Harley didn't calculate savings before killing Buell, hopes business as usual leads to financial recovery

Dailies -

By

Harley_Q3_2009.jpgHarley-Davidson has no idea how much money, if any, it will save by killing Buell. Discussing the decision, Harley CFO John Olin says, “We have not quantified the benefits of increased focus on [the] Harley-Davidson brand as a result of discontinuing Buell nor included any potential savings in our restructuring estimates.” So how does the company plan to dig itself out of its current financial hole (net income has fallen 71.4 percent so far this year compared to the same period during the already abysmal 2008)? By building more large-capacity tourers and cruisers and offering more performance add-ons and accessories, that’s how. Oh, and they’ll be shutting down Sportster production for the rest of the year too.
>
Speaking to financial media during a press conference yesterday, Olin continued, “During the third quarter US Harley-Davidson motorcycle
retail sales decreased 24.3% while the US 651 plus CC motorcycle market
dropped 35.9%. Our market share was up 8.4 percentage points to 53.8%
in the quarter versus last year. In international markets we saw a
sequential improvement with sales being down 13.1% in the third quarter
versus down 18.2% last quarter.

“Buell revenue was $134.9 million in 2008 and $59.4 million in 2009
year-to-date. Capital expenditures related to Buell were $6.6 million
in 2008 and $3.8 million September year-to-date.”

So if Harley has 53.8% of the market, why all the talk of financial
doom and gloom? Describing the cause, Olin says, “On a year-to-date
basis, [Harley-Davidson Financial Services] has incurred $110.8 million
loss…HDFS continues to be adversely impacted by the current economic
environment.”

Many observers have suggested that Harley could, like GM and Chrysler,
turn to the federal government for a financial bailout. It turns out it
already has, borrowing $700 million over three years at 1.2% under the
Federal Reserve’s TALF mortgage-backed securities program. That brings
the total that Harley has borrowed in order to see it through this
crisis to $1.9 billion, with  roughly half that amount costing them 15%
interest.

But don’t worry, Harley has a clear strategy to change the way it does
business and return to profitability. “We are intent on extending the
Harley-Davidson brand by leveraging our unique strengths,” says CEO
Keith Wandell. “What do we mean by extending the brand and leveraging
our unique strengths? Well, the Harley-Davidson brand is one of the
most powerful brands in the world but we also have great conviction
that there is much more that we can do to tap in to the power of that
brand and expand it even further.”

We asked a former Wall Street banker with significant experience financing large motorcycle companies, what he thought of Harley’s strategy. “‘Leveraging the brand’ is utterly ridiculous. People have the brand tattooed on their fucking flesh, how much more leveraged are you gonna get?” He then moves on to compare Harley to GM, saying, “Selling a division and shuttering another are two first steps, but GM could always sell Hummer, stop making Escalades and make more small fuel efficient cars and hybrids. What the fuck is Harley going to do? Start making Hondas?”
 
When Wandell goes into specifics, he reveals that nothing that radical
is on the cards, “We are focusing on leveraging our leadership of the
custom cruiser and touring segments playing to our natural advantages
with the objective of out growing our competitors in each of these
segments everywhere in the world. We will continue to own and to define
the customization and personalization which is another one of
Harley-Davidson’s unique strengths. [Parts and accessories] and general
merchandise represent more than 23% of our revenue year-to-date
reflecting the importance of custom personalized experiences.

“We will build off our unique expertise to develop relevant products
that attract even more young adults, women and other new customers in
to the Harley-Davidson brand. We will expand the brand through related
products and services like Screaming Eagle performance parts or finding
new ways to enhance the HOG experience and broaden it to more riders or
creating apparel collections designed specifically for the needs and
preferences of outreach segments.”

Elsewhere, it’s suggested that the Iron 883 – essentially a Sportster
with matte black paint — represents a successful model for reaching the
under 35 demographic, yet Sportster production will be put on hold
during Q4, 2009.

Wandell continues, “We know from our research that the Harley-Davidson
brand is as strong and well accepted among young adults in the US and
internationally as it is among our current core customers. With our
product plan we are confident that we will continue to expand the
appeal of Harley-Davidson motorcycles to the under 35 age group. We
also know Harley-Davidson has strong relevance as a lifestyle brand
beyond the dedicated motorcyclist. Some people may never ride a bike
yet are strong enthusiasts.”

He’s convinced that the company’s current product mix already
does an excellent job of reaching young people and has no plans to look
for new ways to pursue them.

Cutting through the bullshit, it seems you can boil Harley’s plan down
to this: cut costs by streamlining production and lowering output,
thereby alleviating dealers of stock they can’t sell, then hope that the
loans carry the company through to a projected return of middle-class
solvency and credit availability.

All this sounds startlingly similar to the business practices that got
Harley into so much trouble in the first place. It’ll continue to rely
on the same demographic buying the same motorcycles and, since a large
proportion of those customers don’t have enough money to buy either the
bikes or the accessories, it’ll continue to give loans to people that
can’t afford to repay them. It’ll make those loans using money that it
has, in turn, borrowed, often at a higher interest rate than what’s
being charged to customers. The company has presented no short-term
plans to pursue the design of motorcycles with appeal outside its existing customer base and is therefore hoping the customers of other brands change their preference rather than finding new ways to appeal to new customers. As Boomers age beyond their
riding years and see their purchasing power massively reduced by the
end of cheap credit, Harley is failing to understand either the need or
the means to reach a younger or wider audience. Relying on the market
for motorcycles to return to its pre-recession levels without taking
active steps to see it do so seems a remarkably naive way to do
business. Harley is now effectively a passive passenger riding the
economy’s roller coaster. If the economy goes up, a lot, it might be
OK. If the economy goes down or remains stagnant, it may find itself
unable to repay that $1.9 billion and be forced to seek protection from
its creditors.

Is it now conceivable that Harley could, at some point in the future, face a similar fate to Buell or at least find itself up for sale? Unless there’s a considerable change in strategy, yes.

Transcript via Seeking Alpha

  • powermatic

    This is like entering Bizzaro World-

    “Some people may never ride a bike yet are strong enthusiasts.”

    Maybe,but how much profit potential is there in Motor Company decals for the rear windows of clapped-out old pickups?

    ‘we don’t know how much we’ll save, but we’re cutting Buell loose to “extend the brand”. Or perhaps they’re just operating in Panic Mode, like wasting time spraying your burning house with a garden hose, when you should be calling 911.

    Make no mistake, I wish them all the luck in the world, but I’m having very grave doubts. I can only think that they should have spent more time, as a company, preparing for an inevitable slow down, and less time being worried about patenting the ‘potato-potato’ exhaust noise.

  • http://muthalovin.com the_doctor

    H-D, I have no love for them in their current situation. Bad decisions lead to even worse decisions, and before you know it, you are leveraged like the skinny kid on the teeter totter. I wish I could say I feel sorry for the authorized dealers because they are the ones that are stuck carrying all these bikes, but they are also part of the Harley problem. Dealers (at least the ones that I visited, sadly, looking at Buells) would pay no one but the Harley crowd any attention. That is not a great way to sell bikes.

  • nataku83

    oww, my head hurts. Harley actually does have some small bikes in their history, the Sprint in particular, and might be able to do a vintage revival that would allow them to penetrate the small bike market. I would imagine that I’m the target demographic that Harley would like to capture – mid 20s professional who’s into bikes, but, while I would consider a Buell, I would never consider a Harley. My perception of them is chrome laden, overpriced, overweight poseur mobiles. I’m aware that there is some pretty innovative and serious engineering, although much of it is dedicated to keeping the off balance engine from shaking itself, and the rest of the bike, apart. I’m looking for something smaller, cheaper, and with a lot less “bling.” Since they’re already dominating their market, I would think they could end up with a lot more revenue by making in-roads into other markets, rather than trying to eek out a few % extra market-share in their current, shrinking market.

    • Tom

      Not many know the small “Harley” Sprints of yesteryear were manufactured by Aeromacchi – which Harley sold to the Castiglioni brothers (Cagiva).

      The brothers later bought MV Agusta when it was sold to Harley – but now is being sold ……. and the wheel continues to turn.

  • Hobo Mike

    I find it revealing. Basically, they’re saying they have no plan and really don’t know what to do. Maybe it’s part of the dance to get a government bailout. Whatever. I guess the party’s over.

    They do still have one of the greatest brands in the world.

  • http://www.designronin.com Design Ronin

    “… what’s that button do?”

    “Push it, push it!”

  • Rich

    They got too big for their britches – plain and simple. If ever there was a niche bike, it’s a Harley (large niche admittedly – but still a niche). Their greed – as evidenced by their risky consumer loans – caught up with them.

    When the new paint job, or latest iteration of a Fat-Glide XLWTF failed to lure current owners to trade, they sought new owners by gambling on those of incapable of making the monthly payments. As they say in Russia, “toughski shitski.”

    And now they borrow more at exorbitant rates to bet on the come once again. If their CFO cannot quantify the expected gains from shuttering Buell, and their marketing plan is more of the same, then god help them. They are in deep sheisse. To throw out another trite – but apt – phrase, they dug their own grave. And I have absolutely no sympathy for them (the dealers and Buell employees, yes).

  • pigsbaldder

    90% of the Harley riders I have met, take a different tone once they’ve found out I don’t ride a Harley.

    Both of the dealerships I’ve been to in Arkansas wouldn’t even give me the time of day because I was interested in Buell.

    Elitist views and perceived slow/lumbering bikes, coupled with $35 dollar t-shirts won’t help them getting my business.

  • General Apathy

    Wish I was on the board for Harley..

    “So Mr. CEO you discontinued one of your brands without understanding the consequences or calculating the benefits? You’re Fired!”

    Sadly this happens all the time in poorly managed companies during recessions. Cut first, ask questions later…

  • MTGR

    HD put themselves here through greed. Charging outrageous amounts (above the ability of your target-market to afford) for motorcycles that have had no serious design updates in 50 years (and therefore no R&D investments that needed extra charges to make up). Anyone who needs proof these guys should die like dinosaurs just consider that, after 15 or so years of record profits, they are now seriously upside-down after just 2 bad seasons. Where did all those years of record amounts of cash go? Not to new products, clearly, not reinvested in securing the company, obviously. It went into their pockets and now, like the auto makers, HD runs to the governement so they can add to my taxes while thumping their chests about how great a company they are. Government run companies is the opposite of a free-market economy. HD is now Commie Cruisers. I am sad to see Buell go, but I hope Harley dies before they suck up any more of my tax dollars.

  • carlos

    ok…so just at the math.

    i’m confused by a statement.

    “Buell revenue was $134.9 million in 2008 and $59.4 million in 2009 year-to-date. Capital expenditures related to Buell were $6.6 million in 2008 and $3.8 million September year-to-date.”

    so if i’m doing this right (wes or anyone, please correct me if i’m getting this wrong), Buell took a 44 percent drop in revenue…during in which the whole market dropped roughly around the same during this economic meltdown. Motorcycles are luxury items, and their usually the first to go.

    but in the same 2 year time period, they cut their capital spending by 57 percent. so they cut their costs by more than the amount they took in reduced revenue sales. That’s good right? Doesn’t that mean that Buell was able to adapt to the market and at least survive.

    and in this 2008 revue of numbers, buell was operating at a 4.8 percent ratio of costs vs. total revenue. sounds good. in 2009 they were operating at 6.6 percent ratio of cost versus revenue. not so good, but not so bad either considering this ratio wasn’t a huge increase.

    Don’t these numbers seem pale in comparison to harley’s own poor performance?

    Does the phrase “to cut off your nose, to spite your face” apply here? In this case, your nose(Buell) being the only normal thing on your fucked up face(H-D).

    • http://hellforleathermagazine.com Wes Siler

      Math looks good Carlos, but don’t forget that the $59.4 million figure is year-to-date, not the full year, so it only accounts for 9 months. Buell’s finances don’t look bad at all in that light.

    • Little Joe-Fl.

      Well said Brother! I feel you hit the nail right on the head! The Mothership need to stop cutting away what they think is wrong with the Company’s P&E! It better work on whats wrong with there sales and marketing first then look to remove any part of the equation the they find, as poor profit! I have been riding the H-D brand for 50 yrs. now and can only say that hindsight has shown they jump before the look carefully at the final answers! Enough said on there misguided advisors! Little Joe-Fl.

  • Ken

    Would you invest in Harley Davidson? HD have nothing available but V-twins of large capacity and low specific output. They have one relatively modern motor, but it’s still a V-twin and it’s still huge.

    They’re “leveraging their ownership of the custom cruiser and touring markets” because they have no bloody choice. Diversification is flat-out impossible without serious, very costly investment in new powertrains. Even Buell had to look elsewhere for motors that could sustain development. BMW, famous for its twins, managed to reinvigorate itself, but only because it had one, two and four cylinder motors of varying configurations available. Harley don’t.

    This is exactly the pile of crap GM rode into – cruising (excuse the pun) on repackaged aging technology for quick profits until the world catches up with you. Where does the American motor industry get this idiotic complacency?

  • http://cynic13th.livejournal.com/ Cynic

    When ever I think about what Harleys been doing for a business strategy I always end up shaking my head in wonder/confusion. I don’t think any other successful motorcycle company is so focused on such a narrow niche market.
    I mean we all laugh at what Ducati is doing with it’s “off road” bikes, and that horrid cruiser, but at least they and most everyone else is trying.

    • David Patton

      “…but at least they and most everyone else is trying.”

      I agree. As soon as these knuckle-heads (sorry) stop referring to Harley only as a brand and using words like leverage and tap, the sooner they’ll get back to being an engineering firm that makes motorcycles – motorcycles with a particular vision and style, any kind of motorcycles, not simply massive cruisers.

      Why can’t they be more like Honda and “try” like Cynic says? Why not a sport bike or a smaller trail bike?

      The guys at the top simply see H-D as something to extract wealth from – like some sort of oil well. These bike companies ain’t oil wells. More engineers, like Erik B and less marketeers and bean counters please.

  • Falstaff

    I’m not an owner or even much of a supporter. However, it is obvious that they don’t have the money, and can’t raise the money, to do the sort of brand migration that you are suggesting.

    Buell was not the success that they need right now, and it isn’t likely that this will change after the launch of their latest model.

    That said, they either focus all of their now meagre resources on what they do best (eg marketing motorcycles to cro-magnons) or they run a bunch of ways investing to try to earn the fickle loyalty of an audience that the can’t afford the money to invest in.

    Their 3-5 year crisis is the youth market- their 6-12 month crisis is stability. I don’t think that focussing on what they can influence is as crazy as it sounds…regardless of what I think of their technology.

  • Jay

    The real tragedy is the poor low level “former” employee of Buell. The guy that’s just shit giggles because he works in and around motorcycles all day. He’s out on the street soon. Why? Because of greedy, lazy ass clowns in upper management.

    Didn’t they get the memo that the fat days are over…

    • sly

      Jay – You hit the nail on the head, brother. As a soon to be former employee I was living my dream everyday working for Buell. This was a great American company, I will always be proud to have been a part of.

  • wyatt

    This is a sad day and i have ridden harleys forever.and i love them but have a love of all things 2 wheels. harley truley seems to have lost thier way and shuttering buell is stupidity! im not a rocket scientist but to me it seems they should just give eric buell his name and plant back take thier tax write off for doing so and let buell stand on their own. remember harley buying themselves back from amf ? oh one more thing get them out of the harley showrooms . all harley showrooms are staffed these days with poor sales personnel because the dealers think the bikes sell themselves. this is not so! here is an example here in austin texas we have 2 hd dealerships one is cowboy harley a great store with great people then we have central hd . they turn over thier sales personnel on a monthly basis any customer that rides knows more about the bikes. i realise this is not true of all shops but of many too many! it all goes back to harley being run by riders and enthusiasts whether on a manufacturing level or a dealership level. I hope willie g davidson resigns in his utter disgust with the morons that run the company now. i hope buell can somehow survive my heart goes out to them and thier employees and it will be a cold day in hell before i buy another new harley. color me mad and dumbfounded.

  • 2001 X-1 Lightning

    This article fails to mention the penalty H-D will PAY to Bombardier (Rotax) to break their 10-year contract to supply motors for the new Buell models (1125R & 1125CR). So not only are they not making a profit on design investment but they are paying a penalty for breaking supplier contracts.
    This isn’t 1960, there are numerous H-D look alike bikes out there and the heavy cruisers from Honda and BMW present a serious threat to their market share.
    The younger generations that were raised on Hondas and Toyotas do not have the brand loyalty of their forefathers.

  • Russ

    I hope that the XR1200 isn’t considered a “Sportster” and put on hold for Q4 of 2009. Really the only good thing HD has going right now.

    • Eric

      I hope that the XR1200 isn’t considered a “Sportster” and put on hold for Q4 of 2009.

      Just because production is put on hold doesn’t mean you can’t still buy new bikes. HD probably has enough of a backlog of new Sportsters sitting in dealerships that they don’t need to build anymore for the rest of the year.

      Also, in regards to this comment:
      HD is now Commie Cruisers. I am sad to see Buell go, but I hope Harley dies before they suck up any more of my tax dollars.

      Harley borrowed $700 million at 1.2% interest from the Federal Reserve, not the Government. Moreover, since they borrowed it it’ll be paid back. I don’t see how that makes HD government run or has them sucking up any of your tax dollars.

      And finally, while HD certainly can and should be working on expanding their product offerings into smaller, more nimble bikes that doesn’t mean they don’t spend a good chunk of money on R&D each year. The problem is that the Company feels hamstrung – to a point – by the same hardcore consumers that are it’s bread and butter. HD engineers have to and want to innovate but, at the same time, fit those innovations into a “retro” design that doesn’t offend the standard HD customer.

      Case in point – their flagship Touring line was, essentially, redesigned from the ground up last year. Sure, they look the same but the frame, engine, tranny, brakes, storage capacity, endurance, wheels, etc, are almost all new, with noticeable improvements over previous models.

      The fact that HD is able to create an almost totally new bike (under the skin) and not have anyone notice is both a blessing and a curse.

      • Russ

        “Just because production is put on hold doesn’t mean you can’t still buy new bikes. HD probably has enough of a backlog of new Sportsters sitting in dealerships that they don’t need to build anymore for the rest of the year.”

        -Not exactly where I was going with that comment, but true enough. What really worries me is that this is the first bike that Harley has built in a LONG time that breaks the mold (the XR1200). If they stop building them it means one of two things; both of them bad. Either people are not buying them and there is a backlog, or Harley is just plain dumb. I personally think that even if the XR1200 isn’t making money, Harley NEEDS this bike in its lineup if they want to be around for the long haul. The XR1200 will lay the foundation for a new company in Harley. Look what Cadillac did with their brand. It has completely been revitalized from the days of Grandpa’s Caddy.

        Similarly, the XR1200 is the bike that will diversify Harley’s portfolio and keep it all in house (no MV Agusta), and will eventually (fingers crossed) bring younger buyers into the showroom.

        One final way to look at it is consider it good marketing. Toyota started building the Prius to give itself a very green image. Nobody in Toyota thought it would be as successful as it is. The XR1200 could be just as good of a way to bring in buyers all over the world into Harley dealerships. European and US magazines love this bike, and it would be a waste of great marketing to lose it.

  • Alex

    First, great article and commentary.

    I don’t understand how Harley can be in trouble when they sell an overpriced product that people actually pay for? I could understand if there was someone they actually had to compete against, but Harleys sell themselves, no matter how inferior they are. Also, I’m guessing they spend next to nothing on R&D.

    What’s the root cause here? They have continued to make a profit, so how can they be so far in debt? http://www.google.com/finance?q=NYSE:HOG&fstype=ii

  • hoyt

    “Screw it, Let’s Ride.” …another bike

    Is HD headed towards pleading to the American public that they are an “icon”, an “institution”, and they can’t fail? There are enough douche bags in this country to proudly run to their rescue, money in-hand. That makes this whole thing fucking more miserable. And, a high % of those people are the ones to quickly call people Socialist.

    http://www.youtube.com/watch?v=y3BmMqvyBdM

    • epimetheus00

      I’m with you, Hoyt. It’s ironic (and total BS) that the great free-market ideologue’s were willing to have the great Ronald Regan throw tariffs on import bikes to help save Harley’s bacon, once upon a time. And eventually, as greed and total hypocrisy continued to consume a lot of us in this country, Harley literally filled their fat, bloated dealerships with tons of accessory junk – most all of it imported, to the further detriment of domestic suppliers.
      This information that Harley hasn’t really rigorously crunched numbers around the shutting of Buell sounds pretty sad. The “1000-yard scan” requires one to have eyes open, looking ahead – not head-up-your-butt imagining that what lies ahead looks the same as what is past.
      Bye, bye HD. We’ll miss you…sorta.

  • Isaac

    They need to revive the V1000, modernize it and not sell it for a riduculous price. That 70′s HD750 racer was pretty cool too. What about that ‘Vinatge Revival’ mentioned earlier in this thread? That would be nice! Ducati did it with the Paul Smart and 1000s? the only H-D’s I like are the Sportster and Crossbones thats ‘if’ I had to choose. I agree with what everyone is saying about that 20′s tech. They need to take a lesson form Confederate. Those guys still accomplish retro but with an uprecidented amount of cool.

    Eric I feel bad for you and what the ‘Devil’ has done including DMG and how they have smeared your name. I guess this really is the cliche’ “Paying the Devil his due”.

    • Don

      In order to have a “vintage revival” one must first have had something modern to replace the old iron. That’s the problem with Harley, they never stopped making the old stuff and only came up with new motors and technology because they had to meet some new regulation for noise or emissions.

      My brother-in-law let me spend lots of time on his Harleys. Loved teh FX chassis but that motor is horrible. Buell had it going in the right direction with the 1125 motor. I love v-twins (I ride a Ducati Monster), but if riding American means staying in the stone age, I’ll take my money elsewhere.

  • Josh

    HD is diggin it’s grave here. Not only did they keep the prices hgh, they financed them know so. Buell while not my cup of tee styling wise was looking to be a good performer against the jap bikes.

    I think our 1950′s way of Business thinking is starting to bite every industry in the ass.

  • Jeff

    Seems like it’s just another example of the execs lining their pockets while driving the business into the ground.

    I never understood why Harley couldn’t innovate and come up with something different than a chromed tractor motor. They’re going after women riders with 800 pound bikes? What’s in the water over there at Hardley HQ?

    It’s a strong brand, no doubt, but the company is sorely in need of new leadership.

  • Erick

    Yeah, the Buell bikes were one of the few bright spots in Harley Davidsons’ product line-up. Seems so foolish to just retire the Buell brand and it’s line-up. Seems H-D they could have done much better to sell the Buell division instead of tossing 6 feet of dirt over it. What a waste and a shame.

  • Shawn

    With a 58% of the market….. We ALL better hope that they can turn this around. There are a lot of people who only ride motorcycles because of Harley.

    Now you may want to say “So What?”. But if Harley dies…. there could be a lot less motorcyclists out there. With less people riding, we become even more of a minority….. and risk becoming even more of a target for anti-motorcycling laws.

    I hope they can turn this around. And who knows…. Buell could come right back… just like Indian motorcycles.

    • CBontheMV

      Pffft, If Harley doesn’t make it, you really think people will just stop riding? No, the typical die hard Harley rider will just be forced to switch to a different bike. Trust me, the other manufacturers will welcome those riders with open arms with NEW technologies and better performance and most riders will wish they’d switched years earlier.

      • Syke

        I’ll chime into this discussion from a vantage point that I don’t think anyone else here holds: I’ve flown colors in three motorcycle clubs over the past twenty years, and even though I’m bareback at the moment, I still ride with the Outlaws M/C. I work at a Honda/Yamaha dealership (parts), earlier in this decade was the parts manager for Ducati Richmond. I’ve spent as much seat time on Ducati’s as on Harley’s – and both pale compared to my time on Triumph’s. And I’ve owned about everything in between from dual sports to BMW’s to Ninja’s.

        You state that the hard core Harley owners will go to another brand if Harley goes under. If you’re talking seriously ‘hard core’, not the lawyer who’s out on a sunny Sunday in his factory authorized leathers, no freaking way. Those old hyperbolic statements such as “better my sister in a whorehouse than my brother on a Jap bike” may sound amusing to most correspondents here, but they are taken seriously by the truly hard core. I could see a few of them transferring their allegiance to Triumph, but the majority would probably keep their last Harley until they could no longer ride anymore.

        Harley’s being gutted with a dual edged sword: The younger crowd rags them for staying with what are essentially modern vintage motorcycles, the people who actually put the money down and BUY the bikes want nothing but modern vintage motorcycles. Any attempt to move away from the traditional Harley is greeted with suspicion from those that claim to want different bikes (amazing how that crowd can always come up with an objection to actually opening their wallets and putting their money down, no matter what bike Harley or Buell puts out – and no, they’re not going to copy the Japanese and to an in-line four cylinder sport bike) and derision from those already owning Harleys.

        Basically Harley marketed themselves too well back in the 90′s/early 00′s. They’re straightjacketed. Then they compound it by financing to people who I’d never finance. Back in 07/08 I watched both the president and vice president of the Deranged Few M/C (my last club) get 72 month loans on brand new Harleys while everybody in the club knew it was going to be a struggle for them to make payments past the first six months (if that long). No problem, the important part was for the dealer to get the sale.

        Oh yeah, I’m riding a ’98 Springer I bought used because it’s what I was able to afford and pay cash on the barrel.

        I think the real reason that Buell was dumped is that the majority of Harley dealers who carried the bike were resentful of having to make the effort. Hell, you had to SELL a Buell, where people used to beg to be able to buy a Harley. They never understood the product, weren’t willing to learn it, and wanted little to nothing to do with it.

        This is also a prime example of Harley not figuring ahead to the day when everybody who’s ever wanted to own a Harley finally has one. What do you do then?

        How they answer that question is going to decide their future.

        • robotribe

          Syke, I’m the furthest thing from an HD owner (I am a Triumph owner), but your informed and balanced insight is very much appreciated.

        • Eric

          Harley’s being gutted with a dual edged sword: The younger crowd rags them for staying with what are essentially modern vintage motorcycles, the people who actually put the money down and BUY the bikes want nothing but modern vintage motorcycles. Any attempt to move away from the traditional Harley is greeted with suspicion from those that claim to want different bikes (amazing how that crowd can always come up with an objection to actually opening their wallets and putting their money down, no matter what bike Harley or Buell puts out – and no, they’re not going to copy the Japanese and to an in-line four cylinder sport bike) and derision from those already owning Harleys.

          Skye, great post… couldn’t have said it better myself. :)

          On a side note, I currently ride a Triumph (Street Triple) but have day-to-day insight on the some of the bureaucratic corporatism that plagues HD, as well as much of their marketing.

        • http://ridethetorquecurve.blogspot.com hoyt

          Syke: “This is also a prime example of Harley not figuring ahead to the day when everybody who’s ever wanted to own a Harley finally has one. What do you do then?”

          The biggest “niche” bike around, with no alternatives is a problem.

          And to your point, it is a double-edged sword (detractors and crusty faithful)… anytime HD does try something else, their own start grumbling as witnessed by the backlash towards the VRod.

  • Seak

    It will only be a matter of time before HD goes under. More and more people are leaning towards Sport Bikes. It’s obvious as to why. Older HD riders are just getting older. Younger people don’t want a HD or cruiser. They want something new and sporty. That’s not what HD is. HD is what it is, and what it isn’t is the future. I feel bad for them for making such a foolish deal; but this is what happens when you have idiots running the show. Ignorance ensues.

    • IK

      Not true. Ducati sales droped 56% this year so far. Overall sportbikes segement is down deeper than any other segment of the market.

  • Matt

    Everyone keeps criticizing Harley for not being very innovative but you have to realize that they were making a lot of money without doing so. The comfort created by doing year after year of market-leading sales lulled them into complacency. Why innovate when heritage is what you’re selling? I would have imagined that the past year and a half would shake them out of that mentality, but the closing of Buell might (not certainly) indicate otherwise.

    This doesn’t excuse them from their sub-prime loan practices, inability to save for a rainy day, or their closing of Buell; I’m just saying that it isn’t terribly shocking that they haven’t bothered to engineer anything more remarkable than the V-Rod.

    It’s too bad, if I ever finish college and get an okay job an XB12SS was one of the bikes that I was thinking of getting. The salesman at the HD/Buell dealer in Glendale even seemed enthusiastic about Buells.

    • MIKE

      THE V ROD MOTOR WAS DESIGNED BY ERIC BUELL GO READ THE BOOK OF BUELL AT BUELL.COM. HARLEY IS DOOMED WITHOUT ERIC BUELL PLAIN AND SIMPLE.

    • dmkinsey

      Exactly like GM. Didn’t bother designing a smaller more fuel efficient car because they were making a buttload of money selling four-ton Hummers.
      Nothing wrong with giving the public what they want but good managment means being prepared for changes in the market.
      HD still isn’t prepared.

  • DC

    I’m 25 and ride a 30 year old XS650. I have an aversion to any new HD’s precisely b/c of the marketing efforts that HD apparently continues to embrace. (Guys 15-30 years older than me, wearing Harley shirts, riding on Sundays, super shiny chrome everywhere…ugh) I just don’t want to be associated with those people. And the ONLY reason HD has had recent success with guys my age is bc they have been jocking the work of guys who actually give a crap about custom bikes (see: Biltwell, ChopCult, Church of Choppers, etc…) Those guys have been doing HD’s young-adult marketing for them. The Sportster Iron is a joke. Bump your MSRP up to 8k for a bike you can make with your own hands for about 4k used.

  • carbon

    The simple problem is Harley just charges WAY too much for their bikes. Road Kings start at $18,000? Double-U Tee Efff?

    And this is coming from a guy who likes Harleys! I own a sportster but I’d rather own an air-shocked, softer riding Road King with built-in saddlebags so I can throw some stuff in there. I like these bikes because of the riding position and sound. A Yamaha Road King is starting to look good…

  • carbon

    Whoops! I should’ve said a Yamaha Road Star.

  • Random

    Seems no one at HD board can look around… If you look at BMW you see them maintaining their boxer line healthy but offering thumper-equipped trails, parallel 800c bikes, even betting on a (cough) cruiser and legitimate sportbikes.

    As for the big4, fuel-cell, eletric, Honda choppers and 250cc ninjas can be seen as attempts to fill every possible (present or future) spot.

    In the meantime, what was HD R&D doing? Creating new, exciting color names?

    Even bikes as transportation (instead of big toys) can generate profits, ask piaggio. But no, we can’t let too many people drive Buells, it’s bad for the “brand”, let’s kill Blast. And, by the way, let’s put all or eggs on a big basket (even if we don’t really know it will be there).

  • Not A Baby Boomer

    So, um, HD will stop selling to those under 60, and continue to market to the Graying, Tattooed, Halloween-Costume Leather Pirates. Great move. Good luck with that.

    • fearnow

      What you said. Do people riding a particular brand of bike have to wear a logo’d set of everything to fit in with the rest of their crowd?

      They call it pride. I call logo’d underwear etc stoopid.

  • http://www.yahoo.com Tom

    Harley was a cult that even the board of directors bought into. If Harley goes bankrupt, there are investors out there who would purchase the remaining assets and rebuild the company. Sure, it’ll be painful in the short term, but perhaps, and this is quite logical even if it does not happen, that the best way to save harley for the 21st Century is to kill it now.

    Chris T. Shields gave his prognostication about the demise of Harley back in the 1990s and got attacked by the cult followers for pointing out the obvious.

    http://www.goingfaster.com/angst/noharley2.html

    ——

    So is Indian Motorcycle now on death watch as well?

  • Paul

    Wow and just wow. It reads like an admission of stupidity.

    How much do these execs make in a year including bonuses? Making cuts there first would’ve made a world of sense. Or even some firings.

  • Richard

    It never ceases to amaze me how so many people are passionate against Harley. It’s a wonder there are any out on the highway.

  • TEvo

    Indian is more like a zombie they should just let fade gracefully into the annals of motorcycle history.

  • Nunya

    I’ve bought 5 Harleys and 3 Buells from H-D over the years. Guess who ain’t buying anymore Harleys.
    If you’re that damned stupid, you don’t need MY money.

  • Joe "Bueldog"

    Hey Erik,
    I have a 04 XB12R and ride it every day. I don’t know how all the HD stuff will pan out, but I went for a 200 mile ride today on Bueldog and had one of the most enjoyable rides ever – and I started riding in 1973. The Buell never stops being the center of attraction wherever it goes. But more importantly, as a rider, it pushes all the right buttons. It sounds the part with its Drummer, it goes around a corner like nobodys business, and it just reaches down into this motorcyclist and strikes a cord that no other bike has yet to touch. Don’t lose heart, things are just in transistion. You can be assured that a red “BUELDOG” plated XB12R in Rancho Cucamonga has got your back. We’ll see you soon – no doubt. Looking forward to it.
    Joe Dillingham
    Rancho Cucamonga, Ca

  • mjw149

    I know most enthusiasts are bemoaning Buell’s demise, but in the broader market, I really think MV Augusta was more important. A completely separate line-up that Americans are underexposed to, a brand that isn’t tied to America’s xenophobia or expensive workforce. Yes, I support American jobs, but they’re aren’t competing against people with the same rules. Maybe if healthcare was fixed…?

    Buell wasn’t going to go mass market, so it was really a failed experiment. When they admitted that the Blast failed, what were they going to add to HD? I don’t think they needed Buell to sell HD sportbikes, so hopefully they have some specific models in mind that will replace some of that.

    Looking to the future, how are they going to transition to electric under the Harley brand? The next generation of all-American motorcycles ARE being made, and they’re battery-powered.

    They are in rough shape.

  • fljab

    I am a lifelong motorcyclist and have owned/ridden HD’s for 30 yrs.

    This year I bought a new bike, not a HD, but, gasp!, a Yamaha! I still have my 10 yr old Harley for doing “Harley stuff”, but the dealers and lack of real modern innovations convinced me to move on.

    Go to the dealers, they have a showroom full of $20K+ bikes that even though they have made changes over the years are still not all that much different than my 10 yr old bike for the most part. Most dealers still won’t get off MSRP plus whatever other charges they can bring up and act like they’re doing you a favor to talk to you.

    As I’m getting older and have more time to ride, especially long distance, I wanted a bike that is more reliable, handles and performs better, and stops. HD has made great strides here, but still behind the industry standard while charging premium $$ for their mostly lifestyle product.

    So now they’re cancelling the smaller, affordable bikes? The Sportser is old as the hills even with the revisions. Buells held promise esp with the Rotax version. It would’ve been great to see that in a Sport-Tourer version maybe with cruise and other sensible options/features. The VRod also holds promise IMO as a S-T, but it is hung up on “lifestyle” and not progressed.

    And MV! I really thought that they were going to do something good with that brand, maybe reach out to the sport bike crowd, but no, buy it, sell it, then stick to the big bikes.

    How many more aging Dentists are out there that can afford $25K bikes?

    If HD can make some reasonable changes, I’ll come back, but for now, I’m looking at a 200k+ lifespan on my new Yamadog (which, by the way, I bought as a year end model for $2k less than MSRP and ~$10K less than the Road Glide I was looking at!).

  • omer

    I’m in agreement with the comment on the lousy staff at most Harley dealerships. I don’t own a motorcycle, I’ve been in the market for several years (yes, I’m “one of those guys”), I decided I should get something that’s lightweight, and is low powered so I can get used to riding. I saw the Blast and thought it would be an excellent bike to learn on and own for a few years until I felt comfortable enough to move up to something like a Ulysses or an XR1200.

    I was in a local dealership here in California one day about two years ago asking about the Blast and the salesperson basically said I didn’t want a Blast. I said ok and walked out the door. I know that the Blast was considered by many to be a dog, but the point is, here’s a potential customer that was going to try and spend money on your product. Guess what happened? You did not make a sale. Granted, I’m just one guy, but if there’s enough people getting jerked around by dealers, then obviously, Harley won’t make any sales to new customers.

  • TS

    By mid 2011 what’s left of HD will be owned by a Chinese or Indian manufacturer that’s looking to get into the Us/Western market as an end-around to the perceived/actual quality issues those countrie’s bikes currently have.

    HD’s debt-hole is so deep they will never get out of it. They will be forced to sell off what little of value they have which is basically brand, maybe dealer network, and… Well… I wonder how much they can get for the logo…

    • cWj

      somehow I don’t mind the idea of Royal Enfield getting HDs capacity.

      so long as HD’s not using it anyway.

  • Doug

    Wow, a lot of hate for HD. The petty insecurities are all in full display. So much for just riding what you have, and enjoying it. The need to whine about what others ride has a massive ring of the childishness. I’ve owned two Buells, and many other brands, they’re all fun & unique.

  • Mark

    Ahh Buell, Harley-Davidson’s version of the entire Honda product lineup. You can walk into a metric powersports store and buy a “new” bike from 3 past model years. The distribution network for motorcycles has always been “How many do you want?” Here is what we will send you. Thankfully H-D is limiting production and scaling back to needs in the marketplace. They will also be shipping more bikes overseas where demand is very strong. As for all the dinosaur and aged equipment references. I’m sure that all of you detractors have extensive product knowledge. Here is the real skinny. People the world over love Harley-Davidson the ideal, the bike, the image, and the brand. Harley will continue to sell their brand across many product lines through endorsments. Lending has finally found a level and HDFS should hold more ground. All I know is that I will be happily riding my FLHTCU (thats an Ultra Classic to the product knowledge guys) home tonight. By the way I am gen-x not a boomer.

    • http://hellforleathermagazine.com Wes Siler

      For once, this isn’t about the relative merits of products, it’s about flawed business practices. Harley relies on credit to sell its bikes to such a degree that it has to offer loans at a lower interest rate than the money it has to borrow in order to make those loans. That’s bad. It made a huge number of loans to people that shouldn’t have qualified and subsequently defaulted. That’s bad too.

      General Motors was producing many times the number of vehicles Harley does when it went bankrupt earlier this year.

      If the economy allows a large number of people to take out high interest loans in order to buy Harleys and accessories sometime soon, the company might be ok. But until that happens, it lacks the cash to develop new models or expand drastically overseas.

      You’re right, the Harley brand carries a huge amount of weight all over the world, but there’s no other country like ours with the kind of mass affluence required for large numbers of sales. The big news for India’s middle class is the advent of a $2,500 car, the Tata Nano, that will, for the first time, make car ownership a possibility for the country’s new middle class. There’s just not a mass market there for $25,000 motorcycles. The same is true in China and in other markets often touted as potential saviours. There’s some market, but not to the degree required.

      Harley could sell large numbers of motorcycles in those countries, but that would require designing a cheap utilitarian model and building the in-market production facilities from scratch or licensing one from another manufacturer. Either way, that $1.9 billion is barely enough for the company to continue its current business through 2010, there’s no wiggle room for massive investment in new markets.

  • Joe

    Can’t believe the HD hate on here. Mark, Doug, Eric, and Ik you guys hit the nail on the head with your comments. IK, you really are right on,the sportbike market is sooo dying. There are sooo many new 07 and 08 models on the showroom floor.

  • Joe

    WRONG Wes, you may want to look at this link http://www.earthtimes.org/articles/show/214783,india-china-sees-highest-jump-in-millionaires-survey.html, says that China and India have the fastest growing Millionaire pop. By 2012 they could have more Millionaires then the US. Seems like a REALLY SMART move by HD to me.

    • http://hellforleathermagazine.com Grant Ray

      Um, Joe? The issue here is that Harley doesn’t have till 2012. Quite frankly I’ll be impressed if the company makes it until June of 2010 without going to congress for a formal bailout. So all those estimated future millionaires in China and India you refer to aren’t relevant in the corporation’s current predicament.

      Also, if you’ll notice, a lot of the criticism here is of dealer prejudice against a non-HD cruiser demographic. Not to mention that the haters also happen to be current owners of Harley products. That said, dealer education and service problems is an industry-wide source of lagging sales, by no means exclusive to Harley.

      We’re not here to spread the hate, we absolutely want a strong American manufacturer of motorcycles that we can support. But good christ, when the emperor has no clothes, the emperor has no clothes. We just want them to go put on a sweater, y’know? Maybe some pants…

      • Joe

        Did you read the link I put up Grant?? It’s growing 8 percent a yr. I said there will be more Millionaires in those country’s then the US BY 2012, that means there are a LOT of them there NOW!!!! I would also say that MOST of the HD haters here ride sportbikes not HD’s. John, Ik posted the comment above that said “Ducati sales droped 56% this year so far. Overall sportbikes segement is down deeper than any other segment of the market.”, I believe that statement seems about right to me. I don’t think Ducati is doing that well either.

        • http://hellforleathermagazine.com Grant Ray

          Come on, Joe. You and I both know that being a millionaire in China or India does not automatically make one a buyer of Harley-Davidson products, much less a brand enthusiast. Read the transcript of the Q3 conference call. Even Wandell knows Harley can’t break those markets before 2012.

          • Eric

            Harley has already begun to enter the Indian market and has plans to open it’s first dealerships in the first half of next year:

            “An American Icon Arrives In India With a Rumble”

            • http://hellforleathermagazine.com Grant Ray

              Yes, I know about the tiny presence Harley has in India. Ditto for China, Argentina and Brazil. Opening a couple of dealerships and true market penetration that can sustain a corporation suffering a debt of almost $2B and sliding US sales due to buyer insolvency are like peas compared to mountains.

              • Eric

                Yes, I know about the tiny presence Harley has in India. Ditto for China, Argentina and Brazil. Opening a couple of dealerships and true market penetration that can sustain a corporation suffering a debt of almost $2B and sliding US sales due to buyer insolvency are like peas compared to mountains.

                Ha, well, of course. I wasn’t meaning to use that email as proof that HD has a massive presence in India, just that they’ve already made landfall in the country. :)

                At any rate, if folks are so concerned about their “$2B” debt right now (which is actually closer to $3B in total) then why wasn’t everyone ready to write Harley off for dead the last few years when they were carrying debt loads of $2-2.5B?

                Moreover, if you look at the numbers HD is still making a profit and they have $1B more in operating cash and assets than they did last year. Their sales are down significantly less than almost every other bike manufacturer out there and certainly less than other heavyweight cruiser makers. The upshot is that, from a sales perspective, they’re doing OK – given the circumstances – and people still want their bikes.

                Now, certainly, having $1.9B in loans at 15% interest is an annoying problem but certainly not a critical one for a company used to carrying at least that much debt as S.O.P. on a yearly basis. Long-term, yes, they need to figure out how to diversify their line-up but, assuming the economy is truly starting to recover like the analysts say it is, then I really think all this doom-and-gloom talk about Harley not making it through 2011 is just a bunch of armchair economists making wild predictions.

                Look, HD has been around 106 years now. They’ve obviously been doing something right and I don’t expect them to go away anytime soon. Certainly not in the next 2 years. Hell, look at GM… yes, they declared bankruptcy but they’re still selling cars and are actually projected to gain market share in the month of October.

                If you want some kind of end-of-the-world nihilist stuff to read go Google “2012″ and knock yerself out. :)

                • Joe

                  Good point’s Eric!!!

                • http://hellforleathermagazine.com Grant Ray

                  Eric, I’m not a nihilist. I’ve seen this coming, though. One of my extra duties when I was at Confederate was to personally deliver Hellcats to clientele, film sets, photo shoots, etc. I used to make regular sprints all over the country. I saw more Harley-Davidson dealerships than GM, Ford, even Walmart. Even crazier, the Harley dealership structures where in many instances larger than the Walmart stores. No joke.

                  The point is that Harley could handle the floating debt you refer to of a few years ago because the company hadn’t reached super-saparation in the marketplace. Nor do I believe they ever thought they would. In a sense, HDFC was robbing Peter to pay Paul, which for the time, worked. I also think they considered themselves no longer luxury, but a necessity like cars for commuting and sweaters for the cold. Otherwise, why would they continue to build such megalithic dealerships on the outskirts of smaller and smaller communities?

                  Well, that moment has come, and unfortunately, super-saparation came at a really, really bad time. The 1.9B in debt I referred to wasn’t organically accrued. It was specifically sought as emergency funds to continue operation because the company had unknowingly out-sized itself for the current economic climate. That climate is one of +20% unemployment in many of those rural areas that have shiny, giant H-D dealerships.

                  Can they survive? If GM did, then Harley should be able to as well. But drastic changes need to be made and unfortunately, nothing in the Q3 conference call leads me to have faith they will do so. Instead, Wandell is waxing on about India and China and how Harley will move manufacturing to those markets to serve them.

                  And if their Harley-Davidsons aren’t made in the US, or those Harley parts start showing up on US models, what will that do to the brand, much less sales? That is, assuming they make it that far.

            • Phil H

              Just 1 dealership amongst a nation of 1.17 billion? How will they ever serve all them millionares?!

    • Phil H

      Joe, that’s pretty darn insight of you to know what these millionares in China or India will buy…

      Now I’m not one of them millionares, but I do live in China (well, Hong Kong – close enough) and I can tell you motorcycle ownership amongst the rich won’t be that many – these people will probably buy a Ferrari, Bentley…etc and/or other luxury items such as watches or anything else before considering a motorcycle.

      And even for those who are in the market for a motorcycle, they will probably buy a BMW before a Hardly. The HD ain’t THAT strong over here as you may think and if HD is banking of these noveau riche to bail them out, well, as they say in Japan: “Good ruck!”

      • Joe

        The insight on here is that you all think the HD will be dead in 2010, who knows what will happen next yr. Phil say that that market will buy BMW’s before HD, come on Phil if you live in China (Hong Kong) then you KNOW that BUICK (GM) is one of the BIGGEST sellers of car’s to the rich in China, not foreign cars. They want things made in the USA. Japan was the same way after WW2. Keep the HD hate coming, Ducati will be dead long before HD.

        • Phil H

          “The insight on here is that you all think the HD will be dead in 2010…”

          Nope – didn’t say that. Then again, it doesn’t mean it won’t happen.

          come on Phil if you live in China (Hong Kong) then you KNOW that BUICK (GM) is one of the BIGGEST sellers of car’s to the rich in China, not foreign cars

          Yes, Buick was (is?) one of the biggest selling brand in China, but that has changed rapidly within the last 3-5 years. There are A LOT more Audis, VWs (well, they’ve been around since day one), Hondas, Suzukis…etc. and numerous local branded cars on the streets.

          GM sold its 2 millionth vehicle in China in June 2009 (and they were in China since day one as well) – VW already sold 1.06 million cars from Jan – Sept in 2009 alone. Honda also sold 409,162 units within the same time period.

          More importantly, by directly comparing GM and HD, you are making the assumption that they are in the same business. While both are American brands, GM is in the business of selling a genuine product with features, technology and innovation (albeit not as much as other brands, I am sure they invest money in R&D and design – heck, even some Buick models are now designed in China and only available locally); HD is in the business of selling an image with “features” or “technology” such as “custom flame paint jobs” or “even more chromed parts”.

          Tangible product features and benefits are universally recognizable; image don’t necessarily translate across to your next door neighbour, let alone across to another country in another continent (FYI – flames are considered a bad omen).

          They want things made in the USA. Japan was the same way after WW2.

          That may be so, but end of WW2 was also 60+ years ago…things have moved on a little since then.

          Keep the HD hate coming, Ducati will be dead long before HD.

          I don’t hate HD as a company, just the knuckleheads that feel compelled to act like idiots, rev their engines and make a lot of noise to maintain their “badass biker boy” image.

  • John Self

    HD wants the youth market.

    Buell sells sportbikes.

    Sportbikes ARE the youthmarket.

    HD screwed up.

    This short-sighted move to appease the stcokholders has ridden on one HUGE assumption: That people will keep buying HD’s. If Huge Harleys fall out of style, what’s going to carry Harley? Nothing, that’s what.

    Apparantly the old saying about not putting all your eggs in one saddlebag has not been heard by the current HD brass.

    Non-four-cylinder sportbike sales are up worldwide (Think: Ducati), and HD is reducing diversity. If I was a stockholder, I’d be pissed.

    If HD changes course, and decides to keep Buell, they’ll be doing themselves and their stockholders a long-term favor.

  • HD Wanabe

    Hey quit making crap out of HD. Whats wrong with dressing up like a pirate and cruising from bar to bar on your Harley? Just stop and think. If Harley was not in business the makers of leather vests, tee shirts with a skulls or eagles on them and most of all do-rags would all be out of business. All the beer belly Harley bikers would have to take there pick ups to the bar instead. I kind of enjoy riding by the bars and seeing all the beached Harleys parked out front. They are fun to look at. Some have tassels hanging from the hand grips just like my daughters trike. I love the tall handle bars and the mud flaps hanging from the sidecases. And best of all are the super loud exhaust. Just sitting at a stop lite revving your Harley with the loud exhaust must make your dick an inch longer.

  • fljab

    I will say a couple of things from my own personal buying experience. I own both a HD Ultraclassic and a new Yamaha FJR1300. When buying the Harley (which has been some yrs ago), it’s first the salesman, then the “chrome” or “accessories” person, then the closer, and the person who actually does the paperwork. Even if the bike is X dollars, they do all they can to get you to add on both accessories and clothing.

    Purchasing the Yamaha was much different. I called around the state and got the best price on the bike I wanted then took that info to my local Yamaha/Suzuki dealer. Salesman matched plus called the owner to ensure it was OK within 10 minutes, then it was maybe another 30 minutes of doing paperwork and sorting out payment, and that was it! I asked about accessories and basically got a weak answer from the parts desk with no flyers of offerings available.

    Whether you like them or not, the HD dealerships know how to make the money on everything associated with the bike. Pretty much any one I’ve been into has parts experts, motorclothes experts and so on. Not so much in the other marques IMO. Smart business model for HD I guess, but then again everything is so high dollar (aka HD), it’s easy to get “buried” in the purchase. I think that is part of the problem during this downturn of the economy.

    The Japs may not make as much $ per sale, but they offer so much more aka wider product line so that there is something for anyone that walks in from generators, watercraft, and dirt and street motorcycles. Harley has basically put all their effort into the lifestyle motorcycle segment, and certainly done pretty well at it over the last decade plus.

    It will be interesting to see how all this turns out a yr or more down the road…

  • steve

    I too am upset about losing Buell,although losing the Pontiac division of GM is more significant.
    I really hate all these door closing and losses.
    Now for the positive. At least there is an American motorcycle. Also, the dealerships are state of the art and open 7 days a week and long hours.HD has improved its evolution style engineering to produce motorcycles which do last, and are reliable.I have an 04 XL 1200 Sportster Roadster. I love it.The rubber mounting of the motor saved the Sportster.
    The valves require no adjustment,the belt no lube.
    And being a life long MC rider does qualify me to offer these observations.
    I did read most of the previous entries,and I honor your observations as well.
    I hope and beleive HD will survive.

  • http://www.promopays.ca Custom T-Shirts

    What a nice blog you have..thanks for all this information

  • Geff

    Harley do not need to offer smaller bikes. They do need to drop the price on their entry level models and specifically the 883 Sportsters.
    If you aim a bike at kids, you need to make it affordable.
    Scrapping Buell made/makes no sense. In a way Buell was never really given a chance. A significant number of HD dealers in the US never sold Buells. H-D should have told them it wasnt an option and made the Buell brand a serious part of the business rather than a side-show.
    MV Agusta is not, ever, going to be a mass market player. Even over here in Europe they are a luxury niche market brand. Im sure Buell sold more bikes than MV Agusta for the last few years and woulkd have continued to do so.
    As far as European markets are concerened, Buell had/has a strong following as one of the few vaible alternatives to Jap sportsbikes.

    And finally, I am looking forward to Triumph taking all that market segment that H-D just freed up by scrapping Buell.

  • http://www.ricksmith.me RickSmithAuthor

    Harley succeeded because they led authentically in the market. They figured out that their brand was about the experience, not just the bike – and they played that up.

    Authenticity is at the center of all great leadership.

    Rick Smith

  • http://matthewabate.wordpress.com Matthew

    Let them fall apart so much that they have to fire all these idiots and bring in someone that knows how to run a business.

    I want a successful American motorcycle brand, not this POS.

  • bob utach

    BMW and Ducati and Triumph motos make profit and survive with a VERY SMALL dealer network. Buell could too. HD should have spun off Buell and let them sink or swim on their own with their own dealer network. Here in indy ther is a combo victory/triump dealer. it works just fine…
    we also have combo suzuki/honda/kawasaki dealers. buell couild combo with other brands at independent dealers and do just fine. they have a niche market but make profit..fine…nothing wrong with that. i’m sick of these biddness models that you gotta grow grow grow and growth is everything. there is nothing wrong with making/selling 5,000 bikes/year if you can generate ANY profit…who cares if you only make 2% profit….back in the 1950s that was considered fine. i’d like to see erik buell take buell private and run it and then who cares what hd thinks…and no public shareholders to satisfy. it could work. you just need the initial funding…roger penske could do it.

    • http://ridethetorquecurve.blogspot.com hoyt

      completely agree. Not having to pay any attention to Wall St. to run your business has got to be liberating.

  • Eric

    Eric, I’m not a nihilist. I’ve seen this coming, though.

    Grant, let me just clarify that, yes, I recognize the dire state HD is in right now and, yes, you make a lot of valid points and I would not be very surprised if HD did go into bankruptcy protection within the next 5 years.

    However based on all the crap HD’s been through over the years I am cautiously optimistic that they’ll be OK. Also, in spite of (or maybe because of) last week’s Q3 results HD stock is up almost 16% since last Thursday. So, apparently the market thinks they’re doing something right.

    Eeven if HD does declare bankruptcy they’ll most likely emerge from bankruptcy protection stronger than they were before, with much of their crippling debt-load negated. I would be very surprised if the Harley-Davidson brand simply ceases to exist in our lifetime.

    If they stop building them (XR1200′s) it means one of two things; both of them bad. Either people are not buying them and there is a backlog, or Harley is just plain dumb.

    For sure. However, keep in mind that the entire bike market is in a rather large recession across the board – including sport bikes. So it’s not surprising that even the “sportiest” Harley isn’t selling as well as it could/should be.

    On a side note, I think a stripped-down XR”883″ at around $7/8k would be a great addition to the HD lineup.

  • LADucSP

    This is an egregious breach of their fiduciary responsibility. It will have unanticipated consequences to regulatory filings and GAAP financial presentation that resonate for years.

    Since it is not an informed decision in any manner, it is irresponsible, negligent and irrational.

    If anyone owns HD stock, you should be dumping the shit out of it, because management has no clue what they’re doing obviously.

    Please understand, this is what I do for a living (corporate securities transactions and corporate financial services), and I am not making any comment about the value or merit of the Buell decision itself, just management’s role in the decision, and their clear and utter incompetence.

  • MTbeer

    Maybe by “leveraging our unique strengths” means you’ll see HD clothes sold everywhere just like FOX clothing. That would “extend the brand” ..I guess.

  • Adrian

    Troll,

    I’m not sure, I live in the northeast too, and I see a lot of mixed bagger slowpoke convoys..HDs and Metrics..The metric hate doesn’t seem as extreme here as maybe it is in the rest of the country.

    My experience, as a Buell owner, is that HD owners have always hated Buell more than the metrics and other Jap bikes. Most of them didn’t even know or care that Buell was owned by HD and that it was even an American manufacturer.

  • http://www.yahoo.com Tom

    To The Troll….here is your answer. You won’t like it, but it is honest, genuine, and from the heart. The cultists can attack the demographics but they cannot make the numbers go away.

    http://www.goingfaster.com/angst/noharley2.html

    Notice how Chris (and those of us who agree with him) were, are, and will remain firm supporters of the vision of Buell. The Blast is an appropriately named bike IMO.

    • Eric

      http://www.goingfaster.com/angst/noharley2.html

      Wow. I think that page says more about the (mental) issues/insecurities of it’s writer than HD riders. Who dedicates that much time and effort, posting a page on the ‘net and all, just to bash other motorcycle riders. Who cares, get over it, everyone’s not like you. Enjoy your own bike and stop worrying about what other people ride. They way that thing’s written you’d think a HD rider ran off with his wife or something. :)

  • Blake

    Harley simply doesn’t appeal to the younger crowd. Why would a young person with little cash to blow and a strong craving for speed want to spend more for a heavy bike with lower torque-to-weight and HP?

    The disappearance of Buell would be a tragedy. Large displacement, sporty V’s aren’t produced by many manufacturers.

    Harley, on the other hand, doesn’t seem to be trying. Has the company painted itself into a corner? Can’t they make something sporty, like a Gixxer, Ninja, or CBR? Why are their bikes so expensive? They look great, but if I can get a VTX for several thousand dollars less, why would I want to “buy American?”

  • Tom

    Well said Blake. The cult followers of the HD religion simply cannot grasp the facts before them. Shields is quite clear as have I and yourself. Its so obvious what HD’s problem is and its mindless defenders are no small part of it. The metric sportbike people welcome Buell riders. Its the the cult members, as witnessed here, who dislike Buells and their riders.

  • Syke

    Troll,

    It’s a status thing. Riding a VTX1800 in a Harley crowd is like driving a Corvette to a Ferrari gathering. The performance may be there, but there’s something “special” about that status brand – or more like it, something “unspecial” of the non-status brand.

    Also, physically there IS a difference. Ride a VTX1800, then ride a Harley. You discover real quickly that the Harley is different, and better. A lot depends on model, too. Ride a VTX1300, then ride the Harley, and the difference is nowhere near as pronounced.

  • Scottie

    Three years ago I walked into a Harley dealer to look at a Heritage. As usual, no price tag on the bike so I asked a salesperson how much it was. $23k was the reply. I told him MSRP was under $19k and he said they put on SE pipes. Last time I checked, pipes weren’t $4,000. I walked out.

    I’m 49, near the tail of the boomers. I bought a Star Stratoliner and probably won’t ever visit a H-D dealer again.

    Wandell’s comments have no substance. Business as usual.

  • stempere

    Troll, of course there’s young people loving to cruise, loving HD. I’m sure they’s also somewhere (maybe Japan) a 70 year old woman owning a busa.
    We’re talking majority here (what makes or brakes a major brand like HD), and a majority of HD owners seem to be rather older than sport bikes owners, and vice versa. Most (see, not the same word as “All”)young riders want speed.
    Spyke makes a strong argument, what will happen when every rider that wants one has his HD ? It seems obvious to me that potential buyers will become fewer and fewer and not only because of the terrible market…

  • bg

    With all the schmexpert advice you Harley haters are spouting, you should get together and buy Buell. You know, the company you’re now defending, but never supported.
    What wannabe Harley hypocrites!

    • http://ridethetorquecurve.blogspot.com hoyt

      bg – Did it ever occur to you that a high % of the criticism is not from HD haters? Criticism is not always from people who would not be a customer.

      Imagine a company that produces a genuine product like a Road King AND a sport motorcycle equally genuine and competitive in its market segment. The “Motor” company could do it if they get their head out of their ass.

      • bg

        Why do you care Hoyt? Would you buy the sport bike? Are you invested in HD stock? Or is it just good ol’ American pride in a good ol American company? I don’t understand the HD bashing. It’s simple: If you don’t like the product, don’t f’n buy it. I ride an HD and have for thirty years. It’s what I like. I don’t particularly care for several different bike manufacturers, but I don’t criticize them like many in this thread. Different strokes for different folks. Amazing!

        • http://ridethetorquecurve.blogspot.com hoyt

          I care because I want to ride a sport motorcycle from this country (and that is not a reflection of over-patriotic hoopla, either).

          The entire western hemisphere basically is a no-show in this category of motorcycling. Meanwhile, there is a market waiting for a company to step-up and say they will compete. If small companies like Ducati, Triumph, KTM, Moto Morini, Rotax, etc. can do it, a company in Canada or the US can do it.

          I also don’t want to see HD’s handout for bailout money. That is true hypocrisy considering their “Live Free, Act like it” ads and “Screw It, Let’s Ride”. Good ol American company, huh?

          • bg

            Hoyt, they haven’t taken a dime yet. Relax. And there is nothing wrong with over patriotic hoopla.
            By the way, I still ride dirt on Yamahas, Hondas and a Polaris quad. I like them all.

  • Swampy

    What Harley-Davidson fails to recognise is that the “Other” manufacturers are producing affordable knock-offs of their bread an butter cruisers. With the economy tightening, what makes Harley-Davidson think that the great unwashed will be flocking to their doors to buy their product like in the past? I don’t know how Harley-Davidson can inhance the HOG experience any more. Expensive tee shirts and chrome are not a necessary function of motorcycling, and with the economy the way it is, there is little discretionary income left for the non-motorcycling public to purchase Harley-Davidson thongs and coffe mugs.
    Harley-Davidson is setting itself up for an epic faliure by resisting change and sticking its head in the sand.
    I am truly sorry that corporate greed has overcome a real reckoning of the facts and the development of a real business strategy for the future.
    Best of luck, I hope I am wrong.

  • Zippy

    Harley has been on the ropes before. There was a, time not too long ago, when they were pretty close to closing the doors before. They came out with the Evo engine and then they became popular again.
    Instead of taking the opportunity and increased revenue to branch out, they just did business as usual. The time to prepare for calamity is before the crisis strikes.
    I can see Harley continuing this bust-boom-bust cycle until the end of time. Likely, the next boom will be very much smaller than that in the 80-90s.
    It is a real shame that Eric Buell and that corporation are suffering for Harley’s short-sightedness.
    As long as they continue this “leverage” of the H-D brand image without branching out during the “fat” years, nothing will change (except the size of their market share-which will shrink).

  • Syke

    If you haven’t been in a Honda dealership lately you should. They’ve got a new bike there, it’s called the Fury. It’s Honda’s take on a Big Dog, American Iron Horse, etc., based on the VTX1300. If you’re into choppers it’s beautiful. This time Honda got it absolutely right, and if we’d have had them three years ago, we’d have had people lining up at the door and going on waiting lists.

    Unfortunately, it’s not three years ago. It’s now, bike sales are down, and we’re selling the Fury for about $1000.00 off list. Another wonderful chance lost because Honda was slow on the uptake. Timing is everything.

    And everybody’s hurting in sales. Hey, if you’ve got the CASH to buy a motorcycle, now is the time to do it. Hell, our dealership is selling brand new 2008 CBR1000RR’s for $7999.00 plus the usual tax, transfer, etc.

    The Harley hate/sportbike hate: I’ve been riding for 34 years now, and if I’ve learned anything in life it’s that motorycles are very polarizing. And nothing’s going to change one’s loyalty to the particular form of riding that they do.

    In that time I’ve ridden cafe racers (still do), long haul tourers (ditto), 900cc dual sports, streetfighters, choppers, 150cc scooters (my daily commuter), Harley’s, vintage British, vintage American. I’ve done a lap at Indianapolis motor speedway during MotoGP, ridden with 1%ers, buried my best friend in my first M/C from gunshot wounds, toured half the US on a three bag sport tourer, street raced on Friday nights (usually lost), and have wrenched anything from a 1930 Indian 101 Scout (still have it) to a full custom ZX-6R streetfighter.

    And I’m weird.

    Weird because I can sit down with an Outlaw or Pagan (I draw the line at Hell’s Angels), vintage bike enthusiast, inner city squid . . . . . and get along. Speak their language. Understand what they’re talking about, and share their enthusiasm for their ride. If we’re both riding street, we’re both talking the same language.

    And I haven’t run into too many others who share this breadth of enthusiasm. Mainly because it’s human nature to align oneself with one’s own enthusiasms. And to believe in them completely. To the point that we all become somewhat petulant asses to someone who doesn’t share said enthusiasm.

    It’s human nature. Live with it.

  • http://ridethetorquecurve.blogspot.com hoyt

    keep it weird Syke

  • Scottie

    I’m not a Harley hater and always wanted one. In fact I can make fun of and criticize my own bike’s shortcomings. I mean, Yamaha makes pianos, trumpets and audio systems too, for goodness sakes. Also, it’s a touring cruiser with only 4.5 gallon tank, and part of that capacity is in a reserve tank that prevents ever having crossover pipes. The bags are too small as well. But I had only so much cash on hand at the time and it fits my needs.

  • http://ridethetorquecurve.blogspot.com hoyt

    bg – as this site has pointed out, HD should not be in any position to have their hand out (regardless if they’ve accepted a dime or not, yet). Look at their net income each year for the last 15 years.

  • Rico

    Like them or not, Buell represented one of the few parts of HD where there was any real innovation going on. For HD to fall back on merchandising as their plan for recovery is ignorant. Smacks of the AMF days.

  • zanon

    These threads are always hilarious. People saying “Harley should make a sport bike!” and “Harley should innovate!” when the title of the thread is Buell going down the tubes.

    Pathetic, but illuminating.

    BMW learned their lesson well and understands the sportbike market: witness the S1000RR.

    “Inline 4 — check
    chain drive — check
    standard suspension — check
    standard breaks — check
    fuel tank in the standard place — check
    oil tank in the standard place — check
    Is there anything radical about the bike? — headlights are weird.

    Oh no! Agony Agony Agony! Can we get away with this? Triumph got away with removing ONE WHOLE CYLINDER?! Can we take as great a risk?!!

    Probably not. Let’s get rid of one weird light, but leave the other.”

    Pathetic.

    • http://ridethetorquecurve.blogspot.com hoyt

      The sportbike market does not require 4 cylinders for profitable sales or good racing (obviously)

      The 1125R didn’t sell well because of its styling, not that it didn’t have 4 cylinders. That motor was designed for great torque. Check out its torque curve from a dyno sometime. It is more like a line for the entire usable rpm range.

      So, we have a great superbike designed for more street-use than a the 1098 engine or in-line 4 from Japan. Then, why not style it so it would sell on the street?

      It seemed Erik Buell was determined to use the big 1125R fairing for aerodynamics, which he stated would help make up for the hp deficit. If he was bent on racing this bike, then Buell could have come out with 2 different versions: one that had the bigger fairing so he could homologate it and the other that would be styled for better sales.

      I personally love the Firebolt look. It is very original. This UK company came out with a Firebolt-looking kit for the 1125R…

      http://www.trojan-horse.co.uk/prods/249.html

      • Zanon

        I agree with you actualy. Sport bike buyers are as conservative about looks as cruiser riders. Erik badly misjudged the market here, and bad luck finished him off

    • Phil H

      That was pretty funny. And a pretty good reality check as well.

  • Epyx

    Ok the only critisim of HD I do not understand is the complaint that the bikes cost too much. I can appreciate all the other criticism even if I disagree.

    Yes, HD makes an expensive product but so do the European makes that seem to be the benchmark of most detractors. I do agree that BMW, Ducati, and Triumph do a better job of targeting youth but they are not cheap.

    Ducati has a range from ~$9K to ~$22K, not exactly cheap or entry level for the coveted “young” rider.

    BMW has a range of $9K to ~$25K – again not cheap.

    Triumph is a little lower cost but still range $8.5K to $17K. However, most Triumph products are in the $10 – 13K range.

    HD has a very wide pricing range if the CVO models are included but these are limited builds. The standard line ranges from $6,999 to $25K. The avg range for the big twins is $15K -$17K.

    I agree that HD should diversify into other lines of bikes, but nothing is wrong with the rest of the lineup.

    Hopefully the company will continue to develop the VRSC line and expand the motor into other products (and bring back the mid mount controls). I also hope the XR1200 is a sign of future product direction. It is a nice sporty product that retains the HD brand image and builds on some racing heritage. I would like to see a Buell XB12x type expansion of the Sportster line to compliment the XR as well, also an 883 version of the XR would be interesting. The sport touring market is within the HD wheelhouse of long distance travel riding yet they have ignored it (it is also an accessory heavy niche) .

    I do agree HD needs to capture more youth into the brand. The most dangerous thing that can happen to the brand is to loose the image. Many young people like the “image” but want a slightly different product. Tailor something too them. Low cost Sporties is not the only answer, nor is copy cat Japanese sport bike. Triumph went nostalgic for the young rider and it seems to be working and no one critics them for being archaic, classics (Nor Ducati for the Sport Classic models).
    Anyway, I dont think it is all doom in gloom. I get the feeling some of the detractors are enjoying the downturn and rooting for failure though. It seems juvenile to cheer on the demise of a storied company just because one prefers a different style motorcycle, but whatever to each their own.

    • Tom

      I agree that HD should diversify into other lines of bikes, but nothing is wrong with the rest of the lineup.

      ===

      Agreed. I do not see why Harley (developed by an engineer) cannot keep their current bikes in some kind of “Heritage” line for the devoted while also seeking out new clintele. All the Japanese do this and HD should as well. Even true HD haters cannot be so obtuse as to want to see thousands of Americans out of work.

  • Giuliano Morgado

    Moro no Brazil e possuo uma Buell Xb12x, desde que vi a moto lançada (final de 2005)em meu país foi paixão a primeira vista, já estive duas vezes nos EUA a procura de acessorios e nunca achei, sinto muito pela marca e gostaria de deixar meu pesar a Erick pela marca, espero que consiga ainda reverter este processo de termino da marca e que volte a ele a respónsabilidade de montar a melhor moto que tenho, sobre as HD é burrice o que vão fazer, no meu país uma xb12x chega a quase $30.000,00 e mesmo assim comprei pois não existe até hoje quem não admire a moto. e a todos os proproetários de Buell nos EUA, por favor não deixem que a marca desapareça, No Brazil, além de termos uma representante da marca e que por sinal é uma porcaria, mesmo assim confiei na moto por levar o nome HD por de trás, não me arrependo nem um pouco já andei muito com ela e só me trouxe felicidade e confiança, agora adquirir uma HD isso nunca, não faz meu estilo e é, pelo que eu vi nos post um cara que realmente parou no tempo.

    Grande abraços a todos da comunidade e apreciadores da Buell nos EUA do pessoal aqui do Brazil.

  • Giuliano Morgado

    I live in Brazil and I have a Buell XB12X, since I saw the bike started (late 2005) in my country it was love at first sight, I’ve been twice in the U.S. demand for accessories and never thought, I’m sorry for the brand and would like to leave my sympathy to Erick for the brand, I hope I can still reverse the process end of the mark and come back to it the responsibility to build the best bike I have, on the HD’s stupid what they are doing in my country one comes XB12X nearly $ 30,000.00 and still bought it there today who does not admire the bike. and all of Buell proproetários in the U.S., please do not let the mark disappears, in Brazil, and have a brand representative and by the way sucks, still relied on the bike has taken its name from behind by HD, do not regret a moment, did a lot with it and just brought me happiness and confidence, now buy an HD never, is not my style and is, from what I saw in a post guy who actually stopped in time.

    Big hugs to everyone in the community and lovers of Buell U.S. personnel here in Brazil.

  • bob

    One day all the young sportbike riders will be crusty old effers that will want and need to ride a lumbering,comfortable slowassed bike. I hope HD is still around to satisfy that market.

    • Eric

      One day all the young sportbike riders will be crusty old effers that will want and need to ride a lumbering,comfortable slowassed bike. I hope HD is still around to satisfy that market.

      Ha. Truth. God willing, if I’m still riding when I’m 50 or 60 or whatever I can’t really see myself wanting to be laying on my gas tank draggin’ knees around corners much. Hell, even if I wanted to I doubt my body would allow it. :)

    • Phil H

      If a lumbering, comfortable slow-assed bike is what you’re looking for, you’ve got plenty to choose from in that department – there’s Victory, Triumph, Royal Enfield, Moto Guzzi, anyone one of the big fours – heck, even Ducati makes a slow-assed (relatively) GT1000.

      Unless, of course, you want a HD, in which case there’s only one option!

      • Syke

        Best best maxim I’ve ever heard regarding motorcycling is, “It’s better to go fast on a slow bike than it is to go slow on a fast bike.” The six years I owned a ’69 BSA A50R Royal Star showed me the truth of that statement.

        Besides, the average (note: I just said AVERAGE) sportbike rider neither needs, nor is equipped to handle, anything bigger than a Kawasaki EX500 Ninja. That point was driven home many times during my tenure at the Ducati shop, and has been really reinforced here at the Honda shop.

        • Phil H

          Best best maxim I’ve ever heard regarding motorcycling is, “It’s better to go fast on a slow bike than it is to go slow on a fast bike.” The six years I owned a ’69 BSA

          Absolutely agree with you on that one – it’s an absolute hoot hooning around and reving the tits off my Yamaha Serow 225 on my way to work everyday (and in dense urban traffic as well). And probably just as much fun (if not more!) than riding my Bimotas and Ducs.

          Nothing wrong with lumbering, comfortable, slow-assed bikes (if that was what your reply was referring to) – all I am saying is that there are many different options to satisfy the “crusty of effers” market if a “lumbering, comfortable, slow-assed bikes” is all that’s required. It doesn’t necessarily have to be an HD.

  • John Begley

    Over the last couple of years I bought a Buell Firebolt, a second hand HD Sportster which I then sold to by a Buell 1125R and recently added an HD CVO Fat Bob.

    I will never by another HD product in my life, and this feeling is quite common in the UK I can tell you.

    HD managment are crazy, sticking with large capacity bikes is what helped to kill off the British bike industry

  • Darett

    its all smoke and mirrors. HD has to cut back…. the reason they’re dumpin buell isnt due to profitability its because Buell doesnt bring enough to the table ( it could if it was marketed properly)Plain and simple somethings gotta go by eleminating Buell the cut jobs ie labor costs by cutting production of sportsters (which incidently are made in the same factory as buells) They are hoping that will push buyers into dynas or sloptails. Thats why they did the sportster buy back program last year. Of course they want to increase their productivity of geezer glides and sloptails they range from 17k-30k thats 2-3 times the price of sportsters not to metion all the trinkets the chrome queens NEED ! F U H D I will build my own

  • Skip

    Risky consumer loans – you bet. Any guy with a tattoo, leather vest, pony tail and a do-rag qualified for a instant loan and a new Harley. No salesman needed at a Harley dealer. No wonder salesmen ignored a Buell buyer plus a Buell buyer is not going to sucker for any of the Harley aftermarket shit. A Buell buyer did not fit with the Harley buyer. I haven’t seen any Buell riders dressed up like a pirate have you?

  • Jack Dale

    Dear Sirs: H-D up or down, there’ll be MORE customs, whether cruiser/sport. With Buell down, why not buy it from H-D for a song, and use S&S/other versions of the V-rod engine, in another sport bike, which Erik can race/not. Custom Harleys AS SPORT BIKES, or…cruisers…BOTH have “worked” for Confederate/others, until disposable income picks-up. I STILL hear great things about the old AMF-obtained Aeromacchi (–still in custom production as a cafe/club-racer/special). How about a Turbo’d Suzuki 650cc single on a new version of the Blast/aeromacchi? And as for “branding’, can’t Harley SUE all “HD” television makes for stealing their letters? But I bet you see much MORE stuff with the Motor company’s logo on it. If they did Ford pick-ups, WHY NOT…Tvs…Computers…firearms…firearm supplies? I can’t imagine a BETTER H-D “accessory” (–for a Woman) than a pink-handled, 50cal., 5-shot hammerless, double-action chrome-magnum wheel-gun, that “Momma” can use to protect her “Dudes”, her tats, and her virtue, with Motor-company logos all over the gun, with holsters of all types for it. I can even see a “Fatboy” with springer, sissy, and scabbards & holsters in the critical places…AWESOME!

  • Lurker

    The blue book price and what you get are two different things. My neighbor has a 1999 Harley he has been trying to sell for 1.5 years. Has not had an offer close to what the blue book says its worth. He rides around with a bunch of guys dressed up like the Village People going from bar to bar on “Poker Runs”. He is a typical HD rider. He suckered for the Harley Screaming Eagle parts to get his horsepower up to a whopping 68HP. I don’t think I could handle all that power. He also has the loud pipes and the typical Harley riders Clown Outfit for riding. HD markets to people like this. They can keep selling them the same old overpriced outdated motorcycles but that will stop in a few years as the Harley buyers reach older age. The younger motorcycle buyers do not even consider a Harley. Way to much money for 1950′s technology. If I wanted to ride around slow and show off I could buy a Jap V twin for less than 1/2 the price of a Harley and have better quality and modern technology. Of course then I would be in the t-shirt, shorts and sandals group. At least the HD riders wear a do-rag for head protection. HD found out that they cannot market there clown outfits to Buell riders or the Screaming Eagle crap either.

  • zippy

    There is one way the motor company has not yet “leveraged” its logo/name-toilet paper. Think about it- whether you love it or hate it- H-D toilet paper in your can!

    Less fun would be logo’ed cell phones, Halloween costumes (as a motorcycle- or RUB), fire extinguishers, and paper-paged day planners (it fits with the “old school” gestalt).

  • steve

    A lot of you guys are faulting the failure of GMC because they don’t have fuel efficient cars? My 2001 Pontiac Grand prix gets about 35 miles a gallon. They got into trouble because they gave too much in concessions to their union workers and went broke trying to pay those contracts.

    Harley is making a huge mistake losing MV Agusta and Buel. The real reason sportbikes are being hurt is 2 fold, one the recession and the 2nd is insurance, in Minnesota I bought a ZX14 and it cost more to insure it than it did to buy it. Thank-you stunters!!

  • Steve

    Another thing is some seem to think Buel would be better off as as stand alone brand. It started out that way, remember? It always had Harley sourced sporster engines that Eric modified for his sportbike use. Then after ( I forget how many yuears 6? 7? ) he sold 51% to Harley Davidson.

  • dave

    i have been riding for 54 years and never owned a HD
    now they have killed Buell and took out of the market place the only bikes they ever made i ever liked
    but now one else seem to make much i like any more
    either so its restore time for my old 1954 bmw r51/3
    dave where did all the basic daily drivers go

    speaking of basic where is the blast going

  • Grind

    As far as I can see, Harley Davidson is ran like any other American company. Greed being the driving force. They say they care about their customers, employees and shareholders… really? Prove it. That being said, you gotta admit that the resale value of any Harley is pretty nice comparitively speaking and those 2 guys they found with there heads stuck in the back of semi-truck trailers earlier this year out near where I live were not on harleys. I’m a proud ownner of a Sportster 1200C, I ride with a helmet cause I want to, I don’t have any tatoos or rings hanging out of my nose. I just like to ride.

    • Reply to Grind

      Well Grind you are not an offical Harley rider. The Sportster, V Rod and Buell are not considered a motorcycle by the HD bunch. I still see guys riding around on a Sportster with that great 1950′s engine which I think has a whopping 65 HP. A Honda Silverwing motorscooter will blow that antique Sportster right off the street. Harley resale? Our newspaper always has at least 15 to 20 Harley’s for sale at bargain basement prices. No buyers because if a Harley buyer goes into a bank to get a loan dressing up in there pirate outfit – Well. HD is going broke because they gave instant credit to anybody just to sell there overpriced junk. Now it is biting them in the ass. HD has a R&D department that spends all it money researching how big the new belt buckle should be or what to put on the new line of t shirts and do rags.

      • Grind

        Well I suppose I could of bought 2 used Honda Shadow 750s for the price I paid for my used Sportster…. But I wanted a Sportster… Granted the Hondas are nice and they do kinda look like a Hareley but thats just it… they are not. Bottom line… When I decide to sell this bike, I will get most of my money back. Thats a fact. I do agree with ya on the pirate thing… seems kinda silly for grown men to dress up like pirates (or cowboys for that matter) but ya know…
        Who really cares? They don’t intimidate me… Its their thing… I can respect that. Now go get ya that Silverwing…I think they start out at about 9 grand.

        Grind

  • Carlos

    As a long time Bueller, I’d like to say that this surprises me but it doesn’t…the Mother Co. has been an investor run fashion company for a while and it’s not really a bike company anymore. Buell, as a subsidiary, should have been allowed to run like Ducati…independent and focused and not strapped and zapped. It’s a real shame that this “marriage of necessity” landed Erik in this predicament just when the planets were aligning right and Buell got the right engine (the Rotax sourced Helicon). Erik has battled the stupidity at the Mother Co for more than a decade and the Mother Co never really “got it.”

  • Bun Brown

    The guys running HD are in total denial. Have any of them they actually set on a Sportster? What a cramped uncomfortable motorcycle! Worse yet, they market the bike as “entry level” or “a woman’s bike”. This marketing strategy totally alienates a huge pool of potential buyers being regular sized men who like the looks and sound, but are simply not willing to throw down 14+ grand for a motorcycle.

    Marketing guys PAY ATTENTION, you are shooting yourselves in the foot… Get people on the brand. Offer an 883 Sportster with conventional ergos at a competitive price. Then sell the custom accessories.

    Some will move up to larger Harleys in a few years, and some won’t. But at least you got them riding a HD, not a rice burner.

  • Paulo

    Enough already told…. HD is doing nothing to “dedicate to the brand” and expect sales and profits will increase by itself… Sometimes I guess even me could be a better CEO.
    The competition digs market share by diversifying and doing real R&D really competing in all levels… HD Management expects to grow doing the opposite, like an ostridge with the head in a hole. I really hope to be wrong, it would be a disgrace for the Americans watching this brand going down, I guess I already saw this movie!

  • A

    Harley riders are the few dicks that never sign or wave–even in response to one. A bunch of self-righteous girlie boys who absolutely beg for attention–evidenced by their irritating noise, blingy chrome and easy-entry leather chaps.

  • A

    Carlos, awesome and accurate summary of HD: “an investor run fashion company.”
    For the fall collection year, we’ve have the daring and very ‘now’ style of a wooly lion cloth with the easy-entry butt chaps. Perfect for a cozy winter ride with the boys.

  • Rick

    I’ve been a Buell owner for many years. It is the first and only bike I’ve owned.

    If H-D went down, I’d might be a little annoyed at not being able to get the odd factory part that I may need.

    Dropping Buell was a serious insult that I take rather personally. Having met and spoken to Eric Buell in person and following his story and relationship with H-D…he deserved much better.

  • Rick

    I for one will be sad to see Harley fold. What will replace them as objects to overtake and pass on long, boring stretches of Montana and Dakota roads?

  • monster

    no mention of the dealers? three years ago i almost bought an xb12sS, but the dealers sucked, they couldn’t have cared less for the goofy bikes in the back corner, but wouldn’t budge on price for a current year bike.
    i went to the ducati dealership, had a coffee and donut, was given a tour of the shop, got to peel the cardboard back to see my bike and was given a great price on a current year bike. i was on the fence between the buell and an s2r1000, and the dealer experience made that decision easy.

  • wheelingOnCR

    Keep talking !!!!
    In the meantime I sold my XB12x and I am buying a new 1125CR, the bike Erik would have made since day one: NO HARLEY ENGINE !!!!!

    THANK YOU ERIK!!!

  • wheelingOnCR

    Ducati Vyper Cruiser announces the end of Harley Davidson !
    http://bikes4us.blogspot.com/2009/03/ducati-vyper-cruiser-in-2010.html

  • DrogeN

    Fuck Harley’s future, i couldn’t give a shit about them now…

    Buell is one of the best bikes ever made.

    I hope Erik Buell reconsiders making street bikes… for now Erik has started a small business to support Buell Racing (only).

    http://www.erikbuellracing.com/

  • Al

    Been riding harley for 27 years. had 2 ultraclassics in the past and would like to return to a touring bike. i can’t get exited about an underpowered harley with chain driven cams and pushrods. one or the other please. the more powerful screaming eagle ultraclassics have to much of a premium in cost and reported overheating issues. so what do i do? can’t leave harley, can’t sit on something else, and feel absolutely no interest in anything they currently offer? Actually tried a hoda, that lasted 20 minutes. harley get off your ass, my evo is getting tired.

    • CJ

      Al, I suppose that by “touring bike,” you mean a cruiser with hard bags, and not a sport-tourer. If that’s the case (no pun intended), have a look at the Triumph Rocket III Touring and the Victory Cross Country. IMO, they out-ultra the Ultra.

      If you’ll consider a sport-tourer, though, check out the Moto Guzzi Norge. It’s an old-school, air-cooled v-twin (but one that doesn’t try to shake itself apart), updated with 4-valve heads and placed in a modern chassis. It’s stylish, comfortable, and reasonably priced. Also, for some reason (maybe because they are both considered “heritage” brands), Moto Guzzi riders seem to get less guff from the Harley faithful than riders of other brands.

  • TSport

    Hail the new American Motorcycle… Victory… from the bowels of a Snowmobile company (Polaris)… sorta Canadian don’t you think????

  • gofaster

    The interesting US motorcycling manufacturers these days are US Highland, Motus and the electrics. Hopefully EBR returns as well.
    Am a past HD customer but am not returning anytime in the foreseeable future. Current mgmt is asinine. An old points Shovelhead with an S&S carb and drag pipes is the sweetest sounding HD ever. However I’m more interested in actually riding a sport tourer with about 135 rwhp weighing under 500lbs .
    The sub-culture is sold out,”brand” loyalty shot. Been around HD’s since I was a kid in the 70′s when they were reaallly struggling, selling 15,000 bikes a year too.