandon it.  Sure this happened under ex-CEO James Ziemer shift who retired shortly after cutting the deal, but the board members clearly approved Mr. Ziemer’s compensation package who walked away with only $5.6M compensation, up 26.5% from 2007.   And in part the compensation was based on the boards admiration of the MV Agusta deal, right?  The board members should be put on notice as there are now another 180 employees set to hit unemployment due to the management of the company and we all know they had line of sight just 12 months ago to the economic issues.

The shocker in the financial call was the statement of investing more in emerging markets up to and including local market design and manufacturing!  Is this a precursor to moving manufacturing off-shore?  A lot of talk about taking Hogs to China and India, but nothing about how well the strategy has worked to woo women, African-Americans and Latinos.  The value of the brand was weaved into the growth strategy, but nothing about why it dropped 43% in 2009.  They’ve talked for two quarters about reducing inventory yet made little progress.  And loans made to iffy borrowers aren’t just taking down housing.

The push by H-D corporate for dealers to build increasingly larger and high-end-glamorous retail outlets meant more dealer debt and subsequent failures.   Chapter 11’s continue to stack up across the northwest.  Three locations of Shumate H-D with one in Kennewick (owner hub), another in Spokane and a satellite location in Lewiston, ID.  I blogged earlier this week about Dave Tuomisto’s, $16M and 6-acre mega-expansion at Timpanogo, UT which went under.  It’s not clear when or if any of these dealers will reemerge and the real downside will be H.O.G. groups folding, lengthy drives for service or to hang and drop in which overall effects customer service and having a healthy Harley community.

Harley is in major trouble.  The spin, baby, spin from Mr. Wandell is not good enough, my friend.

Photo courtesy of H-D.  Financial call transcript courtesy of SeekingAlpha.  Disclosure: I have no investment in HDI

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GM, Rick Story and Owner, Dave Tuomisto

GM, Rick Story and Owner, Dave Tuomisto

It’s starting to look a lot like a “job-less recovery”… and the R-word continues to take a toll as bankruptcy filings nationally surged past the 1 million mark during the first nine months of 2009.  Many states have similar statistics, but in Utah the U.S. Bankruptcy Court received 10,706 bankruptcy petitions in the first nine months of this year — a 62% increase from the same time last year.

And speaking of Utah, the owner of Timpanogos Harley-Davidson (Dave Tuomisto) filed for Chapter 11 bankruptcy protection last month to help stall an acrimonious legal battle over millions of dollars in alleged unpaid debts to several lenders.  I previously blogged on the July 2008 opening of the mega-dealership HERE and it’s unique history after a $16 million renovation complete with green building awards.

The 6-acre complex and building was resort-like and often written about in a very positive profile that focused on Harley-Davidson’s growth strategy, branding efforts, and future opportunities.  Overall, it was a great story and a source of pride as a memorial to the Geneva Steel power plant.  For the city it was a way to talk up the merits of building green and reusing historical icons.  It was like a mini-museum and it’s very unfortunate to witness its rapid fall – again.

As the economy continued to falter, the overextended Mr. Tuomisto structured an agreement with Nu Skin founder Blake Roney (Tupelo Investments LLC) to transfer the dealership to them after getting bailout assistance to keep the dealership’s assets from being seized and shut down by Harley-Davidson Credit Corp.  Tupelo Investments LLC owns the 60,000 square-foot building and the motorcycle-themed restaurant called Marley’s. In bankruptcy court filings the list of creditors include: Harley Davidson Credit, which is owed $4.3 million; Monarch Recreation Sales is owed $760,922; Scrub Oaks is owed $400,000; the Utah State Tax Commission is owed $151,363; and millions more owed to hundreds of other businesses and individuals.

But wait, there’s more… quick to smell a deal, Joe Timmons (Owner of H-D Salt Lake, South Salt Lake) is trying to buy the building which housed Timpanogos H-D.  Likely for pennies on the dollar.

Photo courtesy of H-D.

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NCOM Agenda -- Portland, OR

NCOM Agenda -- Portland, OR

Some things are immutable.  You’ve got to show up for appointments on time.

And speaking of meetings the National Coalition of Motorcyclists (NCOM (Region 1)) meeting and seminar is set for Saturday, October 17th in PORTLAND, OR.  The venue is the Holiday Inn (Portland Airport) at 8439 NE Columbia Blvd., Portland OR 97220.

Speakers at the daylong event includes:

James “Doc” Reichenbach – Chairman, National Coalition of Motorcyclists — “Freedom of the Road Throughout the Nation”

Sam Hochberg – A.I.M. (Aid to Injured Motorcyclists) Attorney, Oregon — “Other Legal Issues In Our Region” and “Trademark Defense Update”

Jim Hernandez – Professor Criminal Justice — “New Federal Gang Bill”

Guest Speaker — “The Defender Program”

NCOM was founded in 1986 with the idea that motorcycle groups from across America could “come together” and address the overwhelming need for a national voice to protect our life-style and right to ride.  NCOM is not another association, but rather a bringing together of existing motorcycle groups for the purpose of mutual exchange of information, legislative strategy and to combine strength to fight all that is adverse to the freedom of the road.

All motorcyclists are invited to this free event.   Hopefully you can join your fellow riders as it’s your opportunity to hear about the status of the fight for personal freedom across the country and weigh in on the various motorcycle topics effecting the northwest.  I received information that the WA CoC will be riding in as a master pack which should make for an interesting entrance visual in of itself.

True, I’m on a mini blogging timeout this month, but the meeting is important and I wanted to help get the word out.

Photo courtesy of NCOM.

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timeoutAccording to a 2008 survey by Technorati, which runs a search engine for blogs, only 7.4 million out of the 133 million blogs the company tracks had been updated in the past 120 days. That translates to 95% of blogs being essentially abandoned, left to WOW (wallow on the web), where they become public remnants of a dream — or an ambition — unfulfilled.

I started blogging in 2006 which seems like a long time ago… then in 2007, prior to taking off on an extended motorcycle trip I started the Northwest Harley Blog.  The thinking at the time was that a mix of hobbies (motorcycle and photography) would be a natural fit and thus was born — rantings of a motorcycle enthusiast.

Many people start blogs with lofty aspirations — try to build an audience and leave their day job, land a book deal, get attention from traditional media or simply to share their so-called genius with the world. I did not! Some even assumed that once they started blogging, the world would beat a path to their digital door.  Getting started is easy, since all it takes to maintain a blog is a time commitment and inspiration. Some actually believe those TV advertisements about some mommy blogger making $4,000 a month?

As a “closet journalist” I like to provide a unique voice and work to accurately report and find unusual angles on stories related to motorcycle causes and the industry.  I also like to provide chronologies of my various ride and rally wanderings. After two+ years, or put another way — after 500 posts, 873 photo’s edited/uploaded, and several thousand moderated comments later I feel the blog is a successful hobby after obtaining on average 24,000 unique monthly views, but it’s also at a cross-roads.

trollThe internet is different now.  It used to be about research, accuracy and quality entries.  The good bloggers had something to say about the big motorcycle issues of the day.  Now it’s about snippets from people who pump out dreck or large excerpts of other articles.  Original and high-quality content has become dumbed down.  Bloggers are required to spend more time ‘digg-n’, ‘tweeting’, ‘facebooking‘, ‘youtubing‘ and SEOing their posts than they do on the actual posts themselves. Even H-D is pushing their social media outreach staff to pump up the noise level on marketing messages in non-traditional channels — i.e. bloggers.

Sure it’s cool to have all this media presence, you can tweet ad infinitum and make videos clips if you’ve got a burning desire to do so… especially if you love new media and are thrilled to be in constant contact with your fan base or “tribe.”  In other words, if its an end unto itself.

But, that’s what bothers me.  There is a point of diminishing returns and a mental cost to all the work.  In the early days all that was required to “win” at blogging was to show up early each day.  Today?  You need a team of social marketers to get your message out, a second team to manage any fall-out from whatever you’ve said and a third to manage all the SPAMers and deletion of bad behavior rolled up by the Google machine in the form of drive-by trolls and haters who try and take up residence.  As a result blogs have a higher failure rate than restaurants!

Not all blogs fade from lack of reader interest. Some bloggers find themselves too busy — what with, say, band-camp, and swim practice, or perhaps even housework. Others graduate to more immediate formats, like Twitter or Facebook and drop evangelizing via the blog platform. And a few — gasp — actually decide to reclaim some small slice of their personal time.  This brings me full-circle about a decision.

I’m going to take a blogging timeout. Little if any new material will appear during the month of October.  I plan to resume in November.  Why?  Having blogged consistently for over three years now, I think it would be wise to take a step back and evaluate the effects (both good and bad) and determine what if any new direction should be taken.  If you have an opinion or viewpoint I’m sure you’ll let me know.

I appreciate the allegiance of the blog reader base who subscribe and those who visit the site regularly.  If you happen on to this site during the month of October I hope you’ll enjoy looking through the archives.

Enjoy fall and ride safe out there…

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