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Archive for May, 2009

Bellemont Harley-Davidson

Bellemont Harley-Davidson

For years the heavyweight motorcycle market grew at double-digit rates, thanks to low interest rates, a solid economy, a rising stock market, rising home values and baby boomer enthusiasm.

With the exception of interest rates all other factors have changed and not for the positive. It was reported in JSOnline that Robert W. Baird & Company, surveyed 75 Harley-Davidson dealers and found that new bike sales were down between 20 – 25% from a year ago.  Used motorcycle sales fell between 5 – 10%.  In addition, 63% of the H-D dealers that Baird surveyed in late April and May 2009 were selling bikes below MSRP compared to 36% a year ago.  They also reported that dealers found promotions (Sportster promo which just ended) worked to help bring in foot traffic and to a degree helped stimulate sales.  Dealers want more H-D promotions.

Marketing 101 - Overcome Buyer Resistance

Marketing 101 - Overcome Buyer Resistance

In response the company launched the “Test Ride” promotion, but it has received mixed results from dealers.  The thinking is that historically H-D dealers didn’t provide test rides on motorcycles.  Some did, but many did not and the new promotion means each dealer will designate one motorcycle from each category of the product line up as it’s demo bike.  The test rides are supervised by a dealership staff person who tags along on another bike.

So what does this have to do with Arizona you ask?  Well — I spent the Memorial Day weekend driving the Sedona – Flagstaff – Grand Canyon loop and stopped in at the Bellemont H-D dealer for a quick scan.  Nice enough folks.  It’s an old rustic building and not one of those extra large overpriced mega-stores, but what caught my attention were these amateur bright yellow-green signs on every motorcycle seat in the show floor which read:  DO NOT SIT!  I found this amusing and obviously they never received the how to overcome buyer resistance memo!! 

I don’t know if this just local lunacy, but clearly if you want to attract people who have never ridden a Harley and plant the seed for a future purchase you would want to influence their mind set….especially anyone who ventured into the store.  So, my advice is toss out those bright yellow-green tags because this is a vicious circle in which no dealership wins.

Photo taken at Bellemont H-D.

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HCMRFor the folks who live in Oregon it seems like 3 seasons of: almost winter, winter, still winter as we wait on the final and 4th season – road construction

Now that ‘road construction’ is upon us and warmer weather is getting repeatable it’s time for the Hells Canyon Motorcycle Rally.  It all happens June 12-15 in historic Baker City, OR and this year marks the 10th anniversary of the rally. The rally is open to all bikes and bikers.

BC_MapOn Friday (12th) the Plymouth Tavern, in Plymouth Washington is the Official Lunch stop for the rally.  Being at the east end of SR-14 it is a good location for riders vectoring in from all points northwest.   Jason, the owner, will be serving up specials for HCMR riders and you can check out HERE for more info.    Riders coming from the East may want to consider High Desert H-D in Meridian, ID. as a meet up location.  

A couple of key points to pass along from the organizers after you get settled in Baker City, be sure and stop by the HCMR booth at the Sunridge Ride Center.  They have new Official clothing, registration and info that you can’t get anywhere else.  Additional vendors are located at Ride Center and Downtown, they will be open Friday, Saturday pretty much all day and Sunday till noon.   There are a number of watering holes:  These would include Sonny’s Bar & Grill at the Sunridge,  Golden Crown on Campbell St, Stockman’s Bar, Brew-In-Stein, Barley Brown’s Brew Pub, Main Event, Geiser Saloon all on Main Street or the Idle Hour on Broadway.  Friday night most riders will want to take the Shuttle (you’ll need your wristband from the registration packet for this) to the Baker High School where hundreds of bikers will be camped.  Eric, co-founder of the rally, will be showing classic motorcycle movies in the campground after dark.

Don’t forget that Saturday is about the RIDES.  With the Hells Canyon Scenic Byway, The Devil’s Tail, The Ghost Town – Gold Rush Loop or Strawberry Mountain on the riding agenda there is no time to waste.

If you’re not going to this rally you’ll miss some great rides and fun time!

Photo courtesy Google and Pine Valley Lodge.

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Willamette National Cemetery

Willamette National Cemetery

Whether just back from a combat zone or have been home for 60 years, Memorial Day is a day for remembrance of those who have died in service to the United States. 

It happens on Monday, May 25th and is a U.S. federal holiday that was formerly known as Decoration Day. Enacted to honor Union soldiers of the American Civil War (it is celebrated near the day of reunification after the civil war), it was expanded after World War I to include American casualties of any war or military action.

There is a good summary of Memorial Day events in the Oregon Dept. of Veterans Affairs website.  There are a number of Portland-centric activities planned.  In addition, Memorial Day weekend marks one of only two times per year that more than 100 wineries in Oregon’s Willamette Valley throw open their doors to the public for a chance to meet winemakers and owners.

Be it a BBQ, a day of wine tasting or a visit to the Blue Star Memorial… I hope you’ll take a moment to remember the U.S. men and women who died while in the military service.  If you know of other activities that don’t appear on the state site, feel free to post in the comments.

Photo taken at Willamette National Cemetery, Portland, Oregon

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mfg_plantBaby boomers and Harley-Davidson motorcycles.  The combination of these two delivered a plethora of profits.

I was upgrading my Mac OS and while I waited, I read magazines.  First it was “Baggers” then “BusinessWeek.”

Skimming the BW magazine I notice an article about business book guru Jim Collins.  He wrote “Good To Great.”  Collins was brought to West Point, where he chaired a discussion amongst military men and civilians.  Had America lost its greatness, was it in decline?  The attendees were split as to America’s future, half optimistic and half pessimistic.  But what fascinated Mr. Collins was an observation from a CEO during a break.  The dude stated: “I’ve been thinking about your question in the context of my company.  We’ve had tremendous success in recent years and I worry about that.  So what I want to know is: HOW WOULD YOU KNOW?”  This question formed the basis of Collins new book, “How The Mighty Fall.”

Harley-Davidson has been quite mighty.  But they broke the first rule of Mr. Collins’ book.  Which he labels Stage 1: “Hubris Born Of Success”.  “Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place.”

Mighty_FallBingo!  Harley-Davidson and Baby Boomers.  H-D execs actually believed they were geniuses, who’d found the golden formula.  Dealers marked up everything from t-shirts to baggers.  From then on, motorcycle model after model would all sell thousands of bikes, there would be untold profits!  Rather than questioning their success (“We might have been just really lucky/we’re in the right place at the right time…”), they believed they were entitled to it.  And ultimately blamed this decline of their fortunes on the economy.

Stage 2 of Mr. Collins’ theory of corporate decline is “Undisciplined Pursuit Of More”.  Here we have H-D catering to image buyers… selling sizzle, style and fashion over function paradigm.  With spokespeople like Marisa Miller.  If TV sells motorcycles, let us find the least amount of clothing and the most telegenic performer and craft a message about lifestyle for TV/print consumption!  

Stage 3 is “Denial Of Risk and Peril.”  That’s the beginning of the end.  “Those in power start to blame external factors for setbacks rather than accept responsibility”.  It’s like the music industry saying the Internet ruined it’s business!  It’s the economy’s fault, we couldn’t get bank funding at HDFS, etc. But what’s Harley’s business?  Manufacturing premium (overpriced?) priced one-dimensional products and marketing them for sale on TV and print magazines to the ‘boomers’, the young, minorities and to women?  No difference in product just marketing messages.

Stage 4 is “Grasping For Salvation”.  “The critical question is: How does leadership respond?  By lurching for quick salvation or by getting back to the disciplines that brought about greatness in the first place?”  We’ve got Harley-Davidson heavily invested in MV Augusta and embedding advertising space in video games (UFC).  A non-motorcycle riding enthusiast at the helm.  Is that their core mission?  And we’ve got dealers exiting the business.  All the while the motor company works to protect a business model of an overexposed limited product to reap giant rewards.  Dealers are up in arms that corporate got rich and the locals did not…  But once again, what was each entity’s core mission?  Dealers were made to expose.  The motor company were made to..?  MAKE!  That’s what manufacturing companies do.  Making motorcycles is their core competency.  It’s their defining MISSION!  But that got lost in the shuffle of incredible profits during the nineties.  Harley started selling branding, lifestyle, sizzle, fashion and even some premium priced motorcycles!

Stage 5 is “Capitulation To Irrelevance Or Death”.  Some would argue that’s where the motor company is today.  “In some cases the company’s leader just sell out; in other cases the motorcycle institution atrophies into utter insignificance; and in the most extreme cases the enterprise simply dies outright.”  How long until Harley-Davidson chops up the parts and sells it for catalog value?  

What is the future?  Not the past.

“Never give in.  Be willing to kill failed business ideas, even shutter big operations you’ve been in for a long time, but never give up on the idea of building a great company.”  It’s clear.  Looking for an instant success like the old Michael Jackson days of MTV ultimately render instant irrelevance.  The company needs to be about MOTORCYCLES!  Today’s execs seem only interested in tonnage.  They could be selling anything!  They are not necessary.  Harley needs to find unique talent and nurture it.  Leverage independent blogs?  Motorcycle artistry/development isn’t finding more people to buy a plain stamped out bike, it’s a creative arc, over a period of iterations, wherein the motorcycle grows and more and more people come along for the ride.  

That’s what you need to survive…”to build an enterprise that makes such a distinctive impact on the world it touches (and does so with such superior performance) that it would leave a gaping hole – a hole that could not be easily filled by any other institution – if it ceased to exist.” Everyone knows that real motorcycle enthusiasts are the indies.  The commercial crap from the majors is about commercialism more than artistry.  Today it’s about manufacturing cookie-cutter stuff and yelling at the public to buy it, all the while bitching that the economy is failing.  This is a recipe for disaster.

Rather than whine, be the company that accepts reality, that notes change and adapts to it.  That doesn’t mean charge huge upfront fees for anybody who wants a CVO.  Or clothing attire marked up to the point that celebrities question the essence of imported fabrics.  Your average Joe consumers are your partners, they’re the ones who are going to make you money.  

If you lose your core, you’ve lost everything!

Photo courtesy of Newsweek.

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Jean Davidson

Jean Davidson

In today’s school environment where you’ll find a swim coach who sees children as “eye candy”… accused then acquitted of committing sexual abuse (.pdf) there comes along the real deal Jean Davidson

She is the granddaughter of Walter Davidson, one of the four founders and the first president of Harley-Davidson.  Her father, Gordon Davidson, was Vice President of Manufacturing.  Jean elected not to work at the family company, but instead dedicate her life to teaching children.  She has developed educational curriculum for all levels of teaching at both the state and local levels.

Tragedy hit the Davidson’s when Jean’s 4 year old grandson, Ryder, died in an accident that could have been prevented.  If only the child standing nearby Ryder would have known how to react or what to do.  Because of this and learning of many similar family losses, Jean developed a program called Yell and Tell.”  The program teaches young children who observe a dangerous situation how to react in a proactive way.

Yell_n_TellBesides the educational curriculums that Jean has developed, she has written four books about the personal stories of her growing up and the family stories of the HD Motor Company.  She travels extensively being a speaker at colleges, Harley-Davidson events, and educational forums.  She is a staunch supporter of charity events related to autism and can often be found riding a motorcycle to help raise money for the cause.  Recently she appeared at an event hosted by the Eureka Springs Motorcycle Club.  Jean is the mother of five children and has seven grandchildren. She has spent a number of years gathering personal family stories and old photographs to bring motorcycle enthusiasts a rare look into one of the more famous families in motorcycling history. Her books can be order HERE (.pdf).

If you want to bring the Yell and Tell program to your community more information is available on the web site.

Photo courtesy Yell and Tell and Chip Ford.

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Stimulus_PlanStimulus watching as a lifestyle is boring.  I’d rather be motorcycle riding, but none-the-less how our tax $$ get spent has reached the Northwest Harley Blog.

The blog theme isn’t changing.  There are lots of sources for stimulus-related blogging that serious government-watchers can find. However, coffee drinking colleagues down at ‘bucks’ started tracking stimulus as part of their retirement concerns and because I’ve put energy into promoting Vet’s and Veteran Motorcycle Association topics in the past, I wanted to forward this information.

Nobody does spending plans—complete with color-coded spreadsheets and embossed covers full of eagles and seals and other important looking symbols—like the U.S. military. Check this report out (.pdf).  The stimulus bill, by the way, became law on February 17, 2009. The Pentagon plan was released on March 20th, right on the deadline.

You may recall the Recovery Act includes approximately $7.4B in Defense-related appropriations, which accounts for less than 1% of the total $787B stimulus package.  In the stimulus bill, Congress allocated $2.3B in construction funds to the Department of Defense. The surprising part is what the specific provisions require: No war-fighting facilities, but rather the construction of “child development centers,” “warrior transition complexes,” hospitals, family housing, renewable-energy projects, and, in general, infrastructure for the Pentagon’s softer and earth-friendly side of the business.  In part, they are going to put soldiers and their families ahead of big-ticket technology—or at least on equal footing and the Department intends to spend this funding with unprecedented transparency and accountability. 

milcomapFor those with military experience you might agree that given all its failures to live up to soldiers and their families, and for all of its catch-22 double-speak, anyone who walks around inside the U.S. military quickly sees that it is one of the best-run bureaucracies in the federal system.  The website, www.Recovery.gov, is the main vehicle to provide everyone with the ability to monitor the progress of the recovery.  The DoD also has a website HERE, which links to Recovery.gov. 

The DoD intends to spend its funds as quickly as possible in the following categories:

  • $4.2 billion in Operation and Maintenance accounts to improve, repair, and modernize DoD facilities, including energy-related improvements  
  • $1.3 billion in military construction for hospitals  
  • $240 million in military construction for child development centers  
  • $100 million in military construction for warrior transition complexes  
  • $535 million for other military construction projects, such as housing for the troops and their families, energy conservation, and National Guard facilities 
  • $300 million to develop energy-efficient technologies  
  • $120 million for the Energy Conservation Investment Program (ECIP)  
  • $555 million for a temporary expansion of the Homeowner’s Assistance Program (HAP) benefits for private home sale losses of both DoD military and civilian personnel  
  • $15 million for DoD Inspector General oversight and audit of Recovery Act execution  

I did a quick scan (.pdf) for Northwest based projects and notice Camp Withycombe, OR will get a Storm Sewer MILCON upgrade and the Naval Air Station on Whidbey Island, WA will have a new Water Distribution System & Energy Conservation.  There are several other projects embedded into the document specific to the northwest if you have a desire for more detail.

Photo courtesy DoD and blogger Steve Coll.

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