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Posts Tagged ‘John A. Olin’

2013 Harley-Davidson Road Glide

2013 Harley-Davidson Road Glide

Harley-Davidson Inc. reported it’s Q4’13 financials today posting a 9.7% year-over-year rise in earnings to 34 cents per share from 31 cents in the year-ago quarter.  The year-over-year increase was due to higher revenues and lower operating expenses in the Motorcycles segment.

Revenues improved 1.7% to $1.19 billion and operating income rose 5.1% to $122 million from $116.1 million in the fourth quarter of 2012.  Net income increased 6.8% to $75.4 million from $70.6 million a year ago.

For the 2013 full year results revenues increased 5.7% to $5.9 billion from $5.58 billion in 2012 and net income increased to $734 million from $623.9 million a year ago.

Harley-Davidson shipped 46,618 motorcycles to dealers and distributors worldwide during the 4th quarter which was down 0.95% from 47,067 motorcycles in the fourth quarter of 2012.   In the U.S., shipments improved 6.3% from the year-ago quarter to 27,387 units and commands roughly 50% share of the U.S. market,

Keith Wandell, chairman, president and chief executive officer of Harley-Davidson called the year “outstanding.”

So were there any other highlights?

Well yes… John A. Olin – Chief Financial Officer and Senior Vice President stated, “As we anticipated, U.S. retail sales growth in the fourth quarter slowed from the third quarter’s growth rate, behind 2 key drivers…”   “The second was the impact of the absence of the popular Road Glide models in the 2014 model year.  When you look at Q4 of 2012, the Road Glide represented 9% of that volume, and that Road Glide customers are incredibly loyal to that motorcycle. And that’s probably the biggest impact that we had on our 2013 retail sales in the fourth quarter.”

Mr. Olin also talked about a “fatten the tail” strategy.

Huh?

I’m not 100% sure of the context, but simply put, a financial fat tail describes a rare and extreme event.  On one end of the spectrum, are products like Project RUSHMORE that encourage trade-up at a high revenue and at a very high margin, and typically are aimed at H-D’s core customer. But, Rushmore is selling extremely well with outreach customers. And in addition, the Street Glide is the #1 selling bike to women, young adults, African-American and Hispanic’s.

Suffice to say that the Road Glide was a huge part of H-D sales and it’s no longer there.  Yet, the quarter was great!  Congrats to the H-D team.

Photo courtesy of The Bike Exchange

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Halloween Motorcycle Ghosts

As Halloween approaches, I decided to ponder: What strikes fear into the hearts of Harley-Davidson executives all over the land?

To answer that question, I peeked into a crystal ball, reviewed the Christine O’Donnell ad on “witches” and met with a couple carneys on voo-doo to peer into the subconscious of the motorcycle company’s most powerful execs and see what goes bump in their night.

To be clear: Some of these nightmares clearly stretch the bounds of reality, but some have a level of plausibility. They range from trivial worries to scenarios that could bring down an entire company. Read on to find out about Harley-Davidson executives’ nightmares:

CEO Starts Shooting Black-and-White Commercials: An attempt by Keith E. Wandell (CEO) to humanize the company, explain its brand value and reverse the damage which was done by the glaring hole in his garage when he admitted after being hired in 2009 that he didn’t ride a Harley-Davidson or even have a motorcycle endorsement — he has since rushed out and bought one, placed a yellow one on display in his office, obtained a “Rode Mine to Sturgis” patch and rumors are he’s ordered a 2011 model.  The CEO as pitchman in commercials is not exactly a new concept.  Just look at Sprint who seemingly cornered the market with classy, black-and-white appearances and what it did for them.

H-D Factory Employees Ride BMW: The nightmare manufacturing scenario is this: Matthew S. Levatich (President and COO) calls an all-hands meeting and scores of manufacturing personnel show up riding BMW’s new K1600. Not only would it be a rebuke of the company’s own philosophy, but it would be another sign that H-D’s bet on union workers in WI., was at a dead-end.

H-D Restarts Side-Car Manufacturing and No One Buys Them (Again): John A. Olin (CFO) doubles down on the H-D investment as the marketing efforts were not enough to sell a sidecar-challenged public the first time around, but this time side-cars will have a renaissance comeback.  Or the company hopes so.

H-D Brand Falls Off Top 100 List: Mark-Hans Richer’s (CMO) continued branding efforts to market motorcycles that boasts history over flash results in Harley dropping from the Top 100 Global Brands.  In 2010, H-D went from #73 to #98 — a 24% drop in popularity and brand value. Finding another Malcolm Forbes or Jesse James out there who can provide their personal endorsement will help improve the motorcycle brand value and might keep it on the top 100 list?  In the mean time more advertising is in the pipeline that will lead the public to think that if you own this product you too will be cool.

Fed’s Apply GM Like Pressure On H-D To Be Green(er): Jon Flickinger, (President & COO of Buell) says that H-D being a “tree-hugger” is not the first thing that comes to mind. But, just as President Obama has told our CEO during their lunch meetings, the greenhouse standards will become tougher and H-D will need to aggressively adopt new ‘green’ codes for its factory and dealer network inorder to meet the U.S. Green Building Council’s L.E.E.D. certification.  In addition they will add a new electric motorcycle to their product line, based on the Sportster Family.  Lastly and for good noise measure the company will implement California’s, SB 435 law early — on all 2011 models — which requires all street motorcycles built after 2012 to have EPA-labeled exhausts.

Secret Motorcycle Design Found At Museum Teambuilding Scavenger Hunt: Willie G. (Chief Designer) celebrates his design team accomplishments in an elegant 1920’s style glam and glitter – “the new beginning of the motorcycle” – party with everyone’s family in attendance that was hosted by the H-D Museum.  Some H-D employees dressed in the era of 1920’s to 1930’ in their caps, knee socks and knickers to remind people what it was like during the ‘roaring’ yesteryear. The feeling was eerie and mysteriously exciting all at the same time.  The employee’s children participated in a pencil and paper design contest of which an 8th grader defined the motorcycle shape that will be used to create all future motorcycle styles.

Merger Madness: Joanne Bishmann (VP Communications) is weaving a compelling story and spinning the news how Harley-Davidson is pressured into a merger in order to save the company from further manufacturing cuts and/or collapse.  H-D sells 49% of its shares to Daewoo Corporation in exchange for a much needed influx of capital and to pay off the $6B in debt.  Hyosung Motorcycle director, Mr. Ji Jas Ryong (pronounced “jus wrong”) says “We do not expect to change anything with the famous look of the H-D product, other than the logo, in fact we consider it an honor to include it along side Hyosung premium sport bike line.”

What are your thoughts?  Are there other H-D nightmares out there?

Photo courtesy of Sony Pictures (Ghost Rider) This blog post is satire and entirely fictitious.

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