Harley-Davidson Layoff Wave Accelerates

Some numbers to start your day and it’s not pretty.

The coronavirus pandemic, social unrest, and a scarred economy has created a tipping sentiment toward many jobs NOT coming back.

According to a Harley-Davidson press release, “The ReWire” strategy will now eliminate 700 positions globally of which 500 of the layoffs will occur this year. It will result in a $50 million restructuring charge in 2020, including $42 million in the second quarter. According to new Chief Executive Jochen Zeitz, getting the company on “a path to winning” also includes CFO John Olin leaving the company effective immediately.

Flashback – remember this abrupt CFO departure in 2009?

Some news outlets have reported Mr. Olin’s departure as a “retirement,” but color me skeptical since most retirements have a longer celebratory departure than immediately exit through the door. The current VP Treasurer, Darrell Thomas assumed duties as interim CFO until a successor is appointed.

I’m not sure why, but the CEO press release declaration of “a path to winning” reminded me of that time Charlie Sheen was winning HERE … maybe I just needed some humor?!

Harley-Davidson is not alone on the layoffs.  Below are just a few of the latest examples:

• Macy’s announced it would lay off about 3,900 and shutter stores
• AT&T will lay off 3,400 and shut down more than 250 stores.
• Hilton Hotels announced it would lay off 2,100 corporate employees amounting to 22% of its corporate workforce.
• Chevron announced it will cut 10% – 15% of its 45,000 global workforce.
• Boeing announced it would lay off nearly 7,000 employees.
• Uber announced it is cutting 3,700 jobs (14% of its workforce), then a month later announced they will cut 3,000 additional jobs and close 45 offices.
• Airbnb announced it is laying off about 25% of its workforce, or 1,900 employees.
• Virgin Atlantic (now part of Alaska Airlines) announced it would cut 3,150 jobs.
• Hertz plans to lay off 10,000 employees.
• Under Armour announced that it will lay off about 6,700 employees.
• United Airlines will send layoff warnings to 36,000 employees — nearly half its U.S. staff.
• ZipRecruiter laid off 443 employees.
• GE announced it will be reducing approximately 10% of its aviation unit’s workforce, amounting to about 2,500 employees.
• Cirque du Soleil announced it is laying off 95% of its 4,679 person staff.

You get the point.  Sadly, a lot of employees are expected to exit various organizations. In fact, since February, about 4.6 million Americans have stopped actively looking for work, and another 2.2 million are unemployed NOT on layoff.

And, then there are those companies that have taken an extremely tacky and classless route of laying off employees via Zoom.  Looking at you Bird, the electric scooter company, who laid off 30% of its staff via a 2-minute Zoom call.

Talk about a Nobel Prize-winning way to “Put a Bird on It” — From the “Portlandia” TV show.

Photos courtesy of Harley-Davidson, Great Art and IMDb.

All Rights Reserved (C) Northwest Harley Blog

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The Charlie Sheen Lesson For Harley-Davidson

The first stop in Detroit of Sheen’s “My Violent Torpedo of Truth/Defeat is Not an Option“ variety ‘warlock’ show occurred this past Saturday night.  According to reports thunderous applause at the start, but in about an hour “fans” walked out wanting their money refunded.  Ultimately the conclusion of the first show being — let’s just call it un-winning?

Charlie Sheen made the mistake of thinking the audience was on his side.  That’s what happens when you descend from your showbiz perch, step out of the television and enter the realm of the common man, you find out we’re all equal.  And that if you don’t give a great presentation, we’ll tear you down from your peak.  Don’t think that just because people paid to see you, they’re on your side.  You’re no longer at the mercy of the critics, you’re at the mercy of the public.  A $100 ticket member of the audience is no longer passive, they’ll provide an opinion not only through catcalls and boos, but will tweet and blog as those who care will follow along from home.

For Sheen to play to fewer people over the next 19 cites with even less attention would not only be a PR disaster, but devastating to his pride so, one can only assume there will be some show cancellations.  But, the big story of the past six months is that the people rule.  It happened in the Middle East, it’s happening here.  How long do you expect people to overwork just to make ends meet while an “undeserving” upper class gets to live in an alternative universe?  According to Wikipedia, a humble person is “someone who does not think that he or she is better or more important than others.”

Is there a H-D motor company lesson here?

If you’re one of the privileged, don’t intersect with the public.  Fly private, live behind a gate or a guard, avoid publicity.  Because the little people are there, waiting to pounce on every misstep?  Then again, what if the motorcycle world is ready for a true leader, who knows all this, who is not beholden to the public so much as cognizant of the landscape and willing to march forward into the future.

Does that describe Harley-Davidson?

Jim Collins, who has spent double digit years researching how certain companies are able to sustain superlative performance and identified a key ingredient — having a Level 5 leader — an executive in whom genuine personal humility blends with intense professional will was essential to take a company from good to great.  Transforming a good company into a great one also included getting the right people on the bus (and the wrong people off the bus).  In other (my) words, true professionals don’t equate attention with talent.  They don’t equate notoriety with a career.  They don’t equate an initial demand with longevity.  They don’t set themselves up for ridicule because the smell of a stunt stinks worldwide and people (motorcyclists) know what is good.

One of the most common causes of failure once people (or companies) achieve significant success in business is an out of balance ego.

Photo courtesy of Flickr

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Millionaires Don’t Feel Wealthy

Millionaires Don’t Feel Wealthy

According to a recent survey, 4 out of 10 millionaires don’t feel wealthy.  The point at which they do “feel it” is about $7.5M according to the Fidelity Millionaire Outlook who tracks millionaires confidence viewpoint.

And speaking of millionaires, it’s unclear if Mr. Keith Wandell (CEO, Harley-Davidson) is feeling wealthy versus feeling a bit pinched because according to the AP and papers recently filed with regulators Mr. Wandell received compensation valued at $6.4M in 2010, only up 1% from 2009 when he spent just 8-months on the job.  There were stock and option awards totaling $3.02M and a performance-based cash bonus of $2.3M which accounted for most of his compensation.

I know what you’re thinking… in this day an age of splendiferous benefits, where Milwaukee County bus drivers are making a 6-figure income along with many other working class heroes… we need to cut Mr. Wandell some slack, right?  He’s unified the company, changed whatever can be changed, clearly communicated that everybody’s got to get better at everything and today the road signs suggest a turnaround for the heavy-cruiser company.  In fact, if we go by the past year’s stock (NYSE: HOG) price it has hit a 52-week low of $21.26 and a 52-week high of $43.14 which is a home run in anyone’s portfolio!  Yet, with continued oil fears and the Japan crisis who knows if Harley will drive home better numbers.

To be fair, I’m a little guilty of treating some millionaires a bit like a piñata, but I just read a report about how half of the ‘rescued’ borrowers still default.  That’s not the millionaires issue, but when I hear they don’t “feel” wealthy it’s difficult for me to relate!  The housing market is up and then it’s down depending on which paragraph you read in the SAME article!  Where are the jobs?   Just about a month ago we were stunned and hopeful over the unrest in Tunisia and Egypt.  Then concern followed with the Libya unrest and now war preventing Qaddafi from harming civilians which has been quickly followed with what seems like a weekly double-digit hike in…doesn’t it feel like ‘we’re working just for gas now’?  And then how ’bout that whining from one of the more famous multi-millionaires:

“I’m not broke, but I was kind of counting on some of that money to get me through the summer.  Now I’ve got to like work.  But that’s alright.  Work’s good.  Work fuels the soul.” – said the ‘peaceful man with bad intentions’, Charlie Sheen.

Hey Mr. Sheen quit whining like a little butch and get a grip that your gravy train is done.  We’re all trying to get a little work and counting on some motorcycle rally money to get us through the summer.  Although we don’t all roll with a baby-sitter porn-star mistress.   Winning opportunity – Duh?!

Far be it for me to use the troubles of another to further my blog career, but Mr. Wandell doesn’t get a total pass — it was just last September when he stated that Harley-Davidson management had lost control of costs.  The key item he mentioned was employees at the Harley Menomonee Falls Plant were making an average $32 per hour in wages and with benefits added were costing the company $75 per hour.  He then made reference to General Motors – sort of a connect the dots if you can with the media — and the inability to remain profitable under the burden of its payroll, pension and benefits costs.  Many perceived this as whining and some had an “allergic reaction” to the fact that a CEO who makes more than $6M a year was whining about how out of control workers wages have become….was shall we say, less than gripping.  I’m sure if Mr. Wandell could have a “do-over” he’d try and not alienate the workers again.

And speaking of CEO bonuses, they’ve bounced back faster than a Charlie Sheen Google search.  Mr. Wandell might be thinking his $2.3M performance-based cash bonus was rather paltry when compared to: Howard Schultz (CEO, Starbucks) $3.5M; Jeffery Immelt (CEO, GE) $4M; Daniel Ustian (CEO, Navistar) $3.9M; Robert Iger (CEO, Walt Disney) $13.5M?  According to this WSJ report the median cash bonus at 50 major corporations jumped 30.5% in 2010.

A wise man once told me that there’s no “I” in ‘team, but there are two in whining…

Photo courtesy of Harvey Comics.

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Harley-Davidson Reach And Relevance

HOG Bank

Start with the “charisma and swagger” of Charlie Sheen, add a little Lady Gaga recklessness, mix it all together with the sensibility of John Mayer, and you’re well on your way to a vibrant digital marketing campaign.

Or at least that’s what Harley-Davidson’s, CMO, Mark-Hans Richer seems to believe.

Taking a page from celebrities and musicians who blazed the path before them they’ve embarked on a crowd-sourcing recipe with Victors & Spoils, a Boulder-based crowd sourcing agency who intends to deliver successful digital marketing.  It would seem that every American company on the planet is amassing a rapidly growing list of crowd sourcing digital data to give marketers an even more precise method for targeting their ad messages to specific consumers.

I know, you hate social media.  More people despise Twitter than use it.  You thought Foursquare was a church.  You like Facebook, but you fear its Big Brother qualities.

Well, you probably don’t understand that Twitter is the number one news source for news happening right now.  But if you can’t wrap your head around that, maybe you should look into SproutSocial, which allows you to track your company in social media.  And if you don’t think social media is key to any company’s future, you’re on the road to extinction.

Mr. Richer totally gets it.  H-D has a multi-generational and multicultural customer strategy with a need to get potential customers more engaged in the brand.

You do that through social media.  But, part of the problem for the motor company is its audience knows too many people, who connect with each other online.  Once consumers start talking to each other not only do they spread the word about the so-called “motorcycle lifestyle,” but they also let each other know which products are good and which ones are bad.  Suddenly, the dealers can no longer jam any old product down the motorcycle riding public’s throat.  It’s bad enough when new products leak in advance and are dead on arrival due to bad word of mouth, but even those that make it to the release date intact are not guaranteed sales.  Because by the end of the week, the target audience knows whether the product is worth owning via references from friends.

It all comes down to who you know.

But, the reason I’m writing this is because of the job market.  Unemployment.  It’s steady at 10.5% here in Oregon.  About a point above the national average and has remained there most of the past year.  Just this past week the Oregonian reported another 300 layoffs by 3 different companies closing down operations.  And if that wasn’t enough did you happen to catch Federal Reserve Chairman Ben Bernanke last night on 60 Minutes?  He painted a grim picture.  Stating that the U.S. recovery is still not self-sustaining while defended his $600B bond purchase to help keep interest rates low.  Heady stuff.

Oregon and U.S. Unemployment - Dec 2010

I hate to frighten you, but all your partying and drunken pictures are going to work against you in the job market. Inebriation is not a criterion for employment, not even at Miller Brewing.  You see you’re building your resume every day online.  And whether you can get a job or not is based on this resume and who you know.  People always complain how they can’t get a job in this industry or that industry because they aren’t connected.  Hate to tell you, but it just got worse!  No one’s going to hire anyone without a history, who can’t be recommended by someone.  The days of placing a blind ad and taking on all comers is history.  That doesn’t even work on Craigslist, and have you seen the type of jobs on that site lately?

If you want to succeed in the future, you’ve got to know people.  Who can vouch for you.  Ever get called for a reference?  You never lie if you know the caller, it’s your reputation on the line.   And now that we’re all networked through social media, there’s always someone who knows you, who if they won’t say something negative, certainly won’t say something positive.

And you thought you were just playing online?  You see we all live in a social media world.  Scary huh?!  And as if to help prove my point the CEO of Facebook, Mark Zuckerberg, was also interviewed and talked about changes coming in a redesign.  For example, instead of a single profile picture, people who visit your page will soon see a row of photos you’ve been recently tagged in.

It might be time to start making deposits in the persona-curating bank account…

Photo courtesy of Harley-Davidson, SocialSprouts and Google.

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