Everyone has an opinion on what Harley-Davidson needs to do to turn its fortunes around. I’m going to throw my helmet into the ring because I’ve yet to see a similar take on Harley-Davidson’s problems and how to correct them.
TAKE THE COMPANY PRIVATE
Harley-Davidson shouldn’t be a publicly-traded company. Wall Street has an insatiable appetite for growth and Harley-Davidson is not going to be doing a lot of growing in the near future. Or in the distant future. Also, Wall Street loves diversified companies that can spread risk. Harley-Davidson can’t fall back on a car division or a golf kart division or a finance division (they already sold that off). Harley-Davidson doesn’t offer any insurance to Wall-Street investors worried about a soft motorcycle market. It only sells motorcycles (and parts and accessories). So when motorcycle sales are bad, Harley-Davidson is bad. Harley-Davidson’s biggest problem is that, as a publicly-traded company, their focus has to be on Wall Street, not Main Street.
It will require deep pockets to take Harley-Davidson from a publicly-traded company to a privately-owned company but those deep pockets are out there. They belong to investors who understand that Harley-Davidson is a very, very valuable motorcycle company even if its sales will remain flat or decline. To Wall Street, that is blasphemy, but to someone who understands Harley-Davidson’s mystique and importance, it can be a tenable proposition. These would be investors proud to own and profitably operate the most amazing motorcycle company in the world.
Once taken private, Harley-Davidson, with the Wall-Street monkey off its back, can make some simple changes to move the company towards profitability.
THEY DON”T NEEED MORE MODELS
Plenty of pundits and Monday-morning CEOs have shared insane opinions on Harley-Davidson’s product line, as if that is the reason for their problems. These “experts” say…They need a motocross line. They need a 400cc model that is made in India and retails for $3995. They need a plug-in Street Glide. They need an Amazon delivery trike. They need a Baggers Race Replica model. They need an Adventure line. They need a cafe bike.
The company actually followed some of these recommendations with disastrous results. The electric-motorcycle line, the E-bike line and, let’s be honest, the Pan American model, did nothing but drag down profits. The $110,000 CVO Road Glide RR is a head-scratching distraction for anyone but former-olympians-turned-drug kingpins and speculators (hoping the bike’s limited production will make them sought after 20 years from now). These decisions hurt the bottom line.
SIMPLIFY THE LINE
The Harley-Davidson’s product line is not spot on, however chasing a believed unicorn model that is going to revitalize the company is a sucker’s bet. Don’t stop reaching for breakthroughs but don’t bet the farm on one either. And when the decision to change an existing model is made, don’t stomp all over its heritage. What Harley did to the Sportster is heartbreaking.
Overall, a simplification of the models offered will help Harley-Davidson’s bottom line and the bottom line of their shrinking dealer network. Offer basic models and let the accessory department (and independent aftermarket companies), transform the model into the buyer’s dream bike. Instead of mortgaging the house, a Harley-Davidson buyer could afford a “base” model and customize it over time. The bike’s transition will take place over a matter of years and that rider will visit the Harley-Davidson dealership many times over the course of ownership.
This brings me back to the current Sportster. The redesign almost assures that no customization is possible. It looks like a sealed pod wrapped around an engine. When I stand on the corner of the 118 and Somis Road on a Sunday morning, the hundreds of Harley-Davidsons that roar by have one thing in common…none are the same. The other observation from that street corner is; if all the other motorcycle companies are so much smarter than Harley-Davidson, how come 80% of the bikes that pass are Harley-Davidsons?
SHARE THE PASSION
Harley-Davidson should not sell a model with a solo saddle. Period. End of discussion. Every model needs to accommodate a passenger. I just scanned the Harley-Davidson website and did not see an image with two people on a motorcycle. Motorcycling should be a shared experience. Harley used to be good at portraying that.
MOTORCYCLES ARE TIME MACHINES
I’m old now and feel it. I move slower. I’m not as flexible anymore. I’m not as strong. I have trouble remembering names. But as soon as I get on a motorcycle, I’m young again! The motorcycle transports me to more than an intended destination on a map. It brings me back to my youth. Motorcycles require balance, eye-hand coordination, mental clarity and strength I thought I had lost. In the saddle, wind in the face, totally present, a rider experiences a feeling non riders will never know.
Did I get off track here? Maybe a little. Still, even if Harley’s new CEO had to go out and buy his first motorcycle (that’s kinda weird to me), he should already know the time-altering effect his product offers. He should push that message from the production-line floor, to his dealerships and to his new customers. That is, right after he takes the company private again.
