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Posts Tagged ‘Buell’

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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H-D "Unrest" Paint Set

After 3+ years of running this blog I’ve learned that it can be a truly time consuming gig.  And, finding the time to blog (when it’s not your day job) or keep up the momentum is a challenge.  I often run across topics, but just don’t have the cycles to create something witty or provide fast enough response to trending information before it goes stale.  As a result I’ve re-set (read lowered) my 2011 targets on the number of quality posts per month I can hit.  Quality is always debatable … but at least I don’t have to finish the month feeling blog guilt!

I’m looking to master the art of “half-writing.”  Huh?  I may not have time to create/finish a full blown post, but will try to work up a brief summary and hit the salient points so that readers can look up the information as they wish.  Below is some half-writing:

Buell Bitterness Fades:  His name can never be placed on the motorcycles he builds, but he looks to the future… You may recall that a little over a year ago Harley-Davidson made the decision to shutter Buell.   The Buell name remains with H-D as does the intellectual property and all the original patents.  There is an exclusive interview with Erik Buell who talks about what happened and is looking to return to the volume motorcycle business and possibly to collaborate with Bombardier under the Can Am name.  Motorcyclistonline

2010 Financial Review:  Harley-Davidson is scheduled to release its fourth quarter 2010 financial results before market hours on Tuesday, January 25, 2011.  The public is invited to participate in a webcast conference call and slide presentation with Keith E. Wandell, President and CEO, and John Olin, Senior Vice President and CFO from 8:00 AM to 9:00 AM (Central Time).  It is suggested that webcast participants log on and register (HERE) at least ten minutes prior to the start time.  A replay of the slide presentation and audio webcast will be available approximately two hours after the call concludes. Register HERE.

Searchlight, Nevada:  If you’ve ever attended the Laughlin River Run motorcycle rally you’ve likely rode through this town on the way to Laughlin.  More likely you’ll remember the place for the unnatural and militaristic law enforcement of the 25MPH speed limit along with the aggressive ticketing practices during rally week.  It’s also the birthplace of Nevada Senator Harry Reid who on Friday (12.17.10) introduced the 1000 page legislation, S. 303, called the “America’s Great Outdoors Act of 2010” which was a substitute to unrelated legislation titled the “Federal Financial Assistance Management Improvement Act of 2009.”  Highly reminiscent of the controversial parliamentary tactic that anti-OHV forces used in 2009 to close 2.1 million acres of public land this was seen as yet another non-transparent land grab.  Three days later on Wednesday (22nd) and under significant public pressure Reid dropped his effort – until next year.  See: S. 303

Paris Hilton SupermartXe VIP Motorcycle Team

Top 100: Dealer News announced the Top 100 dealers for 2011 and the northwest Harley-Davidson dealers as part of the list were:  Washington – Downtown Harley-Davidson (Renton);  Montana – Beartooth Harley-Davidson (Billings).  Congrats!  None from Idaho, Oregon or Nevada.  See the full list HERE.

You’ll Sleep When You’re Dead:  Harley-Davidson launched a new Color Shop Limited Series paint set.  The paint set called Unrest, features Day of the Dead skull, tribal designs and helter-skelter lettering over a matte black background on the tank, fenders, fairing and saddlebags.  The product is limited in quantity to 200 sets and available only for one year, priced between $2,199.95 and $5,199.95. The new Unrest paint set is hand-numbered to provide an “extra level” of exclusivity.  More information HERE.

D.B. Class: Somewhat reminiscent of the man who hijacked a Boeing 727 aircraft on November 24, 1971, D.B. Cooper,  H-D made an announcement to create a new Draggin’ Bagger Class (D.B. Class) for the 2011 race season.  This new drag racing class is centered on the introduction of its Screamin’ Eagle 120R engine, a 120 cubic-inch V-Twin capable of outputting 135 HP and 137 lb-ft of torque to the rear wheel.  The new class is for 1999 and up H-D touring motorcycles equipped with the 120R engine.  The motorcycles in this class must run with an original frame, fairings, saddlebags and other bodywork. See announcement HERE.

BMW Gets SIRIUS: BMW Motorcycles announced that starting with January 2011 production, BMW will offer SIRIUS as standard equipment on new radio-equipped model year 2011 R1200 RT, K1600 GT, and K1600 GTL Touring Motorcycles.  This will include an introductory one-year subscription to the “SIRIUS Everything” package.  Pieter de Waal, Vice President, BMW Motorcycles was quoted to saying something about “… we’re providing the perfect soundtrack for the perfect ride.” See release HERE.

But Wait, There’s More:  Fairy dust heiress and fragrance line extraordinaire, Paris Hilton, has announced her own motorcycle racing team on the world motorcycle championship circuit.  The SupermartXe VIP team was unveiled in Madrid and will compete in the 125cc category.  Ms. Hilton agreed to attend at least 5 races in 2011 where she’ll likely wear the team colors (pink, white and blue).  Clearly this will bring a new level of ‘chic’ to racing!  Team riders?  Who cares!  The big question is will they be required to wear her perfume? See more info HERE.

Photo courtesy of H-D and AP/Paul White.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Photo courtesy of H-D.

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MV Agusta - F4

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

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

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

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

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

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

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

I previously blogged about H-D going Italian HERE.

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

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

Photo courtesy of MV Agusta.

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Keith Wandell Resignation Letter

The news was expected.

Harley-Davidson CEO Keith Wandell, citing the pressure of obtaining a motorcycle endorsement and regularly commuting with “cagers”, today announced he is retiring at the relative young age of 60.

It’s through my privileged relations with some of the major actors of the motorcycle industry that allow this blog to offer you an exclusive first look of the resignation letter below:

Date: April 1, 2010
To: Harley-Davidson Employees
From: Office of the President and CEO, Mr. Keith Wandell
Subject: A Letter To My Colleagues

This morning I am announcing my intention to retire by the time of our next board meeting.

It has become clear that in light of the continuing leadership doubt, and the unprecedented level of negative attention about my compensation package, the company – and each of you – has had to endure, that the best thing I can do for you, our dealer network and our shareholders is to retire.

Some of you have done an extraordinary job serving our customers despite the almost daily media distraction.  I feel strongly that the attacks about my riding experience and eight month compensation package of $6.4 million are unjustified, but unfortunately, they show no signs of abating. A simple reality check tells me that people are spending more time reading about the acrimony and not enough time buying our motorcycles from the newly reduced product line up.

What matters is not what happens to me, but it’s really about the remaining employees of Harley-Davidson, our employed customers and our shareholders. The whole is greater than the sum of any 2 parts and clearly more important than me “feeling good about where we are” as a company.   Even in the midst of the first quarterly loss in 16 years, the HDFS liquidity freeze, the India expansion, the Buell distractions, the union worker delinquencies in PA., and the MV Augusta sell-off strategy… my main regret in this short, but well paid, tenure, is that I will not be here to realize the potential of this bold strategy to return the company to a “new” normal.

I will retire when my successor is appointed. The Board has begun a high profile and expensive search for a new CEO, led by the head of the Board’s Compensation, Management Development and Succession Committee. I, of course, will do everything I can to assist in this transition. I will make sure that the company firmly “stays the course” until my successor is chosen.

Let me say that it will not be easy for me to leave. I take enormous pride in obtaining my motorcycle endorsement and I’ve met a bunch of new lunch-time riding buddies.  It’s been said that the true test of a leader is the performance of the company he leaves behind. On that score, I feel my short, but well paid legacy and public record are available for all to read.  The Board has asked me to assure you of their full support as we go through the transition and into the future.

To some of you, I offer my heartfelt thanks for the extraordinary opportunity to work with and lead you during this short tenure that I’ve been in Milwaukee. Of course I will continue to see some of you in the H-D Brewers suite and have enormous faith that the best of Harley-Davidson will be lived in the days ahead.

Sincerely,
Keith “Scooter” Wandell
President and CEO, Harley-Davidson

Happy April Fool’s! Enjoy the day even with all the faux news.

Photo is courtesy of H-D.

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Magna Motors H-D Dealer (Santo Domingo)

By now everyone has heard about Haitians suffering from the mass destruction brought on by the earthquake.   The toll on human life is hard to imagine.  Volunteers have gathered in cities around the world to help with the aid relief.  Not speaking Creole and looking for meaningful ways to help people in Haiti is a challenge — other than to open our wallets.

Hundreds of U.S. companies have rallied to donate everything from money to services and products.  For example FedEx is delivering supplies, Coca-Cola is donating bottled water and food, Lowe’s donated $1M to the Red Cross, Microsoft pledged $1.25M, Google pledged $1M, MLB  pledged a $1M, Procter & Gamble donated PUR Purifiers for access to clean water.  The list of company donations grows daily.

On the motorcycle front, Harley-Davidson announced plans it will donate 28 new Buell and Harley-Davidson motorcycles to assist with earthquake disaster relief and stabilization efforts. The motorcycles are being shipped from Milwaukee to facilities in the Dominican Republic, where the Harley-Davidson dealership Magna Motors, S.A. will facilitate direct delivery to the United Nations Stabilization Mission in Haiti.  The motorcycles will remain in Haiti as a permanent donation to the government.

I was curious and did a quick Google Maps look up on the Magna Motors H-D dealer (Santo Domingo) and learned its 196km (121 miles) from the Harley dealer to the Haitian border.  Then it’s another ~50miles to the Haiti capital.  Given truck transport issues from the border to Port-au-Prince and lack of ground transportation the motorcycle delivery will unfortunately take time.

At a local level Paradise H-D is donating $100 to MercyCorps (a Portland, OR based team of doctors and volunteers to help during crisis) for every new and pre-owned Harley motorcycle they sell during February.

There are some other ambitious projects underway to help that I want to bring your attention too.  Among them, Haiti OpenStreetMap, now the most complete digital map of Haiti’s roads, hospitals, triage centers and refugee camps currently available. Another project is the We Need, We Have Exchange, a project in partnership with the U.S. State Department to create a Craigslist-style site where nonprofits working in Haiti can post needs and requests and find donors.

Photo courtesy of the Forwood World Motorcycle Travel Blog.

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Keith Urban

Keith Urban

Whoa!  My two previous posts on the current state of the Harley-Davidson state was clearly like a sad country song in an old rundown coffee shop, yup one of those “bummer zones” so, we need a change of scenery.

Speaking of, have you been to Nashville?  If you haven’t been to the Country Music Hall of Fame and Museum you’re the worse for it.  Yeah, you may think you don’t care about boot-kickers, but you’re missing out on the history of America.  From slavery to the Dust Bowl to Elvis and the tragedy of the Williams family.  To go to the Country Music Hall of Fame and Museum is to become a fan.  And to insure that it lives on, Vince Gill proposed a “All For The Hall” event where every artist cough up one night of revenue for the Hall.

Keith Urban is one who took him up on it and at the Sommet Center (the Staples Center of Nashville), he hosted some of country music’s finest as they raised money for the Hall.   Keith and his band played one my favorites, “Who Wouldn’t Wanna Be Me“:

“I got no money in my pockets
I got a hole in my jeans
I had a job and I lost it
But it won’t get to me”

That’s the power of music.  It crowds out all the negative and replaces the bad thoughts with joy and inspiration.  And when you watch Keith Urban ride his Harley and hear him wail on his guitar, you’ll smile with a good feeling.  I don’t know about you, but after yesterday’s jaw-dropping news from H-D and the layoffs at Buell I needed some “sunshine blown up my skirt.”

Life.  It’s full of hopes and dreams.  And victories and losses.  What gets you through is your friends, family and the music.

Photo courtesy of Keith Urban.

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