The Harley-Davidson “Green Value Proposition”

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

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

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

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

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

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

Where do I sign up?

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

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

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

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

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

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

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

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

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

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

Photo courtesy of Harley-Davidson

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China’s 30-Years Of Forever War

F-16A Fighting Falcon, F-15C Eagle, and F-15E Strike Eagle fighter aircraft fly over burning oil field sites in Kuwait during Operation Desert Storm.

It never happened!

In contrast, there are motorcyclists who routinely read this blog that fought in Operation Desert Shield, which became Operation Desert Storm and morphed into a number of other names.

I recall one of the biggest tank battles since World War II, was the Battle of 73 Easting, and broke the back of Saddam Hussein’s armored divisions and sealed Iraq’s defeat. Unfortunately that battle marked not the end of the Gulf War, but the beginning of several “forever-wars” that plague the U.S. to this day.

The scheme of maneuver for Operation Desert Storm

The last time China really attempted to wage a major war was against Vietnam back in February 1979. China was the aggressor, but it’s propaganda machine attached an unconvincing name to the conflict — the “Self-Defensive Counterattack Against Vietnam.” Hundreds of thousands of Chinese troops crossed Vietnam’s northern border and invaded the country, to punish them for invading Kampuchea (today’s Cambodia), to remove the Khmer Rouge.

The Chinese invasion had their asses handed to them! Estimates run as high as 28,000 Chinese dead and 43,000 wounded, while the number of Vietnamese dead were estimated at under 10,000. The Vietnamese were tougher, had battle experience, better equipment, knew how to fight asymmetrical warfare against a larger force, and flat out beat the Chinese. After a month (March 1979), China suddenly declared its “lesson” to Vietnam was finished and began to withdraw completely on March 16, 1979.

Report: The Elements of the China Challenge

40-years later, both governments have seriously committed to suppressing memories of that war. Beijing’s unrelenting efforts to control information means that China claims the war as “a victory,” with all missions completed. That viewpoint is not supported by the evidence or any analysis.

Sound familiar? Do you recall China’s indifference to other nations’ well-being as they unleashed the “born in Wuhan,” COVID-19 global pandemic?

You are likely saying to yourself… “Don’t victimize the bats, Mac!”

But, what about the oppression of ethnic and religious minorities (Uyghurs, Tibetans, Mongolians, Christians); fighting Indian soldiers in Eastern Ladakh along the Line of Actual Control (LAC); Chinese fighters/bombers buzzing Taiwan’s territorial airspace; or Hong Kong voters’ voices meaningless with a national security law? How about the forced technology transfers, cyberattacks, and a whole-of-nation approach to economic and industrial espionage. Then there is the intensified internal repression with mass surveillance and control over the country by expanding the systematic use of indoctrination, censorship, disinformation, high-tech surveillance, forced disappearances, “re-education” camps, compulsory labor, forced sterilization, involuntary birth control, and other heinous abuses. And, I haven’t even started on the control over the world’s international supply chains.

They don’t really seem to care unless it relates to control of the population and re-configuration of world affairs through economic power to achieve global preeminence.

Meanwhile, U.S. history reveals that the Operation Desert Storm battle marked not the end of the Gulf War but the beginning of several “forever-wars.” The U.S. established Operation Provide Comfort in April 1991 (renamed Operation Northern Watch in 1997). A no-fly zone was established in 1992 in the south of Iraq, known as Operation Southern Watch. The U.S. invaded Afghanistan in the wake of the September 2001 terrorist attacks. There was the start of Operation Iraqi Freedom in March 2003. There was Operation Neptune Spear to kill “Geronimo.” Then President Barack Obama expanded the battlefield to Syria by 2015.

The fighting we have done in the region, nonstop since the first troops were deployed in Kuwait in August 1990, should now be painfully obvious, the net result of all of the efforts is the same: We — not the ever aggressive economic power hungry CCP  — are always fighting wars, which are perpetually costly. Thirty years of unending U.S. war has had profound costs on our country — with questionable strategic benefit.

Low-ball estimates suggest Washington has wasted a staggering $6T (yes, trillion $) on these wars vs. funding badly needed infrastructure at home. More sadly is the military personnel cost of thousands killed, tens of thousands wounded, and hundreds of thousands with post-traumatic stress and traumatic brain injuries.

With any metric you want to apply, these “forever-wars” and nation-building have cost America an astronomical amount.

I understand that the United States must champion the principles of freedom — but the United States Government is accountable to the American people.

After 30-years, we’ve done our part and it is time to acknowledge reality, immediately withdraw troops and end it.

Images courtesy of USAF and Wikipedia commons.

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