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Harley-Davidson Press Release

In mid-August, Harley-Davidson rolled out a press release (on the Canadian news wire) to announce the launch of a global campaign that embraces “The Freedom of The Open Road.”

It’s part of a 10-year global strategy to build the next generation of Harley riders and the new brand platform is “All for Freedom, Freedom for All” which comes to life with videos containing user-generated and filmed content that shares moments of the open road by riders past and present.

The ambitious campaign goal is to increase Harley’s brand relevance and inspire those “sleeping license holders”  to experience the same freedom that all current Harley riders feel with the wind in the face and ultimately to purchase a motorcycle.

The Harley-Davidson marketing group is using the #FindYourFreedom hashtag to generate social media awareness.

It’s common knowledge that when using a hashtag, you are categorizing your post and is viewed as a valuable tool when marketing your brand.  The objective of course would be to find a hashtag that has never been used previously and one that would really set the campaign apart from all the other social media noise.  However, there is another large company with an equally large brand that is already using the #FindYourFreedom hashtag with an associated marketing campaign.

They spell it:  J E E P  — you know, the company with an adventurous lifestyle that requires an adventurous vehicle!

While you can’t legally own a hashtag, the marketing 101 manual suggests that you chose one that people will associate with your brand, by leveraging a distinctive phrase or word associated with your company and messaging that marketing execs would, at best, like to see go viral or, at worst, contribute to the marketing campaign in a very positive way.

Think about it.  Harley-Davidson just launched a multi-year campaign and is encouraging motorcycle fans to join the social media conversation of a larger Jeep fan base!

The marketing folks may have actually “muddied” the Harley-Davidson brand or made it vulnerable by this hashtag gone wrong.

Photos courtesy of Harley-Davidson and Jeep.

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It could be the title of Harley-Davidson CEO, Matt Levatich’s memoir on his failed 2017 year while in charge of the Motor Company.

I happen to be riding with the HOG Lewis and Clark Expedition last week when Harley-Davidson announced their disappointing Q2’17 financial results and late to weigh in:

* Harley-Davidson net income dropped 7.7%. Sales in the U.S. were down 9.3% and 6.7% worldwide.

* Harley-Davidson now expects to ship 241,000 to 246,000 motorcycles to dealers worldwide in 2017, which is down approximately 6% to 8% from 2016.

* Harley-Davidson expects to ship 39,000 to 44,000 motorcycles in Q3’17, which is down approximately 10% to 20% from 2016.

* Approx 180 U.S. based manufacturing jobs will be cut in Menomonee Falls and Kansas City.  This in addition to the 118 workers who were axed back in April this year at the York plant as some positions were being shifted to Kansas City.

For those keeping track, this is a continuation of a three-year slide by the motor company.  However, during the call Mr. Levatich described what can only be called an “alternative reality” in hopes (I assume?) to reassure the financial markets and stated “we are going to build bikers first, add 2 million new Harley-Davidson riders and launch 100 brand new models during the next 10 years while growing the international business by 50%.

Huh?

I’m being a bit snarky here, but his statement appears either woefully naïve to the point of negligence or a continuance of marketing spin.  Proclaiming an unprecedented future result of this magnitude smells like stunningly wishful thinking at best or at worst plain lying.  For reasons I can’t explain, why would Mr. Levatich climb up on a high-wire without a net given such an overly-optimistic prediction?  Even with nearly 8-million Americans that are “sleeping license holders,” — those who have motorcycle riding credentials, but don’t own a bike — it doesn’t pencil and seems unobtainable.

I don’t know if the boardroom folks in Milwaukee read the NW Harley Blog on a regular basis and/or  hang on its every word.  But, we know the motor company has been continuously producing motorcycles for more than a century,  yet seemingly everyone on the internet with a keyboard thinks they can do it better.

And it’s a well-established fact that internet bloggers and commenters are geniuses. They definitely know how to run a business better than a company that has been constantly producing motorcycles through two world wars, the Great Depression, and roughly 20 U.S. recessions.

Sure the motor company needs our help and I’ve got some feedback and plenty of comments.  But, until the motor company calls me asking for it, I’ll look for Mr. Levatich’s memoir, which will certainly be “a deeply intimate account and a cautionary tale on the world’s most iconic motorcycle brand.

Slightly modified book cover courtesy of Simon & Schuster.

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Ted Gilbert on his Sport Model on top of Larch Mountain

Did you know, that in August 1919, Ted Gilbert became the first motorcyclist to ride a machine to the top of the rocky butte near Portland, Oregon?

His motorcycle of choice was a Harley-Davidson Sport Twin. Sitting at 4,045 feet above sea level, Larch Mountain is 11,000 feet of narrow, brushlined trail. Rugged and heavily timbered, with huge boulders, sharp stones, and logs lining its sides, it had previously withstood all attempts for anyone to reach its summit on a motor vehicle. The three-mile climb took 2 hours and 20 minutes and needed neither chains nor a tractor band to help the Sport Model along. A big sign measuring 4 feet by 6 feet nailed to the side of a huge fir tree marks the time, the name “Harley-Davidson Sport Model,” and the name of its rider, so that when Mazamas and various other organizations of mountain climbers would later reach the top, they would be able to see that a motorcycle could climb the hazardous cliffs of Larch Mountain.

“Hot Road” Perfume and Cologne

Did you know, Harley-Davidson offered a line of perfumes and colognes?

During the “Disneyfication” era which included branding any merchandise product such as T-shirts, leather jackets, caps, helmets, socks, gloves, knifes, signs, wedding cake decorations and key chains.  This was a product to complete the all-encompassing Harley-Davidson lifestyle and smell like your favorite bike at all times. The line of perfumes and colognes were called “Hot Road” and featured woody aromas with hints of tobacco.  It was 1996 and Harley-Davidson thought they’d attempt to capitalize on the company’s unique brand loyalty and decided to produce their own line of perfumes and colognes.

The woodsy scent with faint traces of tobacco did not make the top of the list for even the most loyal Harley-Davidson fans, yet you can still purchase some HERE.

Jeffrey L. Bleustein

Did you know, Jeffrey L. Bleustein is considered the “Father” of the Kevlar Belt?

Mr. Bleustein was Harley-Davidson Chairman from December 1998 to April 25, 2009.  He retired as Chairman of the Board in April 2009.  Previously, he served as Harley-Davidson CEO from June 1997 to April 2005.  He also served at Brunswick Corp in many capacities and was President of Tri-Hawk, Inc., a subsidiary of Harley-Davidson, 1984 to1985.  Mr. Bleustein was a technology consultant with AMF.  In 1969, AMF merged with Harley-Davidson and in 1975, AMF assigned him to help reorganize H-D engineering operations.  Led by AMA Hall of Famer Vaughn Beals and 11 other Harley-Davidson executives (including Willie G. Davidson), Bleustein helped execute an $81.5 million leveraged buyout of the company from AMF Corporation in 1981.

Mr. Bleustein was responsible for engineering innovation which included the rubber engine mounts, redesign of the V-Twin and introduction of the Kevlar drive belts.

More on the CEO’s of Harley-Davidson HERE.

Harley Owners Group

Did you know, Rich Teerlink established HOG?

Mr. Teerlink  — served as Chairman and CEO until 1999 at Harley-Davidson until he retired.  Mr. Teerlink joined Harley-Davidson in August 1981 as CFO where he enjoyed great success over his 18-year tenure.  He started just two months after a group of 13 Harley managers had bought the company from its then parent company, AMF, in a leveraged buyout.  Mr. Teerlink’s greatest accomplishment was establishing the Harley Owners Group (HOG) in 1983.

More on the CEO’s of Harley-Davidson HERE.

Did you know, the birthpace of Harley-Davidson in Australia, is considered to be Morgan & Wacker in Brisbane?

Many people don’t realize that Harley-Davidson started operations in Australia just 14 years after the U.S.  At the Morgan & Wacker dealership is a 1917 V-Twin, the exact bike that was one of the first in Milwaukee, and it sits half-way around the world in Brisbane, Australia.  Bill Davidson recently visited and was photographed by the motorcycle.

Oregon Fueling Experts

Did you know, Oregon Regulation of gasoline dispensing recognizes the special fueling requirements of Harley-Davidson motorcycles and makes the motorcycle rider the expert at fuel dispensing?

According to Oregon’s legislature, ORS 480.330 it’s all about the inconvenience and hazards of self service.  I feel it’s just another step in the government ladder of dependancy.  At any rate, the law states that an owner, operator or employee of a filling station, service station, garage or other dispensary where Class 1 flammable liquids, except aviation fuels, are dispensed at retail may not permit any person other than the owner, operator or employee to use or manipulate any pump, hose, pipe or other device for dispensing the liquids into the fuel tank of a motor vehicle or other retail container.  However, on June 11, 2001, Oregon motorcyclists won the right to pump their own gas. Governor John Kitzhaber signed House Bill 3885 into law, which gives motorcyclists the choice of fueling their own bikes. Oregon and New Jersey are the only two states which prohibit “Self-Serve” gas pumps, and motorcycles are the only class of vehicle allowed to actually dispense fuel into their own tanks in Oregon, which was effective January 1, 2002.

The law recognized the special fueling requirements of various motorcycles which then made the rider the expert at fuel dispensing. This bill also removed a liability for gas station owners who permitted the common sense practice of allowing motorcyclists to fuel their own motorcycle.

Bruce McGill “D-Day”

Did you know,  Bruce McGill, “D-Day” character in Animal House, rides a Harley-Davidson Sportster motorcycle up the Delta House internal staircase?

The 1978 John Landis movie was filmed in Eugene, Oregon and starred John Belushi. Many campuses rejected the filmmaker’s location request, due to the raunchy content of the script, before the University of Oregon approved it. Then-President William Boyd even allowed his office in Johnson Hall to be used as that of Dean Vernon Wormer (John Vernon).

The movie’s Delta House was an early-20th-century Eugene residence that served as the home of the Phi Sigma Kappa fraternity from 1959 to 1967. Although it was demolished in 1986 and replaced by a suite of doctors’ offices, a large building outside the new building bears a plaque that commemorates the Delta House location.  Many of the interior scenes were filmed within the adjacent Sigma Nu house, which still stands today on East 11th Avenue; the exterior of the frat house was cast as a sorority house through whose window Belushi peered at half-naked coeds.

The movie’s climactic parade scene, featuring actor Kevin Bacon’s film debut, took place in downtown Cottage Grove, Oregon.

Did you know, Harley-Davidson has multiple manufacturing plants in Asia?

The motor company announced plans to build a manufacturing plant in Thailand where motorcycles will be assembled from parts manufactured and shipped from the U.S. The company said the plant will cater to the Asia-Pacific market, particularly China and Southeast Asia with plans to begin production in Thailand in 2018.  The factory is being erected in the Rayong province, Thailand which is geographically located southeast of Bangkok. This will allow the Harley-Davidson to circumvent Thailand’s tariffs of up to 60 per cent on imported motorbikes.

The Thailand plant is the second factory in Asia as Harley Davidson has a plant in Bawal, India, where the Street 750 model and Street Rod is produced. In addition, Harley-Davidson manufactures motorcycles at a plant in Brazil and has a wheel factory in Australia.

Tri-Hawk, Inc.

Did you know, Harley-Davidson sold a no-doors, no-roof, no-regrets, Polaris Slingshot knockoff back in the 1980’s?

Called the Tri-Hawk it was viewed as a semi-automobile.  Harley-Davidson acquired the company in 1984 and the cost for a Tri-Hawk was nearly $12,000.  Jeffrey L. Bleustein — who had a long tenure at Harley-Davidson, served at Brunswick Corp and was President of Tri-Hawk, Inc., a subsidiary of Harley-Davidson, 1984 to1985. Mr. Bleustein was also a technology consultant with AMF.

For many years Harley-Davidson made three-wheelers in the form of utility and police “trikes,” but they were not like the svelte looking Tri-Hawk’s.  They product appeared only briefly in Harley-Davidson showrooms as it was determined to be a marketing miscalculation and they were quickly pulled from the motor company line-up.  The two-passenger Tri-Hawk had already been in limited production before Harley-Davidson decided to take it on to fill some niche. In 1983, prior to acquiring Tri-Hawk, Harley-Davidson made a deal with an Austrian Rotax company for engine-gearbox racing units destined for 500 cc short track racing, but the Tri-Hawk was powered by a French-built Citroen four-cylinder motor.

Tri-Hawk

The Tri-Hawk design was developed by race car engineer Robert McKee with deep pockets by millionaire sportsman Lou Richards who was underwriting the project . The Trip-Hawk was assembled in a small plant located in the beachside town of Dana Point, CA. The 1299 cubic inch flat four air-cooled engine rode up front while the frame and suspension echoed McKee’s racecar experience. Borrowing even more from French technology, the builders incorporated a hydraulic braking system manufactured by Renault.  Weighing over 1300 lbs., and powered by 80 horsepower through a 5-speed transaxle transmission, theTri-Hawk had what marketing called, “exhilarating performance characteristics.”

The product had appeal, but the motor company decided not to sell them through their dealers, leaving only the factory in Dana Point and three other franchise locations to sell all the Tri-Hawk’s.  With limited availability and about eleven Tri-Hawks leaving the factory per month they became a sales failure.  Not from design flaws, but from management and company neglect.

Photos courtesy of Harley-Davidson; Harley-Davidson perfume photo courtesy of Sofie Lindberg; photo of Bruce McGill courtesy of IMBD, photo of Ted Gilbert on his Sport Model on top of Larch Mountain courtesy of Motorcycle Enthusiast;

All Rights Reserved (C) Northwest Harley Blog

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Recently it was reported that the typical CEO at the biggest U.S. companies received an 8.5 percent raise last year, taking in $11.5 million in salary, stock and other compensation, according to a study by executive data firm Equilar for the Associated Press.

Over the last 5-years, median CEO pay has jumped by 19.6 percent not accounting for inflation.  That’s nearly double the 10.9 percent rise in the typical weekly paycheck for full-time employment across the country.

It could be, but this isn’t a rant about the typical line worker vs. CEO wage-gap.

If we’re being intellectually honest, CEOs today are required to master a broader range of skills than in the past, when top executives might have climbed the ranks with just one discipline. Companies are bigger, more global and increasingly complicated, and there’s accelerating competition in countries such as China, India and Brazil. Executives must also adapt to quicker technological change, including shifts brought on by autonomous driving, electric vehicles and the widening use of mobile devices.  And then there is the Board, and the increasing requirement that CEOs push their stock price ever higher to collect their maximum possible payout.

So, who are those CEOs at Harley-Davidson, that made Harley-Davidson?  Below is a historical snapshot of the motor company leadership:

Matthew S. Levatich

Matthew S. Levatich — is the current Harley-Davidson President/CEO which he assumed in 2015.  Mr. Levatich was named COO during CEO Keith Wandell’s tenure.

Mr. Levatich, joined Harley-Davidson in 1994. Prior to becoming COO in May 2009, he held wide-ranging roles in the U.S. and Europe. Those roles included Vice President and General Manager of Harley-Davidson’s Parts and Accessories business, Vice President of Materials Management, and President and Managing Director of the Company’s former MV Agusta business. In addition to an undergraduate degree in mechanical engineering from Rensselaer Polytechnic Institute, Levatich holds a graduate degree in engineering management and an MBA from Northwestern University. He has served on the board of directors of Emerson, a St. Louis-based global manufacturing and technology company, since 2012.

Mr. Levatich is known as an avid rider and an engineer, that demonstrates a clear vision for the company and talks constantly about focus and alignment and helping the organization remain clear on what it is they’re here to do.  No longer is the motor company the “voice of the executive” rather it’s the “voice of the customer.

Interestingly, Harley-Davidson has evolved from platform teams. Dyna platform, Softail platform, which was largely modeled like the automotive industry. Each platform team was competing for the next big capital investment so they could say now it’s Dyna’s turn to have a major refresh. Or now it’s Softail’s turn. Or now it’s Touring’s turn.  And that doesn’t exist anymore.

In an interview with Cycle World Mr. Levatich stated: “We’re not really in the business of manufacturing motorcycles. We’re in the business of building customers.”  

Keith Wandell

Keith Wandell —  hired from Johnson Controls to serve as Harley-Davidson President/CEO in 2009 — retired May 1, 2015 — only 6-years later.

Credited for leading Harley-Davidson back to profitability by cutting jobs and making its production more efficient he transformed manufacturing through a restructuring plan that generated more than $300 million in annual savings.

Mr. Wandell cut millions of dollars in costs and eliminated several thousand jobs in the manufacturing plants. He brought a sense of urgency to the company, saying he did not want it to be like General Motors and the auto industry that had fallen into deep trouble.

Under his leadership, Harley made significant gains in reaching new customers through growth in international markets and sales to “outreach” segments in the U.S., including young adults, women, African-Americans and Hispanics.  Mr. Wandell also was credited with stoking excitement for a planned electric bike, called Project LiveWire.

Mr. Wandell has been the Non-Executive Chairman of Dana Incorporated since October 27, 2016 and served as its Interim Chairman from September 9, 2016 to October 27, 2016.

James Ziemer

James Ziemer — served as President/CEO from 2005-2009.  Retired in 2009.  Mr. Ziemer is a native Milwaukeean who grew up in the neighborhood next to Harley-Davidson’s original Milwaukee factory location on the city’s west side.

He started with the motor company in 1969 as a freight elevator operator while attending the University of Wisconsin-Milwaukee. He worked at Harley-Davidson for 40 years.  Upon earning his undergraduate degree in accounting at UWM, he joined the accounting department where he spent the majority of his career. He was named the Company’s Chief Financial Officer in 1990. In 2005, he was named President and Chief Executive Officer of Harley-Davidson.  When he retired, employees presented Mr. Ziemer with the original wood doors from the freight elevator he operated when he first was hired at Harley-Davidson.

As a sidebar, also in 2009, eleven years after being bought by Harley-Davidson, Erik Buell leaves the company to establish Erik Buell Racing.

Jeffrey L. Bleustein

Jeffrey L. Bleustein — retired as Chairman of the Board of Harley-Davidson in April 2009.  He was Chairman from December 1998 to April 25, 2009.  Previously, he served as CEO from June 1997 to April 2005.

He served at Brunswick Corp in many capacities and was President of Trihawk, Inc., a subsidiary of Harley-Davidson, 1984 to 1985. Remember Trihawks?

Mr. Bleustein was a technology consultant with American Machine and Foundry Co. (AMF).  In 1969, AMF merged with Harley-Davidson and in 1975, AMF assigned him to help reorganize Harley-Davidson engineering operations.  Led by AMA Hall of Famer Vaughn Beals Jr., and 11 other Harley-Davidson executives (including Willie G. Davidson), Bleustein helped execute an $81.5 million leveraged buyout of the company from AMF on June 16, 1981.

To commemorate the buy-back, approximately two dozen company officers, along with their wives and select motorcycle press, made a cross-country motorcycle trek from the production facilities in York, PA to Harley-Davidson’s main offices on Juneau Avenue in Milwaukee. This 900-mile independence journey was also a ride to support the Muscular Dystrophy Association, now the official charity of Harley Owners Group (HOG). The ride followed a host of ceremonies at York which included the signing of documents that marked the ownership change, and pulling the first “new Harley-Davidson” motorcycle off the assembly line. This 4-day celebration began a new chapter in the company’s “new” future.

Mr. Bleustein was responsible for notable engineering innovations which included the rubber engine mounts, redesign of the V-Twin and introduction of the Kevlar drive belts.

During Mr. Bleustein’s tenure (circa: 1998), Harley-Davidson bought Buell Motorcycle Company and named founder Eric Buell Chairman of Buell Operations. The first Buell’s hit showrooms in late 1999.

Rich Teerlink

Rich Teerlink  — served as Chairman and CEO until 1999 at Harley-Davidson until he retired.  Mr. Teerlink joined Harley-Davidson in August 1981 as CFO where he enjoyed great success over his 18-year career.  He started with the company just two months after the group of 13 Harley-Davidson managers had bought the company from its then parent company, American Machine and Foundry Co. (AMF), in a leveraged buyout.

Mr. Teerlink’s greatest accomplishment was establishing the Harley Owners Group (HOG) in 1983.  Mr. Teerlink joined the Vertex Board in 2002, and while serving on the Vertex Board, he also served on the Boards of Johnson Controls, Snap-on Tools and Quad Graphics.

Mr. Teerlink is also a notable author of More Than a Motorcycle, The Leadership Journey at Harley Davidson book.  Mr. Teerlink retired from the Vertex Board of Directors, effective February 4, 2015.

Mr. Teerlink was inducted to the AMA Motorcycle Museum Hall of Fame in 2015.  Mr. Teerlink was awarded an Honorary Degree, Doctor of Laws from Marquette University on May 22, 2005.

Vaughn L. Beals Jr.

Vaughn L. Beals Jr. — served as CEO of Harley-Davidson from 1981-1989 and as Chairman from 1981-1996.

In June 1981, it was a challenging time as American Machine and Foundry Co. (AMF) wanted to cut and run, but no one wanted to buy a company with a limited line of high-priced, obsolete products and a reputation for unreliability.  Vaughn Beals Jr., and 13-other** Harley-Davidson executives (including Willie G. Davidson), led an $81.5 million leveraged buyout of the company from American Machine and Foundry Co. (AMF).

Mr. Beals previously served as a research engineer for North American Aviation and Cummins Engine Company where he negotiated the purchase of logging equipment manufacturer Formac International as he was a minority owner and CEO.  This proved to be valuable during the AMF Harley-Davidson buyout.  He was named Harley-Davidson CEO after the buy-out option.

In 1982, the motor company won an anti-dumping judgment from the International Trade Commission (ITC). This led then-U.S. President Ronald Reagan to impose additional tariffs on imported heavyweight Japanese models, as allowed by the ITC.  The additional tariffs–45 percent on top of an existing 4.4 percent measure–were meant to decrease gradually over five years, until April 1988.

In June 1986, Harley-Davidson went public with a stock offering to raise capital to help pay off the buy-out option.  This was very successful increasing share price from $11 to $24.  Harley-Davidson  used some of the stock sale revenues to buy Holiday Rambler, a U.S. maker of recreational vehicles, for $150 million.  The Holiday Rambler sale pushed Harley-Davidson into the Fortune 500 category for the first time at number 398.  In March 1987 the company asked the ITC to remove the tariffs imposed on Japanese motorcycle imports a year earlier than scheduled.

Willie G. Davidson, V.P. Styling (Left); Vaughn Beals Jr., CEO and Charles Thompson, President (Right)

Mr. Beals was inducted to the AMA Motorcycle Museum Hall of Fame in 2008.

Charles Thompson — served as President and CEO of the restructured Harley-Davidson after American Machine and Foundry Co. (AMF) buy-out option.

Mr. Thompson was a long-time Harley-Davidson employee, well-liked throughout the motorcycle industry and served as president and CEO of the restructured company until his health failed in 1982.

William Herbert “Bill” Davidson — was president of Harley-Davidson Motorcycles from 1942 to 1971.  He was the son of William A. Davidson who quit his regular paying job with the Milwaukee Road railroad in 1903 to get into the business of making motorcycles.

William Herbert “Bill” Davidson

Bill Davidson, started working on the Harley-Davidson shop floor of the family business in 1928 after attending the University of Wisconsin.  He won the AMA National Enduro Championship in 1930 and when he wasn’t winning motorcycle races, Bill worked his way up through the company, becoming a foreman, manager of many departments, and finally president of Harley-Davidson in 1942.

In 1963, Bill brought in his son William Godfrey Davidson (Willie G.) on to head up the styling department of the company. Willie G. would end up creating some of the company’s more popular designs, including the legendary Low Rider and the Super Glide which was inspired by the ideas of bike customizers.

In 1965 Harley-Davidson went public as the two families decided to give up control and put the company’s shares on the market.

In 1969, Harley-Davidson was bought by American Machine and Foundry Co. (AMF), a leisure equipment manufacturer.  The arrangement proved, at least initially, to be a good one for Harley-Davidson, for it was in the mid-1960s that the company experienced its first real competition after Indian went out of business. The financial resources and stability that AMF was able to provide helped the company battle Japanese motorcycle manufacturers, who had begun exporting their vehicles around the world, placing themselves in direct competition with Harley-Davidson.

Bill stayed on as president under the control of AMF reporting to it’s then current chairman and CEO Rodney C. Gott (Mr. Gott served as AMF president, starting in 1962, and chairman and chief executive, from 1968. He retired in 1978).  Mr. Gott was a Harley-Davidson rider and big motorcycle fan.  As a sidebar: In World War II, Mr. Gott was a decorated veteran who served in Gen. George S. Patton’s Third Army and on the staff of Gen. Lesley James McNair, chief of ground forces, and was also commander of the 79th Infantry Division Artillery.

In 1971, Bill Davidson was made Harley-Davidson chairman, but reported that he had little power while under AMF’s control.  It was noted that he was chairman of the Harley-Davidson board that never met.  Conflicts with AMF’s strategy and chaotic market conditions led to Bill Davidson’s resignation in 1973.

It was a period of high CEO turnover at Harley-Davidson.  During this time, AMF named John O’Brian and then Gus Davis as president, marking the first time someone other than a Davidson would sit in the company presidents chair.  Other Harley and Davidson family members continued on at the company under AMF’s ownership.  Bill Davidson’s son John was vice president of Sales, and then moved up to become president after Gus Davis.  William J. Harley was engineering vice president until his death in 1971.  His brother John Harley remained at the company until his death in 1976 as the last Harley at Harley-Davidson.

In 1975, AMF put Vaughn Beals Jr. at the head of Harley-Davidson, and Jeff Bleustein was named chief engineer. Bleustein was charged with making manufacturing improvements, which had  become increasingly necessary as production grew and quality declined.  A limited line of high-priced products and a reputation for unreliable motorcycles marked this timeframe in history.  AMF began to lose interest in keeping the struggling motorcycle business afloat.

Rodney C. Gott (Left) and John Davidson, President Harley-Davidson

In a bit of irony, (circa: 09/1977), the motor company unveiled a motorcycle museum in York, PA., that was named after AMF’s CEO — Rodney C. Gott Motorcycle Museum.  A video HERE.

In June 1981, to save the company, and to effect a turnaround, thirteen Harley-Davidson executives, led by Vaughn Beals Jr., put together a plan for a leveraged management buyout. With the financial support of Citicorp, the management team succeeded in taking control of Harley-Davidson from AMF on June 16, 1981, at a cost of $81.5 million.

The role of the new officers after the company buy-out option included: Charles Thompson, president and chief operating officer; Jack Hamilton, Chris Sartalis, Jim Paterson, Kurt Woerpel, Peter Profumo, Jeffrey Bleustein, Thomas Gelb, William Davidson, and Tim Hoelter, all vice presidents. The president of the various divisions were: John Davidson, golf; David Caruso, parts and accessories; Ralph Swenson, York; and David Lickerman, Harley-Davidson International.

Even though he was no longer actively involved with the company, Bill Davidson lived to see the renewal and success that Harley-Davidson enjoyed starting in the late-1980s.

Bill Davidson died in 1993.  He was inducted into the AMA Motorcycle Museum Hall of Fame in 1999.

Walter Davidson — was president from 1907 to 1942.  Bill Harley was chief engineer and treasurer. Author Davidson is secretary and general sales manager and William A. Davidson is the works manager.

In 1936, six sons of the founders are working at Harley-Davidson.  Walter Davidson’s sons Gordon and Walter C.; and William Davidson’s sons, William Herbert “Bill” and Allan; and Bill Harley’s sons, William J. and John.

In 1942 from his death bed,  Walter Davidson named his nephew William Herbert “Bill” Davidson as president and his own eldest son Gordon, as vice president of manufacturing.

Historical Principal H-D Subsidiaries: Holiday Rambler Corporation; Utilmaster Corporation; B&B Molders; Creative Dimensions; Nappanee Wood Products.

Article References:

Vaughn Beals Jr. – Wikipedia
Growing Up Harley-Davidson – Jean Davidson
Harvard Business Review – Harley Leadership U-Turn
Jeffrey Bleustein – Wikipedia
The Morning Call – Harley Is A Classic Turnaround Story
Rodney C. Gott Obituary
Gus Davis Obituary
Cycle World Magazine – Interview with CEO, Matthew S. Levatich
Cycle World Magazine – Rodney C. Gott Motorcycle Museum
Chicago Tribune – The Real Harley-Davidson Story
James Ziemer – Northwest Harley Blog
People – Buy Back Article
Rick Barrett – Journal Sentinel

Harley-Davidson (Buyout) Management Team

**The Harley-Davidson managers post buy-out option: left to right standing: John Hamilton, Dr. Jeffrey Bleustein, Kurt Woerpel, Chstopher Sartalis, and William G. Davidson.  Left to right, seated: James Peterson, Timothy Hoelter, David Lickerman, Peter Profumo, David Caruso, Ralph Swenson, Charles Thompson, and Vaughn Beals Jr.

 

Photos courtesy of Harley-Davidson

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Harley-Davidson V-4 NOVA Model

It’s not a discovery that ranks up there with the Egyptian tombs, but there are plenty of ‘skeletons in the closet’ about Harley-Davidson products that never made it to production.

One such item from the motor company was the NOVA Project which dates back to the late 1970’s and early 1980’s.

The company made a decision to start a program for a new family of modular engines built with two, four or six cylinders, and in displacements ranging from 500 to 1500cc.  Design and development of the engine was in collaboration with Porsche in Germany.

Sound familiar?

This was “revolutionary” stuff back in the day when AMF owned Harley-Davidson and AMF Corporate initially supported the Nova Project with $10 million.  Keep in mind that in June of 1981, AMA Hall of Famer Vaughn L. Beals Jr. and other Harley-Davidson executives (including Willie G. Davidson), were in the middle of executing an $81.5 million leveraged buyout of the company so, AMF protested at the additional millions that would have been required to make the motorcycle a reality.  Harley-Davidson was unwilling to explore other alternatives and officially shelved the project in 1983.

Harley-Davidson V-4 NOVA Engine

The only known NOVA Project motorcycle was a “test mule” and it’s unclear how the final version might have looked or been re-styled for a product launch.  However, the prototype reveals a lot.

The engine was an 800cc water-cooled V-Four, with chain-driven dual overhead cams and wet-sump oiling.  Fuel was delivered by Bosch Jetronic fuel injection.  The horizontally split crankcases were made provisionally for a balancer shaft, though one may or may not have been fitted to the prototype.  The deep finned cylinders and heads revealed the fact of liquid cooling, as did the apparent lack of a radiator.  The radiator was, in fact, located above the engine shrouded by a false gas tank that would duct air across it.  The real gas tank was located beneath the seat. The fuel filler cap was mounted on the right side of the rear fender.

As previously mentioned, Vaughn Beals Jr. was chairman and CEO after the buy-back, and one of the company’s exec’s who actually rode an operational prototype of the Nova motorcycle.  Wayne Vaughn was one of the engineers that worked on NOVA under Mike Hillman. The motor company had completed the first phase engine development, and tooled production crankcases.  It’s estimated that Harley-Davidson invested between $10 million and $15 million on the entire project including the expensive tooling necessary to manufacture the NOVA before shelving it in favor of redesigning the company’s traditional V-twin engine.

Harley-Davidson V-4 NOVA Model Instrument Cluster

Though NOVA never went into production, the program clearly “paid it forward” on future motorcycles and designs.  For example, the fairing that was designed and wind tested for the NOVA made it into production the first time and was used on the 1983 FXRT Sport Glide.  The NOVA Project was a precursor for the eventual development of the liquid-cooled VRSCA Revolution V-Rod engine.  And some elements of the NOVA liquid-cooled design and fuel injection were leveraged in the Twin Cam 88 and Twin Cam 96 to help meet ever tightening emission and noise standards.  It’s interesting to speculate about how NOVA may have changed the market dynamics of motorcycle industry at the time and the effects these Harley “projects” may have made on future motorcycles and their engines.

Harley-Davidson likely finds itself in a position today with the Milwaukee Eight in spite of—or perhaps because of—the no-go decisions and the rejections it’s made in it’s NOVA engineering past.

Photos take by author at and courtesy of Harley-Davidson Museum.

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Harley-Davidson CEO Meets POTUS

Earlier this year, the President met with Harley-Davidson exec’s and put a spotlight on the company in his address to Congress, yet there was no “Trump Bump” as the motor company reported earnings which included sharp declines in revenue and profit for the first quarter of the year.

Some of the key Q1’17 stats:
— $186.4 million in net income, or $1.05 per share, for the period ended March 26, down more than 25% from $250.5 million, or $1.36 a share, in the same period a year ago.
— Revenue was $1.5 billion, down from $1.75 billion in the first quarter of 2016.
— Motorcycle sales in the U.S. were down 5.7% in the quarter compared with a year ago and International sales fell 1.8%
— Reported motorcycle shipments fell 14.7% to 70,831 in Q1
— Market share in the 601cc-plus segment was up to 51.3%.  Execs stated that the Victory liquidation helped market share.

Nothing screams Americana more than deep vehicle discounts and Harley-Davidson jumped head first into that pool by offering its dealers financial incentives to clear out the leftover 2016 motorcycles.  And in an unusual move the company has purposely constrained the supply of its 2017 hottest-selling new models, including bikes with the new Milwaukee Eight engine, leaving some customers waiting to conquer the open road.  All of this is happening with only 4-months until the 2018 model-year launch.

If you listened to the earnings call this week there was a lot of “feel good” expressions from management about the way the company is performing yet, there are tepid sales, a downbeat outlook, and consumer confidence numbers that don’t reflect spending behavior.  Clearly households worldwide are slow to embrace new motorcycles as a way to enjoy life.

According to Harley-Davidson this is the 9th year in a row (based on IHS Market New Registrations) for motorcycles with 601+cc where they were the number one seller of new on-road motorcycles in the U.S. on both their “outreach” and “core” customers.  “Outreach” is defined as four segments — young adults ages 18-34, women, African Americans and Hispanics.  “Core” is defined as Caucasian men aged 35-plus.

Harley-Davidson reported that more people than ever before are discovering motorcycles and claimed that they are dominating the motorcycle market as well as being recognized as the leader in addressing key demographics — women, younger riders, African Americans and Hispanics, however, the patterns of growth remain elusive.

So whats going on?

Let’s drill down:
— Press and media continue to push negative motorcycle narratives (motorcycle crashes, distracted driving, club violence (last years Waco example) etc.).
— Increased pricing on new motorcycles have pushed out the average length of ownership.  For example new autos reached 6.5 years in Q1 2015.
— In the northwest along with parts of California the wet weather has limited the number of days to ride in 2017.
— Increasing Insurance rates  — on auto, home and health care biting into the discretionary funding of a motorcycle hobby.
— Income growth has declined.
— Interest rates have increased (in past years people pulled $$ from their house to buy a “toy” and now there is no where else to pull $$).
— Fewer “Outreach” customers (aged 18-34) own vehicles or don’t drive as much, they UBER.
— Apathy of the motorcycle hobby/life style as a form of entertainment

All or some elements of this could be weighing down new motorcycle purchases.  But I’m an optimist, and Harley-Davidson has a 10-year strategy to train 2 million new U.S. riders, grow international business to 50% of sales (currently about 32%) and launch 100 new “high-impact” motorcycles.

As it turns out and according to this report, about 22% of all new motorcycle purchases come from first-time buyers. This figure has remained relatively stable since 2001.  It’s very likely some of those 2M new riders will buy a new “high-impact” Harley.

Photos courtesy of CNBC and Harley-Davidson

Full Disclosure:  I don’t currently hold or intend to hold any $HOG shares.

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2017 Indian Chieftain Elite

The marketing guru’s claim that Indian is authentic, was born with a dedication for pure performance and now are adding even more capability.

First a bit of history — the first Indian Motorcycle was sold to a retail customer back in 1902, but I’ll spare you a 100+ year recap of the motorcycle.  In modern day history, the Indian Motorcycle brand has been part of Polaris Industries since 2011, and began selling new motorcycles in 2014. The motorcycles are American made and built in Spirit Lake, Iowa.  The are distributed via 200 dealers across North America and nearly 450 dealers globally.  You might recall that the Victory Motorcycle brand, was recently shuttered by Polaris and ceased production.  To the dismay of many, many satisfied customers, it is now winding down operations after 15 years on the market leaving Indian as the only mass-produced American motorcycle brand other than Harley-Davidson.

2017 Indian Chieftain Limited

Jump ahead to April 2017 and we learn that Indian has announced expansion of its Chieftain model lineup with the addition of the Chieftain Limited and Chieftain Elite.  If you’re keeping track this brings the total number of 2017 Indian models to twelve.

It should be noted that the Chieftain was one of the first three bikes that Indian released in 2014, along with the Chief Classic and Chief Vintage.  Although model details differ, the bikes share a common platform — engine, transmission and chassis.

All three motorcycles come with Indian’s proprietary Thunder Stroke 111 V-Twin engine, cast aluminum frame with integrated airbox, air-adjustable single rear shock and many other shared mechanical features.  As it turns out, the Chieftain was the modern-looking of the three, showcasing a unique fork-mounted hard fairing which housed its gauges and electronics, while the Chief motorcycles came with accessory windscreens.

2017 Indian Chieftain Dash

The newly announced Chieftain Limited imitates some details from the custom bagger scene.  It has a skinny 19-inch front wheel replacing the 16-inch front. The “old-school” valanced front fender has been chopped to follow the design line of the wheel and exposes the mag wheel and oversized dual front brake rotors. There is a sleeker seat design, and the headlight bezel is painted, not chromed, to match the Thunder Black paint scheme.  The remaining elements of the Chieftain Limited match the Chieftain feature-for-feature, including the 7-inch touchscreen-operated Ride Command Infotainment/Navigation system and hard saddlebags.

For the well-heeled enthusiasts familiar with and looking at a Harley-Davidson CVO (Custom Vehicle Operations) motorcycle, you’ll appreciate the new Chieftain Elite. Let’s start with the 12-layer paint treatment which is built on a foundation of gold paint. Black accents are added with marble textures, and the bodywork is coated with layers of Fireglow Red Candy clear.  Yeah, it’s a looker with a stunning paintjob, thanks in part to that brilliant red candy color.  Some of you would drop a lot of money with a custom painter to achieve this look, but this one comes direct from the factory.  In addition, the Chieftain Elite gets billet floorboards, a flip windscreen, Pathfinder LED headlights and a 100-watt saddlebag audio system.

At first blush the Chieftain Elite is a factory custom that will hold its own against Harley-Davidson CVO’s.  As to price?  The new Chieftain Elite (starting at $31,499) and Chieftain Limited (starting at $24,499).  Both motorcycles are feature rich, available now and aggressively priced compared to Harley-Davidson.

With warmer weather and longer days on the way, the new Indian Chieftain’s might be the spark of inspiration you’ll need to explore a wide-open two-lane world.

Photos courtesy of Polaris/Indian Motorcycles.

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