Vaughn L. Beals, one of the most influential leaders in Harley-Davidson Motor Company history, passed away on Sunday, Aug. 19, in Scottsdale, Arizona, aged 90.
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| Vaughn Beals: Harley-Davidson CEO from 1981 through 1989 retired as chairman in 1996. “Vaughn Beals brought vision and powerful leadership to this great company” - Matt Levatich, CEO Harley-Davidson |
A Massachusetts native, Beals earned Bachelor’s and Master’s degrees in aeronautical engineering from MIT. He worked for several aviation companies as well as Cummins Engine before joining Harley-Davidson during the AMF ownership era as Deputy Group Executive for Motorcycle Products in 1975. Two years later, he was promoted to Corporate Vice President and Group Executive.
The 1970s were one of the most challenging times in Harley-Davidson history. In addition to internal challenges related to quality, dealer support and overall morale, competition from international competitors was intensifying as the entire industry faced a declining market. In that environment, AMF, the parent company, was looking to get out of the motorcycle business.
Vaughn worked to encourage AMF leadership to put Harley-Davidson up for sale and then spearheaded a team of investors (including 13 company executives) to buy the company from AMF for just over $75 million in a leveraged buyout. That “buyback” was impressive when considering that the company had gross sales of approximately $280 million along with substantial assets in Milwaukee, Tomahawk and York – at the time CitiCorp was reported to have given the deal $81.5m backing.
After the deal was completed in June of 1981, Vaughn assumed the position of CEO and set about radically overhauling almost every aspect of the operation – including a 40 percent reduction in head count, upgrading the company’s engineering and manufacturing processes and working with Clyde Fessler to establish the Harley Owners Group (H.O.G.) in 1983.
In 1982 he was instrumental in lobbying the Reagan administration for protection from Japanese imports – efforts that resulted in a 45 percent increase in tariffs on Japanese made large displacement motorcycles of more than 700cc a year later.
Total United States imports of heavyweight motorcycles were running at around 200,000 machines a year at that time, 80 percent of which came from Japan despite their by then evolving domestic U.S. production capacities. Tariffs for machines, in what was the largest single market for motorcycles in the U.S. at the time, under 400 cc, were not targeted.
In 1973 Beals was quoted as saying that the tariffs “will give us time that we might not otherwise have had to make manufacturing improvements and bring out new products.”
Due to run for five years, Beals’ success in turning Harley around actually meant he was able to ask the FTC to remove the tariffs a year earlier than planned.
After fending off further financial difficulties in the mid-80s, Vaughn worked to take the company public in 1986. He took Harley public with an IPO in 1986 and a full NYSE listing in 1987.
The capital raised paid down debt, stabilized the firm’s balance sheet and funded development of the rubber-mount hidden twin shock Softail frame that Bill Davis had been working on for more than a decade, the first major step forward in suspension and frame geometry since the 1957 Duo Glide and the 1340cc Evolution – Harley’s largest at that stage. These were the leaps forward that laid the foundation for the explosive growth that started in the late eighties and continued to accelerate right up until 2004/5.
Beals was quite open about where he and his fellow management team got their ideas from, implementing Japanese style quality control and production discipline at a time when much of U.S. industry had been left behind by international manufacturing standards and, above all, by international business and management practise.
In a 1989 Fortune Magazine interview Beals stated that “we were being wiped out by the Japanese because they were better managers. It wasn’t robotics, or culture, or morning calisthenics and company songs. It was professional managers who understood their business and paid attention to detail.”
One measure of the challenges faced by Beals and his team, and the success they achieved, was in terms of quality control. Having implemented the kind of Japanese style ‘Just in Time’ inventory control and production quality inspection protocols that manufacturing worldwide takes for granted these days, Harley managed to slash post production snagging (on output that dipped to a low of around 37,000 units a year) to 1 percent from 50 percent by 1987.
Beals had no biking background before joining AMF in 1975 as a senior manager in its motorcycle operations – critically though he had an engineering background and understood the importance of R&D. As an MIT aeronautical engineering graduate, his time in the aviation industry had included ten years directing technological research, moving on in 1965 to become vice president of research and engineering, and later a divisional head at truck engine manufacturer Cummins.
Beals served as CEO until March of 1989 and continued to serve as chairman until May of 1996. He was succeeded by Richard F. Teerlink as CEO in 1989, and as chairman in 1996. To this day Harley operates the Vaughn L. Beals Tour Center at its assembly plant at York, Pennsylvania.
“During some of the most challenging times in the long legacy of Harley-Davidson, Vaughn Beals brought vision and powerful leadership to this great company, said Harley-Davidson President and CEO Matt Levatich. “Most significantly, he ensured that this ‘Eagle Soars Alone.’ We’ve carried his leadership lift under our wings ever since, and we always will.”
Beals is survived by his wife of 67 years, Eleanore, and numerous children and grandchildren.