Harley-Davidson’s Self-Inflicted Wounds

Harley-Davidson’s Self-Inflicted Wounds

Well, they certainly can’t say they were not warned. Ardent motorcyclists have been worried about the future of Harley-Davidson since about 1998 or so and have been talking and writing about it in magazines and blogs and every emerging social commentary outlet.  Now they are in a world of trouble and seem to be stumbling around blindly looking for salvation. How did this happen?

Ironically, the root of the problem is mired in their unprecedented success in the 1990s. Shortly after the Harley Board of Directors pooled all their individual personal assets and (barely) managed to purchase the company back from sports equipment giant AMF, which had been bleeding the company dry, Harleys became the “in” thing.  By the mid-1990s Harleys had a classic supply and demand gold mine. People paid over list price, sometimes a lot over, simply to be the next in line.  When your bike came in you could purchase it or not, and the color it was became the color you wanted, because that was what you got.  Salesmen did not really sell, but spent their time writing up orders and adding as many extra doo-dads as the customer wanted. Sales people made money, the dealers (who had hung in during the awful years) got rich, and Harley went from success to success as prices were raised to keep the buyer’s lust at a sustainable boil.

When I first went to work at a Harley (and many other brands) dealer in 2000, I was amazed to hear Harley riders bragging to each other about how much they had spent.   The more the better. I had never heard of such a thing. One of the best mechanics spent almost all his time bolting on chrome accessories to new bikes – sometimes to the tune of $5,000 worth – in the year 2000.

Even then you could see the storm clouds coming.  The first time I rode an Ultra Classic I was appalled that such a crude device could be sold as a new motorcycle, especially at such an exorbitant price. I rode one in a Seafair parade and literally gave myself a painful burn on the inside of my right leg from the exhaust. True, Ultra Classics as not designed to be ridden at 5mph in 85-degree heat, but really, it was ridiculous.

A year or two later I assisted some high school marketing students with a project. They had sent a survey to 16-25-year-old people all over the USA asking them what came to mind when the heard the words “Harley-Davidson.”  The response ratio was impressive and the results crystal clear.  Only two responses totally dominated the results. One was ‘”my grandparents” and the other was “thugs and criminals.” All the other responses, added together, were statistically irrelevant.  The school district set up a video conference at the admin center for the students and the Harley marketing people in Milwaukee.  At the time, the technology was cutting edge.  I thought then, as I had many times before, that it is woefully predictable that the finest technology in the school district is reserved for the top administrators – and not available to students or teachers unless it is a special occasion.

In any case, the students made a fine presentation of their work – the methodology, the assessment of the data, and the conclusions.  Clearly this was a dire situation.  Grandparents have a regrettable and well-known tendency to ride off to the next plane of existence, and how many new bikes would they purchase before then?  How sustainable is a legitimate business with a demographic of criminals?  The Harley marketing mavens did not actually yawn, but it was close.  I remember the statement “That does not agree with what we are seeing here.”  One student rose to her feet and with perfect poise and a polite tone, absolutely gave them what for and predicted the future for them if they chose to ignore the obvious. Which of course, they did. Her words were prescient.

A few years later Harley tried out a new engine and style of bike in the V-Rod.  Still a V-twin, but with such modern accoutrements as water cooling and… horsepower. Rumored to have been designed with (a lot of) help from Porsche, the engine was a gem, albeit heavy.  The first time I rode a V-Rod, which had forward controls, I dragged my heel in the first left hand corner, and I knew there was a problem.  The engine, however, was a treat, especially if you used elevated rpms. Most of the customers never did. It was sort of like a traditional Harley V-twin had burbled off to college and earned a PhD in mechanical engineering’   The next step was to make the “Roadster” if I remember correctly, with the pegs moved back and the bars lowered.  This had real potential, but the price was far too high and almost all Harley dealers and their sales people had little interest in sport bikes and did not try very hard to promote any of the V-Rod models.

And there is the saga of Buell. Eric Buell was an engineer who wanted to go road racing with an American engine. His early specials had potentials, and then came production sport bikes powered by modified Sportster 1200 engines.  With some success, Harley bought out Eric and his acumen and brought Buell into the corporate garage.  What he needed was a “real” engine, and he never got it.  The Buells were fine bikes (I rode a Buell sport tourer for almost a year) but always hampered by that paint shaker of an antique engine.  Buell never made a profit in 20 years of trying and eventually was tossed into the corporate trash can. If they had spent some money on an engine…

In 2008 or so Harley tried a new tack – the Ulysses adventure bike. I was tasked with riding the new demo to a sport bike northwest rally and quite enjoyed it.  A bit tall, but lots of suspension travel.  Again, hampered by the engine.  I led a group of about a dozen sport bikes down the twisty and badly rutted road from Randall south and marveled at the suspension compliance. At times I had both wheels off the ground, and each time I spared a thought for the riders behind me on sport bikes as they repeatedly rammed parts of your body that are tender into the backs of their fuel tanks. Toward the end I scraped the toes of my right boot in a hairpin, and that was alarming, as the foot peg is a long way off the ground.  I explained this away in my head, as I felt I always cornered harder to the right. The next corner was a left, and I did it again, so I chose to slow down. The Ulysses had about 45 horsepower and the bikes behind me all had at least double that, but the road was so rough nobody could pass me.  Again, alas, neither Harley or the dealers understood the market the bike was aiming for and the bike eventually tottered off to oblivion.

And now what?  Harley sales are falling, and Trump the Bully’s nutso trade policies have encouraged them to seek manufacturing facilities in other countries.  This has been done previously (by Triumph and others), but nobody else has been flogging the all-American horse for so long.  Recently they have been trotting out some electric bike concepts, and have just announced a new adventure bike, which to my eyes is a spectacularly ugly machine.  Many noticed that the promo shots have the bikes photoshopped into an off-road location, which does not amp up confidence.

Another problem is the revived and popular American flat track racing series.  Harley has dominated dirt flat track racing for decades, but they are now getting well and truly stomped on by Indian.  V-twin engines have always done well on dirt ovals, but Indian’s new technology V-twin is handing Harley their butt on a platter.  Not good, and the timing could not be worse.

The real problem, to my mind, is that both the parent company and the dealers are used to large and heavy cruiser and touring models, powered by large and air-cooled, or mostly air-cooled, engines.  They certainly have the engineering prowess to create truly modern motorcycles, but I see no signs that the company or the dealers have any interest in the types of riders and riding that are now leading the way.

Could there be a way forward?  I think so.  Triumph came out with a new Bonneville a few years ago deliberately styled to look like a late 1960’s model.  It has all the current norms, but they are all hidden.  ABS brakes, heated grips, fuel injection, traction modes, etc., and a radiator for the water-cooled cylinder heads that visually disappears between the frame down tubes.  They have been flying out of the dealerships for a few years now, and there are now so many models with the same basic design brief that I cannot name them all.

Harley COULD create cruisers with a similar design brief that would resemble the good old days, and I think would sell well, but I am not sure the company executive culture can adapt to the need.

In an odd way it reminds me of my current situation.  Going through a divorce that you did not see coming for 46 years means that a lot of what you “knew” to be true for decades is no longer true, and perhaps has not been true for some time.  Most people, and there are more of them than you would expect, seem to deal with this on one of two ways. The first is to stay true to yourself and keep going ahead as the person others know you to be, even though your core family support has been yanked away.  The second way is to seek radical change in how you dress and how you relate to others, often embarking on a fruitless quest for love and affection in areas previously foreign to you.  I have been fortunate to receive excellent advice from close friends who have endured similar agonies, and the first method, which they all urged, is serving me well.

For Harley, salvation lies in sticking to the types of motorcycles they do well, but committing to the new dictates of less weight, (a lot less), fuel injection, water cooling, and electronic technology galore, in a package that resembles the Harleys of yore.  Chasing technologies they do not actually like (electronic bikes) and markets they do not understand (adventure and sport bikes) will not work.

I hope Harley gets sound advice equal to what has been offered to me, but I am not sure they will take it.

And that is sad.

Ride safe, ride fast, and ride often!

Copyright 2018                                David Preston


About david

I am a 73 year old motorsports nut who lives in Snohomish, Washington. After a 31 year career as an English teacher, I segued into a self-created job in the motorsports business. Now retired, I was involved in customer relations for Ride West BMW in Seattle, after almost 10 years of similar work for the Cycle Barn MotorSports Group. I own, at the current time, a Triumph Rocket 3 (2020) and a 2016 Ford Focus ST. What else would you like to know?
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6 Responses to Harley-Davidson’s Self-Inflicted Wounds

  1. Patrick says:

    Nope… Harley Davidson is an anachronism who’s persona is fading in light of modern motorcycle design and demographics…

    H-D has capitalized on the social stereotyping of their brand and now this does not carry the panache it once had. Hence, the newer sportier design concepts… They could really break new ground with electric motorcycles, but their persona is intrinsically tied to the stereotypical H-D consumer sociology and this represents the current sales base which is dogmatically tied to a stylistic fashion of an ingrained associative sociological mentality/persona… “Old school” is dead or dying fast.

    All of the motorcycle manufacturers are scrambling to develop a new market demographic. Take for instance the new Yamaha NIKEN three-wheeled sport-tourer as an example of this search for new consumers.

    The rationale for H-D to move manufacturing off-shore makes economic sense, based on the growing wealth of Asia and China.. The countries of the western-world are no longer the wealthiest populations on Earth… The balance of wealth has shifted in favor of these growing Asian/Eastern economies/populations. H-D will be selling to a growing segment of consumers in these regions.However, it is entirely possible for H-D to re-invent it’s design dogma and create and manufacture a new breed of motorcycles here in the USA, given the current impetus for products being manufactured nationally… The import/export tariffs are being negotiated and nothing is codified in these negotiations and they never will be. These will always be dynamic as the world economy and balances of power evolve…

    H-D has an identity crisis that is affecting profitability, that is no different than the rest of the motorcycle manufacturers of the world. The stereotyping associated to the dogmatic stylistic branding, is metastasizing a perceptual toxicity that is killing the company… Not the potentials of tariffs.

    Beware of knee-jerk reactions to, the manipulative hyperbole used in the manufactured, framed and parsed narratives and lies of omission purveyed by those hiding behind ramparts of wealth and power colluding with their crony political operatives, within the conglomerate media bully-pulpits of socio-political influence that would have us accept pseudo-authority and hyperbole as fact or truth, for political gain…

  2. Gary says:

    I’m sorry to hear about your marriage break-up, David. Having been separated a couple times, I have some idea of what you’re going through.

  3. Jeff says:

    “Could there be a way forward? I think so. Triumph came out with a new Bonneville a few years ago deliberately styled to look like a late 1960’s model.”

    This is the way forward??? Fairly sure Millennials could care less about REALLY modestly styled, meek Triumph motorcycles from the 60s.

    No, the motorcycle industry is still targeting the grandfather demographic. Motorcycle sales in North America and Japan are 1/10th as large today as 1983. Figure. It. Out. Just look at every Millennial today – you will have your answer.

    • david says:

      the way forward in business is defined as sales and profits, and Triumph is doing well in both areas. Cleverly, they are pitching it to the hipster folks (who are buying them) but they are also very successful with the grandfather demographic members like me, so in part I agree with you. At least they have appear to have a clear vision of what they are doing, as opposed to Harley and several others who appear to be lost and floundering around.

      • Patrick says:

        Triumph made the turn with modern triple designs and then capitalized on their return to life, by reviving nostalgia in a demographic of middle-aged males by modernizing the twin…

        Success is all about design, market timing and market development/advertising. When a motorcycle costs more than a car, the market demographic shrinks and the dependency on discretionary spending, when other economic conditions impinge on that money, makes these a big lever on profitability potentials.

        Developing products takes a lot of planning and resources to bring a new design to market. It doesn’t happen overnight, so identifying future consumer demographics and developing marketing campaigns, etc. are crucial, especially if interest in motorcycling trends lower in the USA and the marketshare shrinks. World-wide sales is a totally different story, where we see the rise of wealth shifting to the Eastern and Asian middle-class economies and this makes good business sense for HD to manufacture in these regions. Stock-holders are finicky and demand ‘alpha’ from their investments, if they don’t get that ‘alpha’ the stock gets shorted and the company begins to atrophy.

        The Damocles Sword hanging over all internal combustion engine (ICE) vehicle manufacturers is the mitigation of greenhouse gases (GHG’s)… Legislation is not favoring ICE vehicles as we evolve into the Hydrogen Economy, so the sooner the manufacturers shift their design dogma in support of electrification using hydrogen fuel cell power, the better. The recent changes to the new vehicle MPG requirements, reflects what the automobile manufacturers are telling the EPA, etc, about the technological limitations in emissions mitigation and the costs associated, that will get passed along to the consumer. The consensus is that more electrification will be needed to surpass the preexisting emissions standards, and this will stifle new vehicle sales in the immediate future and leave millions of less efficient ICE vehicles languishing in traffic jams all over the country, spewing GHG’s into the air, where more gasoline is wasted and therefore must be manufactured. It’s a vicious cycle.

        ICE motorcycles may get an exemption from stricter emissions standards, however, public opinion surrounding ICE vehicles is rapidly growing negative as global warming trends become more apparent and folks become aware of the extent of our individual contributions to well-mixed GHG’s have on the dynamics of climate change and the health of our ecosystems.

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