Harley-Davidson CEO Keith Wandell on fighting socialism

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Speaking to the Milwaukee Journal-Sentinel in April, after Harley borrowed $2.3 billion in aid from the Federal Reserve, but before that loan was disclosed, CEO Keith Wandell stated that his chief objective was to avoid emulating General Motors. With government aid, the car maker has transitioned from being the unprofitable maker of outdated products that no one wanted to turning a $2.0 billion third quarter 2010 net profit just before becoming the largest IPO in history. Wandell’s plan appears to be working, Harley’s net income for Q3 2010 of just $88.8 million compares extremely unfavorably to its $312.73 million result during the same period in 2006.

  • george_fla

    Why does this not surprise me?

  • ike6116

    Wes I think it’s really shitty the way you rag on H-D. REALLY shitty.

    • Patrick

      why is that exactly?

      • Glenngineer

        Serious, like the bikes or not, HD is one of the worst managed companies in motorcycling.

      • Ducky

        He might (my internet sarcasm-o-meter isn’t working well today) be making a reference to the use of the word “shitty”, found in the previous post on H-D.

        • http://hellforleathermagazine.com Wes Siler

          Well, even if I can’t get any work done today, my sarcasm-o-meter is working and tells me he’s joking.

    • slowtire

      That wasn’t the comment ikee. Nice try though.

  • DAVID

    the comparison is not completely valid because GM went into bankruptcy and was allowed to shed a lot of dead weight. Harley didn’t get to do that.

  • http://www.footshifted.com Footshifted

    …but it does look a little better (purely looking at the numbers) than the $26.48 million from the same period in 2009.

    • slowtire

      Let’s see the numbers from the other Manufacturers compared to 2006.

  • Shaun

    My view is that the long term future of HD is one of incremental decline. They won’t disappear, but their riders will. They’ll die, (the average HD buyer is 46), aggresive development by Triumph, BMW and Ducati will hoover up, over time they’re loyal fans. What can they do? Tricky, they are a bit stuffed unless they attract a new crowd. How? Bribe ‘em.
    Low interest rates, or 0% finance, rider ‘mentors’ to encourage take up, etc, etc…

    It’s not a lost cause, but it probably will be…

    • Roman

      Or they could, I don’t know, use some of the remaining profits to develop bikes younger people want to buy. Crazy idea, I know…

  • nick

    Well, the closing of Buell does not help the cause of attracting younger riders…

  • http://www.thisblueheaven.com Mark D

    Yeah, 50% tariffs on all 700cc+ motorcycles is exactly the kind of thing Adam Smith imagined…

    • DoctorNine

      Actually, Smith was a great believer in retaliatory tariffs in order to protect established markets, when they were artificially affected by adverse governmental regulation and the like.

      But be that as it may…

      Here’s an old discussion of the tariff from the Cato Institute for your perusal:

      http://www.cato.org/pubs/pas/pa032.html

      Enjoy.

  • slowtire

    “a macho Sportster aimed at a younger crowd but with styling from the 1940s.”

    That statement even offends me.

    • slowtire

      “We are not naïve about that,” Wandell said. “I believe that as long as we don’t change those products that our customers love, they are OK with us going outside of the boundaries a little bit to bring new riders in.”

      “a little bit?” Like many of you have said, this is where they are not listening to you younger guys. I can understand being cautious, but this and the “macho sportster” ain’t going to get it for them.

      • http://hellforleathermagazine.com Wes Siler

        Yeah, it’s an image problem as much as it is a price problem for the under 40 crowd. I’d love to see them expand the Harley appeal — timelessness — into other categories like cafe racers, standards, street trackers, scramblers etc without feeling like they need to bring 600lb weights, huge capacities and tassles with them.

        • slowtire

          There’s absolutely nothing wrong with building what they do if it sells. But after reading this article, I am convinced, like you guys have been saying, that they just don’t have a clue for capturing the younger market. People will continue to grow old, although not as many, and many will still want the traditional HD. But the younger riders being exposed to so much better technology in the last 30 years are naturally going to expect more. They don’t seem to be getting that.

          • http://hellforleathermagazine.com Wes Siler

            Well that’s the thing, be-tassled cruisers have sold, but to a very specific (if annoyingly numerous) customer. They’ve now saturated that market (HD’s biggest competitor is used HDs) and need to look outside it if they want to expand sales. That’s before we get to the aging-out-of-riding thing.

            • slowtire

              I think they’ll still sell for sometime as there actually are some younger riders that’ll buy them and I think the end of the HD cruiser is still a bit away. But, HD has got to stop combining the two markets. They tried to appeal to the younger more performance rider with the V-Rod, while still maintaining the V-Twin/cruiser look to lure some of the older crowd. It didn’t work. I don’t think they can do that anymore. I think that many are right when they say that they need something completely new for the younger rider. They’re two different markets and HD has got to stop trying to get both with one style bike. “Macho Sportster!” How rediculous.

  • CG

    Harley=Cigar retailers. Of course, cigar guys watched the gov. throw big tax hikes at them instead of loaning them money under the table (for all I know maybe they did on second thought). Alas for both, same demographic for the most part (i.e. me). I am fairly sure that throwing a new paint job on a bike may not radically alter the purchasing dynamic, but when you have dumped the two most innovative departments from your firm you may be slightly stuck. I am sure the bright MBAs running HD* (you know the Best and the Brightest, the guys who ran GM – who got us into Vietnam – credit swaps – etc.) can come up with something. * A few more from Harvard and Wharton at mid-six figures should do the trick. Announcing your new All American Harley – made in China……

  • Myles

    You can do it HD. Just make a simple bike with ~90hp and ~450lbs full of fuel that sounds cool, rides easy, always starts, and isn’t priced too high. Build the American SV650. Let people know that they don’t need a tattoo of George Washington on their forehead and and a purple heart to appreciate your products.

    You can do it.

    • http://hellforleathermagazine.com Wes Siler

      I’d buy one.

      • Zane H

        Sounds like a good idea to me. I also like how the article had no mention of selling MV for what was it $1 or something?

        • http://hellforleathermagazine.com Wes Siler

          Ha, HD actually paid — off the top of my head — $20 million to help offset expenses associated with the purchase to the Castiglionis.

    • je

      You mean a buell lightning….

  • Zach

    Maybe it’s a good thing that Wandell has been brought in from outside the motorcycle industry – he seems like he has a good handle on what is wrong with HD. Maybe it will just take some time?

  • Ilya

    I’m very surprised you guys points to other manufacturers (Triumph, Ducati and such) as examples for Harley to follow. What really new are these guys doing? The only visible trend is that we’re going to see more bikes for the dual-sport segment, which shrunk two-fold since 2007. What else? For me it seems like the motorcycle industry as a whole has now idea what will be in demand 3-5 years down the road.

    • george_fla

      In the case of Ducati they redesigned the Monster line,the Multistrada,and the SBK line. The SBK line is going through another change for 2012 that is said to be revolutionary.They have ntroduced the Hypermotard,the Street Fighter and the Diavel. All this in the last 5 or so years. So I agree I dont know why anybody would wanna look to them and their stale ideas?

  • http://www.tripleclamp.net Sasha Pave

    I’d like to see HD expand.

    - They should make a dirt/dual/motard play, buy ATK or Highland.

    - Get Eric Buell back on board and build a smaller-scale 1190RS platform line. Give it a better name and hire a notable designer. Erik is awesome, but he’s no Tamburini.

    - Make strategic investments in electric bike manufacturers like Zero & Brammo.

    - Introduce a cafe-racer style retro, maybe rekindle the Aermacchi brand?

    Making plays like this would allow them to leave their retro cruisers to a shrinking but stable market.

    • slowtire

      I think these are great ideas, although I don’t think they would get Buell back. But money does talk. I really like the idea of them investing in the electric bike arena. That could be really exciting.

    • fasterfaster

      I’d love to see that too, but they would need cash to do that, and they have long since blown all of their cash. Also, they can stretch their brand more than they think, but not THAT much. Half the problem with Buell was the dealership network (the other half was H-D stifling Buells engineering and forcing hideous design decisions), and that same network wouldn’t touch dual-sports or electrics.

      I think you’re onto something with the cafe style retro. I’ve offered this up before, but the XR750 is an absolutely amazing bike, that would have huge appeal to younger buyers and couldn’t be more inline with H-D’s history. I’d buy a street stock version (same size and displacement, detuned for reliability, and with lights) at $11k rather than a Bonnie in a second.

  • Mr.Paynter

    Harley has got some history to play on too in an era of increasing niche period-bikes from different companies, why can’t Harley pull out those smaller actually-purpose-built-WW2 machines? I see older smaller Harleys and go hmmm, I’d own that, and the performance can’t be any worse and you’d attract niche buyers looking for a more interactive (Read: maintenance heavy) steed ala Royal Enfield. I love all the ideas of cafe racers and trackers and I’d love to see a bobber too, the way everyone on every forum imagines them, with all of the needless heavy junk cut off and/or stowed away! Harley would actually start cleaning up with a lighter package, perhaps even the same basic engine, say a 6-800cc in different frames and dress-ups with less chrome eagle be-decked engine covers and more creative custom accesories to mix it all up…

  • ike6116

    It seems to me that Harley Davidson is the Jay Leno of Motorcycles. They have all this ability and were once epic but for some unexplainable reason they just turned that part off to become this safe non-threatening boomer brand.

  • Alex

    Hire Scott Colosimo as a consultant, reduce the noise level on your current baggers by 50% and repay the loan. There.

  • Shaun

    A bit more…actually I think HD have come to realise, and I have too, albeit it took me a while that they’re not actually selling motorcycles, as any real comparison in the normal criteria of weight, handling, power, braking let alone style just doesn’t apply.
    They are quite literally selling a dream, a fantasy. The website and all the marketing stuff is easier and cheaper to produce and develop than a decent motorcycle. But one day, it will happen…but don’t wait by the phone….

  • Keith

    “They are quite literally selling a dream, a fantasy.”
    Bang on the money!