Posts Tagged ‘Federal Reserve’

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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:

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)

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)

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)

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)

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)

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)

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)

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)

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)

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

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)

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.

All Rights Reserved © Northwest Harley Blog

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There is an interesting story in today’s Washington Post on a financial fact where the Federal Reserve bought “paper” from Harley-Davidson – 33 separate times in 2008-09, for a total of $2.3 Billion.

This is most surprising!

Clearly the financial crisis went beyond banks.  No surprise there.  The Fed’s efforts to prop up the financial sector are well known, but it turns out that millions of dollars in emergency “aid” went to a broad spectrum of American companies and now we learn it included Harley-Davidson.

Did H-D provide information on the terms of their deal?  Did H-D provide full disclosure of the benefit received through the Fed’s program to ease the market for commercial paper (a form of short-term debt used to fund daily activities)?  Did the Fed’s lower standards for the kind of collateral allowed for H-D to participate?  I’m not aware of any statement or notification made during previous quarterly financial reports/calls, but again I’m not heads down on a daily basis into their financial reports either.

I jumped over to Harley-Davidson’s website (archive tab) to see if their corporate news archive mentioned this arrangement.  I could not find anything.  I reviewed the 2009 report/press release and again could not locate any specific reference to the Fed’s deal.

Is there an issue with this?  Not legally, but it’s hard for me to wrap my head around the “future is so bright” picture of prosperity that CEO Keith Wandell has been projecting recently.  Granted it was extraordinary times in 2008-09 when no credit was available, but this extraordinary $2.3 Billion “aid” package potentially means that H-D got off easy while at the same time they announced life altering employee restructuring activities and requested employee concessions through new labor agreements at York, Pa; Milwaukee and currently ongoing in KS.

Many will see this as a crafty move by the CEO Keith Wandell.  Clearly those lunch meetings at the White House paid off.

Still… does any of this matter?  I suppose not, but the interesting thing is that sometimes Government-related entities (the Federal Reserve is not specifically a branch of the U.S. – it is a privately held bank) will resist your repayment after you have the cash to do so. They do this so that they may continue to excerpt  influence and can apply pressure on a company’s direction.

UPDATE: December 6, 2010 – According to the Milwaukee BizJournal the Federal Reserved reported that all TAF loans (including H-D) have been repaid in full.

Photo courtesy of PiperReport.

All Rights Reserved © Northwest Harley Blog

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