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Is Harley headed for bankruptcy (again)?

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
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Ran across this article/opinion piece. I was not aware that H-D was having problems. From this piece is sure sounds like they are in pretty deep trouble. Anyone have the full scoop?


https://insanethrottle.com/2016/02/14/harley-no-longer-king-company-in-trouble/
Harley No Longer King : Company in trouble
Posted on February 14, 2016
163 Votes

Once upon a time, Harley Davidson use to be the mega force in the motorcycle industry. It was always at the top of the list for any respecting biker to want to own. To be in most motorcycle clubs, one had to have a Harley. A biker without a Harley wasn’t considered to be a biker but just some wannabee. All that has now changed. The once-mighty symbol of freedom and image has started to crumble. The company that used to be the king of the road is just a shadow of itself. The company has no one to blame but itself for its fall from grace.

Harley got to be where it was from those hard working blue collar workers, workers that went to work every day and busted ass just to be able to ride and raise hell on the weekends. Since the early 90s when the lifestyle started to change and different people, usually not a part of Harley’s core customers came flocking to the lifestyle, Harley took advantage of this new influx and started to raise prices. This was a serious mistake on Harleys part.Harley started to price out its core customer base and relied on a customer base that wouldn’t stick with the company for long.

In the early 2000’s shows like Biker Build-Off, Orange County Choppers kept Harley riding high. Shows like those brought customers who never considered riding before into the mix. The Chopper craze was in full swing and if you couldn’t afford one of those a Harley was the next best thing. Harley started it’s decline at this point I believe. Harley started to focus not only on raising prices, even more, they started pushing clothing and accessories as a bigger part of the company instead of staying focused on a better bike.

In 2006, most of the reality show started to go off the air and the recession was starting to loom. Those customers Harley relied upon started to get out of the lifestyle. Started selling off those bikes. The used market became saturated with all kinds of makes and models. That saturation continues till today. What happens when the used market becomes saturated with bikes? No one really wants to spend the 25,000 to get a brand new bagger. Shit, no one wants to spend 10,000 on a Sportster. When people don’t buy then production starts to be cut and people at the company get laid off.

Harley was lucky in its marketing. It had a loyal base from the Vietnam era that pushed an idea. If you were not riding a Harley then you were not a REAL biker. Some of that thinking still exist today but not like it use to be. The problem with that thinking is people started saying “If you’re on two wheels, who gives a shit what you’re riding”. I agree fully with that saying by the way. I got to that point when Harley started closing up factories here in the states and gave work to Mexico and India. When they started shipping production overseas the product suffered. Just look at all the recalls that have started just last year. Quality might as well be made if China.

Since the Old Scooter tramps are now moving onto other things in life a new generation has started to come up. That new generation has gravitated towards Honda, Yamaha, Suzuki, Indian and Victory. Why? Well, it comes down to those companies make a better product then Harley. Most have a better design and most important are way more reliable. No one likes being on the side of the road on a long haul because the ride they are on has design flaws.

I sometimes found it funny when old timers would say “Yea they might make Hondas in Ohio but the money still goes to Japan”. I would just shake my head and tell them “Well, at least, some of that money is going into a hard working blue collar American who is taking pride building that bike”. Yea that usually shut them up lol. It was even funnier when that same old timer called me a couple weeks later asking for a tow because he and his Harley were on the side of the road. “You were saying about Harley again?”

Don’t think I’m here picking on Harley. I own a 03 Soft tail. I also own a Midnight Star. I usually ride the soft tail around town and the Star on long hauls. My personal preference is the Star rides a lot smoother than the Soft tail and my old ass need all the comfort I can get.

What does this mean for Harley when companies like Honda, Yamaha, Victory start putting out better bikes then them? Simple the market share becomes smaller and smaller for Harley. (See Here). Harley is starting to literally fall apart according to their financials. The only bright spot for Harley has been its 550 and 750 models that mainly sell overseas. While Harley was raising prices and putting out some bad bikes over these past couple years the competition came in and swooped up that blue collar base that Harley turned it’s back

Do I think Harley will ever get back to it’s original core, customers? If they don’t I think they will be in the same spot they were in the 70’s. They will be facing bankruptcy and this time, won’t have a loyal base to bail them out. Harley miscalculated who would stick by them in the 90s and 00s. They also miscalculated that everyone in the lifestyle just needed to have that Harley to live up to the image. The new Image isn’t about owning a Harley to be a true Biker. The new image is “Just ride” and who gives a crap what you are riding.

 

Snowtrac Nome

member formerly known as dds
GOLD Site Supporter
good points but hd has refused to change their design for years they would have a larger customer base if they had entry level bikes and something more like a crotch rocket. look at Honda, Yamaha ,Suzuki or Kawasaki. go into one of their show rooms and they have something for everyone.
 

tiredretired

The Old Salt
SUPER Site Supporter
I've owned a few Harley's and Japanese bikes over the years and I liked them all. My favorite all time bike was a 1974 Suzuki 750 water cooled aka "The Water Buffalo". That was probably the best built motorcycle of all I have owned.

I certainly hope Harley does not go bankrupt. They are iconic American, even with their faults and shortcomings. Nobody ever gets a Victory or Indian tattoo. FWIW I never got a Suzuki tattoo either. :yum:
 

Snowtrac Nome

member formerly known as dds
GOLD Site Supporter
what is the difference between a Harley and a hover? you can only get 1 dirt bag on a hoover.
 

EastTexFrank

Well-known member
GOLD Site Supporter
This isn't new. It's been happening for years.

I haven't ridden a bike in many years but a friend of mine who owns a Harley and a Honda says, "Ride the Harley for show but the Honda to go". He is also the one who used to crate his and his wife's Harley's up and ship them to Sturgis every year and then ride the Hondas up there.
 

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
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I think one of the problems is that HD has 1 basic style of motorcycle. They make cruisers. Now some are small cruisers, most are big cruisers, some fancy, some with a bit of cafe racer style but all are basically cruisers.

They bought Buell but just as the adventure bike category was beginning to take off they shut down Buell. So the one highway/off-road combo bike they already had in their portfolio, which could have been positioned against the BMW GS line is gone.

Personally I'd like to buy a motorcycle, but there is nothing in the HD line that even interests me because I'm not look for a cruiser.
 

Big Dog

Large Member
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Wow, ship the Harley's and ride the Honda..... LMAO. That tells me so much about the mind set of some people. Harley ain't going anywhere. Been riding them for 40 years and the models in the last 8 years are exceptional. Granted, still older technology but vastly improved and the bikes today easily surpass 100K miles.

Harley's problem is entry level motorcycles and younger market, they have tried and tried but they just don't catch on. Just last year they brought out the 750 and 500 Street models. Although they're good bikes they don't bring on the tradition or respect. Marketing at Harley is some of the best in the business (especially in accessories), but the young is where they fail. They'll get it done ..............

Harley's resale is still the best in the industry. Whatever floats your boat but I'll never ride a 1800cc stratolounger that sounds like a portable drill and fetches 1/3rd it's sale price after 10 years. The metric's still have their issues in the USA.

If Indian and Victory ever pull their head out of their asses, do some decent designing and quit using plastic THEN Harley might get some real problems.

Yeah, I'm a diehard Harley rider but there's a reason for it. It's been a great product in my 40 years and I know I'd have never have the fun I've had on anything else!
 

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Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
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Wow, ship the Harley's and ride the Honda..... LMAO. That tells me so much about the mind set of some people. Harley ain't going anywhere. Been riding them for 40 years and the models in the last 8 years are exceptional. Granted, still older technology but vastly improved and the bikes today easily surpass 100K miles.
No offense intended, I have several friends just like you, very dedicated Harley fans. But the only point that is on point to a potential bankruptcy and the OP is that the bikes are old technology, even if improved, still old. That may be one of the big problems, people perceive them to be inferior technology. There is a difference between "old school" and just old.


Harley's problem is entry level motorcycles and younger market, they have tried and tried but they just don't catch on. Just last year they brought out the 750 and 500 Street models. Although they're good bikes they don't bring on the tradition or respect. Marketing at Harley is some of the best in the business (especially in accessories), but the young is where they fail. They'll get it done ..............
2 key points here I'd like to address.

First is that the entry level bikes don't get respect simply because of the HD marketing that looks as anything from a Sportster on down as 'inferior' and 'not worthy' of being a HOG.

Second is that HD totally ignores all market segments that are NOT in the cruiser category. Based on sales numbers the ADV bikes are the growing category, HD offers nothing. Street racer/super bikes are another category, again HD offers nothing.



Harley's resale is still the best in the industry. Whatever floats your boat but I'll never ride a 1800cc stratolounger that sounds like a portable drill and fetches 1/3rd it's sale price after 10 years. The metric's still have their issues in the USA.
And this apparently only really matters to HD owners and possibly to people who want big cruisers, but not to anyone else. And I know a couple guys with big v-twin Hondas who lost 50% of their bikes value but got into them cheap enough that even with a 50+% drop in value its still way less expensive than a HD over the long term.

If Indian and Victory ever pull their head out of their asses, do some decent designing and quit using plastic THEN Harley might get some real problems.
But apparently HD is already in financial trouble. :hammer:



Again, not trying to pick on you in any way, just trying to look at this somewhat more objectively.
 

Big Dog

Large Member
Staff member
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No offense intended, I have several friends just like you, very dedicated Harley fans. But the only point that is on point to a potential bankruptcy and the OP is that the bikes are old technology, even if improved, still old. That may be one of the big problems, people perceive them to be inferior technology. There is a difference between "old school" and just old.

For Chist sake it ain't that old, I mean they're not in 40 year old range ...... twin cam and EFI in the last 12 years, hydraailic controls and ride comfort just as good as anybodies out there. The only thing that really needs brought up to date is the primary drive but they've just not gone to gears like metrics and belts like Victory and Indian. My newest bike has everything a metric cruiser has including Infotainment.

2 key points here I'd like to address.

First is that the entry level bikes don't get respect simply because of the HD marketing that looks as anything from a Sportster on down as 'inferior' and 'not worthy' of being a HOG.

Sportster's (Sport category) are their entry level at this point in time especially for women's market and they still sell a ton of them. The V-rod is they're racer and they sell all they make every year although supplies are held back. The last statement is evidence of not knowing more about the company other than the latest financial report. BTW, they still make the best flat track racer in the country. Honestly whens the last time you ran down their models?? A 110 Breakout is hardly a "cruiser" and a 750 street isn't entry level?

Second is that HD totally ignores all market segments that are NOT in the cruiser category. Based on sales numbers the ADV bikes are the growing category, HD offers nothing. Street racer/super bikes are another category, again HD offers nothing.

Harley is never going to make a dual sport, dirt, or quad. Anyone that thinks Harley would even consider it doesn't know the company or what made them boss. Hey, I'd like to a see a good dualsport out of them but I think the first year sales would be brutal due to whats available today. They are currently working on releasing the first electric motorcycle (Livewire project! Demo rides are available .....


And this apparently only really matters to HD owners and possibly to people who want big cruisers, but not to anyone else. And I know a couple guys with big v-twin Hondas who lost 50% of their bikes value but got into them cheap enough that even with a 50+% drop in value its still way less expensive than a HD over the long term.

LOL, that's funny ...... the reason for Harley's current slump. The other guys are dumping their junk at greatly reduced prices. It tells you what they have to do to sell them? AFA as used metrics, please, if a guy gets 50% of new price after 8 years he found a sucker. BTW ..... I sold a 27 year old Harley with 125K miles for 1/2 or what I paid new, ain't gonna do that with a Goldwing. We've all seen what Northern Redneck finds older metrics for ... :)

See Gatto's quote, local seller from me ........ http://www.wsj.com/articles/harley-davidson-cuts-shipment-guidance-amid-competition-1429615662

But apparently HD is already in financial trouble. :hammer:

They'll ride this out when the other guys reduce inventory and start selling their plastic and faux chrome for what they're really worth, which ain't too much for the class they challenge Harley in. Dealers are in it to make money and the metric sellers ain't doing it with the cruiser market. Some guys just can't resist the price no matter what they think their getting.


Again, not trying to pick on you in any way, just trying to look at this somewhat more objectively

Yeah me too
 

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
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HD had an entry into the ADV bike business with Buell but destroyed it right when that market segment was taking off. HD used to have small bikes for real entry level bikes, but no longer offer them.

You seem to be presuming that the sales slump is not related to changing markets, changing consumer demands, and is simply price.

I'm not a motorcycle expert but what you are suggesting that is not what I am seeing in the marketplace or the financials. A bad economy is going to hurt HD far worse than many other brands because HD bikes are almost luxury goods, bought when times are good. I think the outlook is worse than you think.
 

NorthernRedneck

Well-known member
GOLD Site Supporter
When I win the lottery one day I might be able to afford a Harley. For now the old wing will do seeing as its just taking up space in the garage. One day I might finish it up and throw a sale sign on it. Dad just picked up an Electra glide used with basically every chrome option and the engine replaced with a larger cubic inch. Nice bike but not for me since I know I can pick up a Honda vtx 1300 for a quarter of the price used where the original owner already took the hit. Something like that would do me fine.

Sent from my SM-G900W8 using Tapatalk
 

Av8r3400

Gone Flyin'
My wife and I have two full dress class Harleys (00 FLT Road Glide and 02 FLHR Road King). Neither has been out of storage in 3 years. For the 5 years before they only got one or two rides in, anyway. We were big into riding 15 years ago and it has just dropped off the priority list. Built a house, started a business, built an airplane…

There has not been enough time in the day for them. Hoping maybe this summer to get them out and running again. Maybe.
 

Big Dog

Large Member
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I think the outlook is worse than you think.

Did you read the WSJ link? It's not flattering but IMO it ain't gloom and doom as you imply considering the current economic circumstances. I pretty much assumed the economy had influence on share loss like most every other manufacturer, I mean this is a luxury item!

Harley-Davidson Inc. is scaling back motorcycle production as it loses sales to rivals offering discounts of as much as $3,000 a bike.

Shares of the Milwaukee-based company dropped sharply on Tuesday after it reported a 1.3% drop in first quarter retail sales and said it would reduce shipments in the current quarter to trim inventories. Harley executives told analysts they wouldn’t seek to recoup sales by offering discounts, a strategy they said would cheapen the brand.

“We are very committed to protecting our premium brand,” John Olin, Harley’s chief financial officer, said in a conference call.

For the year, Harley said it now expects its motorcycle shipments to grow between 2% and 4%, down from a previous forecast of between 4% and 6% growth. The company said it would ship around 85,000 motorcycles in the current quarter, or 6,000 fewer than earlier planned. Harley officials said they expect rivals’ discounting to persist for at least a few more quarters.

Its shares were off nearly 10%, or $6.10, at $55.67 in recent New York Stock Exchange trading.

The strength of the dollar against the yen and euro allows motorcycle makers in Japan and Europe to cut their U.S. prices without taking a hit in their home-currency incomes. Some of those competitors also are seeking to clear excess inventories. Harley said it also has been hurt by discounts from a U.S. rival, Polaris Industries Inc., the maker of Indian motorcycles.

James Hardiman, an analyst at Wedbush Securities, supported Harley’s decision to avoid discounts in an effort to maintain a premium image. “Although discounting is not going away immediately, I don’t believe that to be a long-term negative,” he said.

George Gatto, a Pittsburgh-area motorcycle dealer who sells Harleys as well as several Japanese lines, said Japanese makers tend to flood the U.S. market. “The longer it sits around [unsold], the more they mark it down,” he said. He said he preferred Harley’s refusal to cut prices. Harley motorcycles sell in a range of roughly $7,000 for the smallest models to $40,000 for the fanciest long-distance bikes.

Harley remains the dominant U.S. seller of heavyweight motorcycles, which it defines as those with engines of 601 cubic centimeters or greater. But its market share in the first quarter fell to 51.3% from 56% a year earlier. Rivals include Japan’s Honda Motor Co. and Kawasaki Heavy Industries Inc., as well as Germany’s BMW AG and Polaris, based in Medina, Minn. In Europe, Harley’s market share declined to 9.8% from 11.3%. Harley said it raised prices in Europe about 1.2% a month ago to partly offset the euro’s fall, which reduces the dollar value of sales there.

Harley was losing market share before the dollar surged in mid-2014. UBS analyst Robin Farley noted that Harley’s share has been falling since the end of 2013, when the company recorded a 58% share. Along with rivals’ discounts, she said, the aging of Harley’s customer base—largely white middle-aged men—also seemed to be hurting share, despite efforts to appeal to women and younger riders with less expensive and lighter-weight bikes.

For its first quarter, Harley reported a profit of $269.9 million, or $1.27 a share, up from $265.9 million, or $1.21 a share, a year earlier. Revenue, including from its financing unit, fell 3.1% to $1.67 billion. Analysts polled by Thomson Reuters expected a per-share profit of $1.25.
 

Av8r3400

Gone Flyin'
After doing a little search I found the same articles written every year back into the beginning of the Internet all forecasting the demise of HD.

HD in general seems a bit rudderless right now, but I don't think they will leave us. We just need to get an economy back running in the USA. They are, after all, an unnecessary luxury item very dependent on a good economy.
 

Ironman

Well-known member
This isn't new. It's been happening for years.

I haven't ridden a bike in many years but a friend of mine who owns a Harley and a Honda says, "Ride the Harley for show but the Honda to go". He is also the one who used to crate his and his wife's Harley's up and ship them to Sturgis every year and then ride the Hondas up there.

I can relate. I've owned both and I'll take a jap bike, any day. I beat the living piss out of my Yamaha and it refuses to break. I work with a guy that used to drive his Harley to work, but after seeing all the trouble he had and being late for work numerous times because of breakdowns... :yum: having to fit in and buy all the T-shirts and shit... Fuk that noise. I'll never sleep in the ditch when I don't have cell coverage, can't contact anyone when my ride breaks down like my buddy did. :yum:

I'm not a fan-girl of jap bikes like the Harley guys are, I just want the best bang for my buck. In the end it doesn't matter what you ride if you love cruising Without a roof over your head. I like to go my own way and choose my own path. to each their own... But yeah. Fuck them overpriced bikes. At least we have better choices. :biggrin:
 

mtntopper

Back On Track
SUPER Site Supporter
Owning and riding a Harley is a lifestyle for many. Those who do not own one will often criticize those that do. I have owned several Harley's but never the life style of the typical Harley owner. They have their place in the big cruiser market and have dominated that in the past even though the other brands often seem to surpass them in creature comforts and horsepower.

Harley's in the past have retained a larger part of their resale value but I am seeing that erode in today's used bike market along with the resale values on the "other" brands. Indian seems to be gathering a "new following" of loyal enthusiasts and that is mostly taking away from the cruiser Harley crowd. Victory has never had the appeal of the Harley or Indian bikes. Victory's resale is really down in my area with very few new sales and quite a few low priced used bikes for sale.

I sold my last motorcycle a year ago as times change and it was time for me to slow it down. I have ridden for over 52 years and been lucky to only have one bad encounter that left me with broken bones. It is much too easy as you age to break and not heal so I just decided it is time to hang it up and find something else to occupy that time.

"A Harley-Davidson is the most efficient way to convert gasoline into noise, without the side effects of horsepower." Seen this today and thought I would pass it along for all to :yum:.
 
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