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Posts Tagged ‘Dealer Meeting’

DenverColorado.  Well known for its magnificent scenery of mountains, rivers and plains.

Harley-Davidson management determined that the Rocky Mountain region with 53 peaks above 14K feet was the perfect place to hold the Summer Dealer Meeting in the Gold Rush mining town of – Denver. Later this week (July 25th) dealers will get revved up to ride the new 2010 models and discuss next year’s sales strategies.  At the same time Denver merchants will all be smiling as they enjoy a big boost from the ~1000 H-D reps and company personnel attending the meetings who will open wallets and infuse significant $$ into the local economy.

Wait!  Wasn’t Denver the city that passed one of the most unfriendly ordinances against motorcycle noise?!  Sure enough the city leaders passed a stringent ordinance (Chapter 36 of municipal code) to keep motorcycle “noise” at or below 82 decibels.  Most non-stock Harley’s idle at about 102 decibels with aftermarket exhaust pipes!  I’m not advocating obnoxious noise, but the ordinance also requires motorcycles made after 1982 to carry an EPA compliance seal or sticker displayed on the exhaust pipes verifying that the pipes have not been modified and are in compliance with the ordinance.  Essentially it’s stock exhaust or literally pay the consequence.

Not to worry — the Denver police have gone through extensive “exhaust sound training” to enforce the new ordinance.  Sure enough, 9News.com reported that an officer will make the determination if a motorcycle is louder than what motorcycles “should sound like” based on their experience and training and will initiate a traffic stop to inspect for the EPA compliance stamp.  Good grief –  reading that made me take a moment of pause and reflect on the legal system…  I could rant on about boom boxes, helicopters flying over neighborhoods, trash/waste trucks at 4:30am, high-pitched exhaust on imports, construction noise and festival events with loud music, but won’t.  It’s common knowledge that a lot of bikers (many who are affluent business people) have voiced opposition and totally avoid Denver now…and taking their $$ with them to other biker friendly locations.

The ordinance clearly is an attempt to limit one specific group in the motorcycle community and I’m sure there may be some quieter neighborhoods as a result.  But, how ironic that Harley-Davidson would compensate a city that obviously finds motorcycles just plain intolerable.

Photo courtesy of Flickr

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shred_dollarNot to buzz kill the summer riding season, but the current recession is the longest we’ve seen in the post-war period. 

Inclusive of the current downturn, there have been 11 recessions since WWII.  Having officially started in December 2007, this month marks the 19th month of the current “slump.”

As you would expect, cut-backs in consumer spending are visible throughout the economy (see below chart) and Harley-Davidson has felt the weight of the “great recession” too.  The company released its Q2’09 results today and worldwide retail unit sales of new H-D motorcycles were down 30.1% compared to the year-ago quarter. Retail new H-D motorcycle sales in the U.S. were down 35.1% and declined 18.2% in international markets compared to last year’s Q2.  On a “positive” note the company’s earnings were $19.9M on $1.15B revenue and industry-wide retail sales of heavyweight motorcycles in the U.S. declined 48.1% for the same period indicating that H-D performed better than its competition.

In his first quarterly report to the investment community as the new President and CEO Keith Wandell stated:

“While the underlying fundamentals of the Harley-Davidson brand remain strong and our dealers’ retail motorcycle sales declined less than our competitors, it is obviously a very tough environment for us right now, given the continued weak consumer spending in the overall economy for discretionary purchases.”  Wendell went on to say: “We plan to ship fewer Harley-Davidson motorcycles worldwide this year than we anticipate dealers will sell at retail,” which is meant to protect the brand.

consumer_spendingDue to the declines in retail motorcycle sales, the Company has lowered its 2009 shipment expectations by 25-30%.  Because of the lowered shipment volume, H-D announced further headcount reductions of approximately 700 positions in the hourly production workforce and 300 positions in non-production, primarily salaried headcount, including some at HDFS. This is in addition to the previously announced reduction of ~1200 positions bringing the total reduction to approximately 2,200.  H-D started the year with 10,100 employees and of course H-D shares rise on news of the additional layoffs.

Looking forward, the company will introduce its 2010 models on July 25th at its Summer Dealer Meeting in Denver.  I wonder if it’s time again for import duties or a Motorcycle Czar?  For now let’s just hope for a great lineup of motorcycles that will create some riding buzz and motorcycle passion!

Photo and chart courtesy CEA.

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