Since I wrote this column last month, I've been to Milwaukee for the Drag Specialties 2024 NVP Product Expo, and the first of a two-part review of vendor news is in this edition. The weekend was dominated by three main lines of dialog.
First, the excellent new expo environment that LeMans is now providing. Second, now that inflation finally appears to be at least somewhat under control, the soft 2024 parts and accessories aftermarket as we await the effects of an overdue interest rate reduction cycle, and regardless of the outcome, getting this year's Presidential election into the rear-view mirror won't hurt either. Third, and inevitably, what with being in Milwaukee 'n all, the ongoing deterioration in Harley's market reputation as it emerges that even its attempts to address its problems are proving problematic.
Having previously addressed the IRA grant aid it scored to subsidize new LiveWire production configuration, last month's "Harley Needs to Start Thinking the Unthinkable" piece talked about the decision to move Revolution Max platform model production (Pan America and new-gen Sportsters) to Thailand. Harley claims it will only be for a year, but representing, as it does, the first time it will be making bikes for sale in the United States outside the United States, that seems unlikely.
dealer disquiet has reached unprecedented levels
Either way, the Unions are furious and accusing Harley of breaking the promises made in 2019 when it pledged that it would only ever make international market motorcycles internationally.
There are many other issues bubbling away in Harley's cauldron of woe - share price, fiscals, dealer policies, inventory channel stuffing, declining sales and, most recently, backtracking on the 'touchy feely' HardWire Diversity, Equality and Inclusivity (DEI) strategy that would see it waving rainbow flags and sailing perilously close to recruitment by positive discrimination quota.
Personally, I have nothing against rainbow flags - nor pink ones, yellow, black or brown ones. I think that it does behove all of us to 'Play Nice' with everyone and to keep our views to ourselves. Express them in the ballot box and not in the cowardly confines of social media channels, I say. Free speech must include the freedom to disagree, or else it includes nothing.
I have always seen the best intentions of positive discrimination as misguided - those intentions, paradoxically, are guilty of exactly the kind of bigotry and bias that such policies are designed to screen out of society.
So, should corporations play the DEI card and deploy its kissing cousin, the ESG (Environmental, Social and Governance) policy? Well, yes, of course they should, but the fact that everyone is now supposed to boast about doing so, and cancel anyone who doesn't, only goes to show just how shit society has been, not how great political correctness is going to make it. Hire someone because of their ability, not because of the boxes they check.
Since last month, the brown stuff really has hit the fan. Dealers have been complaining to Harley about how they are being treated, and bigoted right-wing activists have been banking click-credits as they claim it is their all-knowing wisdom that has changed Harley's corporate governance policies.
Last year I wrote a piece entitled "Harley is Treating its Dealers Like an ATM," and I knew at the time that it had touched a nerve. There is no question that the brave new world of investor group and private equity ownership of Bar'n Shield shrines simply could not end well. Not in any parallel universe was it a good idea to institutionalize the worship of mammon as a higher calling than praising the metal!
We all have fiduciary duties, sure, but as one dealer has said in what has become an open letter to the H-D CEO, Jochen Zeitz, his failure to immediately vacate the role will itself be an abandonment of his own fiduciary duties to all stakeholders. Strong stuff.
Dealer disquiet has reached unprecedented levels, with those lobbying the Harley-centric NPDA said to be in the hundreds. In its inane, toe curlingly self-regarding statement of mid-August, one that was intended to address the disquiet, but singularly failed to heal the wounds, and instead painted themselves as the victims. Harley merely reinforced the sense that, actually, they are neither great listeners nor great capitalists.
In defending themselves from the perception of having attempted suicide by swallowing an entire shed load of Woke pills, the company stated that "we do not have hiring quotas and we no longer have supplier diversity spend goals." Like having had quotas might have been a legitimate ping on the governance radar, and that dumping spend goals makes it all okay now? WTF were they thinking in the first place? Do they not understand the concept of free market enterprise?
Harley lambasts those whose "social media negativity" is "designed to divide the community." Hello? The problem has been that it is its policies that have done the dividing. In reaction, it is the 'stakeholders' that are now trying to reunite the manufacturer with its brand heritage, values, dealers and customer opportunities. But the corporate playbook is one that now eliminates the ability to put the shovel down and stop digging.
For a senior management team that would claim a stellar and insightful understanding of what the concept of 'Brand' means, it does not have even the remotest grasp of who its customers have been, of who they presently are, and of who they are going to be after we Boomers have ridden our last mile. Harley wants the brand to be what it says it is, not what its customers want it to be. Corporate arrogance of the most dangerously juvenile kind!
The original HardWire strategic plan expires in 15 months, and Zeitz has already been coy with investors about the planning of HardWire II. And well he might be. The present plan having so clearly failed, he and his fellow travellers are hardly made of 'the right stuff' where planning the next stage is concerned.
HardWire has failed just as spectacularly as the well-meaning Matt Levatich's ill considered 'More Roads' plan did. It is, therefore, inconceivable that any new sense of direction can be allowed to be sequential to, or developmental to, this one; or that the present management are the ones tasked with devising it. It cannot be built on what has gone before, it needs to be a radically different approach that resets priorities and takes the company in an altogether new direction.
Harley needs new thinking, and that means new thinkers. Harley needs to delist from the NYSE before a hostile takeover bid (probably Chinese) takes all manufacturing out of the USA. It needs to serve time in friendly, heritage-sensitive private hands, lick its wounds (modestly) and re-evaluate what its place in the global motorcycle industry of the mid-21st century can be. That includes selling LiveWire to a (probably Chinese) company that is in a position to make sense of the project.
The timing of change maybe uncertain, but the fact that there needs to be radical change is entirely certain. What a mess!