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Archive for the ‘2010 Models’ Category

Triumph Sprint GT

Triumph Motorcycles are recalling certain model 2010 Sprint ST and GT motorcycles. NHTSA information HERE.

The problem is an incorrect length dipstick and as a result the accuracy of measuring the oil level might be in error.  The remedy is that dealers will replace, free of charge, the engine oil plug/dipstick fitted to the clutch cover.  The recall is expected to begin this month.  Owners may contact Triumph Motorcycles at 678.539.8782.

NHTSA Campaign ID Number: 10V639000
Report Date: December 28, 2010

Photo courtesy of Triumph Motorcycles

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Think Snow Bumpersticker - HD Advertising (circa: 1972-74)

It was a big year for Harley-Davidson as they shifted from downsizing, labor agreements and weathering the recession to now looking forward to growth in 2011.  With freezing temperature and snow falling in many parts of the U.S., I’ve compiled some 2010 highlights to provide you some entertainment as you warm up with hot chocolate:

January
1.    Downtown H-D Renton, WA., one of the northwest dealers named among top 100 (Link: HERE)
2.    H-D reported its first quarterly loss since 1993 (Link: HERE)
3.    H-D announces the new, but “old” Forty-Eight Sportster (Link: HERE)

February
1.    H-D donates 28 new Buell and H-D motorcycles to assist in the earthquake disaster (Link: HERE)
2.    H-D marketing continues to pitch brand with young-rebel-with-tats ethos (Link: HERE)
3.    H-D internal documents indicate 382,000 absenteeism hours in the factories (Link: HERE)

March
1.    H-D promotes danger as Seth Enslow breaks Bubba Blackwell’s jump record (Link: HERE)
2.    H-D dealer (Shumate) in Kennewick, WA., closes under a mountain of debt. (Link: HERE)
3.    H-D CEO, Keith E. Wandell 2009 compensation package becomes public as the $6M dollar man (Link: HERE)
4.    H-D marketing pulls out all stops on innovation and launches Super Ride II (Link: HERE)

April
1.    H-D consolidates motorcycle testing in Arizona Proving Grounds (Link: HERE)
2.    H-D files mass layoff notice with Wisconsin department of workforce development (Link: HERE)
3.    H-D CEO, Keith E. Wandell is “encouraged” as Q1 motorcycle sales revenue declines 20% YOY (Link: HERE)
4.    After 26 years of service Bill Davidson is put in charge of the Museum (Link: HERE)

May
1.    H-D CEO, Keith E. Wandell states in interview that H-D is like GM…a fading American industrial might (Link: HERE)
2.    H-D threatens to leave the state of Wisconsin (Link: HERE)
3.    H-D CMO, Mark-Hans Richer is no man crush of this blog (Link: HERE)

June
1.    H-D launches XR1200 Refresh (Link: HERE)
2.    H-D launches Wii based-game: “Road Trip” (Link: HERE)
3.    H-D at the National Law Enforcement Museum (Link: HERE)

July
1.    H-D opens Hyderabad, India showroom to pandemonium (Link: HERE)
2.    H-D reports Q2 earnings with financial services being largest money maker (Link: HERE)
3.    H-D launches the 2011 model lineup of 32 bikes vs. 38 the prior year (Link: HERE)

August
1.    H-D announces closure of sidecar business which operated since 1914 (Link: HERE)
2.    H-D announces 1-MILLION fans on Facebook (Link: HERE)
3.    H-D sold back MV Agusta to its previous owners (Link: HERE)
4.    H-D announces that after 31 years they’ve parted ways with PR firm Carmichael Lynch (Link: HERE)

September
1.    Erik Buell releases teaser ads promoting a new street bike based on 1190RR (Link: HERE)
2.    H-D gives away free posters of any of their 32 models (Link: HERE)
3.    H-D under threat of moving out of state announces ratified 7-year labor agreement (Link: HERE)
4.    H-D “spins” the fact that massive branding efforts result in a 24% brand value decline (Link: HERE)

October
1.    H-D reports Q3 earnings with motorcycle sales declining 7.7% worldwide and 14.4% in the U.S. (Link: HERE)

November
1.    H-D management “negotiates” with Kansas City plant to accept a new labor agreement or we’ll leave state (Link: HERE)
2.    H-D turns down a $25M tax credit deal by Wisconsin State (Link: HERE)

December
1.    H-D never disclosed a $2.3 BILLION deal with Federal Reserve (Link: HERE)
2.    H-D announces first ever “Crowd Sourcing” for new marketing ideas (Link: HERE)

Photo courtesy of H-D.

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MV Agusta - F4

I’m not sure who said it, but there’s an old saying about Harley-Davidson, that goes something like: “if I have to explain it, you wouldn’t understand.

So, on the day I left for Sturgis (August 6th), Harley-Davidson announced it had concluded the sale of its subsidiary, MV Agusta, to Claudio Castiglioni and his wholly owned holding company, MV Agusta Motor Holding, S.r.l.   You may recall that in October 2009, under the new leadership of CEO Keith Wandell, H-D announced its intention to sell MV Agusta as part of a NEW corporate strategy and to focus resources on the Harley-Davidson brand.  In fact, Mr. Wandell was in route to Minnesota on this announcement day so his handlers undoubtedly had everything all wrapped up prior to his departure ride to Sturgis.

The divesting announcement came 2 years (almost to the day) after it completed the $108M purchase acquisition of MV Agusta on August 8, 2008.  Then CEO Jim Ziemer said of the purchase:

“We are thrilled to welcome the MV Agusta family of customers and employees into the Harley-Davidson family of premium motorcycle brands,” … “Our primary focus with this acquisition is to grow our presence and enhance our position in Europe as a leader in fulfilling customers’ dreams, complementing the Harley-Davidson and Buell motorcycle families.”

The divesting announcement didn’t include the sale price but its 8-K filing with the Securities and Exchange Commission revealed the company essentially paid MV Agusta’s former owners to take it back.  In the filing Harley stated it “contributed 20 million Euros to MV as operating capital” that was put in escrow and is available to the buyer over a 12-month period. The buyer was Claudio Castiglioni, who, with his brother Gianfranco, ran MV Agusta for years before selling it to Harley two years ago.  In the filing Harley also said it received “nominal consideration” from the buyer. In a subsequent interview the company said the specific amount it received was $3 Euros (~$3.98 USD)

In 2008 most of us were stymied by the purchase of MV Agusta.  As a maker of expensive and exotic, high-performance sport bikes at minimum it overlapped with the Buell products and even worse was the company never explained how MV could attract younger buyers to H-D.

Here are my questions.  How many laid off workers equal the cost of this poor decision and why hasn’t the Board of Director’s been held accountable for one of the worst business decisions in H-D history?  Yeah, they’ll likely tell me “if they have to explain it I wouldn’t understand…”

I previously blogged about H-D going Italian HERE.

Footnote:  There is a certain level of incompetence from the old time management at H-D and they should-have-known-better.   It’s not the first time Harley-Davidson has had a hard time with an Italian acquisition. In the 1960s it bought a stake in Aermacchi, a maker of small off-road bikes as a way to expand into new markets. Eventually it bought the whole company, but that move also eventually failed and Harley sold Aermacchi in the late 1970s. The sellers and buyers: the Castiglioni brothers.

UPDATE: September 11, 2010 — Not previously made public, but buried in the Sale and Purchase Agreement filed with the SEC is a provision that H-D retains control of any press releases and statements about the sale for a year from the August 6th closing date.  Why?  Maybe the fact that H-D forgave a $103M Euro receivable… basically money it had loaned MV Agusta for operations.  The sale agreement specifies that the receivable transfers to Castiglioni for $1 Euro!!  Shareholders need to hold the board and management responsible for this “BARGAIN:”  H-D paid $108M, then put $20M Euro in escrow for Castiglioni when they “sold” it back; forgave $103.7M Euro’s lent to MV Augusta and wrote off $162.6M on the company.  Q3’10 will include more losses due to tax liabilities…does it ever end?

Photo courtesy of MV Agusta.

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Harley-Davidson issued a recall notice on certain model 2010 FXDF motorcycles with fork leg assemblies (LH P/N 48622-08, RH P/N 48623-08) manufactured from February 9 through February 29, 2010.

The fork leg assemblies may have been incorrectly assembled using the wrong springs and as a result the motorcycles containing the wrong springs will have reduced effectiveness which can cause reduced traction on irregular road surfaces and will also create an irregular lean angle when parked on the side stand.  The condition may increase the risk of a crash.  The recall effects potentially 70 units.

The recall notice is NHTSA campaign ID number: 10V329000  N/A.   Motorcycles with the wrong springs will be notified by Harley-Davidson and they will repair the affected motorcycle free of charge.  The recall is expected to begin on or about July 26, 2010.  Owners may contact Harley-Davidson at 414.343.4056 or the NHTSA web site or hotline at 888.327.4236 for more information.

Photo courtesy of H-D.

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The jester who stole the kings crown…Bob Dylan.

He rode a 1966 Harley-Davidson Shovelhead and loved to ride to get away.  Once when riding through the countryside, he commented that “The police are really friendly around here; they are all waving at me.” Later he learned they wanted him to stop because he had no helmet on.

And speaking of getting away.

It’s about time to load up for the long haul and head east where the thunderclouds hover over grain bins on soybean fields.  I’m talking about the Black Hills Motor Classic, which most of us just call Sturgis.  And the jester himself is playing at the Buffalo Chip on August 10th!

Road-to-Sturgis Game (circa: 1989)

Getting on the “Road to Sturgis” reminds me of that video game by the same name which Harley-Davidson released in 1989.  The game is about a biker who’s trying to get to Sturgis for the annual biker event, unfortunately it’s only days away and you are on the other side of the country. You’re main objective is to get to Sturgis within days, but to gather enough fame to become legendary as the ultimate biker.  You start off the ride determining wealth, charisma, riding ability, mechanical ability and brawler skills…in case you need to work as a bouncer along the way.  After selecting your stats you begin outside a local bike shop where you can spend some of your money to upgrade your bike. Sound familiar?!  Things like brakes, springs and even whole engines can be upgraded but every Harley has to be unique and you have to make it look different.  You’ll also want to buy some extra sturdy clothes because being on the road on a motorcycle is not easy.

Unlike the real world, the riding sequences had very little scenery and were quite lame.  The game suffered from a very limited appeal and these days it’s a challenge to find much of any information about it.  The game did have something that made people want to come back, probably the idea of riding alone on a motorcycle from coast-to-coast is something that appeals to a lot of us.

The Sturgis rally was started in 1938 by the Jackpine Gypsies Motorcycle Club as an event for Harley riders and their families.  Until he died the founder of the club, J.C. “Pappy” Hoel, would oversee everything, right as rain.  This year it’s the 70th Anniversary and no place in western S.D. will escape the roar and hum of the motorcycle engines.

If you’ve got a few extra bucks on you and can get your scoot to I-90 and exit 32 you’ll be in for a real treat.

Photos courtesy of H-D.

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Polaris Industries -- Victory Motorcycles

Creativity.

There is a fascinating and quite boring article in ‘Newsweek’ about the creativity gap, how creativity is declining in America.  Reading it I couldn’t stop thinking about the motorcycle business and specifically Harley-Davidson.

Given it’s earning season; H-D announce earnings HERE, now it’s Polaris Industries Inc. (NYSE: PII), makers of the Victory motorcycles turn who reported its Q2’10 net income of $25.6 million.  By comparison, the 2009 second quarter net income was $17.5 million.  Sales for the second quarter 2010 totaled $430.9 million, an increase of 25% from $345.9 million recorded in the year-earlier period.

Scott Wine, Polaris’ CEO stated:

“Polaris maintained strong momentum in the second quarter, driven by solid market share gains, sales growth and margin expansion. Innovation and execution enabled us to deliver another quarter of solid operating results in an overall economic and powersports industry environment that remains sluggish.”

Yeah, but you’re likely saying that’s all ATV and snowmobile sales, right?  True the lions share is off-road sales, but specific to sales of the On-Road Division, which primarily consists of Victory motorcycles, they saw an increase of 48% during the second quarter of 2010 vs. the same period in 2009. The N.A. heavyweight cruiser and touring motorcycle industry remained weak during the quarter, but Victory motorcycles had strong retail sales during the second quarter, increasing more than 10% in N.A. compared to the second quarter last year, resulting in overall market share gains and retail sales growth for the third consecutive quarter. The increased demand reflects the popularity of the new 2010 Cross Country and Cross Roads touring models.   The N.A. dealer inventory of Victory motorcycles declined 32% in the Q2’10 compared to 2009 comparable levels. The sale of Victory motorcycles in markets outside of N.A. continues to accelerate, with sales reaching 25% of total On-Road/Victory sales for the year-to-date period.  And lastly the income from Polaris financial services was $4.2 million for Q2’10 compared to $4.0 million in 2009.

I can’t put my finger on it, but there is something missing for me with the Victory motorcycle.  Maybe it’s just the “bar-n-shield” logo and now my bias is showing?  But I balk at comments from riders that claim Victory is NOT a threat or competition for H-D… it just doesn’t ring true.  The cruisers are more roomy, the engine has more HP, the motorcycle is lighter, has a lower seat, larger saddlebags all at a cost of thousands less means Victory is doing a lot RIGHT on the creativity front.

In other words, the Harley-Davidson businessmen look to squeeze all the creativity out in the name of profits.  And now the business is in the hands of the manufacturing line worker, who are always the least creative element in the chain.  The engineers designed out cost, the line-worker built them at the lowest cost, the dealer sold them slightly above cost. Now the company is trying to fix the business, but are flummoxed.  Do they truly think cutting out cost, means somehow people will magically appear?

They’re not and meanwhile Victory ratchet’s up innovation.

Photo courtesy of Polaris/Victory Motorcycles.

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Concert promotion blew up in the ‘70’s during the development and heyday of classic rock.  Stadiums or festivals were where the gigs took place as music drove the culture and everybody wanted to participate.

Thirty plus years later and along comes the internet.  Suddenly everyone is no longer focused on the same thing and niche was king.  Yet the major music labels continue to play the same old tune of trying to get acts TV exposure and on terrestrial radio with 22-minutes of commercials an hour, but the public is sick of being dictated to by music corporations purveying artists only in it for the buck and have tuned out.   The end result?

Is today’s modern concert business where the average person feels fleeced by excessive fees and high ticket prices and have decided to pass on most concerts.  In fact, ‘twenty-ten’ might go down as the turning point year that devastated the concert business.  Look at the signs from SoundScan.  Arizona concert boycotts.  Cancelled concerts by the Eagles, poor showing for John Mayer, Bon Jovi downsizes the number of cities, the death of Lilith Fair, winery offers for Court Yard Hounds, and the ever popular $10 concert cash coupons if you can drink a dozen 1-litre bottles of Diet Coke at $1.49.  The list goes on.

H-D Tent @ Mayhem

Disregarding the external conditions of the concert promotion sphere, is Harley-Davidson marketing.  Their demographic ‘machine’ determined that ‘twenty-ten’ is the year to double down on seeking young motorcycle buyers and do so at…music concerts!   Huh?

It’s true.  They launched their H-D Golden Horse Saloon at the Rockstar Mayhem Festival two weeks ago in San Bernardino, Ca., in an effort to market to young, edgy potential customers.  The third concert of the tour was last week at the White River Amphitheater, in Auburn, Wa.  The festival includes Korn, Rob Zombie, Lamb of God, Five Finger Death Punch, Hatebreed and several other bands. Last month H-D had a similar set-up at the Bonnaroo Music & Arts Festival in Manchester, TN.

Rob Zombie (R) and drummer (L)

The goal of any Harley-Davidson special events marketing campaign is to generate awareness and increase sales among the target audience.  It’s well known in music circles that the concert business is in the toilet.  Sure you can talk about the economy, all the external business factors, but they’re secondary to the acts, the music.  It’s doesn’t matter how great the venue is, certainly doesn’t matter how great the promoter is, it comes down to the quality of the act and whether they can draw a crowd.  Given sky high concert prices and that we live in an on-demand world where you experience only that which you want means this demographic outreach/tactic is unlikely to pay motorcycle sales dividends for Harley.

H-D Demographic -- Young Edgy Potential Customer

One notable item…  Mayhem could arguably be the loudest festival on the planet giving the sparse crowds so much ‘metal’ that many will feel aurally violated after the gig.

Photos courtesy of H-D, Mayhem Festival and Rob Zombie.

Bonus: If you’re into this type of ‘Metal’ music mix there is a free 9-song download via iTunes (good through Sept 30th) using the following code to redeem the songs: 9EL3JJRW3JNF

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