Oregon Volcanoes Rally

Many of today’s technology-driven, electrification, and social media-obsessed adults don’t relate as much as I do to the joy of the wind in your face on a petrol-propelled motorcycle.

Their loss in my opinion.

But, for those who get it, they know that Harley-Davidson enthusiasts like to get together, get to know each other and do a lot of riding.

For those of us who live in Oregon, we clearly know that we have some of the best riding in all of the U.S., which means this year we get to share this gem of a state at a National H.O.G.® motorcycle rally.

I’m talking about the Oregon Volcanoes H.O.G. Touring Rally happening September 11-15th. For those unfamiliar with Oregon, it’s a perfect time of year for riding, with mild temperatures, little chance of rain, and the foliage season begins. Adding to that, the Pacific Northwest is increasingly known for its craft beer, coffee shops, vibrant music and food scenes which is reason by itself to visit the state.

The last time there was a National H.O.G. Rally — that was started out hosted in Oregon — was back in 2017 for the Lewis and Clark; The Expedition Returns. That ride basically followed in the footsteps of Lewis and Clark’s 1805 expedition in search of the Northwest Passage, from Seaside, Oregon to St. Charles, Missouri. If you want a little sample of that adventure, I detailed the adventure HERE.  If you’re looking for even more information about Lewis and Clark, visit the National Geographic site dedicated to their journey HERE.

50 Rides, One Nation

It’s been my experience after attending a few National H.O.G. events, they are a class act.  The local dealers often host evening events and the route information and swag are of high quality.  In addition, the H.O.G. planners (Bill Davis • Rally Coordinator) make it very simple to participate and have a great experience!

At present, the Oregon Volcanoes Touring Rally has 190+ H.O.G. Members and guests registered.  Keep in mind, this isn’t a “group ride” where a couple hundred bikes depart simultaneously every day with a ride captain.  Riders are free to forge their own departure times and routes (with solid guidance on scenic location stops and daily endpoint events) while riding at your own pace.

The ‘Volcanoes’ rally will start on the eastside of Portland, OR with a ride along the Columbia River Highway to the scenic Multnomah Falls viewpoint. Traveling a little farther and it’s a picturesque view of Mount Hood, the first of eight volcanos on this ride. The tour will then head north to an active stratovolcano, Mount St. Helens in Washington State, at a viewpoint which is also one of the stops for the 10 Rides for ‘21 H.O.G. challenge.

Mount St. Helens Loop

You might recall that the 10 Rides for ’21 is an annual H.O.G. member challenge featuring 10 great destinations throughout the country, along with a recommended scenic route for each. At this rally, riders will also have the option of picking up one of the 50 Rides, 1 Nation H.O.G. challenge on the Columbia River Highway at the Vista House in Corbett, OR. That’s two H.O.G. challenge stops completed, in less than 100 miles into your rally! The tour will loop back around to the westside of Portland for the first night on the road with a hosted event at Paradise Harley-Davidson.

On day-2, the tour will pass through the Opal Creek Wilderness and have spectacular views of Mount Jefferson, Three Sisters and Mount Bachelor to the eastern side of the mountains ending in Bend, OR for a hosted party and meal.

On day-3, the tour takes the route west towards the coast and the cool breezes of the Pacific Ocean and the coastal community of Coos Bay. The tour will ride by Newbury and Mount Mazama Volcanos.

On day-4, the tour will ride by the Mount McLoughlin volcano and will visit Klamath Falls before ending the rally with a hosted meal, party and closing ceremony in Medford, OR.

There will be a total of five hosted stops planned at Harley-Davidson dealerships along the tour route. Check out the H.O.G. website if you’ve yet to register and want to join the tour HERE.

It should be a great Oregon tour, with a side trip into Washington and a riding route that provides twists and turns and follows many of the region’s noteworthy volcanos.

Photos courtesy H.O.G. and Harley-Davidson

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Paradise Harley-Davidson 17-Year Anniversary

We all love our rides, but what about the dealers?

If you wander into the forums, they are full of comments ranging from the good, the bad and even the ugly.

Dealers stared into the teeth of COVID-19, mixed it up with the motor company’s revenue declines, layoffs, reduced bike inventory to bolster prices, which was followed by several dealers closing down including some Bar & Shield Circle of Achievement Award dealers, permanently.

We all know it’s been a tough 14-months and that includes every Harley-Davidson dealer along with their employees.

Adding to all of this, was corporate Harley-Davidson throwing out more strategy changes (“wired”) than I change my socks.  And when corporate management dictate the “We know what is best in/for your showroom” requirements — you know how it goes, all the risers need to be symmetrical, with the right merchandise on each one, perfectly priced, labeled, and “faced” toward the customer — the dealership owner has the choice to largely accept them or not.  If they don’t accept them, then the “widget guys” from Milwaukee can say … “No soup for you!”

That’s when those inspirational corporate quotes like: “You’re here by the grace of your lineage” start to sound like marketing for the early Pilgrims.

But, I’ve digressed.

Be it clothing, parts or motorcycles, Paradise Harley-Davidson, has continued to provide what customers want. From the owner to the staff folding t-shirts and everyone in-between, they are part of our Northwest motorcycle community and they interact with us on a daily basis, selling the experience of coming to the dealership as much as of riding itself.

17-Year Anniversary Celebration

You might not recall, but it was not long ago when Harley-Davidson management forced, via franchise contracts, that dealers significantly upgrade or move and open up large “mega stores” on an interstate exit.  The corporate ethos was larger is better and location, location, location!  This mandate alone had a lot to do with dealers selling or going under in the late 90’s and early 2000’s.

The Paradise dealership has its roots grounded in Beaverton, Oregon, a small 7,000-square-foot store.  The store was mandated by its franchise “relationship” with Harley-Davidson to upgrade, however, they were in a very tight geographic footprint on SW Farmington Road.  If you lived or traveled through the heart of Beaverton you know that it meant only one thing — relocating to a new store. The then current owner determined that a new store was way too much to take on and decided to sell the dealership.

Slo-mo ‘Glider’ Wheelie (Note: Hosted on my Google site)

At the time, Ed Wallace who previously was with PACCAR, where he was a General Manager in the Kenworth Truck division was now one of America’s most successful and decorated Harley-Davidson dealers.  Wallace purchased the Tacoma dealership (Destination Harley-Davidson) in partnership with son, Ed Jr., and daughter, Christy, in 1995.  The Tacoma facility went from 7,000 to 50,000 square feet and is located just off I-5. Then in 1997, he acquired the Harley outlet in Silverdale, Washington. Christy was the majority owner of the Silverdale store and planned every detail of the expansion. Going from a 3,000-square-foot converted gas station on Silverdale Way to the newly constructed 20,000-square-foot $3 million building.

Having success in developing the motorcycle business and constructing large, multi-million dollar facilities, Ed Sr., purchased the Beaverton Harley dealer in 1999, and moved it to a new 30,000-square-foot Tigard facility, which Ed Wallace, Jr. managed.  Ed Jr., married his sweetheart from the Tacoma area and after 3+ years of running the Tigard facility, wanted to return to Tacoma.  As I recall, Ed Sr., had fully retired from the business by then, and Ed Jr., put the Tigard dealership on the market when Mike Durbin stepped in and bought it in 2004.  The name was changed to Paradise Harley-Davidson and the rest as they say is history.

Bike wash and Durbin in the Dunk Tank

On a local level, I like supporting small(er) businesses, vs. the mega-destination dealers i.e. Timpanogos in Lindon, Utah, which is one of the largest dealerships in the U.S. at 58,000 square-feet.  In my opinion, Paradise H-D has a loyal following and always a great place to visit, as they have something going on all the time. I’ve enjoyed and been working with Mel in the parts department since the good ‘ol Beaverton days! The staff gets to know the people that bought from them and for service you are never just a number that they need to get through the system! Don’t get me wrong, I still swallow HARD at some of the service pricing, but my personal experiences are of good people, good service and being treated fairly.

This past weekend Paradise H-D celebrated their 17th Anniversary.  I stopped to partake along with a few hundred or more other enthusiasts. They put on a great social event with a beer garden, live music, dunk tank, bikini bike wash, games, door prizes and more for their clientele.  What I really like is that no one talks about what you do for a living. They talk about what and where you ride.

Congrats Paradise H-D on 17-years as a standout dealership!

Glider movie and Photos taken by the author except for logo photos courtesy of Paradise H-D.

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The Harley-Davidson “Green Value Proposition”

I’ve reached the stage of life where any compliment I get about appearance or physicality is accompanied by “for your age!”

After indulging in that “rant” about China and not posting for a few weeks some wonder if I caught the “COVID.”  No, but I’ve been waist deep in the fine art of Harley-Davidson apathy, trying to get back on track… So, let’s talk about exec salaries and how the year+ of the pandemic “rained money”… and not the eco-dollar benefits of any ‘Green’ initiative.

First, let’s establish a baseline. According to “Google”, the average Harley-Davidson salary ranges from approximately $25,000 per year for a Parts Specialist to $133,555 per year for General Manager. Average Harley-Davidson hourly pay ranges from approximately $9.08 per hour for Automotive Detailer to $39.94 per hour for Tool Maker.

Now let’s double-click on the 2020 Harley-Davidson top executives compensation:

Harley-Davidson’s current chairman, president and CEO Jochen Zeitz’s total compensation was $9.4 million in 2020 — Remember way back in April 2020 when Harley-Davidson said that its then acting president and CEO Jochen Zeitz and the company’s board of directors would forgo any salary or cash compensations? They pushed out a news release with the typical “aren’t we great” statements along with how the rest of Harley-Davidson’s executive leadership would take one for the team and also see a 30% reduction in salaries and most salaried employees in the U.S. would see a 10%-20% salary reduction.

So, “forgoing” a salary and/or cash compensation REALLY means collecting $9.4 million!

Where do I sign up?

But wait, there’s more… 2020 was the same year in which the motor company also paid over $4.1 million in severance to former president and CEO Matt Levatich, a serial overconfident exec who created unambiguously bad managerial optimism, which resulted in over 20-quarters of financial loss. In addition, two other executives departed with the same illness, let’s call it Managerial Optimism Flu (MOF).

Specifically, Matt Levatich received a lump-sum severance payment of $2.15 million in 2020, according to the company’s April 9 proxy statement. In 2020, the company also paid Levatich $343,572 in salary and stock awards valued at $5.45 million. Levatich also saw a $653,000 increase in the value of his pension and nonqualified deferred compensation earnings that brought his total compensation in 2020 to $8.7 million, according to the proxy statement.

Mr. Zeitz was named to the CEO position in May 2020. So, for his eight (8) months as chairman, president and CEO, his total compensation of nearly $9.4 million was more than the $7.6 million Levatich received in all of 2019, which was Levatich’s last full year in the job. Zeitz’s salary in 2020 was $1.68 million compared to Levatich’s $1.08 million in 2019. Zeitz also was paid a $1 million bonus, stock awards valued at $5 million, non-equity incentive payments of $1.5 million and other compensation of $206,233.

I’m surprised that line workers didn’t shout from the roof-top that they would “forgo” any salary too!

A couple of other former executives who received large severance payments of note were former CFO John Olin and former senior vice president and COO Michelle Kumbier. Olin left the company in July 2020. He was paid a lump sum of $1.34 million, according to the proxy statement. For six (6) months of filling that position, he also received $374,421 in salary and stock awards valued at $1.75 million in 2020. Michelle Kumbier received a lump sum of $660,000, according to the proxy statement. You might recall that this payment was previously publicly embargoed then it was disclosed; described as a “settlement” after she threatened litigation connected to ‘unspecified events’ related to her departure in April 2020. For the four (4) months in her position, Kumbier was paid $223,385 in salary in 2020 and stock awards valued at $1.58 million.

According to this report; CEO compensation surged 14% in 2019 (most current data) to $21.3 million.  They now earn approximately 320 times as much as a typical worker.

It’s been widely documented how exorbitant CEO pay is and how it’s a major contributor to rising inequality in the U.S.  The Harley-Davidson payouts might sound like a big cash layout, because — well, it is!

Wait. Mr. Zeitz grabbed the handlebar, replacing the “More Roads” strategy with a hard-nosed approach he called “Hardwire” and what if he turns around the company you ask?  Well, that is exactly what shareholders and the board expect…until or unless he doesn’t then it will be the next exec firing. And another multimillion-dollar severance package paid to the outgoing Harley-Davidson CEO.

There’s that apathy thing creeping back in again.  Big payouts.  It’s routine. It’s a pattern.

Full Disclosure: I don’t own $HOG shares. That said, I do watch the stock and the brand’s activities very closely, as it is of course a massive presence in the motorcycle industry, and as of late, has had its struggles.

Photo courtesy of Harley-Davidson

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Harley-Davidson Announces New Movie Telling Origin Story Of Adventure Motorcycles

It’s real, and it’s spectacular. Fastest I’ve ever clicked “buy.”

Wait! Not so fast. What are you talking about Mac?

Today was historic. The original film starts out greeting thrillseekers, music lovers and conversationalists all across the frozen plains.

You had me at; “You’re here by the grace of your lineage.”

But, I’ve wandered off the main trail.

Our “movie hero,” Jochen Zeitz, chairman, president and CEO Harley-Davidson, was an actor riding — yes, RIDING — an actual motorcycle.  That in of itself might be a first?!  There he was in the scenic landscape of Kenya, Africa no less.  Traveling to the vast wildlife preserves to lasso the FIRST twin Adventure Motorcycle and bring it back to Made in America!

Nothing to see here Buell owners.

The emotional exhaustion of this past year must have gripped Mr. Zeitz’ soul, as he peered out onto the Segera Retreat, where a herd of zebra graze, swishing their tails in unison to keep the flies away.  Where a long giraffe at the outer edges of the garden keeps him company as he ploughs through a lengthy to-do list waiting for the Milwaukee employees to wake up.

Today Mr. Zeitz must be just thrilled of simply being alive and to share his wisdom with the motorcycle adventure world.

At the film preview, Journalists cheered… remotely of course.  There were tears and applause, then more tears as the press fell apart during the historical Harley-Davidson Pan America launch today.  Harley-Davidson told a syrupy sympathetic story with dramatic musical overdubs on how the motor company always made off-road bikes. The film narrator described that this isn’t Harley’s first dirt rodeo. You might recall, that back in the 1960s and 70s, Harley offered a variety of small dual-sports, and even briefly got into the motocross game. Harley filled the gap in their lineup by purchasing the Italian motorcycle manufacturer Aermacchi. Not too long after, Harley gave up on the idea of small dirt bikes and sold Aermacchi, which eventually became the company we know today as Cagiva.

It’s fairly evident that the motorcycle press has become nothing but “exhausting love letters to consumerism.” I’ll save my cynicism as a more legitimate response to a product launch once I have a chance to fully review the stats vs. just post another emotional reaction.

We all know that Harley-Davidson is trying to break into the popular adventure motorcycle scene with the 2021 Pan America 1250 and Pan America 1250 Special. The motorcycle and dealer network will compete with some of Europe’s top players, including the BMW GS 1250, KTM 1290 Adventure, and the Ducati Multistrada V4. Harley-Davidson pricing begins at $17,319 for the base model and $19,999 for the Special. The models will arrive at Harley-Davidson dealerships in spring 2021.

For me, it was an immense privilege both physically and spiritually to witness the Pan America launch via film/video. #sarcasmalert

Image courtesy of YouTube: Harley-Davidson Original Film (25:45 minutes)

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Harley-Davidson Dismal Financial Performance

TAKEAWAY: The Q4 2020 Harley-Davidson retail motorcycle sales in the U.S. — the company’s biggest market — fell for the 16th straight quarter!

FINANCIAL PERFORMANCE DETAILS: Yesterday, I posted that Harley-Davidson unveiled “The Hardwire” — a new 5-year strategic plan.  My snarky responses were largely based on what I viewed as the motor company ‘selling the news’ with a lack of granular detail or disclosure around a growth path forward. It was a brutal Q4’20 and full-year financial result. Followed by executive management’s murky 2021 outlook.  The street wasn’t happy and the result was a 17% drop in share price followed by another 2% today.

My blog post today will be on the fourth-quarter and full-year 2020 financial results with less commentary.

The Hardwire Highlights 

• The Hardwire includes investing in the Touring and heavyweight Cruiser segment, expanding into untapped segments of Adventure Touring and creating a new division dedicated to electric motorcycles.
• The motor company views Inclusive Stakeholder Management in the context of people, planet and profit, as all three are now embedded in the past and future success of the company.
• The motorcycle maker plans to give stock grants to its employees, inspired by a program devised by KKR & Co Inc. executive Pete Stavros.

Q4 2020 Highlights

• Reported fourth-quarter adjusted loss of 44 cents per share. A big miss and notable executive mismanagement of expectations as the street consensus estimate was for a profit at 24 cents.
• The revenue decreased by 32% at $725 million compared to previous year.
• The company suffered a net loss of $96 million compared to the previous year’s profit of $13 million.
• The loss per share was 0.63 and the adjusted loss per share was $0.44.
• Total revenues from the Motorcycle and Related products segment, which constitute the bulk of the firm’s overall revenues, plunged 39% year over year to $531 million in the reported quarter.
• For Q4’20, Harley-Davidson retailed 33,925 motorcycle units globally, down 14.1% year over year. The company’s retail motorcycle units sold in the U.S. slid 14.5% from the year-ago quarter to 17,274. Sales in the Middle East and Africa, Asia Pacific, Canada and Latin America declined 2.2%, 9.6%, 30.2% and 50.9%, respectively, from the year-ago period.
• Revenues for Parts & Accessories (P&A) were up 13.3% from the prior year to $146.4 million. However, revenues for General Merchandise (GM) — including Motor Clothes apparel and accessories — dropped 13% from the prior-year quarter to $49.7 million.
• The selling, general and administrative expenses (SG&A) increased to $276.4 million from the $266.4 million compared to fourth-quarter 2019.

Full-Year 2020 Highlights

• Consolidated revenues for 2020 came in at $4,054 million, declining 24% from the prior year’s $5,362 million. Moreover, the company’s adjusted earnings per share for the year came in at 77 cents, tanking 77% from the $3.36 per share reported in 2019.
• The motor company streamlined the product portfolio, reducing the planned number of models by almost 30%.
• Paid dividends of $0.44 per share for the full year
• Re-set motorcycle model year launch timing to align with beginning of the year seasonality
• Exited 39 markets to focus on the approximately 50 highest-potential markets
• Reduced total dealer network by approximately 160 net global dealers in 2020

Jochen Zeitz, chairman, president and CEO, Harley-Davidson summarized the financial call: “The entire Harley-Davidson team put forth tremendous effort in 2020 and we now have the right organization, structure and strategy in place to make step changes in our performance and enhance our position as the most desirable motorcycle brand in the world.”

DISCLOSURE: The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Harley-Davidson.  The author does not own or does the author plan to purchase and/or sell any $HOG stock.

Photo courtesy Harley-Davidson.

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The Harley-Davidson “Hardwire”

Drum roll please…with a rim shot!

Harley-Davidson released the secret recipe for “The Hardwire” — a new 5-year strategic plan rolled out oddly on Groundhog Day.  You can read the press release HERE.

Groundhog Day, the comedy film starring Bill Murray, Andie MacDowell and Chris Elliott portrays a cynical TV weatherman covering the annual Groundhog Day event in Punxsutawney, Pennsylvania, who becomes trapped in a time loop forcing him to relive February 2 repeatedly.

I reviewed the Harley-Davidson press release and like the film, the motor company seems to be in a time loop spewing marketing or business verbiage that doesn’t mean anything. The release reads like quotes from the books “Crossing the Chasm“/”Blue Ocean“/”Good To Great” / “Tipping Point” / “Outliers.”  I’ve never read all of these books, but I sound MBA literate if I quote them. And, besides, most biker enthusiasts probably never read them either to call me out on it.

Below are the main topics of Chairman, President and CEO Jochen Zeitz’s, The Hardwire = with my snarky management euphemisms added for clarity:

The Hardwire Strategy

Profit Focus: Don’t leave money on the table = Be as greedy with them as possible.
Selective Expansion and Redefinition: We’re all about value-add = Unlike our competitors who seek to add no value.
Lead in Electric: It’s best-of-breed = We hired a market research firm to say that.
Growth Beyond Bikes: This is the next big thing/new thing = Some of our 20-somethings have told me this is really cool.
Customer Experience: We’re customer-focused/proactive/results-oriented = That can’t be bad, right?  This is motherhood and apple pie stuff.
Inclusive Stakeholder Management: We need to monetize/strategize/analyze/incentivize = When in doubt, stick “-ize” on the end of a word and it will sound action-oriented.
People: I know you’ve been burning the candle on both ends = Get ready to do some more.
Planet: It’s basic New Green Deal blocking and tackling = How could you screw this up? I also played high school football and those were the best days of my life.
Profit: We want this to move up and to the right = I failed high school algebra but someone said this means we’ll be making a lot of money if this happens.
Financial Targets: It’s about synergies/1 + 1 = 3 = I don’t get the math either, but it sounds like more and more is better, right?

Metaphors or marketing euphemisms are always interesting to me.  Eu·phe·mism — a word or expression substituted for one considered to be too harsh or blunt when referring to something unpleasant or embarrassing. For example, a famous feature of the World Fair in New York in 1964-65 was something called the Dynamic Maturity Pavilion — basically a garden with benches where those of mature years could rest.

Maturity is a positive concept; it implies that a person is fully developed in body or mind. And as a “seasoned” motorcyclist I’ll need to wrap my head around reliving The Hardwire.  We’ve seen this film before. I’ll need to sharpen my pencil and circle back to fully understand the paradigm shift.

In the meantime, I know we’re all on the same team here, rowing in the same direction, and it’s not about me, it’s about us.

Photos courtesy Columbia Pictures and Harley-Davidson.

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What Harley-Davidson Exec’s Want For Christmas

Santa Wish List

Santa wasn’t good to the motorcycle industry in 2020.  It was the sort of year at Harley-Davidson where every week, you’d say “what just happened?” Soft sales and even negative growth along with company shutdowns then longer term layoffs followed by strategic plan “walk-backs” and then the high profile dumping of a Tennessee motorcycle dealer over racist Black Lives Matter posts followed by an ever discriminating consumer to boot.

Speaking of feet, did you hear that having footwear industry expertise is the new turnaround skill set for executives at the motor company?

As the motor company executives sit virtually in the Zoom conference room and wonder what happened to the year, I can’t help but believe there are some major things on their Santa wish lists.

So, I’ve followed the science (parody alert!) and highlighted below what I think a few of the top executives want for Christmas:

JOCHEN ZEITZ, Chairman, President and Chief Executive Officer, Harley-Davidson: Santa, I “charged” up and shorted out ex-CEO Matt Levatich on that EV motorcycle, but I got the head honcho job with the industry’s most iconic motorcycle manufacturer.  Did you know they have a cult-like following similar to my favorite thing — a Scottish Bailey guitar?  And to think that I’ve never even been photographed riding a motorcycle. I can’t think of anything more to ask for. Oh wait – listen up Santa, please help that Pan American be our rock star and displace BMW R 1250 GS Adventure bike sales. Santa, I need your help to move the company from The Rewire, to The Hardwire and now with marijuana being legal in Madison, my new strategic plan will be called The Higher Wire. Santa, I’ve never been to the White House for dinner and I wrote a book about my transcendental awakening with a Benedictine monk.  It’s my turn!  Please let the spinner land on my name. Lastly, can you help people forget about that botched “Gone Girl” firing of Michelle Kumbier and the $660K departure gift?

JULIE ANDING, Vice President and Chief Human Resources Officer: Santa baby, it’s cold outside. It’s not a Christmas party. It’s a non-denominational Zoom holiday mixer. More inclusive. With my team of over 200 HR professionals (“I say H, and you say R”) streaming video around the world, I posted a fun memo about the decisions made at the company Zoom holiday party will have consequences that will haunt them for the rest of their professional lives. I’ve got doughnuts. I’ve got jelly and sprinkles, but not cronuts because they’re a bastard pastry.

AMY GIUFFRE, Vice President and Chief Communications Officer: Santa, please let 2021 be “If the dream is big enough, the facts don’t matter” — a.k.a. the Mohammed Saeed al-Sahhaf school of bubbling optimism to distract the media and bloggers with superfluous BS so they ignore our fundamental problems. As the motor company leader of the world’s foremost authority on brand marketing please let my cutting edge hoo-ha marketers develop a comm’s strategy that will last longer than Aquaman in theaters!

JON BEKEFY, General Manager Brand Marketing: What the font?  Please Santa, I’m seeking stoke so, let the famously irreverent Enthusiast magazine right a wrong, while I write a song on the largest number of variable text sizes and drawing types ever used in a print magazine. We commissioned a student that designed a flyer for the H.S. prom to perform the magazine eye test. I’m a huge fan of Gliko Modern and Gliko Modern Condensed with Body copy set in Freight Text.  Oooh, so many fonts and so little time. I’m rather preoccupied with condensing the regular widths of every page and reducing The Enthusiast page count to a total of three on the next spread.  Is Santa seeking stoke?

BILL DAVIDSON, Vice President of the Harley-Davidson Museum: Hey Santa, I’m still working here and I bleed black and orange. Did you know I’m the son of William G. “Willie G.” Davidson? Just because the pandemic has closed the museum, I remain busy creating ways to bring light and meaningful impact to motorcycle enthusiasts.  In fact, I sketched a new color book that has cryptic clues, puzzles to solve, and you can uncover a mystery through an interactive story adventure in the museum gallery.  We’re doing this in collaboration with The Pabst Mansion and the Pabst Brewing Company. Pass me a cold one!

GINA GOETTER, Chief Financial Officer: Santa it’s not my fault.  The prepared foods at Tyson Foods taught me a lot. Please let me milk this “new in my job” for just a while longer.  What do they expect?  Miracles on Juneau Avenue!  Doesn’t it matter that I’ve been here less time than ZEITZ?   I do have a motorcycle endorsement.  And, my calculator is newer than Jonathan’s!

JAGDISH “J.A.G.” KRISHNAN, Chief Digital Officer: Santa, it’s all hands on deck. Open. Click. Buy. At Bose, I helped close 119 retail stores after digitization and all I want for Christmas is to be that invincible-gungho digital hero and repeat the success for Harley customers. I’m calling it The Wired Buyer plan. It’s no longer about taking care of every person who walks through our doors – whether that’s helping with a problem, giving expert advice, or just letting someone take a break and listen to a great rumble.  We’re going all in online and will digitize the entire customer experience. Now where are those IBM server rooms on Juneau Avenue.

JONATHAN ROOT, Senior Vice President, Harley-Davidson Financial Services: Santa, I’ve been busy creating forecasting models, assessing risk in investments and ensuring all accounting activities comply with regulations, but I need a new platinum edition HP 12C calculator.  The minus button on my current Texas Instruments model quit working.

PAUL J. KRAUSE, Vice President, Chief Legal Officer and Chief Compliance Officer: Santa, I’ll make this short and sweet.  Please tell us who is behind that NWHOG.com blog?!  We have an important legal document gift we wish to serve send over to the Northwest Harley Blog editor. By the way Santa, trespassing involves entering a chimney without consent, but by wishing for presents and sending letters we’re good to go on the legal front!

LUKE MANSFIELD, Vice President Motorcycle Management: I’m dreaming electric Santa. Think Serial Number 1! It’s a simple process that leads to a complex outcome, but I think I can optimize your gift delivery experience so you’ll be home for Christmas.  Sure you have the reindeer and elf idiosyncrasies, but consumer tastes are changing fast and they want those gifts immediately after they Open. Click. Buy.  Santa you need to adapt & disrupt.  By the way, we’re developing a new delicious lemon flavored drink for our motorcycle enthusiasts.  It’s called ‘Harley Harley‘ and will be a standalone new brand in the U.S.

BRYAN NIKETH, Senior Vice President, Product Development and Operations: Please make Indian Motorcycles go away like “Gone Girl” Michelle Kumbier.  We are tired of being embarrassed in our own backyard when it comes to American cruisers and we don’t want that company bragging about their superior performance anymore.  Santa, save the gifts for the laid off 70 employees in India because I’m flying over when the pandemic ends to discuss Harley’s continuing restructuring of the region. It’s the largest motorcycle market and the exit was hastily announced. Lastly Santa, can you find that blogger at the 105th Anniversary trying to take a photo during our plant tour. We ran his butt right out the building before he was able to take pictures of the lunch room, but the Six Sigma manufacturing team learned later we’re missing a crankshaft bolt.

I don’t know about you, but I’m looking forward to the time when I can throw away my mask. Visiting all my family and sitting around the table sharing stories, eating good food and laughing together again.  And of course, getting on the motorcycle and riding across the U.S. at pandemic-free events!

Thank you for your readership during this past year. Merry Christmas, happy holidays and best wishes to you and yours in 2021.

Photo courtesy of the author.

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Harley-Davidson Q3 2020 Financials

Good afternoon.

Election Day is a week away. There’s new evidence of water on the moon. Amy Coney Barrett is a Supreme Court justice, the fire hose of information continues to overwhelm even the most devout COVID-19 science junkies and Harley-Davidson shares soared 27% to $36.82 earlier in the day after reporting third-quarter net income of $120.2 million and post its best Q3 result since 2015.

A striking result after Harley-Davidson put a German environmentalist in charge and recorded a worldwide sales decline of 8%, which is the 15th consecutive quarterly decline.

Wall Street is reviving optimism about Harley’s future at a time when motorcycle sales are in decline. Talk about exaggerating your perspective.

Jochen Zeitz’s (CEO) “ReWire” (yes, a play on the LiveWire electric motorcycle) strategy cut 30% of the models in the lineup, exited 39 markets, eliminated 10% of its workforce including product teams developing new motorcycle models — were executed to manage down motorcycle volume and reduce its global presence due to low sales.  

The actions helped to stop discounting and drive dealership prices higher to MSRP in Q3.  It’s also a tacit acknowledgement that the motor company’s smaller scope and scale is the only way forward after multiple abandoned growth plans and over a decade long quest to appeal and reach new types of riders.

Abandoning affordable, youth-oriented motorcycles is a staggering reversal given Mr. Zeitz’s experience at Puma in connecting with the youth culture and claiming ownership of that generation in Europe. Remember “Puma chic” streetwear fashion?

Harley-Davidson Inc. is back!  Back, to making big, expensive motorcycles for its most devoted customers.

UPDATE: October 27 at 5:13PM Pacific — Full Disclosure: I don’t currently own or have plans to purchase HOG stock.

Photos courtesy of Bloomberg and Harley-Davidson

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The 80th Sturgis Rally Is On With Major Adjustments

Sturgis City Council Release

The Sturgis City Council voted 8-1 last night to host the rally and announced today that the 80th Annual City of Sturgis Motorcycle Rally will move forward.

However, there will be significant changes designed to reduce the large crowd gatherings in the downtown core with the intent to “safeguard the community and residents.”

That there is a true definition of dichotomy.

The City Council decision, given most all other large outdoor events and indoor concerts around the U.S. have been canceled or rescheduled, is an interesting one. The annual rally will generate millions in revenues for the host city, but no mention of that trivia in the press release.

Buffalo Chip Email Blast

According to Sturgis Rally stats, in 2019 there were 490,000 rally visitors — at least 70 times the estimated 2019 population of Sturgis (6,500), according to the U.S. Census Bureau.  In other words, the Sturgis Motorcycle Rally attendees in 2019 were the equivalent to half of the state of South Dakota’s estimated 2019 population of 884,659.

Read the full City Council release HERE.

A few items known as of today that will be implemented at the event:

• Attendees will be asked to practice social distancing and follow CDC guidelines.
• Enhanced safety/sanitization protocols will be carried out in the downtown area.
• City sponsored events including opening ceremonies, parades, B1 Flyover, and live music at Harley-Davidson Rally Point are cancelled.
• Photo towers will NOT be installed.
• Temporary vendors will be required to abide by state and federal protocols and guidelines related to COVID-19.

I’m not trying to “COVID Shame” anyone thinking about or planning to attend the motorcycle rally.  But, remember a long, long time ago when the freedom of riding across the U.S. and attending a rally didn’t bring this type of risk?

Images courtesy of City Council and Buffalo Chip.

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Harley-Davidson Eye Chart Logo

1919 Harley-Davidson Logo

When the original is framed and seen up on a wall, a person might think ‘abstract art’. On closer inspection, you’d recognize that it’s an engineer’s effort to illustrate creative design elements. Call the original Harley-Davidson drawing engineered art.

Fast forward a 100+ years.

Carefully sequestered away, in an attic far from the light of day, a pair of courageous hands, intent on saving a fragment of the brand—unearthed a refreshed version of the Bar’n’Shield company logos.

To motorcycle purists, the new version might be compared to that mystery of the Al Capone Vault, hosted by Geraldo Rivera.

New “Eye Chart” Lettering Logo

A nothing burger!

Back in Q4 2019 and with little commotion, Harley-Davidson replaced the Bar’n’Shield artifact with a new Shield and Strip. The refresh started with the introduction of the 2020 model range and the rolling thunder style refresh (Rolling Thunder, contrasts the traditional lightning bolt launch process with a more gradual, momentum-building process) of the new “brand language” and visual concepts will be completed by 2025.

Refreshing a logo is less dramatic and the makeover designer works with creative elements that are already in place and will typically make small shifts to what’s already there by adding messaging, updating colors, or simplifying the look and feel.

In fact, the motor company stated; “The well-known shape has undergone a change in the proportions and angles of inclination of the curves, the main lines forming the logo have also become thinner and lighter. The minimalistic and clean design looks more balanced and modern. It also fits perfectly into the logo using both on motorcycles and Harley-Davidson accessories.”

H-D Classic Bar’n’Shield Logo

The classic orange and black Bar’n’Shield Motor Cycles logo is being retired to the category of “historical logos.” On occasion it might be used as a tribute to the company’s heritage, but its use will be limited.

I’m of the opinion that Harley-Davidson should avoid directly comparing the renewal options or visual concepts to their old design as a measure of success.

Instead, focus on how the new brand lauguage represents your brand or speaks to your customers. Clearly, the intent of the logo refresh is to show existing customers that we’re modern and up-to-date and prospective customers that we are worthy of being considered for your next motorcycle purchase.

Solely refreshing the name of a company does not change their historical reputation.  It will not save the company, but at least it is a try!

Photos courtesy of Harley-Davidson.

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