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Archive for April, 2009

Swine Flu Face Mask

Swine Flu Face Mask

Unless you’ve been hiding under a rock, you have been bombarded with news coverage of the swine flu (H1N1) for several days now.  I first heard about the outbreaks in the airport when catching a Southwest Airlines flight. 

Whether you’re getting ready for a motorcycle ride, a Megadeath concert or just looking to personalize a face mask — during this pandemic people are injecting some fun into the panic and using them as a fashion statement.

Pity the poor HOG…the CDC has officially stopped calling the virus “swine flu,” opting instead for the more hog-friendly H1N1 flu.  The swine influenza is a respiratory disease of pigs caused by type A influenza viruses and has a major economic impact on the swine industry in the United States. Flu outbreaks in pigs are common, especially during winter months.  Somehow it got to Mexico and then mixed with humans. The World Health Organization (WHO) raised its pandemic alert to level 5, which is the 2nd highest level of alert that indicates a swine flu pandemic is imminent.  Level 5 exceeds the level achieved by both the Avian and SARS outbreaks of past years.

In the 1976 Swine Flu outbreak federal officials pushed for widespread vaccinations after swine flu broke out among soldiers at Fort Dix, NJ., killing one of the 14 diagnosed with the illness.  The program was suspended after at least 25 people died from the vaccine reactions. Another 500 or more later suffered from Guillain-Barre syndrome, which damages nerves and can lead to paralysis.  43M people received the flu shots with the help of TV ads.  Dr. David Sencer (Dir. of CDC) was fired over the deaths although at the time health officials were very concerned with a pandemic on the scale of the 1918 flu outbreak that killed an estimated 21M people.

I’m not trying to do a “Joe” (Biden says: “stay off airplanes and subways”) and cause undo alarm.  In fact, I think this has been overblown by the media.  Sort of a crisis of the week.  As of this writing 11 countries have reported 257 cases.  The U.S. has reported 109 cases including one death.  Mexico, where it originated, reported 97 cases and 7 deaths.  It’s been reported that over 30K people die each year during a typical flu season so this outbreak has a way to go to match that level.

Be safe out there!

More information links:

  1. Ministry of Health (Mexico)
  2. World Health Organization (Swineflu)
  3. CDC (Swineflu Key Facts; Brochure)
  4. Pandemic Flu Info

Photo courtesy Getty Images.

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wolverineWhenever I hear about product placement in movies I think about Wayne’s World. 

You remember… he’s eating Dominos and drinking Pepsi with Nike shoes as he comments on product placement while doing product placement. 

Scriptwriters needed to write an epic superhero piece on mankind’s downfall, while promoting American motorcycle heritage and culture.   Or at least avoid denigrating it!  No problem.  Enter Harley-Davidson placement rights to solve the issue with 20th Century Fox/Marvel’s newest X-Men Origins: Wolverine movie starring Hugh Jackman.  The movie release is May 1st and the stripped down Road King painted in matte black is set to hit the big screen.  Really it should be called product integration not placement.  The mutant character has to drive around so, why not get paid for making sure he drives a Harley motorcycle, right?!  In the last movie, the X-Men: The Last Stand a special edition V-Rod was used.  I’ve written about HD product placement previously HERE, HERE and HERE.

hugh_jWhen I watch this movie clip it makes me think how Marvel is going down the same path as DC did with the barrage of crap for sale in the Batman movies of the 90’s.  Sell to kids with toys, meals, video games, placements and marketing stunts.  Like so many before, this movie will be full of 12 year old fanboys hoping for a chance to win a special edition motorcycle!  As a lifestyle brand, I’m sure HD feels this will excite consumers around the world and bring style to purpose – meaning, sell motorcycles.

But, one issue for Harley is that the bikes are drastically modified and don’t match any current models.  Therefore, not really available for purchase.  At some point, marketers will have to figure out how many product placements per hour viewers are willing to tolerate before it defeats the purpose.  It’s becoming so prevalent that we can’t escape it by even taking a bathroom break.

So, let see…we’ve seen the meat-shaped-like-a-stick (Jerky) which comes in multiple flavors and is distributed in truck stops.  Next up for the aging demographic is Harley-Davidson pudding cups!  Oh yeah, tasty in butterscotch.

Photo courtesy Marvel and HD.

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elevator_doorsI’ve alerted people to the fact that the groundwork is being laid for a new kind of Harley-Davidson company in the future.  It’s anticipated they will need to aggressively streamline brands, shrink capacity and either eliminate or phase-out certain poor performing models. 

Then this past weekend while many of us were in the Nevada desert, hundreds of rain soaked shareholders packed the Harley-Davidson Museum in Wisconsin to hear the top executives plans for the company.  Or as retiring CEO James Ziemer put it… “one of the most challenging economic times since the Great Depression.”  The Milwaukee Business Journal has more details HERE.  In short, Barry Allen, a director since 1992 was elected as the new board chairman and shareholders voted to end the class structure of company’s director terms.  Essentially putting the board on notice through an annual re-election process.  Also former CEO and current board of directors chairman Jeffrey Bleustein’s formal involvement in the company came to an end.

Ziemer stated that “the company’s fixed cost structure is simply too high.”  They plan to reduce excess capacity and make changes to be more competitive for the long term.  Several shareholders booed Ziemer on the decision to consolidate factories.  Does this imply Harley will now need to consider new China-based facilities to offer a world-class cost structure?  Would manufacturing motorcycles in China disrespect the rich heritage of the Harley brand and the importance of the Americana culture?  In today’s world I’m not so sure it matters to the price savvy consumer.

And speaking of the economy it’s not a surprise, but odd that Harley-Davidson did NOT participate in the Laughlin River Run last week.  Given that customers are now investing more in their current motorcycle vs. trading up you’d think that the largest west coast motorcycle rally is not an event to be snubbed.  Most all the Asian brands were well represented and HD being absent was clearly noticed.

Lastly, either in a sign of these recessionary times or nostalgic admiration for his remarkable 40 year career, the employees presented Ziemer with the original wood doors from the freight elevator he operated when he first was hired at Harley-Davidson.  Ziemer’s 2008 compensation ($5.6M) should allow him to build a new wooden ‘man’ shack to admire those elevator doors during retirement!

Photo courtesy of HD

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or_redrocksTalk was about a down turn in attendance.  The economy, you know.  Sure the attendance of Laughlin River Run was down (based on my unscientific estimate), but the beautiful weather, the awesome display of motorcycles, and the backdrop of events in the area brought out plenty of riders for the 27th annual motorcycle rally.

It turns out that bikers are indeed welcome in the little town on the Colorado River!  A nice change given un-friendly events in Daytona and in Snohomish, Wa.  We made the 90-mile trek to Laughlin from our Vegas base camp.  The end of April marks a return of bikers to Casino Drive which for a few days becomes the center of everything motorcycles.  I don’t know about you, but I thought it was easy to get around compared to years past.  A side benefit of smaller crowds I suppose.  The lines to vendor booths were shorter, there were no parking hassles and the overall atmosphere was just more relaxed.  Nice!

Sucker Punch Sallys - "Big Kev"

Sucker Punch Sallys - "Big Kev"

There were too many vendors to cover it in detail.  I’ll let the trade rags write about the assortment of “must haves” for your bike. However, I wanted to do a couple of shout-outs.  We grabbed some face-time with “Big Kev” of Sucker Punch Sally’s.  He had the fun meter on high with the “shine” as riders milled about the village of white tents and booths near the casinos.  Thanks for the hospitality and kudos to the SPS team!  I posted previously about who in the chopper industry is going to be the “new” ambassador and still maintain that SPS has the right old school ideas.  Moving on we spent some quality time with Dan Miller of Renegade Wheels to better understand the nuisances of proper wheel fit/placement on baggers. They have some high quality wheels and had a steady line of folks dropping $$ for additional bling.

Conventional wisdom is to post up at the rally, but I had a bit more passion for desert riding near and around Vegas this time around.  We spent more seat time around Lake Mead, the Valley of Fire, Red Rocks Canyon and the Pahrump Valley.  The RRC gets over a 1M visitors each year since it’s only 30 minutes from the strip, but I never get tired of the 13-mile scenic loop drive.  Further up the road is Pahrump which is a gateway into death valley.

rrc_posseBack to the ride out to Laughlin…as we anticipated, LEOs were visible and out enforcing any traffic violations.  Our first encounter was in the town of Searchlight, NV. where Senator Harry Reid was born.  For a town with a population of under 600, it sure had one of the highest saturation patrols I’ve witnessed from Sheriff, State Police, metro police and city LE.  We did a quick gas/water stop and the dialogue with other bikers quickly turned to ticketing for exceeding the speed limit by as little as 2mph in some cases.  A notable top priority for LE was helmet compliance.  Not for just wearing one, but city police were validating that riders had a DOT approved helmet and were aggressively ticketing.  Unfortunate because a lot of folks were getting pulled over.  We managed to idle out of town and not draw attention.

The trip was a great way to recharge after months of cold and rainy weather.  The most notable event?   There was NO event!  There were NO major problems.  No issues with motorcycle clubs and when I checked earlier today there were no motorcycle fatalities!  There were four felony arrests and 20 gross misdemeanor arrests in Laughlin and according to the Mohave News there were a number of accidents in and around Oatman.  In fact there were three within 61 minutes of each other.  But, no fatalities which is all you can hope for with so many riders who show up to revel in the taste and tunes of the desert.

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in-outI’ll be in-an-out over the next several days.  Maybe even have time to grab a tasty burger.  Heading to the southwest desert sun with a group of friends to ride Lake Havasu, Oatman and catch some of Laughlin River Run.  As a result the blog will take a hit on postings.

In my view it’s been too dam much about restructuring, resizing, and laying off over the last 4 months.  It’s time to ride and this is about much more than just a motorcycle rally.

Photo courtesy Child Abuse Prevention at In-n-Out.

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trainThe money train…. Wow … I think I just had a flashback. A warm sunny afternoon sitting on the hill overlooking the river. The birds singing in the trees, everything is so bright and colorful.  Oh wait weren’t we talking about Harley-Davidson?

Harley announced today its second round of job losses since the beginning of the year with a cut of up to 400 more positions, including up to 80 at its Milwaukee-area factories over the next two years.  The company reported a 37% drop in first-quarter profit as net income fell to $117.3 million, or 50 cents a share, from $187.6 million, or 79 cents, in the year-ago period. Revenue declined to $1.29 billion from $1.31 billion. Harley’s worldwide motorcycle sales declined 12%, and U.S. retail sales declined nearly 10% from last year’s first quarter.

And speaking of riding the money train…we learned this week that the new Harley CEO Keith Wandell, will receive a base salary of $975,000 plus other compensation according to SEC filings.  Wandell, replaces current CEO James Ziemer on May 1, and will also participate in the company’s short-term incentive plans with a total opportunity of 120% of his base salary and a maximum payout of 240% of his base salary with a cap of $3 million, his 2009 payout pro-rated based on salary earned for the year.  For comparison purposes, Forbes provides details on Ziemer’s comp plan is HERE.

Talk about a nice run up from his Johnson Controls base salary of $441,670 plus bonuses.  However that number is a bit misleading because compensation for the “chief” executive typically includes: salary and bonuses; other compensation, such as vested restricted stock grants, LTIP payouts and perks; and stock gains which is the value realized by exercising stock options.  In truth, Wandell’s total compensation as reported by Forbes was $9.7M.  Does anyone think he took a salary cut in moving to Harley?  Might I suggest it’s an over payment for services rendered?  Shall we just chant “U.S.A.!, U.S.A.!” and feel good that CEO pay is more than an order of magnitude above the average line worker?

I suspect that Wandell is pinching himself …paid nearly a $1M to lead the premier American based manufacturer of heavyweight motorcycles yet somehow landed the gig without a riding endorsement or owning a motorcycle…excuse me for a minute while I go puke.

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H.W. "Sputnik" Strain

H.W. "Sputnik" Strain

The open air and miles of asphalt stretch out all across the U.S.  Bikers nationwide consider the open road a home away from home and the desire to explore is sometimes described as a spiritual calling.  To ride with the wind in your face and be free on the open road is like nothing else.

But, are we truly “free?”

Some in the motorcycle community believe we’ve sold our grandchildren into slavery to a totalitarian government by not being involved in the full spectrum of political debate.  One such person is H.W. (Bill) “Sputnik” Strain who founded in 1992 the Texas Motorcycle Rights Association (TMRA2).  As State Chairman he describes its purpose as returning Texas to the Representative Republic as envisioned by those who founded the state and this nation. TMRA2 is a member driven association with a pledge to keep motorcycle citizens informed of the daily political happenings in the state and around the nation. They work tirelessly to introduce and pass Bills into law, that are favorable to Texas Citizens and to try and prevent bad Bills from becoming law.

Sputnik is a hard-boiled and fiery mohawked activist who is consider by many to be the Patrick Henry of bikers.  A well respected member of the NCOM Legislative Task Force who has been reasonably successful in his home state is now looking to go nationwide to help return our country to the Constitutional Republic as envisioned by our Founding Fathers.

There is an excellent interview in the International Journal of Motorcycle Studies (IJMS) by Darilynn McClure which provides an insightful glimpse of the man behind the “Free” tattoo.

UPDATE: June 28, 2010 — Last Thursday (June 24, 2010) the Texas Motorcycle Rights Association announced that Sputnik, passed away suddenly at approximately 5:00 AM in the morning.  Sputnik was 70 years old and passed away in the associations state office.  He will go down in history as a great Motorcycle Rights Activist.  A memorial service is planned for July 10, 2010.

Photo courtesy of Hamilton Steele.

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red_bike_roadI believe that people work harder and invest more when they can keep a larger portion of what they earn.  I don’t believe this concept is unique to the left or right.  I also believe government should promote work; savings and private investment; and stable sensible policies to facilitate the efficient exchange of goods and services.  Good tax policy promotes balance between livability and livelihood.

In Oregon the gas tax revenue maintains the state highway system. Because it’s getting squeezed by rising cost of materials and labor along with a decline in revenues due to improved fuel efficiency and people driving less due to the economy the frantic lawmakers are proposing a mileage-based tax system.  You’ll be required to attach a GPS to your motorcycle and it will track miles traveled in Oregon.  Service station pumps will have electronic reading devices to collect mileage data from the motorcycle and you’ll receive a tax bill in the mail.  Never mind privacy issues.

This from a state where voters couldn’t pass the “no brainer” measure 59 which would allow a taxpayer to deduct from Oregon taxable income the entire amount of federal income taxes the taxpayer paid on the income subject to Oregon income tax.  At the same time there was pure genius from the Oregon Zoo management who paraded out an endearing baby elephant just as voters were being ask to pay more property taxes via a $125M bond measure to enlarge the elephant reserve.  I’m not anti-zoo, but paying more $$ to make an inadequate elephant exhibit a litter bigger in the middle of the Portland metro area seems anti “peta-ish.”

If that wasn’t enough elephant Haathi Chap for you there is the Oregon governor, Ted “Sleepy” Kulongoski.  He seems to be clueless in coming up with one idea after 6 years in office other than to propose building a 2000-room hotel by the convention center and open it as a state-owned casino.  How ironic because Kulongoski was the most vocal opponent of video poker back when the state economy and budget wasn’t in free fall.  If this is his best idea of dramatic state government restructuring and leading Oregonians through a recession that has forced over 12% of the residents out of their jobs — then Ted your cheese has slid off your cracker!  All he talks about is raising taxes (property, mileage, lotto, cigarettes, gas, sales, and the list goes on) — gimme, gimme, gimme and nothing about downsizing incompetent government.  In a very recent interview Kulongoski said,

“When you do not have enough revenue,… a lot of the fun leaves.” 

A true mark of a real loser is to whine when the going gets tough!

There are TEA Parties and tax revolts being held all over the state.  Join in and have a voice.

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ambulanceA couple years ago just after dusk several of us were returning to Las Vegas after a busy day in Laughlin, NV at the River Run.  Hwy 163 is a long windy road at night in the desert.  Black asphalt runs like a ribbon through the mountains near Pipe Springs Canyon where we came upon motorcycle pieces scattered all over the road. Flashing emergency lights blinded us and in the center divider was a white tarp covering someone’s remains.

I won’t speculate if the accident was the result of inexperience, poor judgement or equipment failure, but it was obvious the motorcyclist slid out on a curve and ended up in the wrong lane beneath a SUV.  It was a sobering reminder of riding risks and left a lasting impression.

Economic issues notwithstanding, motorcycle ownership is on the rise in Oregon.  The state has more than 131,200 registered motorcycles and scooters. That’s twice the number from 1999 and at an all-time high.  But what is alarming is that nearly 30% of the 14,268 people who received motorcycle licenses in 2008 hit the highways without going through a single motorcycle-safety course to learn basic skills, according to state statistics. 

I thought about that accident when today I learned there have been 6 motorcycle fatalities for 2009 as of April 10th and 5 were from the first two weekends of spring!  Three of these happened in the Portland area.  In the northwest the reality is that when the sun comes out, so do the motorcycles. And sometimes tragedy follows.

sb546According to police, inexperience, is the most-common cause of motorcycle fatalities.  It’s just not about motorcyclists losing control.  In past week 463 inspections were made in a truck driver operation. More than 1-in-10 vehicles and 20% of the drivers were placed out-of-service for equipment and driver-related safety violations at the southbound Interstate 5 Woodburn area.  Arrests/ticketing for everything from false urine test kits, possession of meth, marijuana, illegal handguns, suspended licenses and DUII.  These statistics are most worrisome and something to remember the next time you decide to throttle around a truck hoping they don’t reach for a breakfast burrito and run you over!  All this underscores a sobering reality that Oregon’s roads are dangerous.

And if the above truck driver information wasn’t enough of the dumb acting dumber… there is the Bend motorcyclist Anthony Suratt who was westbound on Hwy 126 riding his 2003 Suzuki motorcycle and clocked at 135mph on radar.  While trying to eluded police he failed to negotiate a sweeping right hand corner and crashed.  His jail mates will likely enjoy the “almost got away” story. 

Later this week the Salem legislators are considering SB 546 (.pdf) sponsored by Vicki Walker (D-Eugene) which directs the Department of Transportation to include on driver license examinations at least two questions pertaining to practices necessary for safe operation of a vehicle around motorcyclists.  I’m told this bill  also includes mandatory training provisions, but I couldn’t locate the actual text to confirm.  The bottom line is that motorcycle accident statistics suggest we need to be intellectually honest with ourselves… more and more of the most preventable hazards facing a motorcyclist is their own poor judgment.

Please beware and ever diligent as you ride.

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wandell_letterQuestion — Does the CEO of a multi-billion dollar motorcycle company need to be a motorcycle enthusiast?

The newly named Harley-Davidson CEO, Keith Wandell, sent a letter to the approx 1400 independent dealers opining his excitement in joining the motor company.  I was able to obtain a copy.  What did it say? But, more important what can we learn about this “motorcycle buff” who is set to grab the handle bars?

The Good:

  1. He’s thrilled to be part of the “family”
  2. Achieved operational results in a global business (read – he’ll always be welcome in the finance dept!)
  3. Strong manufacturing experience
  4. Loves the brand and the Marketing department likely increased their ad budget for brand awareness
  5. Switching from “tee times” to “riding times”

The Bad:

  1. Never used Harley products
  2. An old hand from another industry
  3. Comfortable with slash-n-burn restructuring…comments: “assure your long-term vitality and ours”
  4. Unclear track record in the often brand fickle consumer retail market
  5. Not a motorcycle rider, yet, but did “borrow” his brother’s motorcycle a couple decades ago and was “thrilled.”

What do you think?  Do you want a CEO lurking in the design center or doing lunch with the bean counters?  Do you think a “motorcycle buff” is someone who polishes your chrome or a visionary in the motorcycle industry?

The full text of the letter follows:

Dear Dealer, 

First things first. I want you to know how excited I am to be joining this legendary company. One thing I’ve admired over the years, while living here in Harley-Davidson’s hometown of Milwaukee, is the tremendous power of the brand, and the many ways it touches lives and makes emotional connections with customers from around the world. I have especially loved taking in the anniversary celebrations – three of them now in the time we’ve lived here in the Milwaukee area – not only because they are just plain fun, but also because everyone is welcome to join in and be a part of the celebration and the Harley-Davidson family. I’ve also gotten a great sense of the power of the brand over the years from my older brother Mike, an avid Harley rider and active member in his local HOG chapter in my home state of Ohio. Believe me when I say how honored and thrilled I am to be coming into this very special family. 

I am looking forward tremendously to this opportunity to take what I’ve learned over the years about driving growth, developing and motivating talent and producing strong operational results in a global business, and together with you and the entire team at Harley-Davidson, help take a highly successful Harley-Davidson to an even brighter future. 

You probably have a number of questions about the moves that Harley Davidson has announced. Over the coming weeks and months, one of my top priorities is to spend time with dealers, where we can talk face-to-face, I can listen and learn about your businesses, and you can learn more about me and my priorities and vision for this company. I also know you have questions about the leadership change at the top of Harley-Davidson Motor Company, where Matt Levatich has been named President and Chief Operating Officer, succeeding Jim McCaslin. I know that Jim has worked closely with the dealer network and will continue to do so. And those of you who know Matt, know him to be a great guy and a highly skilled leader. Look for a note from Matt this week about his new role and thoughts he has about working effectively with all of you on behalf of Harley-Davidson Motor Company. 

For now, I’ll pose a few questions that I bet are on your mind: 

– “What does this news of Keith’s appointment mean for me as a dealer?” 
– What does Keith know about Harley-Davidson and why is the Company bringing in a newcomer to lead the organization?” 
– “And who is this guy, ‘Wandell’?” 

Let’s start with the first question. It is crystal clear to me through the many discussions I’ve had during the interview process that Harley-Davidson has the best motorcycle dealer network in the world, bar none. The nearly 1,400 independent Harley-Davidson dealers worldwide live and breathe Harley Davidson in your communities, and I am keenly aware that you are key to our mutual success. I also know that Harley-Davidson has a great group of highly motivated and talented employees who are incredibly passionate about their work and continue to dial it on every day. 

My job is to help the team of dealers and our employees harness and enable all the energy and passion that’s evident in this enterprise, as we work together to reach our mutual full potential and success. As for what I know about Harley-Davidson and why the Company is bringing in a newcomer, my overarching priority is to assure your long-term vitality and ours. We will do that through new products, technologies, demographic markets and global markets, and at the same time through our ongoing strong commitment to traditional markets and core customers. I understand and appreciate the importance of growing in ways that are true to the Harley-Davidson culture – always remembering where we came from but always ready to explore new horizons. 

One of the key ways that I am going to learn about the business is to get around the Company, meet with dealers as I mentioned, go to rallies and H.O.G. events where I can get to know our customers better and see as much as possible firsthand. I’m going listen carefully to dealers and employees, and get your perspectives about the business. I’m going to ask lots of questions. What do we do well? What can we do better to grow and serve our mutual customers well? Frankly, I can hardly wait to get started. 

Now let me tell you a little bit more about myself. I’m a family guy who’s been married to my wife Deb for 27 years and have five children – two working, two in college and our 16-year-old daughter who is still at home with us here in Milwaukee. I love to play golf, although I’m pretty certain I will be switching some of my “tee times” to “riding time” in the very near future. 

I’ve had a great 21-year career at Johnson Controls, which among other things is one of the world’s largest automotive suppliers. And I really wasn’t looking to make a move, when I got a call one day asking if I would be interested in interviewing for the CEO position at Harley-Davidson. Johnson Controls is an outstanding organization and I have had a very fulfilling career there. I can assure you I wouldn’t have given that call a minute’s consideration if it wasn’t Harley Davidson. I believe in building strong relationships and in the importance of developing talent. 

You’ll find that I’m an open person and that I place a high priority on integrity, building teams that work well together and inspiring them to win. And no – I’m not a rider just yet, although I vividly recall the adrenaline rush and sense of unbridled freedom from the occasions that I “borrowed” my brother Mike’s motorcycle as a teenager. I’ve got my eye on a Screamin’ Eagle Softail and I’m looking to sign up for a Rider’s Edge course very soon. I’ll then be able to join Mike and all the other members of the extended Harley-Davidson family of riders – including dealers – out on the road. 

Finally, just a note about the road ahead. We all know and appreciate that Harley-Davidson has a uniquely powerful brand and a record of market leadership. 

While every business has its share of extra challenges right now – and I am acutely aware of what many of you are going through in this economy – I firmly believe Harley-Davidson has limitless possibilities to grow, develop and build on our remarkable record. By working together, I am confident that we will be a powerful combination and achieve great success in the years ahead. 

We’ll be in touch again soon, 
Keith

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