Posts Tagged ‘Picture of Prosperity’

BITW-HelmetAs I write this I’m reminded that I was flying home from Barcelona, Spain about this time last year after a long work week at an industry event and that every year in business is different.

A few years are easy, some are hard, and most are somewhere in between. Each year you face a different set of circumstances: changing economic, political, social and what’s cool in the billet industry.

We know from the Discovery Channel which scripted a mini-series project about the history of Harley-Davidson, that in the early years the company really struggled to survive. From month to month, they worked hard to keep from getting further behind and sinking further into debt.  There were the AMF years and then came the housing bubble.  Those of you who have tried or are establishing a little business of your own know that success is much harder than you envisioned it should be. Many folks think there must be “one big thing” they are missing that if discovered and remedied would turn things around and put them on the path to major prosperity.

Clearly, that isn’t the case, and over the course of a few startup years often you learn that rather than “one big thing,” there are many functions throughout the business that had to get established in good working order for the business to really succeed.

After 114 years, this still holds true for Harley-Davidson. There are no guarantees or shortcuts to success. There is only doing the hard work that needs to be done, doing it to the highest standards, and identifying the next area to establish or improve in order to build the next generation of Harley-Davidson rides and riders to control their destiny.

All of this became acute over the last week when Harley announced their Q4 and full-year 2016 financial results (HERE).

Words like “intense competition, flat market, soft sales, and earnings miss” ruled the day.

These are just words.  I’m of the viewpoint that how well any company performs is a key factor in how well they succeed compared to their competition.  Since we’re a few days before Super Bowl — a sports analogy is in order — how well a team executes ALL aspects of their game has everything to do with whether they win or lose.

Obviously taste in motorcycle brands, styles, or in paint schemes, is subjective. Some in the press have beaten down the overall market with reports that seem to indicate the riding “fad” has ended. Granted there’s been negative publicity with Polaris shutting down the Victory Motorcycle brand and overall motorcycle industry earnings not being great, but there are many very nice motorcycles being made, and WE the riding enthusiasts/public have lots of choices.

Why do I bring this up?

I’ve notice in my travels that many successful companies have a sense that they are masters of their own fate; their success is within their control. They know it’s a myriad of little things done well that add up to their success. And no matter what their size, they realize that a company always has the resources at hand to take their next step. Isn’t that really the “art” of it: to creatively employ existing resources to advance the ride, the employees and the company?

Most of us know the answer to a problem is rarely found outside the company; it usually comes from within.  I’m confident that Harley-Davidson will find the answers and simply function better as an organization.  I predict they will do a more thorough job of performing the functions a successful motorcycle company needs to and roll out compelling new products that will be industry hits.

All Rights Reserved (C) 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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