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Posts Tagged ‘Dealers’

Neil Young sang the song “Long May You Run“.

“We’ve been through
Some things together”

Last August, specifically on the 8th I was returning home from a week long ride in the Canadian Rockies and spent a night in Kennewick, WA (Tri-Cities) where I stopped at the local Harley-Davidson dealer.  Nice place and the dealership is owned by Shumate Motorsports or more importantly the owners are John Michial Shumate and his wife, Jennifer Shumate.

Interestingly on this day they were having a mother of all sales.  Strangely not on motorcycles, but on EVERYTHING else.  It looked like a going out of business sale and when I ask the sales clerk what it was all about she responded with something about needing to make room for all the new products so they were unloading inventory.  Sounded fishy.

Turns out that my inner voice was correct.  Just a couple of weeks later (September 2009) the owners filed for bankruptcy.  In court documents the Tri-City couple stated they’d racked up more than $10 million of debt for Shumate Tri-City LLC, Shumate Inc. and Shumate Spokane LLC.  Their first motorcycle shop was in Kennewick.  Then in 2004 the couple took over Spokane’s sole Harley-Davidson dealership, at 6815 E. Trent Ave. They also owned stores in Walla Walla and Lewiston, ID.

Sure these dealers are just locations on a map, but they also represent what life is about, experiences as you travel across the country making new friends and I’ve been to all of them over the years traveling around the pacific northwest.

According to reports, the Shumate’s filed an adversary proceeding in October 2009, accusing the motor company and affiliate companies of violating the Washington State Consumer Protection Act and of breaching a good-faith obligation.  Specifically the Shumates stated that Harley-Davidson disrupted their ability to carry on normal dealership operations by obtaining a temporary restraining order in August prohibiting them from selling motorcycles, parts, accessories and clothing that constitute collateral to which Harley-Davidson Credit Corp. claims it’s entitled. They contend Harley-Davidson then used that temporary inability of the Shumate dealerships to operate normally as the basis for the issuance of letters announcing the manufacturer’s plans to terminate its dealer contracts and franchises with them.  This maneuvering occurred when at the same time the motor company approved a new posh and competing dealership in upscale Coeur d’Alene, ID.

I don’t have visibility into all the internal workings or choices made at Shumate Motorsports, but one can’t help but have empathy.  If you believe Harley-Davidson advertising we’re supposed to have one part “stick-it-to-the-man” and one part sympathy for H-D, after all, they are losing millions bringing us these premium-priced motorcycles and the lifestyle.  Ain’t that America, where the public is beholden to corporations who pay little tax yet demand sympathy, as their lobbyists keep the government’s hands off of them and they wine and dine luxuriously in private while walking around in public with their pockets turned out?

At any rate, the latest update is a bankruptcy judge in Spokane will next week set a date for selling Spokane’s only Harley-Davidson dealership, plus the three other stores.  The Shumate Motorsport attorney (Barry W. Davidson of Spokane – see the irony?!) stated that it was Shumate’s intent to close his Spokane and Idaho operations but they were going to try and keep his Tri-City and Walla Walla stores open.  It’s not clear they will be successful in that effort.

Long may you run…

Photo courtesy of Boston.com

Previous posts on H-D closures HERE, HERE and HERE

All Rights Reserved © Northwest Harley Blog
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movie_posterIt’s iconic.  “A man went looking for America and couldn’t find it anywhere.”

Forty years later Sony Pictures prepares to re-release (on October 13th) a newly digitized version of “Easy Rider” on Blu-ray disc and leverage movieIQ technology which allows fans to access relevant cast and crew trivia online.   At the same time, Kerr Leathers, a Salem, MA., company has an exclusive contract to produce replicas of the Captain America leather jacket which Fonda (Wyatt) wore. As one of only a couple American leather makers left,  Kerr also has the contract to produce other anniversary memorabilia, including Fonda’s vest and T-shirt, a CD of the movie songs, and commemorative posters.

The original leather jacket was designed and manufactured by Clarice Amberg of ABC Leathers in South Gate, California.  In 1971, ABC Leathers was bought out by Bates Manufacturing and later the company was renamed Bates Industries.  Currently its Bates Custom Leathers.  Bates is owned by two women, Dawn and Dana Grindle. At the time, ABC Leathers made two jackets and one set of pants for the movie.  The movie secured private financing of $440K and grossed over $19 million.  You can hear Fonda speak about the jacket HERE (.wmv file)

Kerr Leather "Captain America" Clothing

Kerr Leather "Captain America" Clothing

Millions of baby boomers who relate to the movie will undoubtedly line up to obtain one of only 3,000 Captain America jackets to be made.  All are signed by Fonda, and will retail for $459. In a brilliant coup d’état, all of the gear will be sold by Harley-Davidson dealers worldwide.  In addition, each of the dealers will receive a Fonda autographed American flag on one jacket, which will be raffled off for the dealer’s favorite charity.

And speaking of the American flag — the original, one-and-only American flag patch worn on the back of Wyatt’s motorcycle jacket, was sold in 2007 for more than $89,000 by Heritage Auction Galleries in Dallas, TX.  The flag was featured prominently throughout the movie.  Fonda kept the jacket after production wrapped, and wore it until the jacket wore out. He then saved the patch, framed it, and then decided to make some of the memorabilia available to fans.  Ironically, for a film so fervently anti-establishment, the Department of Defense pin that adorned the jacket was valued at over $15,000. 

The launch of the re-released movie on Blu-ray is set to coincide with the 26th annual Love Ride during California Bike Week (October 23 – 25).  As the population ages it’s common these days to see commemorative clothing and products hit the market.  Nostalgia sells.  The last time Kerr Leathers first produced an “Easy Rider” commemorative jacket was for the film’s 25th anniversary in 1994.

Photos courtesy of Kerr web site.

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Hamsters Logo on Fuel Tank

Hamsters Logo on Fuel Tank

In the Andes, guinea pigs have a festival devoted to them, which includes contests for the biggest, fastest and best-dressed furry friend.  A Hamster fest has yet to be founded, unless you’re thinking of the motorcycle group?!

The Hamsters’ Motorcycle Club (HMC) is an elite and somewhat secret group of motorcycle riders.  Charter members were Arlen Ness, Dave Perewitz, Donnie Smith, Ed Kerr, Jim Leahy, Barry Cooney and Steve Allington.  A who’s who of the motorcycle industry!  It began in 1978 at Daytona Bike Week.   As the story goes Jim “Jimmy” Leahy and others were in the Mystic Sea Hotel.  They were taking a nap and when they woke up no one was around.  No money, no food and peeved about being ditched Jimmy started calling them Hamsters.  He drew pictures of Hamsters on a bunch of paper plates and wrote Hamsters M/C on each of them.  Before placing them on doors he personalized the names of the charter members.  The idea was it would aggravate his posse, but instead they all laughed about it and the name stuck.  Jimmy went and had black shirts with white letters made up that said Hamsters M/C.  Later the MC was dropped and they call themselves enthusiasts.

Hamster_LogoThe rodent stuck as the mascot which graces bright yellow t-shirts.  The club is selective about new members, but it includes blue collar workers to doctors.  You don’t just join the club.  You must ride with the group 6-7 years and then you’ll receive an invitation to join. There are now 240 members with chapters as far away as Italy, England and Japan.  These days the Hamsters are about as opposite you can get from the outlaw bad guy clubs.

It takes three things to become a Hamsters member:

  1. Owning a custom bike
  2. Riding a custom bike to South Dakota’s Sturgis rally with the group, at least two years in a row
  3. Receiving an invitation to join by another member

The Hamsters have ridden to Sturgis for 25 consecutive years and never followed the same route.  The Spearfish Holiday Inn has served as the Hamsters’ headquarters for several years although approximately 20+ Hamsters purchased townhouses behind the hotel known as Hamster Hill Lane.  The annual dues are $100 and Hamsters who don’t attend at least one function each year are voted out.  Some years there are no new members allowed into the club. Some years there are as many as seven. The average is two.

The Hamsters are famous for a lot things, but two notable items I wanted to bring to your attention is the Hulett Ham-n-Jam in the land of no overpasses (Wyoming on the way to Devil’s Tower) and their generosity and major fundraising for charitable functions.  Many of the Hamsters are world-renowned motorcycle and motorcycle parts builders who donate items to be auctioned off at charity events.  The group’s generosity and ability to raise funds/donations is staggering.

I would be negligent if I didn’t also mention the high profile and weird coincidence of Bruce Rossmeyer (Daytona H-D) and Clifton “Click” Baldwin (Carolina H-D).  Both Harley-Davidson dealer owners, both on the way to the Sturgis Rally riding from dealer meetings, both members of the Hamsters Motorcycle Club/Group, both in deadly motorcycle accidents (Wyoming and Montana respectively) while passing a vehicle turning left on a two lane country highway.  Both passed away one year apart, neither were wearing helmets and both accidents were reportedly misjudgments.  It’s truly sad and a tremendous loss for the communities and families.

I’m reminded of the prophetic Marvin Gaye song “Brother, brother, brother…there’s far too many of you dying…”  Let’s hope for better days ahead…

Photo of courtesy of Hamsters.

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mfg_plantBaby boomers and Harley-Davidson motorcycles.  The combination of these two delivered a plethora of profits.

I was upgrading my Mac OS and while I waited, I read magazines.  First it was “Baggers” then “BusinessWeek.”

Skimming the BW magazine I notice an article about business book guru Jim Collins.  He wrote “Good To Great.”  Collins was brought to West Point, where he chaired a discussion amongst military men and civilians.  Had America lost its greatness, was it in decline?  The attendees were split as to America’s future, half optimistic and half pessimistic.  But what fascinated Mr. Collins was an observation from a CEO during a break.  The dude stated: “I’ve been thinking about your question in the context of my company.  We’ve had tremendous success in recent years and I worry about that.  So what I want to know is: HOW WOULD YOU KNOW?”  This question formed the basis of Collins new book, “How The Mighty Fall.”

Harley-Davidson has been quite mighty.  But they broke the first rule of Mr. Collins’ book.  Which he labels Stage 1: “Hubris Born Of Success”.  “Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place.”

Mighty_FallBingo!  Harley-Davidson and Baby Boomers.  H-D execs actually believed they were geniuses, who’d found the golden formula.  Dealers marked up everything from t-shirts to baggers.  From then on, motorcycle model after model would all sell thousands of bikes, there would be untold profits!  Rather than questioning their success (“We might have been just really lucky/we’re in the right place at the right time…”), they believed they were entitled to it.  And ultimately blamed this decline of their fortunes on the economy.

Stage 2 of Mr. Collins’ theory of corporate decline is “Undisciplined Pursuit Of More”.  Here we have H-D catering to image buyers… selling sizzle, style and fashion over function paradigm.  With spokespeople like Marisa Miller.  If TV sells motorcycles, let us find the least amount of clothing and the most telegenic performer and craft a message about lifestyle for TV/print consumption!  

Stage 3 is “Denial Of Risk and Peril.”  That’s the beginning of the end.  “Those in power start to blame external factors for setbacks rather than accept responsibility”.  It’s like the music industry saying the Internet ruined it’s business!  It’s the economy’s fault, we couldn’t get bank funding at HDFS, etc. But what’s Harley’s business?  Manufacturing premium (overpriced?) priced one-dimensional products and marketing them for sale on TV and print magazines to the ‘boomers’, the young, minorities and to women?  No difference in product just marketing messages.

Stage 4 is “Grasping For Salvation”.  “The critical question is: How does leadership respond?  By lurching for quick salvation or by getting back to the disciplines that brought about greatness in the first place?”  We’ve got Harley-Davidson heavily invested in MV Augusta and embedding advertising space in video games (UFC).  A non-motorcycle riding enthusiast at the helm.  Is that their core mission?  And we’ve got dealers exiting the business.  All the while the motor company works to protect a business model of an overexposed limited product to reap giant rewards.  Dealers are up in arms that corporate got rich and the locals did not…  But once again, what was each entity’s core mission?  Dealers were made to expose.  The motor company were made to..?  MAKE!  That’s what manufacturing companies do.  Making motorcycles is their core competency.  It’s their defining MISSION!  But that got lost in the shuffle of incredible profits during the nineties.  Harley started selling branding, lifestyle, sizzle, fashion and even some premium priced motorcycles!

Stage 5 is “Capitulation To Irrelevance Or Death”.  Some would argue that’s where the motor company is today.  “In some cases the company’s leader just sell out; in other cases the motorcycle institution atrophies into utter insignificance; and in the most extreme cases the enterprise simply dies outright.”  How long until Harley-Davidson chops up the parts and sells it for catalog value?  

What is the future?  Not the past.

“Never give in.  Be willing to kill failed business ideas, even shutter big operations you’ve been in for a long time, but never give up on the idea of building a great company.”  It’s clear.  Looking for an instant success like the old Michael Jackson days of MTV ultimately render instant irrelevance.  The company needs to be about MOTORCYCLES!  Today’s execs seem only interested in tonnage.  They could be selling anything!  They are not necessary.  Harley needs to find unique talent and nurture it.  Leverage independent blogs?  Motorcycle artistry/development isn’t finding more people to buy a plain stamped out bike, it’s a creative arc, over a period of iterations, wherein the motorcycle grows and more and more people come along for the ride.  

That’s what you need to survive…”to build an enterprise that makes such a distinctive impact on the world it touches (and does so with such superior performance) that it would leave a gaping hole – a hole that could not be easily filled by any other institution – if it ceased to exist.” Everyone knows that real motorcycle enthusiasts are the indies.  The commercial crap from the majors is about commercialism more than artistry.  Today it’s about manufacturing cookie-cutter stuff and yelling at the public to buy it, all the while bitching that the economy is failing.  This is a recipe for disaster.

Rather than whine, be the company that accepts reality, that notes change and adapts to it.  That doesn’t mean charge huge upfront fees for anybody who wants a CVO.  Or clothing attire marked up to the point that celebrities question the essence of imported fabrics.  Your average Joe consumers are your partners, they’re the ones who are going to make you money.  

If you lose your core, you’ve lost everything!

Photo courtesy of Newsweek.

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HD_StormNow more than ever, Harley executives say that customer experience is critical to how motorcycle firms compete.

They’re right: research indicates a high correlation between good customer experience and increased customer loyalty.

Unfortunately not all dealers get high marks from their customers. And that translates into lower sales, higher churn, and lost business that goes to competitors.  Does the customer experience become less important during an economic downturn? Absolutely not!!  Building loyalty and catering to the needs of customers is even more important in these very challenging times.  And HD is doing much more than paying lip service.

PiperAccording to the newly released (.pdf) 2009 Pied Piper Prospect Satisfaction Index (PSI) U.S. Motorcycle Industry Study, Ducati dealerships ranked highest.  This is one of a series of annual benchmarking studies which measure how consumers are treated when shopping for a new car, motorcycle, RV or boat. The independent study sent 2,100 hired anonymous “mystery shoppers” into motorcycle dealerships nationwide, then used the patent-pending PSI process to compile the results into accurate measurement of how each brand’s dealerships treat motorcycle shoppers.

Following Ducati was Harley-Davidson—whose dealers were ranked first in 2007 and 2008—then BMW, Victory, Buell and MV Augusta all above the industry average. Overall motorcycle industry performance improved from 2008 to 2009, with eleven of the fifteen major motorcycle brands achieving higher PSI scores.  Harley-Davidson dealers performed substantially above the motorcycle industry average, but 2009 marked the first time in three years that dealers from another motorcycle brand were ranked higher.

A powerful brand needs to convey a long list of qualities; often, a brand may find itself stuck trying to represent too many — even conflicting — things. It seems that Harley is faced with this very situation. Social media interaction with the company will continue to grow in this downturn due in part to its ability to reduce the cost of customer acquisition, service, and transactions. Motorcycle consumers have many places to discover products. In fact, consumption of digital media and the Internet is shifting to cell phones and other portable devices. This proliferation adds complexity to an already highly competitive marketplace, and changing demographics. Keeping the customer central in retailers’ strategies will be difficult given the short attention span.

They have yet to ask for my viewpoint, but I believe Harley-Davidson can improve business results by developing deeper connections with us consumers and independent bloggers. It begins with the recognition that blogs are a new motorcycle “voice” and that the customer experience is a wide-range set of activities, not just an isolated event.  It’s a multiyear customer experience with the end result for any organization dependent on how effectively it navigates through multiple stages of the customer experience maturity.

Congrats to Ducati and the HD dealers!

Photo courtesy of PSI and Forester.

All Rights Reserved © Northwest Harley Blog

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H-DNet Web Site

H-DNet Web Site

Working together to improve their joint bottom lines IBM and Harley teamed up for a new television ad promoting the way IBM’s portal technology (H-Dnet) helps the motor company advance its brand identity online.

The four-minute ad was filmed on location at Milwaukee HQ, in Daytona Beach, and at Hal’s and Wildfire dealerships.  It’s a testimonial-type ad shifting from one speaker to the next and again talks “lifestyle” (Harley heritage) more so than products and how they’re using IBM technology to reach new riders.

See the 4 min video on YouTube HERE.  I watched the ad and think it will get favorable responses from the public at large.

H-DNet photo courtesy Harley-Davidson web site.

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