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Archive for the ‘Harley-Davidson’ Category

Some numbers to start your day and it’s not pretty.

The coronavirus pandemic, social unrest, and a scarred economy has created a tipping sentiment toward many jobs NOT coming back.

According to a Harley-Davidson press release, “The ReWire” strategy will now eliminate 700 positions globally of which 500 of the layoffs will occur this year. It will result in a $50 million restructuring charge in 2020, including $42 million in the second quarter. According to new Chief Executive Jochen Zeitz, getting the company on “a path to winning” also includes CFO John Olin leaving the company effective immediately.

Flashback – remember this abrupt CFO departure in 2009?

Some news outlets have reported Mr. Olin’s departure as a “retirement,” but color me skeptical since most retirements have a longer celebratory departure than immediately exit through the door. The current VP Treasurer, Darrell Thomas assumed duties as interim CFO until a successor is appointed.

I’m not sure why, but the CEO press release declaration of “a path to winning” reminded me of that time Charlie Sheen was winning HERE … maybe I just needed some humor?!

Harley-Davidson is not alone on the layoffs.  Below are just a few of the latest examples:

  • Macy’s announced it would lay off about 3,900 and shutter stores
  • AT&T will lay off 3,400 and shut down more than 250 stores.
  • Hilton Hotels announced it would lay off 2,100 corporate employees amounting to 22% of its corporate workforce.
  • Chevron announced it will cut 10% – 15% of its 45,000 global workforce.
  • Boeing announced it would lay off nearly 7,000 employees.
  • Uber announced it is cutting 3,700 jobs (14% of its workforce), then a month later announced they will cut 3,000 additional jobs and close 45 offices.
  • Airbnb announced it is laying off about 25% of its workforce, or 1,900 employees.
  • Virgin Atlantic (now part of Alaska Airlines) announced it would cut 3,150 jobs.
  • Hertz plans to lay off 10,000 employees.
  • Under Armour announced that it will lay off about 6,700 employees.
  • United Airlines will send layoff warnings to 36,000 employees — nearly half its U.S. staff.
  • ZipRecruiter laid off 443 employees.
  • GE announced it will be reducing approximately 10% of its aviation unit’s workforce, amounting to about 2,500 employees.
  • Cirque du Soleil announced it is laying off 95% of its 4,679 person staff.

You get the point.  Sadly, a lot of employees are expected to exit various organizations. In fact, since February, about 4.6 million Americans have stopped actively looking for work, and another 2.2 million are unemployed NOT on layoff.

And, then there are those companies that have taken an extremely tacky and classless route of laying off employees via Zoom.  Looking at you Bird, the electric scooter company, who laid off 30% of its staff via a 2-minute Zoom call.

Talk about a Nobel Prize-winning way to “Put a Bird on It” — From the “Portlandia” TV show.

Photos courtesy of Harley-Davidson, Great Art and IMDb.

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Highway 395 View of Mono Lake

Back when modern life swallowed me up with bills, paperwork, pick-ups, drop-offs—a life regulated by a busy schedule and commitments with work, family and friends— hitting the highway for an extended ride was a challenge.

But, on occasion the simplicity of traveling (route, food and shelter) replaced the intensity of modern living and one such adventure was a ride to Yosemite National Park and Mono Lake

Yosemite is approximately 1,200 square miles, but most visitors seem to always congregate near the Half Dome and El Capitan monoliths in Yosemite Valley.

Tufa Towers at Mono Lake

I learned that the beauty stretches far beyond the over crowded seven-mile Yosemite Valley. I especially liked the east-side, with wild Tuolumne Meadows, Lembert Dome, Cathedral Lakes, and Tioga Pass (CA. highest vehicle crossing) which is a great motorcycle riding experience – without the crowds.

On the eastern gateway to Yosemite National Park you’ll also find Mono Lake. The 70 square-mile lake is located 13 miles east of Yosemite National Park on Highway 395, near the town of Lee Vining, California.  It’s known for its salty waters, mineral deposits and being one of the oldest lakes in North America.

Tioga Lake

It’s a beautiful landscape with the lake reflecting the snow-capped Sierra Nevada in its blue waters. The lake has many tributaries but no outlet. The main way that water leaves the lake is by evaporation which is why the water has such a high mineral content including salt. In fact, Mono Lake is three-times saltier than the ocean.

One of the Lake’s most prominent geographical items is the tufa (too-fah).  These are tower formations found in many alkaline lakes around the world. In the South Tufa Area there is a trail that allows you to walk right up to and among these giant spires, some reaching 30-feet tall.

Tioga Pass Road (Hwy 120)

To get to the South Tufa Reserve from the Visitors Center, you drive 5-miles south on U.S. 395, turn left on Hwy 120 East and follow the signs to South Tufa. Of course the Yosemite National Park pass is not valid at this location.  There is a parking lot where you pay a modest fee to access a self-guided trail. The trail is level gravel, boardwalk, and sand. It is less than a mile long.

I did a bit of research to learn that the tufa is limestone that forms when calcium-enriched springs flow up into and react with the lake water – in other words, they only form underwater. The limestone towers are above the waterline now because the city of Los Angeles began diverting the streams that feed the lake in 1941, lowering the lake’s level by more than 40 feet. Since a Water Board ruling in 1994, the lake has been gradually refilling to its 1963 levels; when it’s done, part of this trail will be underwater again. So visit sooner than later.

Unless you plan to camp, the closest lodging to Yosemite (from the east side) is in Lee Vining and June Lake. Bridgeport, to the north on US 395, and Mammoth Lakes, to the south, are each about 40 miles from the Park’s east entrance.

NOTE: Currently, Yosemite is open, but reservations are required to enter the park and use Tioga Road due to COVID-19.

Photos courtesy of author.

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Specifically, the motor company announced it will lay off approximately 90 employees at the York manufacturing plant and and 50 at the Tomahawk site in Wisconsin as part of an adjustment to its production volume.

The plant in Springettsbury Township just re-opened on May 20th as York County moved into Pennsylvania’s “yellow phase” of COVID-19 mitigation.

You might also recall that the motor company is pivoting from the “More Roads” plan to now focus efforts and energy to appeal to customers of premium-priced brands with limited availability.

I previously posted about this new success formula HERE.

Harley-Davidson has leveraged “scarcity” in the past. Underproduce motorcycles and limit distribution, which creates longer waits that in turn create an exclusivity mystique. Then up-sell consumers on the “premium-ness” motorcycle choice/brand.

As part of the new ‘scarcity strategy’ the company is adjusting its production volume (which to be fair, it routinely adjusts headcount), which will now result in a workforce reduction of York employees.

Previously, Harley-Davidson announced that it was reducing all non-essential spending and temporarily reducing salaries by 30 percent for executive leadership and 10 to 20 percent for most other salaried employees.

This reduction is nothing like the 2009 great recession when Keith Wendell cut the workforce by 2,700 hourly workers and 840 administrative employees.  Unless you are one of the laid off employees…then downsizing feels like cutting into “muscle” and is painful.

Laying off employees is difficult in normal times; but amidst the COVID-19 pandemic can magnify the tension and make coping with the turbulence very difficult. I hope Harley-Davidson makes the process equitable and those laid off have a soft landing.

Photo courtesy of Bradley Staffing Group.

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Sturgis City Council Release

The Sturgis City Council voted 8-1 last night to host the rally and announced today that the 80th Annual City of Sturgis Motorcycle Rally will move forward.

However, there will be significant changes designed to reduce the large crowd gatherings in the downtown core with the intent to “safeguard the community and residents.”

That there is a true definition of dichotomy.

The City Council decision, given most all other large outdoor events and indoor concerts around the U.S. have been canceled or rescheduled, is an interesting one. The annual rally will generate millions in revenues for the host city, but no mention of that trivia in the press release.

Buffalo Chip Email Blast

According to Sturgis Rally stats, in 2019 there were 490,000 rally visitors — at least 70 times the estimated 2019 population of Sturgis (6,500), according to the U.S. Census Bureau.  In other words, the Sturgis Motorcycle Rally attendees in 2019 were the equivalent to half of the state of South Dakota’s estimated 2019 population of 884,659.

Read the full City Council release HERE.

A few items known as of today that will be implemented at the event:

  • Attendees will be asked to practice social distancing and follow CDC guidelines.
  • Enhanced safety/sanitization protocols will be carried out in the downtown area.
  • City sponsored events including opening ceremonies, parades, B1 Flyover, and live music at Harley-Davidson Rally Point are cancelled.
  • Photo towers will NOT be installed.
  • Temporary vendors will be required to abide by state and federal protocols and guidelines related to COVID-19.

I’m not trying to “COVID Shame” anyone thinking about or planning to attend the motorcycle rally.  But, remember a long, long time ago when the freedom of riding across the U.S. and attending a rally didn’t bring this type of risk?

Images courtesy of City Council and Buffalo Chip.

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McKenzie Pass Highway (OR242)

Oregon is home to a large network of highways and backroads, from rugged coastal headlands to deep old-growth forests, lush vineyard-lined valleys to lofty alpine passes, high-desert vistas to deep river canyons. The epic landscapes offer up motorcyclists everything from beginner to expert road diversity.

One such spectacular highway is the old McKenzie Pass Highway (OR242), which opened this week from it’s winter hibernation.

Assuming you start in Sisters, Oregon you’ll have about 8 miles of warmup of gently rising, mostly straight road as you head west past hay meadows and into the forest. Then you’ll take a 90-degree turn at McGregor’s Curve, and the elevation climb is on. The main ascent is over 5 miles, and you can settle into a rhythm as you take in the pine-scented air.  Unfortunately, you’ll also note the large wildfire destruction from the summer of 2017 that disrupted the forest and surrounding landscape.

Until the 1860s, the pass was an Indian trail that later became a wagon route (known as Craig’s McKenzie Salt Springs/Deschutes Wagon Road) for driving cattle over the Cascades.  As you emerge from the forest at Windy Point, you’ll get a nice view of Mt. Washington and can scan across a 65 square mile, 2,000-year-old black lava flow. You may want to stop to process it all and then continue on as the ascent travels serpentine asphalt between lava-rock walls just before reaching the summit.

The summit provides a unique view of the lava-rock-constructed Dee Wright Observatory (at 5,187 feet), which provides panorama views of the mountain landscape and Three Sisters Wilderness areas.

The 25-mile, 4,000-foot descent to Highway 126 is no “puff and fluff” ride as it snakes down tight corners and exhilarating switchbacks to the dense Cascadian forests over the McKenzie River. It’s a dramatic transition from the east side of the Cascades and is a billboard of the natural environment and defines the uniqueness of the region.

The highway speed limit is slow at 35mph to 45 mph in most places. The scenic views are well worth the extra time and should be on everyone’s ride list.

Additional Information:
The John Craig Story
McKenzie Pass
Previous Blog Post

OR 242 map/photo courtesy of Oregon By-ways.

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I grow restless. I must go. I need a road trip. It is not just me.

The nation feels like it is pulling itself apart.

There’s the coronavirus and ongoing spread. Skyrocketing unemployment. Concern for our livelihood.  Will our employer bring us back to work. Then there is the color of justice and the ethnic disparities of the criminal justice system. Not to mention, the behavior of individuals that boil over into violence, looting, and riots.  I’m not trivializing the protests because people who participate in these types of events do so for a real reason.

Individually, each protester has logic, beliefs, and reasoning, but when a crowd becomes angered, tribal mentality often sets in and leads to a criminal mindset. It’s impossible to predict when a group will suddenly turn into a rioting horde. But, can we all agree that “protestors” shouldn’t destroy their communities?

I’ve digressed.

I’m itching to go for a long ride on the Harley. Clearly, these are frustrating times and a road trip is one of the last remaining fragments of the American dream. I cling to it like a splinter from the true cross. We may no longer be able to ride west to a land beyond fences but, for a little while longer at least, we remain mostly a nation without permanent, police roadblocks.  Although, I must admit that during the Laughlin River Run, the motorcycle road blocks set up by the Mojave County Sheriff in-and-out of Oatman really agitate me!

And, yet I still think about riding there. I don’t know why. Probably because I have already gone so many times. I recall the old days at the Flamingo, now the Aquarius, when there were patches everywhere from everywhere. The Hells Angels would put on a nightly show of bagger wheelies and motorcycle tricks for the riffraff. It was the PR classic image of the good ‘ol rowdy boys having fun. Now those good, old days are long gone. Everything changed after a “spontaneous” biker brawl between the Hells Angels and Mongols in 2002.

The old idea of freedom (to come and go as I please) seemed evident not long ago. I have yet to adjust to the many recent improvements in my country. I do not own a motorcycle with an electric plug and an estimated cruising range of 100 miles and doubt I ever will. I own a gasoline burning, American motorcycle that makes noise. As a result, I still think about the solitary desert Muse, two-lane black tops, cornfields and the vast landscape of 14,000 foot peaks.

The road trip has always been so essential and my personal restlessness has been boiling for a couple of months now.

Earlier in the year I was anxious to ride and it was all about calendar planning. I scribbled rallies and ride plans in boxes on a paper calendar. For several days I sat at my computer reviewing maps and motel locations with a calendar in one hand and my checkbook and a calculator in the other. My laptop browser had multiple travel sites open. When I started the planning process, I thought it would be as much fun planning the trip as going. It wasn’t and that was before traveling became a casualty of “The COVID.”

I am starved for rides this year and was aiming for Arizona Bike Week, Laughlin, Devils Highway (HOG), 80th Sturgis and Reno. I guess it is a good thing they cancelled Pendleton Bike Week and Hells Canyon or else I would be trying to fit that in, too.  To date, they’ve all been cancelled.

And it’s looking more like I might not need to be concerned about adding in the cost of the “World Famous Sirloin Tips” and a Budweiser at the Loud American Roadhouse on Main Street. The Sturgis City Council has prepared a set of protocols that will be used when making the decision to hold or cancel the 80th motorcycle rally.  They will assess the COVID situation again on June 15th and determine next steps.  I know that if I did go, I must return from Sturgis with a tee shirt and other crap I don’t need. Once I get there I can’t help myself.

There is freedom on the road. To point my front wheel towards the east, twist the throttle and leave the misleading news with click-bait headlines all behind. This year might be the year that a spontaneous day trip turns into a long distance solo motorcycle tour.

It’s time to see this great country!

Photos taken by author.

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According to an article by @bob_tita in the Wall Street Journal (WSJ – Paywall), Harley-Davidson plans to reopen its factories this week at lower production rates and stated it will be sending dealers an attenuated range of new motorcycles — meaning, time for a COVID-19 course correction.

You may recall that Harley’s U.S. assembly plants and most of its dealers closed in March as part of a nationwide effort to slow the spread of COVID-19.  Currently, as many of the company’s 698 U.S. dealers make plans to reopen, Harley’s director of product sales, Beth Truett, stated in a memo, which was viewed by the WSJ, that about 70% of them likely wouldn’t receive any additional new motorcycles in 2020.

The motor company is pivoting from the “More Roads” plan to now focus efforts and energy to appeal to customers of premium-priced brands with limited availability.

Speaking of availability… By definition, excellence is scarce.  Harley-Davidson has leveraged “scarcity” previously. Underproduce motorcycles and limit distribution, which creates long waiting lists that in turn create an exclusivity mystique. Will it work again?

And speaking of premium positioning…

Harley-Davidson Eau de Toilette – Example of brand dilution!

Price alone won’t make a brand premium and few companies can thrive on limited market coverage and low volumes by commanding premium prices in a particular niche.  One thing is sure: motorcycle customers are price-sensitive, even if they are ready to pay a premium price for a … Harley lifestyle.

This means Harley-Davidson has to be able to truly earn the added value.

Data supports what we already know to be true about premium brands: people with lots of money buy nice things. Whether you’re talking apparel (i.e. Phat Farm, Polo, Timberland and Tommy Hilfiger), Tequila, hand bags (i.e. Gucci, Fendi, Louis Vuitton and Prada), restaurants or footwear, it’s easy to recognize the pattern that the nicest, most expensive brands are favored by consumers with the highest household income. What is less obvious, are the fewer instances when wealthy people opt for the less-expensive, or when average-income people make deep trade-offs to purchase really pricey things.  There are a whole lot more average-income people than there are excessively wealthy ones.

Strong brands have a strong identity. Mediocrity doesn’t captivate or win the motorcycle sales race. There is a rule of thumb that says that a company ought to be able to explain its brand identity in seven words, give or take a couple.

The clock is ticking Harley-Davidson!

So, what is it about “premium-ness” brands that are able to inspire consumers to say “no” to some things so they can say “yes” to a brand that’s often or slightly out of financial reach? That’s the Harley-Davidson opportunity.  Finding the nooks and crannies to up-sell consumers on “premium-ness” choices—especially a candy coated brand in the top tier of the motorcycle pack.

The Harley downside risk is the “Porsche Effect“… becoming known as an SUV manufacturer that also produces a few sports car models rather than the premier sports car brand that also makes SUVs.

I’d like to better understand how Harley-Davidson can retain a premium brand identity if combustion engines, once the top tier of American motorcycle engineering, are being replaced by e-motors (LiveWire) that can be built by almost anyone, and if motorcycles feel and act like smartphones that you no longer even have to own?  It’s likely that the V-Twin motors of the future will no longer be a distinguishing brand characteristic.

New competitors are knocking on the Milwaukee door and customers are better informed, have tougher requirements and are able to interactively rate and influence companies and their products.

In the end, what Harley-Davidson claims about it’s premium brand doesn’t matter. What matters is whether or not consumers believe it enough to pay more for it.

Photos courtesy of Twitter Bob Tita/WSJ and Harley-Davidson.

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#500 “First Strike” Edition LiveWire – United Way Auction

Harley-Davidson, in conjunction with Bonhams, is auctioning off a one-of-a-kind custom motorcycle and donating the proceeds to the United Way Worldwide’s COVID-19 Community Response and Recovery Fund.

The Milwaukee motor company has previously stepped up in times of crisis; it has contributed to both U.S. and international relief efforts consistently over the years, from support for 9/11 first responders to donations of motorcycles in the Haitian earthquake restructuring. Now with the current COVID-19 pandemic health crisis, H-D is chipping in to raise funds for this moment.

The motorcycle being auctioned is an exclusive version of Harley-Davidson’s electric machine, the LiveWire®, which is customized with a one-off paint scheme and unique graphics package.  This bike wears a full array of carbon fiber accessories including carbon fiber Speed Screen Blade, Tail Section Cowl, and Tank Trim. To mark the historical significance, the never-to-be-replicated motorcycle on auction is number 500 of the 500 “First Strike” edition LiveWire’s and will be signed by members of the Davidson family.

The motorcycle winning bidder and a guest will also be treated to a unique delivery experience and a “behind-the-scenes” tour of the Harley-Davidson Museum, which includes all travel and accommodations to Milwaukee as well as a private, one-of-kind walk-through of the museum.

The auction started yesterday and is being held digitally by Bonhams to follow the CDC’s social distancing guidelines, and will close on May 26 at 4:00pm (EDT).  Bidders can find more information about the auction and prize package at bonhams.com/LiveWire, which is available for participants from the United States.

Thank you Harley-Davidson!

Photo courtesy of Harley-Davidson.

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Jochen Zeitz with an electric Harley-Davidson LiveWire motorcycle – Photo Credit: Joshua Kurpings

He saved Puma. Now he’s going to fix the Harley-Davidson global business!

I’m talking about Jochen Zeitz, the interim Harley-Davidson CEO.

The motor company today announced that Zeitz has been appointed President and CEO, effective immediately. You might recall that Zeitz assumed the role back in February when Harley-Davidson ditched CEO Matt Levatich for years of disappointing sales.

Before we ratchet up turnaround enthusiasm of new leadership, it might be good to peel back a layer on the mysterious Mr. Zeitz.  I’ve written a detailed background post HERE.

It’s been my experience that business leadership works much differently during a turnaround transformation.  Managers are less able to rely on practices that previously insulated them from criticism. In addition, a traditional consumer goods company is research driven, and don’t typically decide on action until research tells them to change – but the reality is that research doesn’t always tell you what the consumer wants.

Let’s check out some of the Zeitz FACTS:

  • Zeitz is on a combat mission to make the Harley-Davidson business sustainable in a way that improves both society and the natural environment, and that creates economic growth.
  • Zeitz was the driving force behind Harley’s sustainability efforts and approved former CEO Matt Levatich’s desire to “bet the farm” on electric motorcycles.
  • It took 8-years and the work of a thousand engineers to fully realize the LiveWire, the company’s first electric model, that finally went on sale at $30K.
  • Among the entire Harley-Davidson board of directors, there’s a total of ZERO years of motorcycle industry experience.  Coincidentally, ZERO is the top manufacturer of electric motorcycles for the street and dirt.
  • No public (via Google search) photo exist of Zeitz riding a motorcycle, attending a motorcycle rally or HOG event.
  • At Kering, Zeitz was known as the “sustainability Taliban” — Kering employees characterized him as impatient and demanding unrealistic standards.
  • Lack of gender equality on the Harley-Davidson board, yet Zeitz has been a board director and influential member since 2007.
  • Zeitz history of working with unions is murky.  In China workers don’t have the right to Freedom of Association and Asia remains Harley’s strongest sourcing region
  • Zeitz gets the gist of enlightenment after a dialogue with Benedictine monk Anselm Grün – yeah, yeah, you let go of attachments, dissolve your ego, and then you get enlightened and write a book.

Let’s gain some additional insight of the Zeitz thinking from his previous statements; “My belief is that every company has an opportunity to innovate by creating business solutions for services or products that significantly reduce your impact and create more demand for your product.”  “Well, unless you are an extracting business. In that case, you’re a dinosaur and you’re dying.”  The solution is to marry sustainability with growth. “It’s a question of what we grow and how we grow, and how we can reduce our impact significantly and still grow,” he went on to say, “We have to grow within planetary boundaries.

Planetary boundaries?  Huh?

I’m as green as the next fuel/air motorcycle enthusiast, but I had to do a deep dive on this one…  It seems the 11,700-year-long Holocene epoch (“Age of Man”) is the only state of the Earth System (ES) that we know for certain can support contemporary human societies. The planetary boundary (PB) concept, introduced in 2009, aimed to define the environmental limits within which humanity can safely operate.  The planetary boundary (PB) framework contributes to such a paradigm by providing a science-based analysis of the risk that human perturbations will destabilize the Earth system (ES) at the planetary scale.

Whoa, this is heavy!

I would assume that in Harley-Davidson parlance and every day practice, this means that instead of making short-term profits that may incur costs later on (an obvious example being depleted resources leading to higher raw material prices, or social inequalities reducing at-work performances and purchasing power), businesses need to spread some of that growth to the wider world around them, for the sake of the planet – but also themselves.

Who would’ve thought… buy a Harley-Davidson motorcycle for the sake of the planet!

Zeitz might actually be on a path similar to Alfred Ford.  Currently known as Ambarish Das, he is a great-grandson of Henry Ford and heir to the Ford Motor Company who has converted his earthly consciousness to helping build the Temple of the Vedic Planetarium in Mayapur, which was largely funded by Ford’s $35M donation.

I don’t want to appear like I’m self-serving, but as you get gray hair in the beard you tend to focus the “More Roads” plan on which rides you are really trying to accomplish in life.  Maybe it’s time to published a memoir, meet-up in Alachua County, Florida and reflect in one of those “healing” pools.

I hope this transcendental awakening works out for Harley-Davidson.

Photo courtesy of Harley-Davidson.

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