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The new Harley-Davidson™ Riding Academy

The new Harley-Davidson™ Riding Academy logo

Back in April, Harley-Davidson unveiled its new Riding Academy in the U.S., which is a program to help students take their first lessons in riding and they get to do it on a Harley-Davidson Street 500 motorcycle.

You might recall that the Harley-Davidson™  Riding Academy was previously called Rider’s Edge®.  In September 2012 the program celebrated a milestone of training 300,000 riders since starting in 2000.  At the time the Buell Blast, a motorcycle made by the Buell Motorcycle Company was used in the Rider’s Edge New Rider program.  In July 2009, prior to ceasing all motorcycle production, Buell ran an ad campaign stating that the Buell Blast would no longer appear in their line-up and the ad featured a Buell Blast being destroyed in an automobile crusher.

The new Harley-Davidson™ Riding Academy is a national rider training program and is likely to be hosted by Harley-Davidson dealerships across the country.

The old Rider's Edge® logo

The old Rider’s Edge® logo

It’s designed to get folks comfortable on a bike and give them the skills needed to ride with confidence.  The students are trained on the motorcycle that they will be riding and will also be taught the basics of rider safety. All the student needs to bring is the riding gear that consists of a long sleeves, jeans/pants, ankle length footwear, full gloves, eyewear and DOT standard helmet. The academy will provide a motorcycle and certified instructors from Motorcycle Safety Foundation (MSF). The course features a minimum of 20 hours of classroom and range training with two instructors guiding 12 students at a time. The practice range is where students learn maneuvers such as turning, braking, going over obstacles and controlling skids.

Some thought the original Rider’s Edge Program was a pricey version of the MSF Basic Rider Course with four additional promotional/marketing hours added into the curriculum. Otherwise the curriculum of the two were nearly identical.  I have not been through the new Riding Academy, but would anticipate that it’s a Harley-Davidson branded version of the new 2014 MSF curriculum.

The motorcycle used in the new Harley-Davidson Riding Academy is the newly launched liquid-cooled Harley-Davidson Street 500.  I suspect the strategy of incorporating the Street 500 motorcycle is that students will want to keep riding after the class is over once they’ve learned on the motorcycle… maybe even consider a purchase.  The Street 500 is fitted with a vehicle protection kit that protects the motorcycle in case a student is not able to maintain balance and topples it. In addition, there is a first of its kind Power Limit Calibration system that is in place to restrict the bikes at low gear speeds allowing only the maximum speed needed for the course.  Or put another way, it modifies the fuel injection system and de-powers the bike.  If you’re looking for initial impressions of the bike for training check out this post HERE.

Once the training has been completed, the students will get an MSF Basic Rider Course completion card which may even exempt students from the state testing for a motorcycle endorsement, but this varies state to state. Harley states that this card may even help new riders in getting a discount on their motorcycle insurance.

TEAM OREGON Locations

TEAM OREGON Training Locations

But, what about the state of Oregon?

It looks like the Oregon Harley-Davidson dealers get somewhat of a pass on managing the new Riding Academy logistics since the only approved training is provided by TEAM OREGON.

If you’ve been riding awhile you’ll recall that Oregon was the first state to break away from MSF and Idaho soon followed.  There is 40-years of history, but in 2003, the last time MSF released a new curriculum, TEAM OREGON decided the new product didn’t meet the riders of Oregon needs.  However, MSF would not support continued use of the old product so, TEAM OREGON designed their own curriculum to meet the needs of Oregon riders.  The prevailing viewpoint was the California-based MSF “one-size-fits-all curriculum” didn’t address local issues – for example, Florida’s riding environment is much different from Washington State’s, which is unlike Wisconsin’s or New York’s.  MSF sued TEAM OREGON in 2006 over the curriculum they developed which the Oregon Department of Justice and Oregon State University tenaciously defended and in December 2008 the MSF agreed to abandon its lawsuit without any monetary settlement.  More details on the lawsuit are located HERE.

Independent of where you live in the Northwest, this blog has promoted safe motorcycle operation and suggested many times that riders be life-long learners.  Take a training class.

More information can be found at: TEAM OREGON – Basic (BRT) and Intermediate (IRT) courses are available statewide and meet Oregon’s mandatory training requirement.  Idaho STAR Motorcycle Safety Program;  Advanced Street SkillsPuget Sound Safety

Photos courtesy H-D and TEAM OREGON.  Shout-out to Pat Hahn (TEAM OREGON Communications and Outreach Manager) who was consulted for accuracy in the writing of this article.

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Kingfisher-LogoI’m talking about Kingfisher.

Beer was introduced into India by the British, who eventually set up a brewery that produced Asia’s first beer — a pale ale called Lion. However, these days, lager is the only type of beer you’ll find available in India and “The King of Good Times” is Kingfisher.

It’s India’s most recognized and widely available beer. Its name has been associated with sports, fashion, and even an airline.

And sooner than anyone would have thought… in Bawal, India a Harley-Davidson assembly line worker will be having a Kingfisher and relaxing with co-workers.

But, I’ve gotten ahead of myself…  let’s jump into the the way back machine and set the dial for — 2009.

The fact is we must focus both our effort and our investment on the Harley-Davidson brand, as we believe this provides an optimal path to sustained, meaningful long-term growth,” said CEO Keith Wandell at the October 15, 2009 announcement to discontinue production of Buell motorcycles.  On October 30, 2009 the last Buell (Lightning XB12Scg) rolled off the company’s East Troy, Wisconsin. assembly line.  It was the last of the 136,923 motorcycles built in the company’s 26 years of operation.

Harley-Davidson Street 750

Harley-Davidson Street 750

It was a combination of factors in making the decision, but essentially the global recession forced a reckoning and Harley-Davidson decided to refocus on its tent pole products or what I’d call doubling down on its core lineup of heavyweight bikes.  As a result, the motor company abandoned entry level motorcycles (Buell Blast), exited the sport bike (Buell and sold MV) and thumb their noses at the adventure market (Buell Ulysses).   In the process the motor company made a lot of motorcycle enthusiasts upset about what looked like a myopic approach of only looking at spreadsheets versus doing a bit more market research and addressing a need.

Jump ahead 4-years and witness the financial rebound of the company and the launch this week of the new Harley-Davidson Street 750 and Street 500 motorcycles.  Could it be a Buell Blast ReDeux?  The smaller 500cc motorcycle basically fills a void left when they discontinued the Buell motorcycle line which included the 492cc Buell Blast.  More important in this announcement is the fact that the motorcycles will be made both in the U.S. and Bawal, India, marking the first time the company will manufacture a complete motorcycle at an overseas facility.  I’ll repeat that… the first time the company will manufacture a complete motorcycle outside the U.S.!

Harley-Davidson Street 750  (Side View)

Harley-Davidson Street 750 (Side View)

The manufacturing news in of itself will be fodder for many future blog posts, but sticking to the motorcycle announcement, the new ‘Street’ bikes are the first Harley-Davidson motorcycles to be designed from scratch since the V-Rod 13 years ago.

It makes this Road Glide owner wonder if that’s an indicator of where all the engineers were redirected in lieu of updating the ‘Glide’ with the all new Project RUSHMORE features that were incorporated into the new 2014 touring models?

The fact is the company has aggressively expanded its marketing efforts because realistically, there is no replacing white Baby Boomer men. And this means they have to attract younger men, non-Caucasian men, women, and do that from countries as disparate as India, Italy, Brazil and the U.S. with much more success.  By turning inwards, relying on a single-brand tradition and nationalism over the last 4-years and divesting itself of brands that were dimming the lights on a brighter future–the motor company can and now has expanded into other segments.

At the Street 750/500 announcement the Harley-Davidson, CEO Keith Wandell said, “The younger riders don’t want their dad’s chromed-out Harley,” “They want the Dark Custom, sinister look, the ability to rebel.

Sounds like a bit of marketing spin, but with more than half of its dealerships outside the U.S., Harley-Davidson has really put a lot of investment behind a push to expand and broaden its customer base including new motorcycle buyers–worldwide.

Photo’s courtesy of H-D and Kingfisher.  Note: Kingfisher, “The King of Good Times”, is India’s most recognized and widely available beer. Its name has been associated with sports, fashion, and even an airline.

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Rumors and “teaser” ads have surfaced on the web this week about Erik Buell Racing (EBR) who looks to be promoting a new street bike based on the 1190RR race machine.

You might recall that last October Harley-Davidson announced the discontinue of the Buell Motorcycle brand.  On October 30, 2009 just two weeks after the announcement the last street-use Buell rolled off the line.   In November Eric Buell established EBR in East Troy WI., which supplied race-use-only parts for Buell motorcycles and performed race prep services for engines and motorcycles.  H-D gave EBR license to build and sell race-only motorcycles based on the Buell 1125R.

Reportedly Erik Buell’s non-compete agreement with H-D ends February 2011.  The new street legal motorcycle will be called the EBR 1190RS and speculation is the motorcycle will be based on the 1190RR race bike which uses an 1190cc V-Twin engine claiming 185HP.

The source of this information came from Erik Buell’s record label called “Rat Pack Records” and where the sale of clothing and various motorcycle swag bearing the new EBR 1190 RS logo is available.  A teaser video for the new bike will be released on September 14th.  Obviously this would make a lot of fans excited and looking forward to the new motorcycle.

Photo courtesy of EBR/Rat Pack Records.

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Harley-Davidson reported its first quarterly loss since 1993!

No surprise given home foreclosures, unemployment fear, stalled economy and ice-cold demand for high-end, premium priced motorcycles.

For Q4’09, H-D reported revenue of $764.5M and a loss of $147.2M.  Affecting Q4’09 results was the previously announced 53.1% reduction in motorcycle shipments from the year-ago period and $167.1M in restructuring, on the Buell end-of-life costs and the MV Agusta discontinued operations.  For all of 2009; revenue was $4.29B compared to $5.58B in 2008, a 23.1% decrease; income was $70.6M in 2009 compared to $684.2M in 2008, a decrease of 89.7%.  And don’t forget all the non-cash charges related to Harley-Davidson Financial Services (HDFS).

There was a surprise in today’s financial call.  Keith Wandell, (H-D President and CEO) stated: “We also feel good about where we’re at.” Huh?

Isn’t that the kind of thinking that would have Kodak saying that they’re relying on film, or newspapers saying they’re relying on print, or music labels saying they’re relying on CDs.  Just because you can’t see the cliff from where you are, that doesn’t mean it doesn’t exist.  Remember when everyone said no one would read a book on a hand-held electronic device, and suddenly now everyone’s saying the opposite, Kindle’s got so many new competitors and Apples yet-to-be released tablet gets more press than a starlet without panties getting into a car outside a pub.

Mr. Wandell may be referring to his reactive changes the past 8 months and the hope they will restore growth. I’m skeptical, and time will tell if they are the right decisions or if management can execute with a renewed intensity.  But isn’t that just the point.  REACTION to events vs. pro-active change?!  From the outside looking in, the majority of action the company has taken seems REACTIVE.  They curb demand, shrink manufacturing, reduce structural costs, pullback on spending, slash and cut employees, sell off businesses based more on profit margins not on the contribution to the customers soul.  Motorcycle sales are down more at H-D than other manufactures.  Why?

There is a saying: “Businesses should concentrate on their customers’ needs, not on specific products.” — “Marketing Myopia” (1960); Theodore Levitt, Harvard Business School

My opinion is that H-D needs to relearn customer needs.  If you desire to appeal to your core fans, then they’ll want to know that you are in it for the motorcycle hobby/sport, not just the money.  Stop calculating how to get to millions of revenue in a spreadsheet by maximizing this and that.  Just create something rawly desirable, then the revenue will come.  A great hit is more powerful than any marketing campaign.  People don’t need motorcycles, but they want one.  When the product is great.  When it speaks to them.  When it’s seen as integral to their lives.  You’ll have something!

Photo courtesy of JupiterImages.

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Ice Racing -- Franky Zorn

Yes, it’s been ten years!

Magazines and newspapers with decade-ending rankings have started to appear.

Over the next month, we’re going to be deluged with statistics.  Telling us who the winners were.  People who provided fodder for the system, that you consumed, and forgot.  Best movies, best athlete, best TV shows, best songs, best companies etc.  So, I thought it would be good to go back and compile highlights on the Harley-Davidson decade.

It wasn’t all good news—marked by the roughest economy since the Great Depression.  In pulling together the data I was reminded of a song by James McMurtry’s “We Can’t Make It Here”.  It’s a favorite and one I would vote as the “best” song of the twenty first century, yet it never seems to get air play.  But, this isn’t a rant about how they killed radio and now have us anesthetized in front of the flat screen, selling us products we don’t need, that we put on credit cards that charge 29%.  Sure, McMurtry’s lyrics are poignant, but there’s a hypnotic groove that hooks the listener.  It makes me want to play the song again and again.  But, I’ve moved a little off topic… here is a look back:

2000 — The Softail Deuce is introduced.  All 2000 Softail models have the Twin Cam 88B engine, a counter-balanced version of the Twin Cam 88.

2001 — The V-Rod is introduced for the 2002 model year. Inspired by the VR-1000 racing motorcycle, the V-Rod is H-D’s first motorcycle to combine fuel injection, overhead cams and liquid cooling.  It delivered 115 horsepower.

2002 — The all-new Buell Firebolt is launched.

2003 — Buell launches the Lightning XB9S.  More than 250,000 people come to Milwaukee for the final stop of the Open Road Tour and the H-D 100th Anniversary Celebration.

2004 – The Sportster family models receive rubber engine mounting, a new frame, and a wider rear tire. The Road King Custom is introduced with a low rear suspension and wide handlebars it brings a beach cruiser look to a classic motorcycle.

2005 — The XL 883L Sportster 883 Low brings a lowered seating position to the Sportster line.  H-D and the Muscular Dystrophy Association (MDA) mark the 25th anniversary of their partnership.

2006 — The first of the 6-speed transmissions are made available on 2006 model year Dyna motorcycles. The 2006 model year includes the all-new Street Glide, a lower profile touring motorcycle. H-D appoints Beijing Feng Huo Lun (FHL) as the first authorized H-D dealer on mainland China.

2007 — Union rejected a proposed new collective bargaining agreement for employees and went on a strike at its final assembly operations in York, Pa.  H-D launch the Sportster XL 1200N Nightster. The H-D Foundation and the Disabled American Veterans (DAV) Mobile Service Offices (MSOs) launched the Harley’s Heroes Tour.  H-D celebrated 100 years of Police Motorcycle Sales.

2008 – H-D teamed up with the Ultimate Fighting Championship (UFC).  H-D holds its 105th Anniversary Celebration and the H.O.G. 25th Anniversary.  H.O.G. launched the Million Mile Monday ride. A H-D Softail stars in the new Indiana Jones movie. H-D acquires MV Agusta Group expanding presence in Europe.  The H-D museum opens to the public. H-D introduces the 2009 Tri Glide Ultra Classic motorcycle (3-wheel).  For 2009 touring models H-D introduces the all-new frame, swingarm, engine mounting system, wheels and tires and new chassis.   The H-D XR1200 is launched in the U.S.

2009 — CEO James Ziemer retires and is replaced by Keith Wandell. H-D reports decreased revenue, net income and diluted earnings per share and provides a new strategy and restructuring update. Buell named Official Pace and Safety Bikes of AMA Pro Road Racing. H.O.G. set a 5 Million Mile Monday goal, but falls just short of the goal. H-D launched the Ride Free II Guarantee program.  H-D rolls out nine new motorcycle models for 2010 across six model platforms. H-D formally enters the motorcycle market in India. H-D unveils long-term business strategy after poor Q3 revenue and announced the discontinue of its Buell product line and plans to divest its MV Agusta unit.  Erik Buell leaves the company to establish Erik Buell Racing.  H-D announced it will keep its motorcycle operations in York, Pa., that includes a restructuring plan which eliminates almost 50% of the workforce.

H-D Revenue: 2000 = $2.24 Billion (2000 was the 15th consecutive year of record revenue); **2009 = $4.08 Billion (back-to-back yearly declines — in ’06 revenue = $4.55B)

H-D U.S. & Canada Market Share (651+cc): 2000 = 45.9%; **2009 = 45%

H-D Gender:  2000 = Male (90%); Female (10%); **2009 = Male (89%); Female (11%)

H-D Median Age: 2000 = 44.2; **2009 = 48.1

H.O.G. Membership: 2000 = 582,400; **2009 = 1.3 Million

Unit Shipments: 2000 = 204,592; **2009 = 225,000

(** indicates estimates as final results not tabulated/reported and subject to change)

From record revenue and income to record downsizing and decline.  I didn’t mean to get you reaching for the Prozac, but it’s not all that bad.  Just like ice racing in winter months can be slippery with the occasional crash, H-D will continue to modify, adapt and adjust to come out on top.

Photo courtesy of Rutger Pauw;  Statistical Sources: H-D; H-D Investor; Google Finance and various analyst estimates.

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HD_MCThis is the question I’ve been pondering over after having an opportunity to spend a couple of hours with “No Barriers” founder Neal Petersen.

To save you some time the short version of Neal’s story is — He is a black South African who grew up poor and disabled during apartheid yet achieved his dream of racing/sailing solo around the world.  He now does motivational speaking and is involved in peace talks in multiple countries across the world.  During Mr. Petersen’s speech he routinely ask the audience; “Does what I do on a daily basis at work have a positive impact?”

This resonated with me and while I personally reflect on this I can’t help, but ask the question of Harley-Davidson’s CEO, Keith Wandell.

Today, Harley-Davidson reported out the Q3’09 quarterly results and announced a massive 21.3% decline in revenue for the 3rd quarter and an 84.1% decline in net income from a year ago quarter.  Apparel and general merchandise represents 23% of H-D revenue to date.  Then the news got interesting.  They announced that 14 dealers have closed year-to-date and set the expectation that 15-30 additional dealers will close in the next 6 months as the company reduces inventories to match sales.  They discussed the HDFS bad loan/delinquencies and financial progress.  The Harley-Davidson brand value (note: its moved down from 43 to 71 position) and the more important announcement was to shutter the Buell product line as well as divest its MV Agusta unit.  A busy day of spin as Mr. Wandell went on to discuss the going forward 4-piller strategy of: growth; continuous improvement; leadership development and sustainability.

On the Buell front I can’t say that I’m not surprised because it was reported a couple weeks ago in the Milwaukee Journal-Sentinel that Erik Buell didn’t renew his employment contract with the motor company and there were a number of rumors circulating as to what that might mean.  I want to personally thank Erick Buell and the Buell employees.  I believe what they did on a daily basis at work had a positive impact.  They should be proud of what they accomplished.  They are an American innovation poster-child and represent what passionate and inspired people can do through engineering and manufacturing some of the best-handling bikes in the world.  But, in biker speak… it’s WTF?  An American designed and manufactured motorcycle that out performed Asian manufactures all year in the AMA Pro Roadracing circuit and Mr. Wandell dumps it?  This is forward thinking?  2009 marked the first year H-D had a non-motorcycle enthusiast running the company and I have to ask if he really got out there to see what all that (Harley) race stuff was about and how it enhanced the brand?

Since I was rather harsh in a blog post last year about the $108 million MV Agusta deal and describing it as a train wreck, I agree with the decision to abandon it.  Sure this happened under ex-CEO James Ziemer shift who retired shortly after cutting the deal, but the board members clearly approved Mr. Ziemer’s compensation package who walked away with only $5.6M compensation, up 26.5% from 2007.   And in part the compensation was based on the boards admiration of the MV Agusta deal, right?  The board members should be put on notice as there are now another 180 employees set to hit unemployment due to the management of the company and we all know they had line of sight just 12 months ago to the economic issues.

The shocker in the financial call was the statement of investing more in emerging markets up to and including local market design and manufacturing!  Is this a precursor to moving manufacturing off-shore?  A lot of talk about taking Hogs to China and India, but nothing about how well the strategy has worked to woo women, African-Americans and Latinos.  The value of the brand was weaved into the growth strategy, but nothing about why it dropped 43% in 2009.  They’ve talked for two quarters about reducing inventory yet made little progress.  And loans made to iffy borrowers aren’t just taking down housing.

The push by H-D corporate for dealers to build increasingly larger and high-end-glamorous retail outlets meant more dealer debt and subsequent failures.   Chapter 11’s continue to stack up across the northwest.  Three locations of Shumate H-D with one in Kennewick (owner hub), another in Spokane and a satellite location in Lewiston, ID.  I blogged earlier this week about Dave Tuomisto’s, $16M and 6-acre mega-expansion at Timpanogo, UT which went under.  It’s not clear when or if any of these dealers will reemerge and the real downside will be H.O.G. groups folding, lengthy drives for service or to hang and drop in which overall effects customer service and having a healthy Harley community.

Harley is in major trouble.  The spin, baby, spin from Mr. Wandell is not good enough, my friend.

Photo courtesy of H-D.  Financial call transcript courtesy of SeekingAlpha.  Disclosure: I have no investment in HDI

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2010 Buell Blast

2010 Buell Blast

The public has been manipulated so many times, that when something extraordinary happens and becomes instantly viral in our networked world, many people cross their arms and say – “not real!”

They say the public is cynical.  Who’d blame them?  What with the Borat and Eminem “butt kiss” at the MTV awards show — it was all for ratings.  It seems everything is about seeing misfits behave in the midst of other misfits.  Once upon a time we respected honesty.  To truly make it these days, you’ve got to be honest, you’ve got to have the goods and talent too otherwise you’re just another “scammer” trying to make a buck.

Speaking of honesty, Eric Buell (Buell Motorcycle Co.) is not some faux character in a vague reality TV script.  He’s the real deal and shoots straight about the Buell Blast.  Yes, it’s a piece of crap “sport bike”.  Not his words.  Sure, Eric comes off with ‘tude as if completely independent, not beholden to the parent company (Harley-Davidson), but he does what everyone would like to do — trash compact/compress that little nerdy Buell Blast into oblivion!

The 2010 Buell Blast introduction video is HERE.

The video works because it’s a “first”. Well actually I am pretty sure that it isn’t – but that’s not important as long as it’s perceived as a novel idea.  Kudo’s to the marketing dudes.  The video contains a bit of a mystery. Something that wants to be solved. Curiosity sets in and you wonder if this is a hoax or a real video.  There’s always both the message (the actual video) and the meta-discussions of the message (is this real/stupid/too much?) to drive people to share and view your content. As the buzz grows, people will join only to see what others are talking about – this is when the crowd mentality kicks in.

It’s a battle over clever stuff and this was good product marketing on the failure to convert the non-riding public into Buell owners!

UPDATE:  September 17, 2009 — I neglected to mention that back in March Buell retained Crispin Porter + Bogusky as its new advertising agency of record. The advertising account was previously handled by Laughlin Constable.  This was some good work Alex (Bogusky).   Congrats!

Photo courtesy of Buell.

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