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Archive for October, 2012

Harley-Davidson VRSCDX

Harley-Davidson Motor Co. is recalling 2,798 motorcycles.  The NHTSA CAMPAIGN ID Number is 12V503000.

The recall covers all 2012 model year and certain model year 2013 VRSCDX motorcycles manufactured from June 14, 2011, through Aug. 1, 2012.

The issue is related to the license plate bracket mounting screws which can loosen and the assembly can separate from the rear fender, resulting in possible damage to the rear brake line, according to the National Highway Traffic Safety Administration.

Harley-Davidson is in the process of notifying owners, and dealers will inspect and repair any affected motorcycles free of charge.

Photo courtesy of H-D.

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Enterprise Resource Planning (ERP) was the watch word at Harley-Davidson’s Q3’12 earnings call earlier in the week.  So eloquent were the deflections it almost makes a person think they’re a SAP – for investing in SAP AG!

Harley-Davidson’s third-quarter earnings were income from continuing operations at $134.0 million on consolidated revenue of $1.25 billion, compared to income from continuing operations of $183.6 million, or $0.78 per share, on consolidated revenue of $1.40 billion in the year-ago quarter.

Through nine months, Harley-Davidson income from continuing operations increased 12.1 percent year-over-year to $553.3 million, or $2.40 per share, on consolidated revenue of $4.41 billion, compared to income from continuing operations of $493.4 million, or $2.09 per share, on consolidated revenue of $4.13 billion in the year-ago period.

“The third quarter marked a pivotal milestone in Harley-Davidson’s transformation. With the launch of the ERP production system at York, a major piece of our restructuring work is behind us. We are now focused on optimizing the system and look forward to the start of seasonal surge production early next year,” said Keith Wandell, Chairman, President and Chief Executive Officer.

Like partners in a three-legged foot race, both the management and employees were hobbled by their connection to this so-called new ERP production system at the Company’s largest assembly plant.  How ironic.  A new production system being implemented to improve manufacturing performance becomes part of the problem that resulted in comments during the call like:

  1. “Harley-Davidson’s annual new model launch was pushed to late August from late July.”
  2. “New motorcycle sales were adversely affected by a limited availability of new motorcycles in July, August and early September.” 
  3. And leaving no deflection rock unturned… “The economy remains fragile and there’s a lot of uncertainty for high-end products like a brand (Harley-Davidson) like ours.”
  4. No mention in the call about the Milwaukee HQ IT jobs outsourced in July to India (Infosys) and if that had an impact on Q3?!
  5. Nothing mention in the call whether what I feel has to be the lamest slogan (“Great Motorcycles”) on the 110th Anniversary models is creating sales issues.  It would be the first thing I’d take off the bike!

110th Anniversary Model with “Great Motorcycles” Slogan – Primary Cover

On a worldwide basis, dealers sold 61,053 new Harley-Davidson motorcycles in the third quarter of 2012 compared to 61,838 motorcycles sold in the year-ago period.  Dealers sold 40,402 new Harley-Davidson motorcycles in the U.S. compared to sales of 42,640 units in last year’s third quarter. In international markets, dealers sold 20,651 new Harley-Davidson motorcycles during the third quarter compared to sales of 19,198 units in the year-ago period.  During the quarter, retail unit sales increased 32.3 percent in the Latin America region, 9.8 percent in the Asia Pacific region and 1.8 percent in the EMEA region and decreased 4.7 percent in North America (U.S. and Canada) compared to last year’s third quarter.

Harley-Davidson Motorcycles and Related Products Segment Results Third-Quarter Results: Third-quarter operating income from motorcycles and related products was $144.8 million, a 19.9 percent decrease compared to operating income of $180.7 million in the year-ago period.

110th Anniversary Model with “Great Motorcycles” Slogan – Air Cleaner Cover

Revenue from motorcycles during the third quarter of 2012 of $774.0 million was down 16.1 percent compared to the year-ago period. The Company shipped 52,793 motorcycles to dealers and distributors worldwide during the quarter, down 14.5 percent and in line with prior guidance, compared to shipments of 61,745 motorcycles in the third quarter of 2011.

Revenue from motorcycle parts and accessories totaled $233.7 million during the quarter, down 0.8 percent, and revenue from general merchandise, which includes MotorClothes® apparel and accessories, was $75.6 million, up 9.1 percent compared to the year-ago period.

Gross margin was 34.7 percent in the third quarter of 2012, compared to 33.7 percent in the third quarter of 2011. Third-quarter operating margin from motorcycles and related products was 13.3 percent, compared to operating margin of 14.7 percent in last year’s third quarter.

For the full year 2012, Harley-Davidson continues to forecast a five-to seven-percent increase in motorcycle shipments compared to 2011.

My view is that they are not done transforming the company and it’s going to take more time to right the ship while getting the ERP humming to turn the management business vision into a reality.

Photo courtesy of SAP and H-D.

Note: In 2006 H-D selected SAP to help them manage and optimize their growth.  In June 2011, there was an article in Forbes referring to H-D involvement in SAP’s Community Network.  It’s unclear if the “new” ERP implementation is an updated rollout of a newer version of SAP or a major transition to new ERP vendor. 

Full Disclosure:  I have no investment in or hold any SAP AG or Harley-Davidson stock.

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Lance Armstrong visits Nike HQ in Beaverton, OR. with OCC Bike and all the supporters

People who end up living their dreams are not those who are lucky and gifted, but those who are stubborn, resolute and willing to sacrifice – NY Times interview with Jonathan Vaughters a former professional cyclist.

Now that I’ve got your attention, we know… without a doubt Lance Armstrong is the biggest contemporary sports fraud alive.  Most could look the other way on the doping, but it was the lies — all of the lies — years of lying.

Remember way back to 2004 when American Chopper was firing on all cylinders?  There was even a Lance Armstrong/LIVESTRONG bike introduced on Jay Leno. We know that Lance’s net worth is upwards of $120 million and that he turned the rubberized yellow bracelets into a must-have, cause related fashion accessory.

However, the whole set of values that the LIVESTRONG “brand” was grounded in (resilience, courage, endurance, hard work), has now been shown to be a façade after the USADA doping report paints a story of lies, intimidation and deceit spanning 15 years.  It was only a couple weeks ago that Nike introduced the Holiday 2012 LIVESTRONG collection, but is now hoping to salvage it’s corporate image by ending the 16 year Lance endorsement and emphasizing the LIVESTRONG charity association.

Cutting the support of Lance Armstrong/LIVESTRONG

You might think that Lance’s future will be similar to Pete Rose?  A book signing tour – My Prison Without Bars or selling notarized copies of his banishment letter outside Caesar’s in Las Vegas.

Unlikely, because there is always a savvy marketer out there that is an expert when it comes to brand-washing, and will promote it as now is the best time to consider pursuing Lance because you’ll have a better chance at securing an affordable partnership.

It’s clear that his reputation, his legacy and his character were thrown away by the doping.  And, that is LiveWRONG.  I waited awhile before jumping on the “slam Lance train”, but the cutting photo above captures how I feel after being a long time supporter and the shame he’s brought onto the community here in Oregon.

UPDATE: January 18, 2013 – I watched the Oprah Winfrey “interview” last night.   Armstrong offered up at best a contrite explanation of his difficulties… hyper-competitiveness fueled his toxic need to control every outcome… but, there were no new facts beyond the USADA report and it was really nothing more than another example of Armstrong trying to control the apology narrative from Oprah’s chair.  More importantly he vehemently deny that he ever called Betsy Andreu fat!  Sure he called her a lot of names, impugned her character and tried to permanently wreck her ability to ever earn a living, but as a consolation he never ever called her fat.  I’m sure Betsy feels so much better!

Armstrong ran a doping cartel and perpetuated the doping scam for over a decade, was complicit in every aspect of the lies and cover up, sued or smeared into financial ruin and bullied so many “friends” that by his own admission he lost track of how many, lied to sponsors and strategically misled the public to improve his personal finances.  What he did to people was just plain mean.   And this entire “apology tour”, with the media circus and its elegantly choreographed week-long build up prior to sitting on Oprah’s chair was just another example of Armstrong’s need to control every outcome.  Shameful.

Lance Armstrong visits Nike HQ in Beaverton, OR., with OCC bike – Photo courtesy of Beau Hudspeth.

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Seattle Motorcycle Unit Selects Harley-Davidson Electra Glide

The Pope blessed a couple of motorcycle tanks earlier in the month in prep for next years  110th Anniversary ride in Rome and now the Seattle Police department has selected a new ride.

Does it get any better for the motor company?!

As background, the primary duties of the Seattle Motorcycle Unit are traffic complaint enforcement, high congestion traffic control and enforcement, accident reduction enforcement, escorts, and special event traffic control.

Motorcycle officers are assigned to geographic districts throughout the city on a daily rotation. The use of traffic districts is intended to give the motorcycle officers a more thorough knowledge of the traffic problems in the varied City neighborhoods and to provide consistent traffic enforcement citywide.

There were five motorcycles evaluated by the unit: the Kawasaki Concours, the Honda ST1300PA, the Harley-Davidson Electra Glide, the Victory Commander and the Harley-Davidson Road King. Thirty-one officers helped narrow down the selection by riding each one of the five motorcycles for one week and evaluating them.   The department chose to stay with Harley-Davidson, but switched from the Road King to the Electra Glide.

Analysts project that quarterly revenue for the motor company will fall 19% year-over-year and this new purchase can only help earnings.

Photo courtesy of Harley-Davidson, Electra Glide

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NWHog Stats

Good morning.  This little hobby of a motorcycle blog logged its 1 millionth viewer today. Woo hoo!

Unfortunately there will be no falling balloons, bells and whistles or motorcycle give away as it’s a low budget operation.

There once was a time where I thought a million was a massive amount of views.  At one point I had “Content-Creation Madness”… thinking that all I had to do was post new content every day and then sit back and watch the hordes of new readers and the corporate decision makers find me.  I watched and waited for my clout score to skyrocket.

It didn’t.

And in today’s social media over hyped up marketing world with the aggregators, intermediaries and pyramid viral tricks,  I’m now thinking that I should be asking why is it only a million?!  If you were to benchmark entertainment or compare this blog to other viral legends like Susan Boyle, Lady Gaga, Old Spice Guy and Rebecca Black it’s really nothing but a dismal failure.

Number of Days To 100 Million Views

For example, let’s look at the number of days it took each of them to reach 100 million views:  Susan Boyle did it in nine. Lady Gaga’s Bad Romance, which currently has over 900 million views, took 18 days. Rebecca Black’s Friday, currently at 430+ million views, took 45 days. Even Justin Bieber’s Baby, which has topped 1.1 billion views, took 56 days, one day faster than Miley Cyrus’ Party in the U.S.  Even Modern Warfare 2, one of the biggest entertainment gaming launches ever, hit 100 million views after 77 days.  I won’t go through all of them, but you can see how long it took some of the biggest viral names ever to reach 100 million views in the chart above.

This blog is about one-tenth that amount.  Yeah, I know it’s not an A-to-A comparison, but a million views is hardly a blip on the score board these days when you contrast it with entertainment.

In the beginning, the plethora of content distribution “paths” once exited me.  I developed a Twitter feed.  I started a Facebook feed then stopped it due to privacy concerns.  Early on I caught the eye of some savvy social media folks at Harley-Davidson who were convinced that product reviews (HERE) were the wave of the blog future.  It wasn’t.  I developed an iPhone app for mobile users.  There was even a shout out from the reality series man himself… Kurt Sutter (FX – Sons of Anarchy) HERE.  Then there was the Daily Newspaper (HERE).  Most of these were all attempts to help scale out the blog or content reach.

NWHog Geo Stats

Now, I realize that much of the blog content is landing in the “cloud dumpster” and I no longer think “view statistics” are a good gauge of a blog.  This blog has never been about attracting leads and transforming them into customers.  Customers of what?  I don’t sell anything so creating content for each stage of the buying process (awareness, consideration, and decision) is silly.  The characteristics that make for a great blog are typically never tracked.

Characteristics like:

Clarity – Is the blog/author clear about details such as the time period and subject.  Who or what does it apply to and are there updates to the information as new data unfolds over the days/weeks ahead.  Content should appear or link to many forms, ranging from videos, infographics and/or links to legal or report summaries.

Credibility – Is the information the author posted derived from sound research and is the methodology related to the facts.  Is the article sharing an opinion or is just biased?  Is the blog nothing but a repost-er of previously reported news articles or does it provide commentary and analysis of the potential impact to the motorcycle community?

Attribution – Is there clear attribution to the original source and an accurate/valid link to that source provided when possible.  Does the author/article provide links to the study or legal filing/report or just refer to it as “information found on the web.”

Though I generally don’t hold to a “hits mean much” worldview, I’m intrigued by the search results that send readers to the site and that readers are coming to this blog from all continents including places that I wouldn’t have thought — for example: Afghanistan, Iraq, Nigeria and Guam.

The point of this post today is to say that I appreciate all the readers who’ve joined in the discussion on this blog.  More importantly I’ve realized that some readers had better ideas than I or had important insights that I wanted to share.  The blog has evolved a bit from my original intention and is far better.

I learn every day and for that I thank you.

Photo courtesy of Visible Measures and WordPress.

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Thomas “Gypsy” Quinn – Laffing Devils Motorcycle Club

Pardon me, but your character is showing…

Companies that support reality programming are a bell weather of the culture.  Reality TV programming is an expansive industry label, and runs the gamut from Michael “Mike” Rowe (Dirty Jobs), Adam Savage (MythBusters), Jake Harris (Deadliest Catch) to Thomas Quinn (The Devil’s Ride).  The one consistent characteristic of these type of TV shows is the dramatization of “real” events and occupations.

And in The Devils Ride dramatization, there includes an element of criminality and deviance which is posed as “entertainment” and is a constant factor in their so-called everyday motorcycle club life.

Speaking of lifestyles and the failure to realize the impact on other people…  Thomas “Gypsy” Quinn (age 43 ), ex-president of the Laffing Devils Motorcycle Club (now disbanded) and star of Discovery’s – The Devil’s Ride, was arrested August 28th on suspicion of committing a lewd act with a minor.  Specifically he was arrested on suspicion of having oral sex with his minor stepdaughter.  Mr. Quinn was arrested at 10am outside Grossmont Hospital in La Mesa, CA. and bailed out the next day.  I don’t have independent confirmation, but it’s been reported in motorcycle forums that the stepdaughter is a child of his ex-wife and that she was 10 years old at the alleged time of this event.

As all the facts come to light and if the arrest results in a conviction – I point this out because Mr. Quinn and his ex-wife have been in a contentious battle for custody of children (different children than the alleged victim), and this could be an attempt to pit one parent against the other through the kids “crying wolf” prompted by the ex-wife.  Crazier things have happened and as of Sept 5th Mr. Quinn still has not been charged. He was supposed to be arraigned on that day, however San Diego’s District Attorney is still mulling over charging him.  So, it’s prudent to maintain the innocent until proven guilty theme.

But, speaking of guilt — when a publically traded company Discovery Communications (DISCA) maintains tacit support (by its silence) of a reality TV actor accused of child molestation – its sending a powerful message.  I’m not cutting Discovery Channel any slack on this.  It’s my viewpoint that David Zaslav, CEO Discovery Communications or David Pritikin, Discovery Channel Executive Producer of The Devils Ride missed the opportunity to build a meaningful and authentic connection with its viewers.  The company should have released a formal response about the arrest/allegations, but as is often the situation the economic incentive, and publicity has them instead remaining silent.  SILENCE from the very same company who just released an award winning documentary, “Sin By Silence” to raise awareness of domestic abuse!  In this post-Sandusky era of saying nothing to avoid bad publicity… that is shameful.

The lines between culture and commerce mean companies, their Reality TV programs and the actors often blur the lines between reality and representation, where the ability to determine what is real and what is not is increasingly brought under question.  There have been a lot of critics about whether the Laffing Devils Motorcycle Club is real.

Child sexual exploitation be it fabricated or real is serious.   I don’t know how this will ultimately play out for Mr. Quinn, but clearly it’s a sad family tragedy.

References: Sin By Silence movie trailer; Fox 5 San Diego; Channel 10 News;  Channel 6 news

Photo courtesy of Discovery and Quiet Little Place Productions.

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2012 Interbrand Top 100 — Harley-Davidson #96

Maybe it was the Willie G. retirement?   Or it could have been a result of Mark Hans Richer (H-D CMO) flexing marketing muscles on the urban scene.

It might be that after nearly three years of downsizing, plant closures and restructuring its business, Harley-Davidson is firing on both cylinders and there is a lot less heat buildup due to the “synthetic lube” of Keith Wandell’s (H-D CEO) new break-in procedure?  Whatever the case, it has emerged with an improvement in brand value.

This according to Interbrand who recently released the 2012 Best Global Brands.  In 2010, the H-D brand was 100 on the top 100 list.  In 2011 it improved to 98th and for this year it again improved its ranking to 96th.

How does Interbrand choose which brands it considers best?

The research firm uses three factors: 1) the financial performance of the branded product or service; 2) the role the brand plays in influencing consumers; and 3) the strength of the brand in asking a premium price for its products or bringing in earnings for the company.

“Stereo Typical” Harley Ad

The restructure strategies seems to be paying off with signs of solid performance and consistent growth. Sure there are significant “head winds”…  meaning challenging economic times and the motor company knows that it cannot solely rely on baby boomers, and needs to appeal to women, minorities, Gen Y, and Millennials.

HERE is an example of that new outreach (#stereotypicalharley).  Or the remix version HERE.

The management at Harley-Davidson want customers to “feel a certain way” when using their products, visiting a dealer, or surfing on the H-D Web site.  They know that a brand connects a business with the hearts and minds of consumers.

Photo courtesy of Interbrands and H-D.

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