Federal Investigators Knock On Harley-Davidson’s Door

I’ve never been ask this question, but I was curious how you know if you’re under Federal investigation?

In Harley-Davidson’s case it might have been a knock on the door of the Milwaukee HQ.

As it turns out, the U.S. government is investigating complaints from Harley-Davidson owners who say their motorcycle brakes failed without warning.  The National Highway Traffic Safety Administration (NHTSA) states the investigation covers 430,000 motorcycles with model years from 2008 through 2011 and the investigation stems from motorcycles with an anti-lock braking system.

A common motorcycle maintenance task is to replace the hydraulic fluid in the brake system.  Check your service manual, but for many Harley-Davidson models it’s recommended to change the D.O.T. 4 fluid and flush the brake system every two years.

Did you know brake fluid can collect condensation over time from the outside air?  Brake fluid collects water in a similar fashion as your McDonald’s soda cup has water droplets on the outside. Hydraulic fluid will over time absorb water which causes the fluid to boil when the brakes are applied and will reduce effectiveness of the system.  A spongy brake feel might be a combination of contaminated brake fluid or air in the system. Either way, changing the brake fluid is often recommended.

But, I’ve digressed.  Motorcyclists have reported that the brakes on the hand lever and foot pedal did not work, causing one driver to crash into a garage door.

Government regulators said they’ve received 43 complaints, three reports of crashes and two reports of injuries.  The NHTSA said it is possible that some riders who experienced brake failure did not change the motorcycle’s brake fluid every two years as recommended by Harley-Davidson Inc.  The old fluid may corrode valves in the anti-lock braking system, but even if riders did not change the fluid, the sudden brake failure “is a concern.”This is not a motorcycle product safety recall as of yet.

Harley-Davidson stated it was aware of the Federal investigation and that it was cooperating with regulators.

Photos courtesy of H-D.

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The CanAm Fire Controversy

Can-Am Spyder

Hype, or is Bombardier taking a gamble?  But, lets start at the beginning.

U.S. safety regulators are investigating two reports of fires in the Can-Am Spyder three-wheeled motorcycles.

The motorcycles are made by Bombardier Recreational Products Inc.  (BRP) of Canada and the probe covers about 52,000 motorcycles from the 2008 through 2014 model years and they are looking into what is causing the fires.

Bombardier has had three recalls to date in 2012 and 2013, and all involved the risk of fires. Last year, the company recalled about 8,200 Spyders because brake fluid leaks could cause fires. In 2012 it recalled about 34,000 because fuel vapors could leak due to an ill-fitting gas cap. It also recalled 9,600 because fuel vapors could exit a vent hose in the engine compartment.

I don’t want to draw any similarities because these are very different situations, but many of you might recall the Ford Pinto.  It was one of the biggest continuing automotive news stories in the late 1970s with dramatic tales of exploding Fords on the highway and considerable awards from civil-court juries that were presented to victims of accidents involving the cars.

At the time, experts calculated the value of a human life at around $200,000, while a serious burn injury was worth about $67,000. Using an estimate of 180 deaths and 180 serious burns, someone at Ford put on paper that the cost to redesign and rework the Pinto’s gas tank would cost close to $137 million, while possible liability costs worked out to around $49 million.

Ford’s corporate legal machine went to work, however, when the memos regarding the liability assessments were leaked and entered into evidence, the cases were as good as over and Ford paid dearly in civil claims, public image and as a brand for product safety.

Former Ford exec Lee Iacocca reflecting on the Pinto incident and Ford’s attempts to control the damage, made this summation in his book Talking Straight: “Clamming up is what we did at Ford in the late ’70s when we were bombarded with suits over the Pinto, which was involved in a lot of gas tank fires. The suits might have bankrupted the company, so we kept our mouths shut for fear of saying anything that just one jury might have construed as an admission of guilt. Winning in court was our top priority; nothing else mattered.”

BRP is a world leader in the design, manufacturing, distribution, and marketing of motorized recreational vehicles and powersports engines.

The term “transparency” means much more than the standard business definition and its my hope that the company will be candid with the motorcycle riding public beyond the narrow interpretation of legal compliance on the risk of fires.

Photo courtesy of BRP.

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Dancing With The Heat Dragons

No, it’s not a new motorcycle club.  It’s not even a reference to the 40+ continuous days of 100°+ temperatures in Texas.

I’m talking about litigation “heat” for the motor company.

Recently a Federal Court Judge has denied a Harley-Davidson motion to dismiss Harley bikers’ claims for fraudulent and unfair business practices, violations of Consumers Legal Remedies Act (CLRA), and unjust enrichment. As a result a class action lawsuit** will now go forward against Harley-Davidson alleging certain Harley motorcycle engines produce severe, and excessive heat causing burn injuries and clothing to catch on fire.

Class action lawsuit filings are nothing new to Harley-Davidson.   Back in 2005 there was a lawsuit/complaint against the company alleging securities law violations.  Of course the company believed that that lawsuit was without merit and vigorously defended against any action just like they will on this latest case.  Talk about keeping the legal department busy, this class action suit adds to another lawsuit by Brando Enterprises HERE on the “Brando Boot.”

At any rate last week, a federal judge ruled that a class action overheating & burn lawsuit against Harley-Davidson could go forward, siding with four bikers who claimed their Harley-Davidson motorcycles were defectively designed because their engines ran so hot as to pose a constant danger to riders of being burned and were therefore not fit for their intended use.

The complaint alleges that since 1999, Twin Cam 88, 96, 103 and 110 cubic inch engines in Harley motorcycles produce severe, excessive heat causing clothing to catch on fire, burn injuries and the danger of burn injury to riders and passengers as well as overheating causing premature engine wear and is in models manufactured after 2006, transmission failure.  Although Harley-Davidson asked the Eastern District of California court to throw out the claims under state law, the U.S. District Judge sided with the plaintiffs.

Harley-Davidson will now face a Class Action Certification process at the end of the month.

**Case No. 2:10-CV-02443-JAM-EFB in the Eastern District of California (Plaintiff’s represented by Owen, Patterson & Owen)

Photo courtesy of Jeff Hoffman.net

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It’s A Summer Thing

Auction Preview

“The sun is get’n ripe and the water’s get’n warmer”
“The days are get’n longer , them shorts are get’n shorter, you won’t hear me complain”
“It’s a summer thing”

It’s the lyrics from country’s new comer, Troy Olsen who sings a song which highlights friends, beverages and flotation devices on the water.

And speaking of flotation…it’s well known that most Harley buyers use financing from Harley-David Financial Services (HDFS) when they purchase a new ride.  Not so long ago, H-D applied logic to its loan portfolio that was eerily similar to the housing bust.  The company used its in-house finance unit to chase after subprime borrowers, making it easy for them to buy $20,000 chrome-sters with no money down.  The risky lending—which later forced Harley to take million dollar write-downs — along with rising default rates created major problems.  Customers with low credit scores weren’t the only issue for HDFS.  Turns out those “creditworthy customers” walked from those no-money-down financing offers and along came the delinquencies as repossessions reached new levels.

Silvio Perez (Manheim) - Starts The Auction

In steps Manheim — a worldwide leader in the sale of used vehicles.  Being reported as a first, Manheim Seattle helped execute a massive auction sale of Harley-Davidson motorcycles which were ‘rounded up’ from the various repossession parts of the U.S.  The auction occurred last week and we had a man on the inside watching some of the action.

Essentially two auctions took place over a two-day period.  The first day was exclusive to H-D dealers and the second was open to any type vehicle dealer.  Of the 60+ motorcycles on day #1 about 40 sold with the remainder falling short of the minimum required bid.  Tells you a little about where the dealers are in terms of inventory and price right now.  The GM from Downtown H-D picked up a great buy on a Springer Screamin Eagle.  The 20 or so unsold were added to the second day of bikes scheduled for auction to all vehicle dealers.  The second day motorcycle inventory list were older bikes vs. the first day.  However, most but not all sold.  Several stalled at the minimum required and the auctioneer prompted the lady from HDFS as to any movement on the minimum bid as she looked to be pulling her hair out with the fast action pace of the event.

Crowds Swarm the Auction Motorcycles

The motorcycle repossession/auction business is somewhat of a hidden market business which the general public knows little about. Given that the housing market remains stressed with foreclosures and short-sales being high we can expect motorcycle delinquencies to remain high and as a result firms like Manheim will continue to flourish.

Photos courtesy of John (aka.“Burn-Out”) and Manheim.

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BMW Recalls Boxer-Engined Models

K1200 GT

This week Toyota paid a $16.7M civil penalty for not notifying the NHTSA of a dangerous pedal defect.

Certainly Harley-Davidson has had its fair share of defects and needed to recall motorcycles in 2008 HERE, 2009 HERE and then again in 2009 HERE.

Now it’s the German motorcycle manufacturer BMW’s turn.

This week they launched a global recall of 122,000 motorcycles owing it to front brake problems.  The company uncovered a risk of leaks in the braking systems on its K1200 GT motorcycles and other models built on the same base.  The recalled models are R1200 GS, R1200 GS Adventure, R1200 R, R1200 RT, R1200 ST, and K1200 GT.  The recall concerns motorcycles built between August 2006 and May 2009, some of which have already been checked, according to a BMW spokesman.

“Over time, it emerged that even corrected braking systems did not resolve the problem 100 percent,”

The culprit seems to be vibration generated by the motorcycle’s operation which were found to cause leaks that affected the front brake.  The company stated that rear brakes continued to function normally.  BMW has not heard of any accidents linked to the problem.

As of this writing, BMW has yet to post information to the Office of Defects Investigation or onto the NHTSA site (Safecar.gov) about this recall notice.

UPDATED: March 17, 2015 — Edward Walker of the About Automotive Industry Action Group provided this:  Complete Road Safety Overview: Global Issues, Safety Laws, New Road Safety Measures, Car Safety Technology, Car Safety For Kids, Teenage Drivers

Photo courtesy of BMW

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Harley’s Push And Pull Strategy

Marketing theory distinguishes between two kinds of promotional marketing – “push” and “pull.”

A “push” strategy uses the company’s sales force and trade promotion to create consumer demand.  A “pull” strategy is one that requires heavy advertising spending and consumer promotion to build up demand for the product.

It’s the beginning of a new year and the start of a new decade so Harley-Davidson rolled out a new $500 bonus credit for potential consumers to “push-or-pull” a competitor brand trade-in to your nearest dealer.  The offer expires January 31st and covers untitled 2008, ’09 and ’10 models.  Of course read the fine print on the trade-in site for all the details and restrictions.

Photo courtesy of H-D.

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Remembering The First

You always remember your first.  Or so the saying goes.  Whether you hold on to it forever is another question.

I’m talking about the first time you installed engine performance upgrades on your motorcycle and that “first” ride to check out the components.  There’s a moment, be it short-lived, where in your gut you reevaluate the purchase scenario from a pure economic sense then the siren’s song of increased power puts it all into perspective and ridin’ her brings out nothing but good memories…

In 1995, H-D began offering electronic fuel injection (EFI) as either standard or optional equipment and since 2007 all models include EFI.  Like most H-D riders chances are you’ve wanted to improve the engine performance by installing performance upgrades and unlike the carbureted engine days where you could turn a screw or replace a jet in your garage the EFI system is more complex and it’s likely you’ll need to download software fuel maps or install a new “black box” and do some serious dyno tuning to tweek the engine induction system.  Given the cost of today’s EFI tuning equipment such as a dyno, riders typically leave the tuning to engine builders or dyno tuning experts.

Since the internal combustion engine, in simple terms is an air pump, most engine modifications are designed to increase airflow through the engine.  However, as airflow increases, fuel flow must also increase to maintain the correct air/fuel ratio for max performance.  The factory EFI system is intelligent, but it’s also very limited due to EPA requirements and often even minor engine airflow increases are beyond the scope of the factory EFI.  Fortunately there are a wide range of options capable of altering the EFI fuel map for higher performance.  One alternative is the H-D Screamin’ Eagle Super Tuner which is a software map-based reprogrammer that has the ability to reprogram the factory ECM.  The Super Tuner superseded Harley’s popular Race Tuner program.  There are other performance options including replacement of the closed-loop ECM with aftermarket parts from Zippers ThunderMax, Daytona Twin Tech, BC Gerolamy or S&S Cycle.

Speaking of the Super Tuner, during a recent “Train-the-Trainer” session Ed Ramburger (Global Training Mgr– SE) traveled to Europe to provide deep and detail knowledge of the optimized software programs and tuning applications from Harley-Davidson.  They demonstrated the Super Tuner capabilities using dynamometers from Dynostar (TTA International is parent company) who developed advanced communication software specially for the H-D Super Tuner that displays full fuel mapping results within seconds.

It was announced there that H-D plans to introduce Dynostar dynamometers as the worldwide standard for its training centers and dealers.  It wasn’t clear if this is a Worldwide plan or specific to Europe.

“If Harley-Davidson European training centers and official dealers are going to concentrate on tuning motorcycles they will use Dynostar dynamometers,” said Ed Anderson, District After Sales Manager of Harley-Davidson Benelux. “With the software specially written for Harley-Davidson, the Dynostar dynamometer is specifically designed for our motorcycles and meets the very highest of requirements.” 

In addition, the H-D University has decided to organize its European training at the TTA International training location in Belgian Kontich which was quoted as being one of the best equipped training centers in Europe.

Photo courtesy of Dynojet.

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Harley Engine History Update

Twin Cam 96

UPDATED: April 24, 2017 — Added a tab “Engine History” on the blog home page with updated V-Twin engine history including the Milwaukee Eight.

A little over a year ago I wrote about the history of the Harley-Davidson engines.  It’s one of the articles that gets a lot of attention/views from across the blogosphere so I thought it might be appropriate to update the post with some newer information.

The Twin Cam 96 was released for the 2007 model year in August 2006. Although the engine was the successor to the Evolution engine (“Evo”), they share a number of characteristics with nearly all previous HD engines. Both engines are a V-twin configuration at 45 degrees, are air-cooled, and control valve timing with push-rods. The crankshafts have a single pin with a tongue and fork arrangement for the connection rods. These are sandwiched between a pair of flywheels.  The HD Twin Cam 96B engine was released at the same time and is currently used on all softail models.  The TC96 is approximately 1584cc. The motor company has released Screamin’ Eagle models named TC103, a 103-cubic-inch (1,688cc) which is used in the 2009 Tri-Glide Ultra Classic (Trike) and the TC110, a 110-cubic-inch (1,803cc) in the 2009 CVO models (Fat Bob; Softail Springer; Road Glide; Ultra Classic Electra Glide).  The TC110 comes in an upgrade kit for the TC96.

It’s been speculated that the Motor Co. moved to the Twin Cam not because the Evo had reached its power limits as a design, but because HD could not prevent other manufacturers from making clones of the design. With the Twin Cam, HD was able to preempt cloning via the U.S. Patent Office, thereby making it a lot more difficult and expensive for the aftermarket vendors to compete with the Motor Co. in the development and sale of upgrades or complete motors.

In order to comply with the increasingly-stricter EPA standards, all TC96 equipped Harleys come from the factory tuned very lean, which in turn creates a great deal of heat.  All ‘07 and later Big Twins are equipped with Electronic Fuel Injection (EFI) and 02 sensors for closed-loop operation, allowing an extremely lean tune to be safely, and consistently achieved. This has been a topic of much discussion in the Harley world, as many have commented that the excessive heat makes the TC96 too uncomfortable to ride in stop and go traffic, or in the heat of the summer. There are also concerns about heat’s impact on the longevity of the engine. To help combat this many owners re-tune their engines, run synthetic oil or add an oil cooler; and HD developed a “Parade” mode in which one cylinder shuts down on the Twin Cam to prevent damage to the engine.

Sources: Answers; Harley-Davidson; Wikikpedia; Shop Manuals

Photo courtesy AnimatedPiston.

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VRSC Recall Notice

Harley-Davidson is recalling 97 LED turn signal mounting kits, P/N’s 69951-08 (Black) and 69593-08 (Chrome), for installation on 2002 – 2009 VRSC model motorcycles (excluding VRSCF model). 

Due to the design of the mounting bracket, (P/N 70497-08, which secures the LED turn signal controller to the motorcycle frame, the controller may come in contact with the oil filter.  This is the load equalizer that mounts near the oil filter on the frame, which enables the LED lights to work.

• Vehicle Make / Model:  H-D / VRSC     Model Year(s): 2002-2009
• NHTSA CAMPAIGN ID Number: 09E007000
• Component: Exterior Lighting: Turn Signal
• Potential Number of Units Affected: 97

Consequence: Over time this contact can lead to a hole in the oil filter and allow excessive oil to get on the rear tire, causing a loss of traction and possibly leading to a crash and potential injury or death.

H-D is notifying owners and will remove and replace the existing bracket with a new bracket (P/N 70497-08A), free of charge.  The recall is expected to begin on or about March 2, 2009.  Owners can contact Harley at 414-342-4680 and refer to RECALL NO. 0138.

Photo courtesy H-D.

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A Lighter Shade Of Black

Adding fuel to the “burned out” leisure vehicle market was today’s earnings report from Harley-Davidson.

The company announced the cut of 1100 jobs and that Q4 profits fell 58% to $77.8M.  Revenue fell 6.8% to $1.29B from $1.39B in the year ago quarter.  Worldwide sales fell 13.1% in Q4 with sales in the U.S. market (it’s biggest) falling nearly 20%.  However, International sales did creeped up 0.7%.  For the full year, worldwide retail sales fell 7.1%.

Just the numbers (Q4):

1. Revenue from motorcycles only was $1.02B (a decrease of $95.4M)
2. Total shipments of motorcycles totaled 76,581 units (down 4,625 units)
3. Revenue from Parts and Accessories totaled $152.1 million (down by $13.1M)
4. Revenue from General Merchandise, (apparel etc.) totaled $69.0M (declined $4.4 million)

Harley is slicing even further new motorcycle production this year to somewhere between 264,000-273,000 to adjust to the down market.  In 2008 Harley shipped more than 303,479 motorcycles — down 8% from the 330,619 shipped in 2007.

The companies new three-part strategy is: A). to invest in the Harley-Davidson brand, B). get the company cost-structure right, and C). obtain funding for HDFS to help our dealers sell motorcycles and retail customers to buy them.  The company also plans consolidate engine and transmission plants as well paint and frame operations.  They will also close distribution facilities and discontinue domestic transportation fleet operations which will now be outsourced.

The HDFS financial arm is really struggling.  They finance more than half of the company motorcycle sales and had to write down $63M as a result of credit losses which led to a $25M operating loss in the 4th quarter alone. 

The only bright spot I could find was that the General Merchandise (apparel etc.) revenue increased 2.8% for the year to $313.8M compared to $305.4 in 2007.  I suppose people like Harley’s logo and if they can’t buy a high-priced luxury “ride” then wearing one is the next best thing?

Photo courtesy Flickr.

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