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Posts Tagged ‘Great Recession’

2014 Electra Glide Ultra Limited

2014 Electra Glide Ultra Limited

“New? New is easy. Right is hard.” – Craig Federighi, Apple Sr. VP of Software Engineering.

Fresh back from the 110th  Anniversary celebration, where I spent some time on the factory floor, trying to get some spy photos and probing a number of the workers to talk about what’s behind that so-called RUSHMORE name.  Was it real or another marketing slogan by “Mr. Pontiac” himself… Mark-Hans Richer?

Cut away - 103 cu.in. Liquid-cooled Cylinder Heads

Cut away – 103 cu.in. Liquid-cooled Cylinder Heads and Radiator Fan

It turns out that Project Rushmore is a nod to the famous monument that also happens to be near the mother of all motorcycle rallies, Sturgis.

Basically it’s an overarching theme for Harley-Davidson’s internal quest to build a better motorcycle. And while the motor company always stated they took customer feedback and tried to make improvements, even the most casual observer could see that Harley-Davidson’s pace of innovation has been off.  Compounding the dribbles of innovation are two motorcycle trends that have been working against the motor company; the continuing rise of competition, most notably Indian/Victory, and the fall of prices that consumers are willing to pay for a premium motorcycle.

When the “great recession” hit, Harley was arrogant complacent with those easy customer conquests/sales that were financed by home equity and they missed how customers views were changing on premium motorcycles.  It was from this business duress that Harley-Davidson reworked internal processes and procedures while at the same time being forced to become a leaner organization that could work more efficiently at engineering and developing motorcycles.

CAUTION: Blogger about to enter the H-D factory floor...

CAUTION: Blogger about to enter the H-D factory floor…

Layoffs, renegotiated union contracts, temp labor, threats to shut down manufacturing sites, no more music on the factory floor, etc.,… the bad news seemed endless coming from the Milwaukee HQ.

But, the 110 year old company moved forward and internally the Project RUSHMORE name became a rallying cry and served two product goals;  quicker development time (rush) and deeper features (more).   After analyzing and reviewing  successful product development organizations across numerous industries, Harley-Davidson re-worked their engineering, marketing, styling, manufacturing, and supply chain management strategy, and successfully reduced their product development timeline from 5+ years down to just over 3 years.

Clearly the H-D executives, at best, passed off some illusory innovation prior to the 2014 model year!

However, today Project RUSHMORE is real and the results are tangible for motorcycle enthusiasts.  It’s focused on four key areas — Control, Feel, Style, and Infotainment.  The 2014 touring models received significant refinements to shortcomings that the owners have lamented about for years.  The tangible results are that H-D has encapsulated over 100 new features and incorporated over 2,400 new part numbers.  From more aerodynamic fairings and easier-to-use saddlebags to the availability of two Twin-Cooled engines that incorporate precision liquid-cooled cylinder heads.  

After seeing, sitting on and riding the new 2014 touring models it’s easy to state they have a lot to offer and props to H-D for rolling out tangible enhancements beyond the typical new paint scheme.

Photos courtesy of H-D.  Engine cut-away photo taken by author on Milwaukee factory tour.

All Rights Reserved © Northwest Harley Blog

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Indian TankCoincidence? 

On Friday, August 9th, three days after the Indian launch, the Harley-Davidson Chief Financial Officer, John Olin sold 11,104 shares of HOG stock.  The stock was sold at an average price of $59.00, for a total transaction of $655,136.00. Following the transaction, the CFO now directly owns 12,702 shares in the company. The sale was disclosed in a filing with the Securities & Exchange Commission, at this link.

Just a couple of days later Harley-Davidson CEO, Keith Wandell sold 77,102 shares of the stock in a transaction dated Tuesday, August 13th. The shares were sold at an average price of $58.82, for a total transaction of $4,535,139.64. Following the sale, Mr. Wandell now directly owns 70,545 shares in the company.  Those stock options must be working out for him as he now owns three motorcycles; a Street Glide CVO 2011; Road King Classic; and Dyna Wide Glide. 

Well-heeled Riders

Well-heeled Riders

As is often the situation with an executive selling  stock it was likely in the pipeline for weeks prior to the actual sale.

But, after the Great Recession began, the lingering impact of the worst downturn in a half-century continues to deplete the standard of living on the middle-class American household.  Let’s face it, the big factor in the market for anything expensive nowadays is that the only people who have disposable income are the super-rich… and THEY have more of it than anyone has ever had in all of human history.

Sure it’s become trite to slam the rich and I’m trying not to be repetitive.

But, it’s not about being ostentatious:  the super-rich don’t care about impressing the rest of us, because they never see us. They glide from the gated community to the private jet to the island vacation home without encountering any “downscalers.”  They mix exclusively with the other super-rich, and those are the only people they care about impressing.

And that’s tough, because when you’ve got enough money to buy about anything that’s ever been made without a second thought, you have to realize that the guy living next door to your McMansion can buy it too.  So, you’ve just ordered a one-off custom color CVO with a turquoise ostrich-skin seat with matching hand-made gloves and boots?  He’ll give it a glance and say, “Not bad. I think I’ll get a couple for my kids to use when they’re home from prep school.”

So, if really you want to one-up your neighbors by owning something they can’t, your choices are restricted to items with a built-in limited supply, such as art works, and a U.S. Congressmen. Or in keeping with a narrower interpretation of that custom motorcycle style genre, just minimize the amount of tchotchkes on that bone stock H-D motorcycle.

Simple is the new chrome and when your well-heeled fellow riders guffaw, you just have to learn to smirk in a superior way and say, “I guess you don’t grasp the irony…”

Photos courtesy of Indian Motorcycle and Flickr.

All Rights Reserved © Northwest Harley Blog

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