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Harley is at a pivotal time. Which way should it turn?

Harley Davidson Motorcycle Company

The Bear

What is the feeling about Matt Levatich’s ‘mutual’ decision to leave H-D inside the motorcycle industry? Who better to ask than Robin Hartfiel, the editor of Dealernews and a longtime friend of the author’s.

Robin, how did you find out about Mat Levatich’s departure from Milwaukee?

I was on an airplane coming back from Dallas when the news dropped. By the time the plane landed, my voice mailbox was completely filled! And my e-mail box was equally jammed… everyone seems to have a very strong opinion on this matter! Everyone but me, that is.

But you must be seriously concerned about happenings at the Motor Company?

Yes. Like it or not, the health of Harley still impacts all of us in the U.S. motorcycle marketplace. After the MV Agusta situation, which you and I were privy to first hand when Matt and Claudio Castiglioni had that spat in front of the media who had been flown in to see what was supposed to be a peaceful coup, I wasn’t sold on the fact that Matt was the right guy for the job back then, and when Matt sold the storied MV marque back to Claudio for $1 I really had my doubts. However, the board of directors felt differently.

I’m not sure who pushed the death of the FXR, killing off Buell (only to bring out the Brooklyn and Pan America concepts that Erik Buell already had going with a sportsbike and the Ulysses), rise and fall of V-Rod, who hired the disgraced Neil Grimmer as Global President of Brand Development, etc. but they all happened on Matt Levatich’s watch, so ultimately he is the guy who has to fall on the sword.  And the pundits are already asking what took so long!

What should the H-D Board be looking for in the new CEO?

Rather than blaming Mr. Levatich for the talent drain as talented execs like Rod Copes, Anoop Prakash, Heather Malenshek where pushed off The Motor Company’s depth chart, or the demise of Buell/FXR et. al. I do have a very strong opinion regarding Harley-Davidson management and the man or woman, who succeeds Matt. Rather than the board basing its decision on an individual they think is right for the gig, how about asking their long suffering dealer network for some ideas?

What do you think those ideas are likely to be?

Forget Wall Street for once and do what Main Street needs to survive! Harley-Davidson could reset to 1903 and go back to giving people a motorcycle experience they want, serviced by the strongest (at one time) dealer network in the world. Continue catering to the last of the Baby Boomers as they ride off into the sunset, while simultaneously building the future Harley riders with the Boomers’ great grandchildren via their acquisition of STACYC. Rather than jockeying to beat the ‘Street (Wall Street stock expectations), how about beating arch rival Indian in a dirt track race once in awhile? Give the dealers something to cheer about rather than arbitrarily telling them what key models will be cut or how much the LiveWire requirements will cost in terms of tools, training and floor space?

This is nothing new, and not entirely Matt Levatich’s fault. I was at Harley’s dealer meeting when the techs discovered they would  all have to invest in a set of metric wrenches to work on the VRod… a collateral damage casualty that the dealers had to bear the brunt of, not the board room

Is there any company history that’s worth consulting?

Former CEO Jeff Bleustein led Harley for seven years — during which The Motor Company tripled revenues before he resigned back in April 2005 — wasn’t focused on flooding the market as much as he was looking at retaining value. His stated goal was to manufacture one less bike a year than was ordered by the dealer network so there would always be demand.

So H-D Board and management need to learn to listen, rather than spouting slogans.

My thought is that we all need to listen to the dealers and their customers; Dealernews is conducting a poll of the dealer network to do just that. Focus on what the world has been begging Harley to be for years: be THE MOTOR COMPANY — not just some stock ticker symbol. Be the leader. Drive value, even if that means making fewer motorcycles… Harley-Davidson is still a premium brand and one of the ultimate aspirational purchases the world over. There may be more Toyota Camrys being sold in America than any other vehicle, but I have yet to see a single “Camry” tattoo on anyone. I doubt any kids grew up dreaming of driving Camry.

How do you see the future for Harley-Davidson?

Harley is at a pivotal time in its history, and with the right leadership choice and listening to what their customers want, they can leave the Levatich era in the rearview mirror and rumble on for another 117 years.

Thank you, Robin.


1 Comment

  1. Chip

    I worked on Honda automobiles for many years starting in 1977. During that period Honda had sever problems with with head gaskets and head bolts allowing the head gasket to leak. There were recalls for 1976, 1977 and some 1978 cars. Honda bite the bullet and did engineering changes on the design and fixed those engines with a no questions asked policy of repair. In some cases, there were cars that got rebuilds a couple of times and then got a new engine. Through all this time with known engine problems, the resell valve of the Honda line never suffered, even to the point of having one of the highest resell values on the market. I saw cars with blown engines getting traded in for new cars getting above Blue Book value. The dealers new they could run it through the shop and get a new engine and turn around and advertise to the used car market that it had a factory new engine in it. It could have very easily sunk Honda as a reliable brand, but as it turned out enhanced the reputation of the company. Honda knew they were investing in the future by standing behind their products reputation.

    I really think that Harley can learn a lesson from this. It is not about the number of bikes you build, but how you take care of the product and the customers that buy them. If you build a good product, sell it a t a price that is a fair value and stand behind what you sell, it is going to be successful.

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