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Archive for the ‘Brand Loyalty’ Category

Is Harley-Davidson committed to lending a hand?

It’s not obvious that Harley-Davidson execs realized their normal marketing plans will no longer cut it as COVID-19 overtakes nearly every facet of American life!

I’m not talking about an empty kumbaya ‘Let’s Ride’ sentiment.  Clearly, the typical messaging in the motorcycle marketplace isn’t going to work the same way as prior to the WW coronavirus pandemic.

Stating the obvious, one would think that Harley-Davidson would play into the motor company’s more than 116-year history and remind consumers how the company has responded during world wars and during previous disasters in America.  While buying or servicing your motorcycle may not be top-of-mind at the moment, offering up some type of payment relief program to consumers affected by this disaster would not only provide some peace of mind to customers, it would reaffirm that the motor company is really focusing on the consumer health situation vs. self-serving attention in suspending U.S. production to disinfect manufacturing equipment and pulling financial guidance for wall street.

Digital Advert — ‘Breathe’ by Droga5

The last significant digital advert (‘Breathe‘ — February 10, 2020), by Droga5, was a message of the outdoors and the experience of riding in a world that is humdrum.

In case you missed it, the world is no longer humdrum…  Droga5 should waive client fees for ‘pivoting’ H-D creative and media to be more reflective of the current situation.

Where is Harley-Davidson marketing?  Not only to pivot the current creative, but how about immediately trying to get a little bit of free publicity via “specially curated images” for video conference backdrops. Spitballing here… It’s important to be reassuring right now and not try to say to people ‘Rush into your Harley dealership for a sales event.

Where is the Harley-Davidson Foundation, the philanthropic organization of Harley-Davidson Inc.?  Where is Harley-Davidson Credit?  How about offering a program giving new motorcycle buyers very low-to-zero percent financing and the option to delay their first payment for 90 days?  Where is Harley-Davidson Service?  Maybe provide free service or reduced costs for people who only have a motorcycle for transportation?  And lastly, where is the “We’re With You Every Step” inspirational statement from the United Steelworkers and International Association of Machinists and Aerospace Workers’?

The COVID-19 pandemic is producing economic and social disruptions not seen before, and major industries have already felt the impact. People aren’t buying as much stuff. People are getting laid off. Despite government reassurances, the anxiety of closed businesses and lost employment and wages weigh heavy on people.

But, lets bring it back to the local situation in the northwest.

As of this morning, March 30th, the Coronavirus situation is:
Oregon: 13 deaths, 548 cases — Oregon numbers
Washington: 195 deaths, 4,896 cases — Washington numbers
United States: 2,600 deaths, 143,532 cases — U.S. numbers

While not essential for health, sustenance, shelter, and hygiene—it’s time for Harley-Davidson to step up and find a way to exist, operate, and communicate in ways that offer one of some combination of help, hope, and entertainment.

To Be Fair:  It is important to note that Harley-Davidson, it’s dealership network and the Harley-Davidson Foundation have made significant charitable contributions over the years.  From donating motorcycles to the Haitian Earthquake to funding Red Cross for the earthquake and tsunami in Japan and to natural disasters in the U.S. like hurricane Florence.

Photos courtesy of Harley-Davidson

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Highway 50, just outside of Great Basin National Park

You might not know, but there are 59 national parks and 4,092,729 miles of roads in the United States.

All the roads in Brazil, Germany, New Zealand, Canada, Japan, Mexico, Sweden, and France combined would not equal the length of America’s roadways.

Believe it or not, there was a time in our not-so-distant past when there were no paved roads bridging the gap between civilization and the North American wilderness.  The earliest Harley-Davidson motorcycles had the same suspensions as bicycles of the time: none at all. The roads were a hodgepodge of dirt, stone, and other materials. Bumps were everywhere!  Harley-Davidson’s weren’t necessarily the fastest bikes on the market, but they were built with reliability in mind and were among the first truly heavy duty motorcycles in the world that could be relied on for safe running over the atrocious roads of the day.

1913 Harley-Davidson Model 9-B Single — Valve Side

The transformational American road-trip essentially became touring wide-open spaces from the saddle of a motorcycle.

In last months posts, I touched on a collection of classic motorcycles in the northwest and provided tribute to an inspirational man (Bob) with a genuine love of wrenching motorcycles.  I also illuminated his first restoration in the collection — a 1937 Harley-Davidson Model U-Series Flathead.

In this post, I’m plunging head first into another motorcycle in the collection, a Harley-Davidson 1913 Model 9-B Single.  It was already Harley-Davidson’s 10th anniversary when this bike originally rolled onto the showroom floor. From their humble beginning and that first bike built in their 10′ x 15′ shed, they had overcome the competition to produce over 1,000 motorcycles in 1909 to almost 17,000 bikes in 1913.

1913 Harley-Davidson Model 9-B Single — Transmission Side

According to an advert for the 1913 Chicago Motorcycle Show, Harley-Davidson states (page 10) that they sold out their entire manufacturing output in 12.5 weeks!  Clearly, the Milwaukee motor company had grown past the “motorized bicycle for fishing trips” into planning  motorcycles for large volume production.

Postured affectionately in the corner of the vintage collection showroom, you’ll want to gaze at this motorcycle for hours, and each time notice something new. A small hand-turned screw on a throttle linkage, a one-off brass cam on the carburetor body, a perfectly machined castellated nut on the rear hub that firmly holds the pedal sprocket – a few indicators of its origins as a commercial motorcycle. All of these details amaze and remind me of just what this bike was built to do – both by its original designers and by its inherited restorer.

1913 Model 9-B Single — Valve Side Close-up

It was interesting to learn that Bob’s motorcycles were never chosen for specific “provenance” or heritage — the range of manufactures in the collection represent personal tastes as well as unique expressions — beauty, performance, functionality and style that resonated with him through the years.

This 1913 Model 9-B single originally sold for $250.00 at the factory in Milwaukee and it took Bob more than 15 years to fully restore.  It’s the oldest motorcycle in the collection, and was one of Bob’s top-three favorites, but not the rarest or most collectible in the world.

Restoring a Milwaukee icon is no easy task, but with Bob’s guiding hands this motorcycle showcases exceptional restoration craftsmanship, pristine attention to detail, and along with some unique history it might well mean that it is destined to be in a museum some day.

1913 Model 9-B Single — Transmission Side Close-up

The condition of this single-cylinder, four-cycle, air-cooled model is truly immaculate and a bill-board poster of simplicity.  It’s also the foundation of what generated the Milwaukee motor company mystique.  The motorcycle features a 35 cu in (565cc) motor with a nominal 5 HP, an overall weight of 235 pounds, a 2-gallon fuel tank, a 3.5 quart oil tank, and a Bosch magneto placed behind the motor to keep out road grit.

For the 1913 model year, the Harley single was updated with the mechanically operated inlet valve (replacing the ‘atmospheric’ type), which was developed first for the twin cylinder models, and at the same time boasted a balanced bottom-end, alloy piston and improved carburetor.  The stroke was increased to 4 inches as compared to 3.5 inches of the former model.  The wheel-base on the singles were 1 inch shorter than the twins.

1913 Harley-Davidson Model 9-B Single — Front Fort Close-up

Harley-Davidson also made a small change to the form of the clutch lever operating the “free wheel” in 1913.  On the flat belt models a guard was mounted.  These motorcycles were popularly known as the ‘5-35’ (5 horsepower, 35 ci displacement).  The 9-B single was available in belt and chain-driven versions while ease of use was considerably enhanced by the adoption of the rear hub clutch first seen on the twin cylinder.  As the twin’s popularity grew, the single declined, accounting for only 4% of sales in 1917 and production of the Harley-Davidson ‘5-35’ ceased in 1918.

The gray color paint on the restored motorcycle includes a bold striping scheme, which complements the original manufacturing process of taking great care during the enameling procedure with three hand rubbed coats of paint followed by a protective varnish.

1913 Harley-Davidson Model 9-B Single — Transmission Side

Manufacturing the Model 9-B single made up the majority of the company’s production in the early years.  By 1912, all Harley-Davidson’s had gained mechanical inlet valves and all-chain drive, but this restored model, included the belt option, which was offered for several years.  Both singles and V-twins had single-speed transmissions with a robust rear hub clutch operated by a tank-side lever, and their new mechanical inlet valve meant more power and higher revs were possible. The valve side has a pedal-and-chain drive. With the rear wheel raised up by the stand and with the clutch engaged, the pedals are used to crank the motor. The brake is engaged by a slight backward pressure on the pedals.

The rider sits on a leather brown saddle, mounted with a central, sprung pillar sliding with the frame’s vertical saddle tube, which was positively located by an articulated lever pivoting from the top frame, just ahead of the saddle nose.

1913 Harley-Davidson Model 9-B Single — Top Looking Down at Valve Side

Harley-Davidson called this the “Full-Floteing” seat—a riders comfort not-with-standing accurate spelling—as the system should be quite familiar to any Duo-Glide owner.  The oil tank hid with the tool box. While the engine’s drip oil feed was “automatic,” any hard riding owner could give a visible shot of fresh lubricant from a tank-top hand pump.

The 1913 motorcycle frame was reportedly stronger than the previous year models and provided better handling, while the new vertical fins atop the cylinder head allowed the engine to run cooler.

1913 Harley-Davidson Model 9-B Single — Transmission Side

As mentioned earlier, the Bosch magneto was placed behind the motor to prevent collection of road grim, and proved to be a reliable instrument, making the machine easy to start via its bicycle pedals on the stand or off the stand using the valve lifer to take off.  The motorcycle has 28 X 2.5 tires with an Eclipse Knockout front hub that allows the tire removal by taking only one nut off.  The brakes are “coaster type” on the rear wheel like today’s simple pedal bikes.

In the late summer of 1913,  a new board track was opened in Milwaukee, right in Harley’s back yard.  The company’s professional race abstinence came to an end as Harley-Davidson change its corporate mind and the Racing Department was formed, with William Ottaway as its first Assistant Engineer to racing engineer William S. Harley.

1913 Harley-Davidson Advert — Courtesy of Motorcycle Illustrated and Google Books

The Harley twins pulled ahead of Indians and would dominate motorcycle racing in 1914.  The Racing Department was referred to informally as the “Wrecking Crew.”  However, one of the racers acquired a pet piglet, which was quickly adopted as the team’s mascot, and helped popularize the nickname ‘the Harley Hogs’ due to the race team carrying the team’s mascot around on the motorcycle fuel tank during victory laps.

The 9-B single is truly a peppy machine and can be ridden all day long at 40-45 MPH, as proven in the Motorcycle Cannonball Endurance Run, where a 1914 single-cylinder Harley-Davidson won the 2018 event with a steady, thumping pace.

This 1913 Model 9-B was a frame-off full restoration which Bob completed in the 1980’s.  Parts were sourced as needed from various swap meets, nickel ads, flea markets, yard sales, and scanning newspapers to find an elusive part!  There was no Dubya, Dubya, Dubya (i.e. Internet) in those days.  Most of us will never know the feeling of satisfaction derived from unearthing the perfect part at a swap meet and haggling its price down to a bargain.

1913 Harley-Davidson Model 9-B Single — Transmission Side

During the course of multiple interviews, I ask if anyone knew why Bob was so fervent about recruiting parts from swap meets. It turns out that Bob and his wife loved to travel. And, in the course of seeing America from a motorcycle, he recruited ever more vintage enthusiasts to help him find and locate parts for motorcycles he had in the restoration queue.

Those early days began the tradition of keeping motorcycles running and riding as much as possible.  It was called “self-assemble.”  Buying a complete front end may wipe-out your budget, but if one guy has a set of tubes for $40, and you remember seeing a triple tree on that table over by the Port-A-Potty, and you manage to negotiate a wheel and axle for $35… well, you are most of the way to having a front end cheaper than buying a complete unit — if it existed!  The rides and swap meet experiences were some of the best and fun times for Bob and his wife.

This is one of the finest restorations of an early Harley-Davidson model anywhere!

Previous posts on this vintage collection:
Vintage Restorations Uncovered In The Northwest
A Northwest Collection Gem – The 1937 Flathead

Photos taken by author. The black & white Motorcycle Illustrated advert courtesy of Harley-Davidson and Google Books.

All Rights Reserved © Northwest Harley Blog

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Harley-Davidson’s Entrepreneur and New Mastermind

Jochen Zeitz — Harley-Davidson interim President and CEO

The ultimate maverick has been hired to preserve and renew the freedom to ride.

I’m talking about Jochen Zeitz — the entrepreneur and new mastermind in charge of Harley-Davidson until he is offered the position permanently or a recruitment committee finds a replacement CEO.

So, what do we know and who is this man?

Jochen Zeitz at Segera Retreat Lodge

As a slacker who would debate a good life is better than a good job, paint me truly inspired for that list of accomplishments!

Talk about an extreme producer with a missionary zeal!  And, I haven’t mentioned the best part… a profile of his “day job” achievements.

Mr. Zeitz represents qualities too good to be true and the idea of him shilling for some corporation to hawk motorcycles deflates the “HERO” excitement.  It’s clear, Mr. Zeitz won’t be satisfied until he has done everything to promote his vision of a new, better world.

LiveWire — Jochen Zeitz — Milwaukee, WI

With his multi-millions in fortune, Jochen Zeitz is likely the richest person in history to run Harley-Davidson as interim president and CEO.

So, again, who is the 57-year old sandy-haired, 6’1’’ athletic build of a man?

Mr. Zeitz was born in Mannheim, Germany, in 1963, to a gynecologist father and dentist mother.  He grew up in a time when the Green Party and the anti-nuclear movement were enjoying strong support in Germany.  Along with the time he spent at the family’s lodge in the Odenwald forest, the outdoor exposure planted seeds of interest in environmentalism.  He was educated at Karl-Friedrich Gymnasium, Mannheim, south-west Germany, and then international marketing and finance at the European Business School of Oestrich-Winkel near Wiesbaden.

Jochen Zeitz and wife Kate Garwood

Mr. Zeitz began his professional career with Colgate-Palmolive in Hamburg in 1986. He then moved to Herzogenaurach in the Franconian countryside to work for sporting goods manufacturer Puma (Bio) in 1988. From there, he rose rapidly though the ranks to become head of marketing in 1991 and vice president — international and head of the global marketing and sales department.  In 1993, at the age of 30, he became chairman of the board of Puma, making him the youngest CEO of German firms with commercially traded stock. He dramatically reduced staff numbers, took production to Asia, made English the corporate language, started sponsoring African football teams and was credited with turning around the near-bankrupt business into one of the world’s top three sports brands.

The Zeitz Museum of Contemporary Art Africa (Zeitz MOCAA) — Cape Town

In 2003, he insightfully signed 16-year-old future Olympic champion sprinter Usain Bolt to Puma.  In 2007, he was appointed to the Board of Harley-Davidson.

Puma was acquired by luxury goods conglomerate Kering in 2007, and a few years later Mr. Zeitz served as Kering’s Chief Sustainability Officer.  In 2011, he set up a sustainability committee for Harley-Davidson, which he also chaired.

Also in 2011, he wanted to step back and focus on his environmental work and resigned as CEO of Puma.  He became a director of parent company Kering and chairman of the group’s sustainability committee.  He co-founded ‘The B Team’ with Sir Richard Branson in 2013.  That same year he launched the Kenyan Segera Retreat with a focus on his foundation’s 4C philosophy for sustainable tourism.

In 2020, he was hungry for something much more and became Harley-Davidson’s interim president and CEO.

Jochen Zeitz — 1929 Gypsy Moth Airplane Photo credit: Eric M Rojas

On a personal level — he divorced his first wife Birgit Jöris in 2012 following an 18-year marriage.  He is currently married to LA-based producer Kate Garwood‚ 41‚ producer of the 2016 movie “Race”‚ about U.S. track star Jesse Owens.  They have two children; 4-year old Jesse born September 2017 and a three year old. He keeps homes in Switzerland, Santa Fe, Los Angeles, a 50,000-acre ranch in Kenya and has property in west London.

When researching material for this blog post, I was blown-away on the amount of information published about Mr. Zeitz.

In a 2013 interview with the International Bar Association, he stated no plans to marry again, although at the time he was in a long term relationship with Kate Garwood. He was adamant about no intention of having children. ‘No, definitely not,’ he stated emphatically. ‘Never say never, but it’s very unlikely. It’s not something that fits with my daily life and I’ve never believed that having children without a father around is a good idea. It’s not really something I would get excited about.’  Just a short four years later both occur.

Jochen Zeitz at Segera, his 50,000-acre ranch. Photo credit: David Crookes

In recent press interviews, he’s stated the joy of his decision to have children late in life, because now he can see them grow up versus having such a busy schedule in running a company and traveling for 10 months in a year.  An interesting side bar: Speculation swirled that Jesse, their first child, was named after the 1930s athlete and fueled by the fact that Jessie Owens was provided with shoes for the 1936 Olympics by the Dassler brothers‚ who went on to found Adidas and Puma. 

But, I’ve digressed and want to return to connecting the Harley-Davidson dots… Mr. Zeitz’s experience at Kering was a critical influence and the driving force behind Matt Levatich’s (the recently fired Harley-Davidson CEO) pivot to sustainability that led him to think much more about environmental profit and loss at Harley-Davidson.  Mr. Zeitz had devised an environmental profit-and-loss account method at Kering which, put a figure on what a company’s air pollution, land use, water use and carbon consumption cost the planet.

Jochen Zeitz’s Favorite Thing — A Scottish Bailey — Photo credit: Charlotte Haden

While Mr. Zeitz — wealthy, world-view philosophy, competitive, over-achiever and relatively young — has the luxury of carving out grandiose, acronym-fueled sustainable ‘visions’, that struggling businesses like Harley-Davidson, desperate to increase motorcycle sales, might find distracting or even an irritant.

We’ll have to read the biography when ex-CEO Levatich publishes the book, but as an outside observer, one distraction example is: it took eight years, millions of dollars and the work of over a thousand engineers to fully realize a product that few want — the Harley-Davidson LiveWire — the Milwaukee company’s first premium electric motorcycle to go on sale in September 2019.  As a long-serving Harley-Davidson board member, Mr. Zeitz convinced executive management to focus not just on the moral justification for electric engines, but on the needs of Harley-Davidson customers to have healthy natural landscapes in which to ride. The logic behind this claim, was that “what every rider loves about the ride – it’s the environment they’re riding in, isn’t it?”  Soon afterward, the marketing and brand alignment teams marched in unison to support sustainability as a major part of the brand.

Segera Retreat — Laikipia, Kenya

The result?  A new mission, twisting the brand’s historic celebration of freedom into a desire “to preserve and renew the freedom to ride” and TWELVE quarters of sales decline.  Along with a $2,152,500 million severance payment to Matt Levatich.

Mr. Zeitz believes and is on record, stating there is more to corporate life than the relentless pursuit of profit. Wait, what?!  Isn’t profit what got Matt Levatich fired?

I’ve watched “An Inconvenient Truth” and the sequel. The oceans are heating and the poles melting, but color me skeptical of environmental groups with sustainable-for profit-business interests.  We’re all too aware of what the world needs: another multi-millionaire telling others how to behave better once they have made their own fortune while flying private and choppering into a rich man’s playground.

Jochen Zeitz GQ Article — in German

The motor-head scholars, bankers, real estate agents, lawyers and fashion designers who gather not to drink cheap brew, but to sip $15 “born to be wild” martinis and straddle $40,000 motorcycles might pontificate on the value of sustainability, but I just don’t see grizzled leather-clad loyalists describing Harley-Davidson as the world’s most sustainable manufacture over a beer at the Sturgis rally.

But, sometimes there’s a man. I won’t say a hero – ’cause what’s a hero? – but sometimes there’s a man – and I’m talking about Jochen Zeitz here – sometimes there’s a man who, well, he’s the man for the time and place.

A man who will improve the brand that is unique, exciting and one that gives value to it’s riding customers.

But wait, there’s more… An incentive if he kicks a field goal… according to the company 8-K regulatory filing, the interim Harley-Davidson, CEO Jochen Zeitz, is eligible and will receive a $3 million bonus (in the form of restricted stock units (RSU’s)) that would vest one year after the grant date and become payable if his employment continues to the date of the installation of a new CEO.  That $3 million would come on top of the annual base salary of $2.5 million he is receiving now after taking over for Matt Levatich. I don’t think this will be too difficult since Mr. Zeitz has served on Harley-Davidson’s board since 2007.

Photos courtesy of Harley-Davidson, Jochen Zeitz, Twitter, Eric M Rojas, David Crookes, and Charlotte Haden

Information Source & References: IBA, Independent,Wired,Business Daily Africa, Milwaukee Business Journal, Adventure Rider, Infosys, Telegraph, Financial Times, Angama Blog

All Rights Reserved © Northwest Harley Blog

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Matthew S. Levatich — Ex Harley-Davidson President and CEO

Harley-Davidson, Inc. announced yesterday that Matthew Levatich has stepped down as President and CEO and as a member of the Board of Directors. The Board of Directors appointed current Board member Jochen Zeitz as interim President and CEO following the abrupt resignation of Levatich.  A search committee is being formed, and the Company will utilize an external search firm to undertake the process to find a new CEO. The press release also stated that Levatich would assist with the transition through the end of March.

Levatich had a 26-year career at Harley-Davidson with the last five years as President and CEO. The abrupt departure marks 5-years of sliding sales and the value of the Milwaukee motor company has been cut in half.  It was not a cheerful week at Harley-Davidson!

The board and the CEO share responsibility for corporate performance, so it stands to reason that when a CEO fails, the board has failed as well.  I would speculate the company board is reacting to pressure from shareholders and seeks to appease investors in the short term by handing them the CEO’s head on a platter.  The investment community will want a replacement CEO who’s both promising and reassuring—and they’ll want him fast.

Jochen Zeitz — Harley-Davidson interim President and CEO

If we were to step into a time-machine and journey back to the future… from the V-Rod to the Buell Blast. Who can forget the MV Agusta dumpster fire and in the parlance of our time, there is now a green machine— LiveWire—a motorcycle short on juice, and one that few people want or can afford to buy.  Harley’s attempts to branch out has with out a doubt shown mixed results, at best.  In fact, some observers wonder if the company is “asleep at the switch.”

It would seem that “seeing the problem is easier than fixing it!”  Levatich’s mantra that Harley-Davidson doesn’t build motorcycles, it builds riders, always seemed a bit odd.  That’s like saying, “It’s not about horsepower, but more ideas per horsepower.”  Or “we don’t build motorcycles, we’re a lifestyle merchant company.” It’s that line of reasoning which is nice for marketing collateral, but when you actually dissect its meaning, it’s a  “wait, huh?” moment.

Harley-Davidson Five-Year Sales Slump

Levatich was promoted when Harley announced in February 2015 that he would succeed Keith E. Wandell as President and CEO of Harley-Davidson, Inc. upon Wandell’s retirement on May 1st.

You might even recall that back in August 2008, Matt Levatich, who at that time was vice president and general manager of parts and accessories and custom vehicle operations (CVO), was named managing director of its newly acquired premium Italian motorcycle company MV Agusta Group.  I blogged about this $108 million acquisition being a train wreck (Go Italian) back in 2008.  That deal was heavily promoted as a major part of Harley’s bid to increase its presence in Europe, where it had seen sales grow in the double digits the previous three years, offsetting weaker performance in the US.  The $108 million included $69 million paid to erase MV’s debts and included the Cagiva brand.

Just 14 months later, the Milwaukee “jetsetters” revealed during the Q3’09 financial results, the motor company would divest from the Italian national symbol of motorcycling and the real gut punch was—they would discontinue the Buell® product line.  I don’t recall seeing a lot of MV Agusta T-shirts, coffee and dog collars so, I guess it wasn’t a good fit.  Unfortunately, Levatich will go down in the motorcycle history books as the man that shut down Buell.  Granted the previous CEO, Keith E. Wandell, started unwinding the process caught up in the axel, but Levatich concluded the 16-years of collaboration.  It never added up as a smart business decision and every time I go back and research the articles and press releases it sounds more like someone had a vendetta they wanted to settle.

It’s my view that the blame for Harley-Davidson’s poor results lies squarely with the board of directors!

Poor performing companies don’t get that way because of any single decision or for that matter any single leader. Patterns of historical decisions, strategic neglect, and misallocation of resources all contribute to the deterioration in performance; some contributing factors may even lie outside the company’s control—looking at you tariffs!

Typically a CEO is dismissed not because the board has thoughtfully and deliberately concluded that it’s time for a change at the top, but because investors, concerned about poor performance, demand a change.

Let’s hope Mr. Zeitz and the board of directors have a blueprint for success.

UPDATED: March 1, 2020 — added sales chart and text on length of Levatich career.

UPDATED: March 4, 2020 — According to the company’s 8-K regulatory filing on Monday, March 2nd, Levatich will receive a severance in line with the company executive severance plan.  The company’s 2019 proxy statement states; top company officers will receive a cash severance of 24 months of base salary and 18 months continuation of certain employee benefits, such as life insurance, medical, dental, vision, as well as outplacement and financial planning benefits, if employment is terminated for reasons other than for cause.  The Milwaukee motor company had 12 previous quarters of sales decline, and Levatich’s severance payment will be $2,152,500.  Assuming a 2018 base salary of $1,076,250.

Photos courtesy of Harley-Davidson.  Sales chart courtesy of Bloomberg news.

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1984 Honda Magna (VF700C or V42)

It’s a play on George Orwell’s dystopian 1949 novel 1984 — where the world in 1984 is under control of Big Brother and the Thought Police who enforced the rules against individuality and original thinking — essentially praising society’s achievement on the “Unification of Thoughts.

Taking a page from Apple’s Super Bowl ad, my “1984 wasn’t like 1984,” — thumbing my nose at the roots of America, I purchased a little slice of freedom and original thinking in the form of a Honda VF700C or V42 Magna.

That shiny jet black Honda Magna (V42) had a liquid-cooled, double-overhead cam 90° V4 engine (displacement is 699cc or 42.7 ci) with four valves per cylinder and a compression ratio of 10.5:1.  Honda claimed it’s output was 82 crankshaft HP at 9,500 RPM.  The motorcycle had a smooth shifting 6-speed transmission, a wet multi-plate clutch that was hydraulically activated and shaft final drive with helical gearing in the rear-drive unit.  The motorcycle featured twin horns, coil rear springs, hydraulic clutch, air preload front fork with anti-dive valving, and an engine temperature gauge.

1984 Honda Magna (VF700C)Specs

Braking was delivered via a hydraulic activated double twin-piston disc brakes up front and a traditional non-ABS mechanical internal expanding drum brake in the rear. Great for leaving skid marks, but not so much for stopping!

The instrumentation was housed in chrome and included an analog speedometer, tachometer and engine coolant temperature gauge, along with lights for oil pressure, neutral, turn signals, tail light burn-out and a light that illuminated “OD” which let the rider know the transmission was in 6th gear.

As I reminisce on riding the Magna, I recall it having good power and a broad torque band.  Given its light weight and low center of gravity, the motorcycle was easy to ride in the city or a twisty two-lane country road. The Magna’s features were truly pushing the state-of-the-art for a production cruiser in its day.

From a historical viewpoint, only a few years had past since Harley-Davidson executed the epic buy back from AMF.  Their sales hadn’t reached the levels they envisioned, in part, because the AMF era was famous for shoddy quality, bikes requiring a lot of maintenance and the Milwaukee motor company was getting knocked down publicly and in need of some sunshine.

The poor quality and hi-maintenance requirements on Harley motorcycles was a key factor in my decision to purchase Honda.  In fact, a member of our posse also purchased a Honda, a V65 Magna (VF1100C) the same year.  Man, those V65 Magna’s (1,098 cc) were fast.  It was Honda’s initial entry in the “1/4 mile wars” between all the Japan manufacturers during the ’80s.

As Harley skidded toward bankruptcy, you might recall they petitioned and lobbied the Reagan administration in 1982 to raise tariffs on Japanese manufacturers because of “Dumping.”

“Dumping” in this context refers to exporting a product at a lower price than is charged in the home market, or selling at a price that is lower than the cost to produce it.  In April 1983, President Reagan signed into law an act that imposed draconian import tariffs for a five-year period on Japanese motorcycles with a displacement of greater than 700 cc.  This would give the sole American motorcycle maker some breathing room from intense competition to retool, get its act together and turn profitable.

However, Honda quickly responded to the retaliatory import duties and retooled the engines (what had been the 750cc class, VF750C V45 Magna) to displace just under 700cc; making them immune to the financial impact of the tariff.  One of the bikes that debuted as a “tariff buster” in 1984 was the V42 Magna.  Ironically and in a show of engineering superiority, it had three additional horsepower compared to the 750cc!

Harley was eventually able to turn a corner and the motor company ultimately requested that the tariff protection end early — essentially stating, they were now strong enough to take on the best competition in the world!

While the act was supposed to last for five years, then CEO Vaughn Beals asked that it be lifted a year early in 1987.  The 5-year tariff officially expired in 1988. That same year the Honda Magna reverted back to its original size of 748 cc.

Photos courtesy of Honda and Harley-Davidson Museum.

All Rights Reserved © Northwest Harley Blog

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Let me start off by saying I like Indian motorcycles. I really do.  I’m digging the variety of styles and the attention to detail on each build.

But, my heart is with Harley…

In a previous post I discussed the Indian “Challenger Challenge,” a campaign that invites motorcyclists to test ride the Challenger and the Harley-Davidson Road Glide® Special back-to-back for a head-to-head comparison.

It’s brilliant.

It’s worth pausing for a moment to consider how this campaign would’ve worked out if Indian used any other motorcycle in their lineup vs. the Road Glide — one of Harley’s bagger cash cow.  It’s dangerous to make assertions about “might-have-beens,” or what analytic philosophers like to call “counterfactuals,” because no evidence can exist that fully demonstrates the falseness of such an assertion.

But, I’ve digressed.

A “bake-off” for the preeminent bagger, demonstrates a battle for supremacy in the public mind.  It’s also a battle for cultural supremacy, not a judgement about features, technical prowess or achievements.  It’s the subtlety of Indian craving the appeal of that, what makes a Harley, a Harley.  That ineffable something (that je ne sais quoi, if you need a phrase to go with your cappuccino).

So, in classic Harley fashion, and only 5-months in the role, Jon Bekefy (GM of Brand Marketing at Harley-Davidson) calls BS and snapped back at Indian.  Mr. Bekefy uploaded an agency polished Instagram post and in the process scorches Polaris. (Bekefy Twitter)

In other words, “Anything Polaris/Indian can do, Harley can do better.”  Clearly the General Manager of Brand Marketing at Harley-Davidson doesn’t want to get upstaged.

We all know that Harley-Davidson is not just a bike, it’s a choice.  An existential decision and the life that follows upon it.

Wait.  That statement may not be as defensible, since Harley is now promising to be another “transportation” manufacture delivering a Chinese 338cc bike where affordability remains paramount to the upscale EV future of two-wheel transportation and includes all bicycle types in between.

As Indian and Harley arm wrestle each other over boomer-centric models, it has a limited lifespan and is unlikely to generate a lot of new riders, but it’s pure theater and fun to watch!

Photo courtesy Instagram.

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Indian Challenger vs Harley-Davidson Road Glide

Earlier this week, Indian announced the “Challenger Challenge,” a campaign that invites motorcyclists to test ride the Challenger and the Harley-Davidson Road Glide® Special back-to-back for a head-to-head comparison.

It’s not the typical, behind-the-scenes advertising effort by Indian to sell a product in its own time and in its own way.  Instead, it’s a high-visibility campaign marked with in-your-face marketing which proclaims — the Challenger will absolutely “smoke the competition.”

That’s a blue-collar craftsmen and beer-bellied “motor-head” inflammatory call to battle!

Will Harley-Davidson laugh and say, ‘Good try, bad result‘ expecting it to reinvigorate the Road Glide sales or will the Milwaukee gurus sit up and make a hard-eyed comparison of the competition’s strengths?

I’ve posted previously that motorcycle growth rates domestically are decelerating.  Wall Street is worried that the motor company has tapped out demand for their line-up as sales cool.

Challenger Challenge Stats

My initial reaction of the Indian campaign was, it being reminiscent of the 1980’s when commercials were a sign of the times — desperate, struggling times that car manufactures hoped would turn prosperous.  You might remember, “If You Can Find a Better Car, Buy It” ad campaign?  The face behind that familiar slogan was Ronald DeLuca — the advertising whiz hired by Chrysler Corporation chairman Lee Iacocca to turn around Chrysler’s late-1970s death plunge in a recession-weary America.

Indian has the not-so-simple task of convincing Americans that the motorcycling passion isn’t an archaic lifestyle teetering on the edge of the toilet bowl.  Or if Millennials are truly killing motorcycles, then why not ride it out in style with a new Indian Challenger!

Carey Hart and Big B

The Challenger Challenge is set to launch at Daytona Bike Week on Friday, March 6th.  The product demo tour will visit Indian Motorcycle dealers around the country, as well as select motorcycle rallies and events, including Sturgis in August. In addition to the national tour, select Indian Motorcycle dealers will have a Road Glide on hand to ensure that any customer who visits their dealership can take the Challenger Challenge.

Of course there will be a full-court press with social hashtags and digital media including a video series where Carey Hart and Bryan “Big B” Mahoney, pit the new Indian Challenger against the Road Glide Special in a series of rubber burning tests that showcase power, torque, braking and handling.

We will know soon enough if the campaign is more about finding new customers who don’t necessarily want to own a motorcycle or boosting the Indian public image and extending the brand’s good name.

Photos courtesy of Indian Motorcycle.

All Rights Reserved © Northwest Harley Blog

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