Harley-Davidson

Harley Q1 Global Retail -17.7% as Motor Company Announces COVID-19 Response Actions and Steps Toward Recovery Including Strategic Plan Reboot
 
Harley-Davidson, Inc. has reported first quarter 2020 results that are not, in fact, as awful as may have been expected - indeed, until mid-March, for the first 10 weeks of the year, the company was headed towards seeing one of its strongest quarterly performances in 6 years.

At the same time as releasing its results, Harley has provided an update on the actions it has taken to address the impact of COVID-19 as it restarts production and begins moving toward recovery. The company also outlined near-term actions that will lead to a new strategic plan and confirmed that it is to facilitate home delivery where it is permitted.

Being termed a "Rewire" of the 'More Roads' strategic plan of 2018, or more specifically an 18-point 'Rewire Playbook', a framework for which has been released with the Q1 results with fuller details available when the company releases its Q2 fiscals in July. 

However, in the interim, the influence of acting president/CEO Jochen Zeitz is evident in the framework for re-evaluation of the company's direction that has been released so far - indeed, it appears to represent a complete jettisoning of the much maligned 'More Roads' thinking and for 'Rewire' one might just as well read complete 'Reboot'.

Specifically, Zeitz has stated that it is time to "re-evaluate the strategies to reach new riders and build ridership"(especially in the context of H-D rider numbers only being up by around 24,000 at the end of 2019); he has said that he accepts that the dealer network is likely to see some further contraction through the COVID-19 crisis (5 dealers closed in Q1 in USA and 20 internationally) and will need some "optimization"; that the company needs to have a tighter focus on its core market; that rebuilding the model year introduction cycle to early in the calendar year, closer to the riding season, is something that he would see as a permanent change; and that, moving forward, Harley must not only minimize organizational complexity and bring sales management up front and center but that the sense of management remoteness, overlap and indecision must be addressed.

Zeitz stated: "Throughout this global crisis, we prioritize the well-being of our employees and the Harley-Davidson community in every decision we make. Our brand is rooted in community, and we care deeply for all of those who have been personally affected.
"We also honor the heroes working tirelessly to bring care, relief and an end to this terrible pandemic.

"Finally, in the face of significant uncertainty, we have taken swift action to protect the company by bolstering our already strong balance sheet and liquidity position."

The reference to liquidity is telling, and the company has indeed now announced that it will suspend its share buyback scheme, at least for the time being but is still to pay shareholders a dividend and that among other measure to protect liquidity Harley is approaching banks with a view to raising an additional $1.2bn.

Inevitably the first quarter 2020 results reflect the impact of COVID-19 on the company's business.

Global retail motorcycle sales of Harley-Davidson models in the first quarter were up a strong +6.6 percent until the pandemic took hold in the U.S. in mid-March. For the full quarter, U.S. retail sales finished down -15.5 percent compared to the prior year at 23,732 units, with Harley domestic U.S. 601+cc market share down -2.2 percentage points to 48.9 percent.

International retail sales were down -20.7 percent compared to 2019 with Harley's European 601+cc market share at 7.6 percent in the first quarter. In Europe (EMEA) the company sold 7,730 units in the quarter, which was down by -28.4%; Asia Pacific was down by -5.3% (5,752 units); Latin America was down -21.5% (1,758 units) with Canada -24.7% (1,466 units).

Worldwide Harley-Davidson retail motorcycle sales were -17.7% for the first quarter at 40,439 units (down from 49,151 units in Q1 2019). Total motorcycle shipments were -10.0% at 52,973 units in the quarter.

Revenue from the Motorcycles and Related Products segment was down by -8.0% in the first quarter at $1,099.8m (from $1,195.6m in the year ago quarter) reflecting the temporary global motorcycle manufacturing suspension that began in mid-March. Motorcycles revenue was -6.8% at $899.4m with gross margin largely flat at 29.0%; operating margin was down year-over-year (-1.4 pts at 7.7%) primarily due to lower revenues and increased SG&A, offset by lower restructuring expense.

On top of everything else, the production shut down appears to have slewed the product mix for the quarter in a way that reduced revenue and profit. Touring models were down by -1.7 pts at 48% of mix, with Cruisers up by +3.3 pts at 38% of production; Street/Sportster were -1.5 pts at 21.2% of mix.

Financial Services segment first quarter operating income of $22.9m was down -60.9 percent driven by an increase in the provision for loan losses related to the impact of the COVID-19 crisis as well as the impact of the new "Current Expected Credit Losses" or CECL accounting pronouncement.

Cash and marketable securities were $1.47bn at the end of Q1 compared to $759.6m in Q1 2019. Harley-Davidson's cash from operating activities was an outflow of $8.6m in Q1 compared to an inflow of $32.7m in Q1 2019. Q1 effective tax rate was 26.3% (24.9% Q1 2019).

The company paid a Q1 cash dividend of $0.38 per share; the company did not repurchase shares on a discretionary basis during the first quarter; there were 153.7m weighted-average diluted common shares outstanding and 18.2m shares remained on board-approved share repurchase authorizations.

GAAP diluted EPS was $0.45 versus $0.80 in 2019. Net income was $69.7m on consolidated revenue of $1.30bn versus net income of $127.9m on consolidated revenue of $1.38bn in 2019.

As a result of the uncertainty surrounding the magnitude and duration of the COVID-19 pandemic, Harley-Davidson withdrew all guidance on March 26, 2020.
Jochen Zeitz went on to say that "COVID-19 has dramatically changed our business environment and it is critical we respond with agility to this new reality.

"The crisis has provided an opportunity to re-evaluate every aspect of our business and strategic plan. We have determined that we need to make significant changes to the company; to our priorities, to our operating model and to our strategy to drive more consistent performance as we emerge from this crisis.

"We will reduce complexity, sharpen focus and increase the speed of decision-making. These efforts will pave the way for a new strategic plan that incorporates some key products and initiatives from the current plan but focuses on improved profitability and long-term growth. As a result, we will emerge as a stronger and more efficient company and reignite the Harley-Davidson soul," said Zeitz.

COVID-19 Response and Recovery Actions
The company is executing its plan to address the impact of COVID-19 and begin its recovery through a multitude of recent actions across the following areas:

Cash Preservation
Reduced planned capital spending and also reduced planned spending across every part of the organization including freezing hiring, temporarily reducing salaries and eliminating merit increases for employees in 2020. The company also implemented other aggressive cost management efforts such as retiming the launch of new products. In total, the company expects these efforts to preserve approximately $250m of cash in 2020. Additionally, the company suspended discretionary share repurchases. Today the Board of Directors approved a cash dividend of $0.02 per share for the second quarter of 2020, down from the first quarter 2020 dividend of $0.38. The second quarter dividend is payable June 12, 2020 to the shareholders of record of the company's common stock as of May 22, 2020.

Liquidity
Maintained $2.47bn in liquidity including $1.47bn cash as of the end of the quarter and remains compliant with all covenants. Recently, the company amended its $1.42bn credit facilities, extended its 364-day loan facility and is in discussions with major U.S. banks to secure an additional $1.30bn in liquidity. Additionally, the company expects to access the capital markets in the near future.

Supporting Dealers and Riders
Eased the burden on Harley-Davidson dealers by providing support based on the unique needs of each region, including financial support for motorcycle inventory, extending credit payment due dates on Parts & Accessories (P&A) and General Merchandise (GM) and adjusting dealer requirements for warranty and training. The company also offered dealer discounts on certain GM products and is engaging with dealership staff via live chat sessions to share unique ways to stay connected during the crisis. For customers, many dealers remain open for service support and the company continues online sales of P&A and GM, and along with dealers, is offering home delivery of new motorcycles in states and countries where it is permitted. For riders who have been impacted by COVID-19, Harley-Davidson Financial Services (HDFS) is helping keep riders on the road.

Community Strength
Acted quickly and in alignment with government efforts to protect the safety and health of employees and the Harley-Davidson community. The company implemented travel restrictions, enhanced sanitation practices, cancelled events and closed facilities including temporarily suspending global manufacturing starting in March. In support of relief efforts, the Harley-Davidson Foundation donated $150,000 to the United Way's COVID-19 relief fund. Through its "United We Will Ride" efforts, the company is connecting riders who want to help provide relief through food drives, blood donations and other ways to make a difference in their communities.
As the company focuses on recovery efforts for the business, it has prepared and started implementing rigorous protocols and procedures for worker safety and is working with its supply chain to be ready to resume operations. The company has restarted some manufacturing and will gradually ease work-at-home restrictions at the appropriate time, which will vary by region.
The following is the framework for the 'More Roads' Strategic Plan 'Rewire' that acting president/CEO Jochen Zeitz outlined with the Q1 financial release on April 28 …

The Rewire
The company is executing a set of actions, referred to as The Rewire, that will be further developed over the coming months, leading to a new strategic plan.
These actions are part of a comprehensive Rewire playbook designed to address top priority opportunities, drive consistent execution and reset the company's operating model in order to reduce complexity, sharpen focus and increase the speed of decision making.
The company expects The Rewire actions - those already taken and those that will be implemented over the coming months - to lead to the definition of a new 5-year strategic plan that will incorporate key products and initiatives from the More Roads plan but will focus more on the markets and products that can drive performance in terms of profitability and growth.

Key elements of The Rewire: 

• Enhance core strengths and better balance expansion into new spaces
• Return focus to the strength of brand and company, starting with dealers, customers, stronghold products and committed employees globally. 
• Re-evaluate strategies to reach new riders and build ridership. 
• Prioritize the markets that matter
• Narrow focus and invest in the markets, products and customer segments that offer the most profit and potential. This includes building on Harley-Davidson's strong position in the U.S.
• Establish a simplified market coverage model and take cost out of the process.
• Reset product launches and product line up for simplicity and maximum impact
• Continue to be guided by the voice of customers and dealers to optimize value and profit delivery.
• Simplify and retime launches to reflect the new reality, align with the start of riding season and better suit the capacity of the company and dealers. 
• Expand profitable iconic motorcycles to excite existing customers. Remain committed to Adventure Touring, Streetfighter and advancing electric motorcycles.
• Build the Parts & Accessories and General Merchandise businesses to full potential 
• Develop a comprehensive strategy across P&A and GM businesses that focuses on assortment and distribution opportunities, maximizes channels, improves ecommerce capabilities and grows revenue and margins for both the company and dealers.
• Align P&A and GM strategies with motorcycle strategy for a holistic presentation to the market.
• Adjust and align the organizational structure, cost structure and operating model to reduce complexity and drive efficiency to set Harley-Davidson up for stability and success
• Create a framework including an organization that is more focused, profitable and nimble; a cost structure that is adjusted to the new realities of the market post crisis; and an operating model designed to increase empowerment and accountability.
• Establish commercially led central and new regional structures to gain a deeper understanding of customers and to return focus to dealers and selling.
• Elevate the role of Motorcycle Management and sharpen marketing strategy and execution to enable a bigger impact with an improved go-to-market process.
• Each of these key elements of The Rewire playbook includes actions that have been implemented or are currently being developed. The company plans to share more about The Rewire in its Q2 update.

Parts Unlimited and Drag Specialties

LeMans Brings E-Bikes and E-Bike PG&A Category to Powersports Distribution

At its recent 2020 NVP Product Expo in Louisville, Kentucky, LeMans Corporation, parent company to Parts Unlimited and Drag Specialties, brought in renowned high-end mountain bike innovator INTENSE LLC to showcase its new moto-inspired concept E-mountain bike.

 
"A forum was provided for dealers and vendors to share their experience with and opinions on this emerging market. The INTENSE Tazer MX E-bike was met with great interest and sparked many discussions on and off the expo floor as the E-mobility category starts to gain a foothold in powersports dealerships across the country."
"Pedal-assist bicycles are quickly becoming a significant segment in our industry," said Jeff Derge, VP of Sales for LeMans. "Many of the motorcycle OEMs are now selling E-bikes in Europe and the U.S.A. and offering models that cover many riding styles. E-MTB, road, gravel, commuter and urban are some of the most popular styles that are interesting for the powersports channel.
"Mark your calendars - we will be launching the INTENSE Tazer MX and an initial line of PG&A at our 2020 Fall NVP Expo in Madison, WI, on August 22nd and 23rd. We'll have products and experts on hand to speak with dealers about this new category, and like always we will have the top brands and manufacturer representatives showing their new and top-selling products from every category in powersports and American V-twin."
"INTENSE has always engaged in and been inspired by motorsports, with motocross and off-road motorcycling closely tied to our company's history and products," said INTENSE CEO Jeff Steber. "With the development of the Tazer, we created a true E-performance category in bicycling – innovating how E-MTBs ride and perform while elevating the overall performance of the entire segment. With our new partnership with Parts Unlimited, we will be able to deliver a powersports industry-specific Tazer model to motorsports dealerships that's made just for them."
LeMans says it "welcomes this opportunity to bring awareness and products of this growing market to our network of dealers."

Sturgis Museum Hall of Fame

Sturgis Museum Hall of Fame - Class of 2020

This year's list of Sturgis Museum Hall of Fame inductees includes parts, accessory and performance industry legends such as Allen Alvarez, Dave Mackie and Skeeter Todd and legendary custom bike builders such as Arlin Fatland and Don Hotop (Arlen Ness Lifetime Achievement Award).

There is recognition too for those who have dedicated themselves to "keeping the flame alive" in the face of the challenges that Rider's Rights are always facing, with this year's Freedom Fighters award going to Wayne and Susan Lettau of the local Sturgis ABATE chapter.
Hugely liked and respected former custom bike shop owner and builder Micah McCloskey (California) is recognized, along with Vicki "Spitfire" Sanfelipo, a registered nurse and motorcycle trauma response and accident scene management expert, and Jody Perewitz – unless I am mistaken, making this a first father and daughter to both be inducted.
www.sturgismuseum.com/hof

ODI

ODI Named AFT Official Grips and Handlebars

Riverside, California specialist ODI has been named the Official Grips and Handlebars sponsor for the 2020 series.
"We've come to know Flat Track racing as America's oldest foundation for professional motorcycle racing," said Johnny Jump, Powersports Sales & Marketing Manager for ODI Grips. "The racing is pure, hardcore, high-speed and very intense. 

"We want to put ODI Grips into the hands of these racers at this level of competition. Our goal is to provide these riders with the most control and the most confidence available for racing at these speeds. Introducing our Lock-On grip system and Podium series handlebars to the teams, riders and families that live and breathe this sport is our primary objective.
"AFT has provided us all this platform, and we intend to utilize it to its fullest extent. We are proud to be a part of the series and look forward to delivering the most solid product to the racers."
www.odigrips.com

Darkhorse Crankworks

Man O-War Motorsprocket System by DarkHorse

The Man O-War Motorsprocket is described by John Dahmer, General Manager of Darkhorse Crankworks of Wisconsin as "the first performance engineered primary motor sprocket on the market" that provides "instant torque response combined with our patented  engine pulse absorbing cushion drive (EPACD)  primary drive system for Harley-Davidson Twin Cam and Milwaukee-8 models."

Through extensive model design and testing, the Man O-War Motorsprocket is said to be "the only product on the market today that is engineered for longevity compared to OEM compensating sprockets, and that has been achieved without sacrificing rider comfort. 
"This patented system also puts an emphasis on rider comfort compared to the noise and harsh feeling under loads associated with one-piece solid motorsprockets.
"These premium features result in a product that is not just durable and reliable, but inexpensive to service compared to the expensive compensator-based sprockets that fail and need to be replaced as an entire unit. 
"The Man O-War will be the last motorsprocket you will need to buy for your customers' Harley-Davidson Twin Cam or M-8 model.

"All these benefits combined with being a billet machined, balanced motorsprocket that weighs nearly 2 lbs less than the OEM compensator, with half the number of parts, results in an unsurpassed level of reliability and durability for trouble-free miles and improved riding comfort.
"Replacing cushions costs considerably less, and we estimate that it takes a technician under one hour's labor with proper tooling and our economically priced, certified 8-piece cushion kit."
The Man O-War Motorsprocket is available as a 34-tooth OEM sprocket, or the rpm range can be raised with the company's 32-tooth gear performance sprocket to allow faster acceleration and better utilization of 6th gear at lower speeds, without lugging; both carry a 12-month limited warranty.
The 32-tooth gear performance sprocket requires a primary chain adjuster shoe that attaches to the OEM auto chain tensioner - available from Darkhorse.

DARKHORSE CRANKWORKS
www.darkhorsecrankworks.com

Performance Machine

Performance Machine Mid-Controls

Performance Machine mid controls are the "mandatory upgrade for M-8 Touring or M-8 Softail models when performance riding is the goal - allowing for a much more aggressive riding position while providing increased ground clearance for attacking corners.
"Made from 6061-T6 billet aluminum, these mids are strong, lightweight and are a bolt-on install with a PM or stock rear brake master cylinder - check for exhaust clearance on some models before ordering."

Steel brake linkage and chrome heim joints offer easy brake actuation and the short throw shift lever "lets you quickly rip through the gears." The simple bolt-on design means no cutting into the primary cover and no modifications. Stock H-D style clevis is compatible with PM foot and toepegs as well as other aftermarket pegs. Available in Black and Gold Ops finishes.
Shift linkage and chrome hardware is included; foot and toepegs are sold separately.

PERFORMANCE MACHINE
www.performancemachine.com

Mid-USA Motorcycle Parts

PowerHouse 4 1/2" Mufflers for 2017 and up M-8

New in 2019, these 4 1/2" O.D. PowerHouse brand mufflers for M-8 applications from Hazelwood, Missouri based Mid-USA Motorcycle Parts are described as "show quality mufflers that give a deep, high performance sound when on the gas and a low rumble at cruising speed."

Said to produce horsepower gains of approximately +15 HP when tuned properly, features include a full-length, multi-perforated baffle with glass packed surround. Sold in sets, they are available in chrome or black with choice of cut down or inside cut billet end caps.
Sold in sets, the right side has a 2 1/2" inlet, 1 3/4" on the left side.

MID-USA
www.mid-usa.com
www.mid-usa.ca

Metalsport Wheels

Metalsport Adds 20" x 5.0" Fat Wheel

South Gate, California based Metalsport Wheels has added to its wheel size range with a new 'Fattie" - the new wheel joins the company's established 21" x 5.5" and 23" x 5.5" fat wheel sizes.

"This wheel is made here in the USA, just like our other wheels, and is a perfect fit for the Steam Roller Touring (SRT) big wheel performance kits from Bagger Nation," says Metalsport. "Pick your fat wheel size and then choose from any one of our over 27 designs - they are all available in all three of our fat wheel options, also with matching pulleys."
Metalsport offers a full line of 3D and 2D finished wheels, including its Chip Foose designed exclusive line. "We have one of the largest selections of wheel sizes in the USA. Wheel sizes start from the 16" wheel to our monster 34" wheel. All wheels come with options to add matching rotors, pulleys, sprockets and hubs."

METALSPORT WHEELS
www.metalsportwheels.com

Maxima

Maxima - "How to Improve the Best Oils in the World"

Described as "unique and exclusive", Santee, California based Maxima Racing Oils has released an entirely new engine oil additive system called PEAC (Performance Enhancing Additive Chemistry) for all its four stroke applications, including most Harley-Davidson, Indian Motorcycle and custom V-twin applications.
PEAC was developed by Maxima and tested with factory teams like Monster Energy Kawasaki, Monster Energy Pro Circuit Kawasaki and Geico Factory Connection Honda. The PEAC reformulation was designed to "significantly improve performance in several critical areas: engine cleanliness, clutch performance and most importantly – power and acceleration."

Increases in power and acceleration: "The new oils were first and foremost designed to make machines faster, at the heart of which is an exclusive and proprietary friction modifier system with a high affinity for metal surfaces and low affinity for clutch plate material."
This advanced system is said to be able to improve power "while having a negligible detriment to clutch friction. Through extensive testing, we were able to achieve the necessary balance between 'clutch friction increasing' and 'crankcase friction decreasing,' allowing for maximum power output from the engine and maximum transmission of power to the rear wheel."
The results are said to be quadfecta of often conflicting and mutually exclusive benefits - increased horsepower, increased acceleration, increased torque and improved balance between clutch feel and power.

Better clutch performance, especially at high temperatures: "Clutch performance was improved by introducing chemistries with a high affinity for clutch plate material, but minimal attraction to metal surfaces. The minimal interaction of these components with metal surfaces helps to prevent drag and frictional losses in the crankcase, while still increasing clutch friction. This balancing act allows for maximum efficiency in transferring engine power to the rear wheel, making sure none of that hard-earned power is lost to clutch slippage. To maintain this performance throughout the entire life of the oil, shear stability was also improved, thus ensuring the necessary film thickness required for efficient power transfer."

100% improved cleanliness: "Deposit control was also improved, in part due to the increase in oxidative stability. Oxidation by-products are known to form the precursors to unwanted deposits, making oxidative stability the new oils’ first line of defense against harmful build-up. An additional and significant step to improve deposit control was a complete overhaul of the dispersant system, which are the components responsible for keeping contaminants from accumulating on engine surfaces by 'dispersing' them throughout the bulk oil. The new dispersants, produced by a completely different and novel process, provide 100% improved cleanliness per unit concentration, drastically reducing engine deposits."

Improved resistance to breakdown: "Oxidative stability was improved by making advancements to the antioxidant chemistry that prevents oxidation of the oil and by selecting even more oxidatively stable base oils than the exceptionally stable base oils used in the outgoing products. The already potent dual-molecule antioxidant system was further improved by both improving the efficacy of the chemistry and increasing the amount of chemistry used. These upgrades have successfully been shown to improve oxidative stability over the previous oils and key competitors. The results are longer drain intervals, increased protection, improved heat resistance and improved resistance to oil breakdown."

MAXIMA RACING OILS
www.maximausa.com

Bagger Nation

Raked Wail Tail Tour Pack

Bagger Nation's new Wail Tail Tour Pack adds a totally custom and racy look to a normally mundane accessory. The all-new high impact, injection molded ABS Tour Pack design features a contemporary raked profile with Bagger Nation's unique proprietary and patented Wail Tail wing molded right in.

At a recent show Paul Yaffe told AMD Magazine that "the innovative wing features a brake light that’s frenched discretely under the wing. The light will utilize our laser bright COB (Chip on Board) technology and will offer running light, brake light and signal functions.
"Each of the three Tour Pack sizes - Slim, Street and Ultra - will arrive completely assembled using a sleek new hinge design and a single open latch that includes lock and keys. We’ve even included a retractable tether inside to keep things neat and highly functional."

The Wail Tail Tour Pack fits all H-D detachable rack systems and can be universally mounted to just about any model or brand. Bagger Nation offers a choice of two optional backrest styles in full or slim designs. Wail Tail Tour Packs arrive assembled in a satin black ABS finish light scuff and ready for custom paint.

PAUL YAFFE'S BAGGER NATION
www.baggernation.com

Harley-Davidson

Harley-Davidson Updates

Reported as one of several current Harley-Davidson rumors in the May edition of AMD Magazine (available to read online now at www.amdmag.com, see page 64), it would appear that Harley is indeed slated to announce cancellation of its August 2020 international Dealer Meeting at Nashville, Tennessee.

Instead, the company is working on plans for a January or February 2021 roll-out for its MY21 announcements - most likely as a series of three regional dealer meetings, one each for the Americas, Europe and the other EMEA managed territories, and Asia and related markets.

Harley's next single venue worldwide dealer convention is slated for January or February 2022. Once it is able to get back into production and dealer shipments (still thought to be the second half of May at the soonest), it is expected that MY20 production will need to be extended before any model launches can be contemplated, probably to as late as October or even November 2020.

This raises two further questions - whether or not Harley will participate at the usual industry expo events at which it would normally have booths, such as INTERMOT and EICMA (assuming they go ahead that is), and whether or not the new Pan America ADV Tourer and Bronx Streetfighter will be included in the first tranche of MY21 announcements. AMD had already heard that production for them had already slipped to November 2020 at the earliest, even before the present crisis-driven production shutdown became an issue.

•    Whenever the MY 2021 announcement does come, it is believed that, in what is thought to be a largely paint job and accessory make-over announcement (Pan America and Bronx aside), Harley is to wave the white flag of surrender and abandon the hydraulic clutch on Touring models from 2021 on. The hydraulic clutch was introduced on all MY2014 Project 'Rushmore' Touring models (except Road King), but it has been plagued by recalls and other tech issues ever since.

•    In other news, the on/off battle between Harley and Impala Asset Management, to see independent directors appointed to the sclerotic Harley board (as described by Motley Fool), looks set to rumble on until after Harley's 'virtual/video' annual meeting on May 21.
 
Activist investor Bob Bishop's Impala Asset Management (owner of more than 1% of H-D stock) had originally petitioned for the appointment of two independently nominated directors at the annual meeting. But in return for a bunch of cash and some modest concessions, it has accepted a compromise. Instead, Impala, and the other investors whose backing it claims to have, will propose one appointee after, rather than as an item of business at, Harley's annual meeting.
 
Stockholder disquiet revolves around the recent management of the company and the direction it has been taking. Bishop's candidates had been a former cable TV executive (and professional race car driver) and a former GM and NASCAR executive. Motley Fool explains that having withdrawn these nominees, the deal will see Impala and its associates and Harley submit two names each (four candidates in total) for consideration as independent directors to fill one slot on the board. The position may either be a new one or come from one of the existing directors standing down. Either way, the vacancy could end up being filled by one of Harley's own picks.
 
•    As at March 1st, and as listed in Harley's Annual Meeting Shareholder and Proxy Statement, the largest stockholders in Harley-Davidson, and those owning more than 5% of the common stock, are … Vanguard Group (11.55%); BlackRock Inc (9.45%); Bank of New York Mellon (9.27%); Invesco (6.98%), and Dodge & Cox (6.55%).

•    Finally, Harley is moving Larry Hund from his role as President and COO of Harley's Financial Services business to Chief Commercial Officer at the Motor Co., focussed on Motorcycle, P&A, General Merchandise sales, and on the Milwaukee Museum.
 
A slew of motorcycle sales appointments are also being made, reporting in to Larry Hund and in an effort to streamline Harley's existing and notoriously inefficient global region motorcycle sales management structure.
 
Dave Cotteleer becomes the VP and Managing Director for North America; Nigel Keough for Asia Pacific and Latin America; and Andy Benka for EMEA. Jonathan Root, Vice President of Insurance and Protection Products, HDFS, has been promoted to Senior Vice President, HDFS, and will succeed Larry as the leader of HDFS.

MIC

Powersports Employees Included Among Essential Workers

MIC, April 17, 2020 – Powersports employees in manufacturing, distribution, sales, rentals and maintenance are essential workers, according to newly revised federal guidelines released April 17.

This clarifies that many powersports businesses nationwide can remain open, thanks to the addition of new language added to the Cybersecurity and Infrastructure Security Agency (CISA) Guidance on Essential Critical Infrastructure Workers.
This guidance, which outlines the federal government's position on essential workers, is currently in use by 33 of the states with stay-at-home orders, and has always listed "automotive repair" employees as essential workers. The CISA 3.0 guidance for the transportation sector now expressly includes: "Workers critical to the manufacturing, distribution, sales, rental, leasing, repair and maintenance of vehicles and other transportation equipment (including electric vehicle charging stations) and the supply chains that enable these operations to facilitate continuity of travel-related operations for essential workers."
"We are grateful to CISA Director Christopher Krebs, who heard our case and made this important clarification," said Scott Schloegel, MIC Senior Vice President of Government Relations. "Proper servicing of all types of vehicles, including during times of emergency, is absolutely necessary. However, everyone still needs to follow state and local guidelines, as well as health official directives and practice social distancing."

Polaris

Polaris Supports 'Goggles for Docs'

April 26 - Polaris has donated nearly 1,300 pairs of 509 and KLIM goggles to support 'Goggles For Docs', providing eyewear to healthcare workers battling the COVID-19 pandemic - the donation is said to equate to a MSRP of $72,200.

The goggles were distributed to hospitals and medical facilities across the nation including AMR Riverside in California, Newark Division of Fire & EMS in Ohio and Emory University Hospital in Georgia, among others.
"During these unprecedented times, we have seen so many examples of healthcare workers and first responders working in the most demanding circumstances despite the lack of PPE for the greater good," said Tom Delanoy, 509 founder and president. "Working with 'Goggles For Docs' to provide eyewear for those fighting on the frontlines of this pandemic seemed like a great way for us to contribute and we are humbled to be part of the solution."
'Goggles for Docs' is a grassroots effort to provide healthcare workers with ski, snowboard, snowmobile and off-road goggles as they treat COVID-19 patients, offering a solution to the shortages of healthcare eye protection. As of April 4, more than 29,000 goggles have been shipped across the United States.
www.gogglesforDocs.com

Polaris

Polaris Borrows $300m 

Polaris has entered into an incremental $300 million 364-day unsecured term-loan facility to further increase the company's liquidity position. 

"During this pandemic-related lockdown of the global economy, we remain committed to prudently managing the company's financial resources for the long term. Execution of this new term loan with our long-standing banking partners provides us with an additional liquidity buffer to navigate these uncertain times," said Mike Speetzen, Polaris' Executive Vice President and Chief Financial Officer.

Baikal Mile Ice Speed Festival

To Russia with Gloves!
 

The May edition of AMD Magazine carries a feature about the Baikal Mile Ice Speed Festival (Lake Baikal, Russia) at the end of February.
Indian Motorcycle and Workhorse Speed Shop took on the extreme challenge of the kind of sub-zero temperatures in which neither man nor machine are designed to function with 'Appaloosa' - the highly modified Scout Bobber sprint racer - in what must be the toughest possible of pre-season shakedown tests for its 2020 Sultans of Sprint comeback.
                                                                          

In only its second running, the Baikal Mile challenged competitors to reach maximum speeds with their specially prepared vehicles on the frozen surface of the deepest lake on Earth - Lake Baikal, Siberia.

"Racing on ice is hard, this is the most incredible thing I've tried to do. Coming here was a huge adventure for all of us and it was all about challenging ourselves, making new friends and having fun at the same time," said Brice Hennebert, the bike's original builder.
 

"At this event there are bikes, you've got cars, a helicopter, a tank with a Bentley body. I mean, the craziness of the machines is just at the top level." - Sébastien Lorentz

For a glimpse into the mayhem and fun that used to inform human activity on pre-Covid era Planet Earth, check out the video here...

SEMA

SEMA Says Aftermarket is "Largely Open For Business"

Diamond Bar, California, April 20 - SEMA is reporting that the automotive market's specialty aftermarket industry is "Largely Open for Business" with two thirds of the industry continuing to operate during the COVID-19 pandemic.
The findings are from a survey of SEMA member companies conducted April 1-7. SEMA has been working to identify areas to support the aftermarket industry during the pandemic as it moves towards recovery.
"The results of this survey show the resiliency of the specialty automotive industry and how it continues to push forward, working to move past the COVID-19 disruption," said SEMA President and CEO Chris Kersting. "We are using this feedback to further develop resources to help member businesses through this time of economic interruption."
Most aftermarket industry facilities remain open under the "essential business" designation, and more than half of the industry's employees continue to work from a company site, as a large number of production, technical, logistical and retail positions can only be done at a jobsite.
The survey also found that most business owners maintain a positive outlook, with 87% indicating that they are "impacted short-term, but will get through it." The strength of the industry is depicted by the 82% of employees who continue working from a jobsite or from home, and by the nearly 2,000 companies that have signed up to exhibit at this year's SEMA Show."

Harley-Davidson

Harley Shutdown Continues as Unemployment and Recession Forecasts Worsen

Having already extended the shutdown of manufacturing operations at least twice, as the previously announced April 19 deadline approached Harley-Davidson extended the suspension of production through May 15 (at least).

In an April 15 announcement of additional actions Harley is taking in response to the impacts of COVID-19 on its business, acting President and CEO Jochen Zeitz said: "The effects of COVID-19 on economies around the world have been swift and unprecedented.
"It is essential for us to respond quickly, adapt and position the company to manage near-term challenges while preparing to re-energize the business for the recovery and beyond." In response to the near-term impacts of COVID-19, the company announced that it was taking actions to reduce its costs with immediate effect.
This included "significantly reducing all non-essential spending and temporarily reducing salaries." While the salary cuts affect all Harley-Davidson employees, with a 10 to 20 percent reduction for most salaried employees in the United States, the CEO and Board of Directors will "forgo salary/cash compensation" and there will be a "30 percent reduction for executive leadership."
The company also announced that there would be "no merit increases for 2020," and that it was implementing a hiring freeze. The statement did not, however, clarify if this would include the hiring of a new permanent CEO to replace Matt Levatich and whether Jochen Zeitz would therefore be continuing to fill the role for longer than had been initially intended.

The statement went on to say that "outside of the United States, the company will take similar actions as based on regulations governing each of its operating locations" and that "salary reductions will be reassessed at the end of the second quarter as the company continues to closely monitor business conditions."
The majority of Harley's global production employees are currently on temporary layoff, but with medical benefits remaining intact for all.
Zeitz went on to say: "We understand that navigating this new reality has a real impact on our employees. Their dedication to Harley-Davidson is never taken for granted, and we thank them for supporting one another and rallying together as we manage the profound impact of COVID-19."
Previously (March 26) Harley announced withdrawal of its financial guidance for 2020. Contrary to market trend and despite imposing wage cuts, at the time of writing, Harley had not yet announced a suspension either of its dividend payments or of its share buy-back program - having doubled capacity to do so in February.

Motorama Madrid

Motorama Madrid
March 6-8, 2020

One of the newest events to become an AMD World Championship of Custom Bike Building affiliate event was Motorama Madrid, which took place at the Pabellon de Cristal, Casa de Campo, over March 4-6.

The timing of the event was really tricky with the concerns about coronavirus already swirling around the Spanish capital, not surprisingly the attendance was down on previous years, but the show still drew an excellent crowd of around 28,000 fans.

Spain has always been a great market for bikes at the 'AMD', and the Motorama custom bike show featured 30 bikes from 20 competitors in Custom, Performance Custom and Cafe Racer classes, with prizes sponsored by Custom Chrome Europe.
The organizers invited two well known 'AMD' stalwarts to act as judges - Noel Connolly (Flame-Art Design, Ireland) and Lasse Sundberg (Roth Engineering, Sweden) - with me in my 'AMD' ShowMaster capacity as chairman to mediate between them if there were disagreements!
The bikes also had to complete a run test on an outdoor circuit during the event in order to be eligible for a prize.

Custom class winner and Best in Show was Old Custom Flames' "Setente y Siete" ("77"), a 1977 FLH 1200 Shovelhead, featuring handmade springer front end and swingarm, handmade gas tank with inset gauges, one-off forward controls and numerous other handmade parts finished in bronze and brass. Builder Ricky C. Lopez won an invitation and travel expenses to compete at the 2020 AMD World Championship at INTERMOT Customized, Cologne, Germany, 6-11 October.

A very competitive Performance Custom class was won by TooHard Motor Co with "Throwback", a 1998 Triumph Trophy 1200 scrambler with modified frame featuring a Triumph Daytona 675R swingarm, Öhlins shocks, Triumph Bonneville Bobber tank and seat, and Triumph Thruxton 1200R wheels.

 

Sueca Iron Performance Cycles won the Café Racer class with "Bolt D'Or", a 1982 Honda CB900 with modified frame, custom wheels, Yamaha inverted forks and brakes, Barnett clutch and Öhlins shocks.

www.motorama.es

Bike photography by Alvaro

Vance & Hines

Vance & Hines to Restart Production

Santa Fe Springs, California, April 17, 2020 - A Statement by Vance & Hines President Mike Kennedy


From the beginning of the COVID-19 issue our Mission has been clear:
1. 100% Safety and Well-being of our Teammates.
2. Protecting our business, so that we manage through with resiliency and where necessary reimage our business, so that we are best positioned to drive our commercial success.
We've introduced measures to protect our employees' health and aligned with the Centers for Disease Control and CA OSHA Standards around the Infectious Disease Preparedness and Response Plan. We started that process in March and have made continued improvements since then.
None of our employees have been diagnosed with the virus, and we are proud of that. We promise to continue to be diligent and have new standards for how we work and new standards for personal protection. In addition, we've evaluated our processes and are making changes that include eliminating non-essential tasks and instituting a number of administrative and engineering controls.
We are overjoyed to let you know that Vance & Hines (for both Indiana and California) has been approved to enter the next stage of our recovery from COVID-19 and is preparing to start manufacturing again.
Next week we'll begin the gradual resumption of production in Santa Fe Springs, CA, and Brownsburg, IN, starting on Monday, April 20. We'll be ramping up manufacturing activity as quickly as we can.
While we navigate this crisis filled with unfamiliarity and uncertainty, we have a clear path forward filled with optimism and confidence. We ask for your patience as we design a “ramp plan” and we will share that plan with you in full detail next week. We are confident, we'll return to production as a better company and a better place to work.
As a company which was born on the racetrack, it's great to be back in competition.
Be Safe. Be Strong.
Mike Kennedy, President, Vance & Hines

News Briefs

With National No. 1 plates at stake, the 2020 AMA Hillclimb Grand Championship takes place in Wisconsin this year, with Bay City's Valley Springs Motorcycle Club to host an amateur national championship event at Valley Springs Motorcycle Club, August 7-9. The club's 500-foot hill also was the site of AMA Hillclimb Grand Championships in 2012 and 2014. Riders with the ten fastest times across all classes will compete for the King of the Hill award in a run-off at the end of the program on Sunday; valleyspringshillclimb.com

The National Marine Manufacturers Association (NMMA) announced +5% growth for sales of new personal watercraft in 2019. New powerboat retail unit sales closed Q4 +4% overall on a rolling 3-month year-over-year (R3M YOY) basis and closed 2019 -1 percent on a rolling 12-month year-over-year basis, marking the second highest level of new powerboat sales in 12 years. Wake sport boats were +5%, cruisers +4% and jet boats +1%. New yacht sales were -6% for 2019.

Founded over 100 years ago and renamed in 1947 by 'Bub' Tramontin, Tramontin Harley-Davidson (Hope, NJ) has closed its doors with current owner and founder's son Bob Tramontin retiring after 45 years in the business. Bob is quoted as saying that "based on current Buy-Sell market conditions, we were unable to find a qualified buyer. After lengthy negotiations, thanks to George Chaconas of Performance Brokerage Services, we were able to reach a retirement incentive buy-out with Harley."

Manchester Harley-Davidson in New Hampshire has been acquired by Paul Veracka, his second acquisition since he split from his brother Michael and started his own company. Manchester H-D is located 35 miles north of sister store High Octane H-D, which is in Billerica, Massachusetts. "High Octane is already the largest new bike dealership in the North East, and we feel that with the vast H-D community in New Hampshire, Manchester has the customer base to equal or beat it. Our 2020 goal for the dealer group is to have five of the top ten new bike volume dealerships on the East Coast," said Veracka. "This is my sixth H-D dealership now with the goal to own ten in total in the next couple of years." Collectively, Paul's company will likely sell over 5,000 H-D motorcycles this year.

 

The 2020 SEMA (Specialty Equipment Manufacturers Association) Show will be staged at the Las Vegas Convention Center from Tuesday 3 November through Friday 6 November 2020.

A new SEMA Industry Perspectives Report, 'Independent Retailers are the Most Common Sales Channel for Specialty Automotive Parts', has found that independent retailers in the automotive aftermarket remain the most used sales channel for getting parts to consumers. While manufacturers and distributors sell into a variety of channels, including direct-to-consumer, over 80% of manufacturers report that their products sell through independent specialty retailers, and that while many retailers and installers report selling some of their inventory through online auction sites and marketplaces, these only account for 7% of sales.


Sources: AMD, IDN, FT, Reuters, PSB, MPN, B&B, BDN, MCN, AP, Bloomberg, MSNW, Electrek, electricmotorcycles.news

Norton Motorcycles

India's TVS Buys Norton Motorcycles' Assets

India's TVS Motor Company has emerged as the buyer of Norton Motorcycles, or at least of the brand and the most likely remaining still viable current models and design IP.
In an all-cash deal for a consideration of GB£16m ($20m/€18m) the assets have been acquired from Norton Motorcycles (U.K.) Limited (in administration) through one of TVS Motor's overseas subsidiaries. "This will be one of the most interesting acquisitions of a storied motorcycle maker in recent times and will reflect TVS Motor Company's and India's rapidly rising prominence in the international two-wheeler market," said a TVR press release confirming the deal.

Norton went bankrupt in January after several months of appearing to become increasingly creative in its attempts to secure additional funding, and several years in fact ever since the brand was acquired by Stuart Garner, in which there has been widespread industry scepticism about the financial and strategic stability of the project to revive the brand in Britain under British ownership.

Commenting on the acquisition, Mr. Sudarshan Venu, Joint Managing Director, TVS Motor Company said: "This is a momentous time for us at TVS Motor Company. Norton is an iconic British brand celebrated across the world and presents us with an immense opportunity to scale globally. This transaction is in line with our effort to cater to the aspirations of discerning motorcycle customers. We will extend our full support for Norton to regain its full glory in the international motorcycle landscape."

Sudarshan Venu, Joint Managing Director, TVS Motor Company: "This is a momentous time for us at TVS Motor Company. Norton is an iconic British brand celebrated across the world and presents us with an immense opportunity to scale globally."

This is not the first attempt TVS has made to "scale globally". Among other hitherto unsuccessful endeavors had been a non-equity deal with Triumph some years ago to take on manufacturing of lightweight and middleweight machines for the Asian market.
Mr. Sudarshan Venu further added: "Norton will continue to retain its distinctive identity with dedicated and specific business plans. TVS Motor will work closely with customers and employees in building the success and pre-eminence of the Norton Motorcycles brand and we look forward to growing together globally in the years to come."
TVS is India's third largest motorcycle manufacturer by volume, and this deal brings them toe-to-toe with Eicher Motors, whose UK/USA bred Interceptor 650 parallel twins are being very well received in Europe and North America, and with Bajaj Auto, who appear to have successfully engineered a non-equity partnership for lightweights and middleweights with Triumph.

TVS says it is "excited about the existing and upcoming products at Norton Motorcycles, including Commando, Dominator and V4 RR. Confident of the strong synergy between both the brands, we believe that Norton Motorcycles can leverage TVS Motor Company's global reach and supply chain capabilities to expand to new markets."
However, no mention is being made of a Riccardo designed engine "Design and License" deal that Norton is reputed to have signed with Zongshen in 2017.
Part of the $8.5bn 1911 founded TVS Group, TVS Motor Company is the largest group subsidiary, which has revenues of around US$2.9bn and an annual sale of more than 3 million units with an annual capacity for over 4 million two and three-wheeled vehicles. TVS Motor is also India's second largest exporter with sales in over 60 countries worldwide.
The company has four manufacturing plants, three located in India (Hosur in Tamil Nadu, Mysore in Karnataka and Nalagarh in Himachal Pradesh) and one in Indonesia at Karawang. It is unclear at this time (though thought unlikely) as to whether TVS plans to keep any of the manufacturing or assembly in the UK, or has acquired an interest in Norton's Donington Hall facility alongside the Donington Park race track - former home of the British MotoGP round.

Italian Motorcycle Registrations

Italy - March 2020 Motorcycle Registrations -69.18%

The latest motorcycle industry registration statistics from ANCMA, the motorcycle industry trade association in Italy (and owner of EICMA), do not make good reading.
In motorcycle terms, March was -69.18% at 3,855 units (compared to 12,507 units for March 2019 - the third highest month of last year).

This followed a good start to 2020 with January +3.13% (6,817 units) and February +12.70% (8,857 units). For the year-to-date (first quarter), motorcycle registrations in Italy are -27.61% (19,529 units in total).
In total PTW terms, March was -66.09% at 8,519 units (+27.27%/25,121 units in March 2019), and the Italian market is -24.73% in total at 41,324 units (54,900/+18.88% for Q1 2019).
Scooter registrations for Q1 were -21.95% at 21,795 units YTD compared to 27,924 units for Q1 2019.
The top seller in Italy in Q1 was Honda Italia's SH 150 (2,205 units), followed by the Piaggio Beverly 300 ABS (1,374 units) and the Yamaha TMAX (1,356 units). The top selling motorcycle was the BMW R 1250 GS Enduro (779 units), followed by the Honda Africa Twin (719 units), BMW R 1250 GS Adventure, Yamaha Tracer 900 and Ténéré 700.
For the record, the Italian market was +6.26% in motorcycle registration terms for 2019 at 98,883 units and +5.65% in total PTWs at 231,937 units.

Feuling Parts

Feuling Race Series M-8 Camchest Kit

Oceanside, California based Feuling Parts' complete camchest kits include all necessary components, from the top to the bottom of the camchest, conveniently packaged under one part number to "ensure each individual part is designed to work and function together, and to do so in total harmony," says Feuling CEO Luke Leatherman.
"They take the guesswork out of the ordering process and provide the engine with builder maximum reliability, peak performance and the coolest engine/oil temperatures obtainable."

The kits include Feuling's high-volume oil pump, high-flow camplate, Reaper Series camshafts, hydraulic roller lifters, fixed length pushrods, Timken/Koyo cam bearings, rocker arm studs/nuts, gaskets, O-rings, ARP cam/crank fasteners, washers, moly paste and Loctite.
Feuling Race Series edition kits include a Race Series oiling system - billet 7075 oil pump, Race Series lifters, and high-flow billet 7075 aluminum camplate. "The Race Series aluminum oil pump, which is 50% harder and stronger than the factory pump, holds tighter tolerances under temperature and has deeper scavenge kidney ports over the Feuling HP+ oil pump for even more scavenge flow volume."
Race Series hydraulic lifters have a full .200" of total travel, designed with a slower bleed-down rate to handle heavy valve spring pressures, increase engine rpm before valve float and feature increased roller clearance for steep ramped camshafts and clearance for the M-8 front exhaust camshaft lobe flange.
The results include 30% more pressure gear volume, 53% more scavenge gear volume and 27% more pressure and scavenge gear volume over stock for M-Eight oil-cooled motors; 42% more scavenge volume with port sizing, matched passages and holes to the engine case, 68% more oil volume to the crankshaft and connecting rod bearing, 15-25 degrees cooler engine temperatures, 15-30 degrees cooler oil temperatures and 10-30 more PSI of oil pressure for M-8 twin-cooled and oil-cooled motors.

Additional benefits include increased oil pressure, scavenge volume and engine oil flow, quieter and smoother engine operation and reduced wet sumping, blow by and oily air cleaners. Magnets in the oil pump help protect gears and pressure relief valve.
Test results show +2 HP gain and +2 ft/lbs of TQ gain to the rear wheel on M-8 engines and a 50% reduction of engine sump oil level.
The Grim Reaper 508 grind cam will give aggressive pulling power and deliver a satisfyingly 'nasty' sound, performing exceptionally well in 114" and larger cubic inch engines with added compression ratio. The stock throttle body produces an excellent powerband, and use of a high flow throttle body will increase peak power numbers.
This camshaft revs up faster than the 521 grind, sounds nastier and pulls harder, but is more difficult to tune - a high flow exhaust system and air cleaner is highly recommended for optimal performance.
High-lift valve springs are required, such as Feuling Endurance BeeHive valve spring kits or high-load valve springs (high-load requires the use of Feuling Race Series lifters). Heavy-duty pushrods are also highly recommended. Ported cylinder heads are not required, but will complement the cam and add even more pulling power throughout the range.

DRAG SPECIALTIES
www.dragspecialties.com
www.feulingparts.com