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Harley-Davidson has learned that the software in the Onboard Charging (OBC) System of the LiveWire (ELW) model motorcycles built between 3/18/2019 and 8/20/2020 may initiate a shutdown of the electric vehicle powertrain, without providing reasonable indication to the rider that a shutdown sequence has been initiated.

In some cases, the vehicle may not be able to be restarted or, if restarted, may shortly thereafter shut down again. Unexpected loss of propulsion of the vehicle while in motion without the ability to restart or remain restarted may increase the risk of a crash.

In addition, prior to loss of propulsion indicator lamps may illuminate to include: the Traction Control (TC) lamp, the Anti-lock Brake System (ABS) lamp, and the Failure Indicator Lamp (FIL).

Details of the recall are as follows:

NHTSA Campaign Number 20V624000 — Harley-Davidson Motor Company Components ELECTRICAL SYSTEM

Loss of Propulsion: An unexpected loss of propulsion without the ability to restart may increase the risk of a crash.
Potential Number of Units Affected 1012

Summary
Harley-Davidson Motor Company (Harley-Davidson) is recalling certain 2020 LiveWire (ELW) motorcycles. The electric vehicle powertrain may unexpectedly shut down and not restart, due to a software issue in the Onboard Charging (OBC) system.

Remedy
Harley-Davidson will notify owners, and dealers will update the OBC software, free of charge. The recall began October 19, 2020. Owners may contact Harley-Davidson customer service at 1-800-258-2464. Harley-Davidson’s number for this recall is 0176.

The Service Bulletin is: M1519: RECALL 0176 – LIVEWIRE – SOFTWARE UPDATES

Photo courtesy of Harley-Davidson

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In August 2016, Harley-Davidson agreed to pay a $12 million civil fine and stop selling engine “Pro Super Tuners” deemed illegal after-market devices that caused its motorcycles to emit too much pollution.  I previously posted about this topic HERE.

The motor company also agreed to spend about $3 million to retrofit or replace wood-burning appliances with cleaner stoves to offset excess emissions from the sale of “tuners.”

It’s important to note that the EPA legal action had a significant chilling effect on the performance parts market at Harley-Davidson dealers and many other after-market manufactures.

As previously disclosed, the settlement resolved allegations with the EPA, that the company sold about 340,000 “tuners” enabling motorcycles since 2008 to pollute the air at levels greater than what the company certified. Harley-Davidson did not admit liability and has always maintained that it disagreed with the government, arguing that the tuners were designed and sold to be used in “competition only.”

Even though the settlement had not yet taken effect, a U.S. judge this week approved a revised settlement with Harley-Davidson and dropped the requirement that it spend $3 million to retrofit or replace wood-burning appliances with cleaner stoves to offset excess emissions.

Multiple environmental groups along with a group of 10 states sharply objected to the revised settlement by U.S. District Judge Emmet Sullivan.

Photo courtesy of Harley-Davidson

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UPDATE September 10, 2020:
Scrutiny, then disagreement of methodology and then harsh criticism of the academic modelers from San Diego State University’s Center for Health Economics & Policy Studies arrived quickly after they published their findings in a 63-page report. The researchers sought to quantify the Sturgis Rally COVID-19 impact in South Dakota and nationwide by analyzing the (anonymous) cell-phone data of attendees.

South Dakota Gov. Kristi Noem said the study was “fiction,” and criticized journalists who reported on it.  “Under the guise of academic research, this report is nothing short of an attack on those who exercised their personal freedom to attend Sturgis,” Noem said in the statement. “Predictably, some in the media breathlessly report on this non-peer reviewed model, built on incredibly faulty assumptions that do not reflect the actual facts and data here in South Dakota.”

Media References:
USA Today
WSJ (paywall)

The Associated Press as of last week identified 290 cases from 12 states tied to the rally. Instead of looking at contact tracing and trying to identify specific people who had the disease and passed it onto others, the San Diego researchers looked at the areas that sent the most people to the rally and how case trends changed after the event.

*****

A scientific “Discussion Paper” (dp13670) was recently released referencing preliminary work, which documents the spread of COVID-19 due to a mass gathering conducted during a pandemic against the guidance of the CDC.

The document explicitly refers to the Sturgis Motorcycle Rally and how a single superspreading event can be leveraged to impose restrictions on future mass gatherings.

Discussion Paper Highlights:

  • The per 1,000 case rate increased by 10.7 percent after 24 days following the onset of Sturgis Pre-Rally Events.
  • A total of 263,708 additional cases due to the Sturgis Motorcycle Rally.
    These cases represent a cost of over $12.2 billion, based on the statistical cost of a COVID-19 case of $46,000 estimated by Kniesner and Sullivan (2020).
  • The cost is enough to have paid each of the estimated 462,182 rally attendees $26,553.64 not to attend.

The document concludes that the spread of the virus due to the Sturgis Rally was large. The authors provide descriptive evidence and suggest stricter mitigation policies to limit exposure due to the behavior of non-compliant events and those who travel to them.

Photo courtesy of IZA Institute of Labor Economics Document.

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Riding the Going To The Sun Road – Glacier National Park

From Acadia to Zion our country’s most spectacular landscape treasures are protected inside the parks.

No map or brochure can prepare you for that first motorcycle ride and peering out over a guardrail at snowy mountain peaks, waterfalls that flow down the valley through the forests, and end in a clear blue lake carved out by glaciers. The mountain mornings always have a bite of cold as the sun takes its time to wake, while meandering through the incredible scenery.

I’m talking about National Parks in general and specifically Glacier National Park, Montana which in my view shines above the rest.

Glacier National Park – Going The Sun Road

It never gets old and I plan to ride through the million-acre paradise later this month and take a COVID-19 mental diversion through the park. Montana has plenty of mountain roads where motorcyclists can ride and absorb the landscape, but the crown jewel is the Going-to-the-Sun Road. It crosses the Continental Divide carves through the steep grade of rock and forest with roughly 50 miles of sweeping curves and hairpin switchbacks along with an occasional tunnel passage through the mountain.

The national parks are such a gift, one we’ve given to each other. One we’ve inherited and, with luck, will pass down to the generations that follow us.

Speaking of paying it forward…

Going To The Sun Road

The National Park System comprises 419 national park sites, but only 62 of them have the “National Park” designation in their names. The other sites fall into different National Park System categories like National Historic Sites, National Monuments, National Seashores, National Recreation Areas, and others.

You might be surprised to learn that the National Park Service accounts for 84 million acres of land at more than 400 different sites, but as of 2019, they were due for $11.9 billion (that’s a B!) in deferred maintenance and repairs. Fortunately, the current administration recently signed a bipartisan bill (Great American Outdoors Act) that will pay for repairs at national parks, permanently finance the Land and Water Conservation Fund (LWCF) and in addition will create a lot of jobs.  The bill directs up to $6.65 billion to priority fixes and up to $3 billion for agencies such as the Fish and Wildlife Service. In addition, the bill will allocate $900 million each year to the conservation fund. The program – which has existed for half a century – has historically been plagued by funding shortfalls.

Lake McDonald

The Great American Outdoors Act enacted last week is clearly the most consequential funding for national parks, wildlife refuges, and public recreation facilities in U.S. history since the conservation legacy of President Theodore Roosevelt in the early 1900s.

As motorcycle enthusiasts, we can take heart that there’s always going to be those historic chalets, lodges, and miles of tarmac with beautiful landscapes that meander their way through the firs, aspen, and stone.

Photos taken by author.

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Jason Momoa (i.e. “Aquaman”) collaborates with Harley-Davidson

How often have we recently heard… “We continue to face challenges during these unprecedented times.” — Harley-Davidson CEO Jochen Zeitz opening statement during the July 28, 2020 financial call.

I’m not a grammar nerd, but “unprecedented times” is a tiresome word.  Stop saying it Mr. Zeitz – and it’s also inaccurate!

We are not in an “unprecedented” time.

This isn’t the 1930’s Great Depression, the worst economic downturn in the history of the industrialized world. There’s been no dot-com bubble (i.e. Internet bubble) that was caused by excessive speculation in Internet-related companies in the late 1990s. It’s not the real estate bubble of 2008 and the follow-on market crash, recession and unemployment that was linked to the “subprime mortgage crisis.” There is no automotive industry crisis of 2008–2010 where declining automobile sales and scarce availability of credit led to General Motors, Chrysler, and Ford facing insolvency without major government intervention. It’s not the 1918 flu pandemic, which killed 675,000 Americans and the worldwide death toll was estimated at 100 million. One pandemic death is too much, but the COVID-19 deaths are currently nowhere close to that, thankfully.

Q2 2020 HOG Earnings Report

So, stop using these new most-hated sayings: “unprecedented” times, it’s the “new normal” and “we are in this together” mantra.

And, who’s the “we” here? The point is “we” are not all on the same team in this pandemic. Everyone is dealing with it in their own way. The restaurant employee who’s been unemployed for months isn’t in this together with a Fortune 500 CEO.  The nurse on the front-line treating pandemic patients isn’t in this with the marketing manager who can work from home.

It’s not “unprecedented” for me to rant about something while being largely sequestered at home for nearly five months. But it is what it is, I guess.

Back to the Q2’20 financial call… and some key comments made during the call:

  • The Harley-Davidson culture has suffered. The company has seen five consecutive restructuring’s every year in order to basically chase the downward trend in sales.
  • The Rewire” strategic vision is now being replaced by “The Hardwire.” (more on this at the bottom of the post)
  • Extending the 2020 model year through fall (historically launch was late August) and now new bikes will arrive in dealer showrooms early 2021.
  • Used motorcycle pricing increased about 6% throughout Q2, certainly, higher than Harley has seen in any previous quarter.
  • Harley continues to see strong potential in Adventure Touring and will launch Pan America globally in 2021.
  • Harley has streamlined the structure, which now requires approx 700 fewer positions and approximately 500 employees laid off.
  • H-D is not willing to sacrifice the strength of their legacy in a quest for pure volume growth going forward.
  • Increased recognition on the role of digital technology as a critical priority in the future for Harley-Davidson.
  • H-D will focus on roughly 50 primary markets that generate the vast majority of their retail sales and shipments.
  • Surprise!  Planning to add a Sustainability Officer to the team who will further H-D commitment to the planet and to society.
  • New brand building approach and social media campaign directed by “Aquaman” i.e. Jason Momoa (video of Mr. Momoa touring H-D Museum)

Q2’20 Numbers:

  • Harley-Davidson posted a loss of $0.60 per share for Q2’20
  • Worldwide retail sales of new motorcycles were down 26.6% versus prior year and Q2 revenue of $865 million was down 47% year over year.
  • U.S. retail sales in Q2’20 were down 26.7% versus prior year.
  • EMEA declined 29.8%, Asia Pacific was down 10.2%, and Latin America saw declines in Mexico and Brazil and finished the quarter down 51%.
  • U.S. market share of new bike registrations was 38.5%, down 8.1 percentage points
  • Motorcycle mix shifted from touring to cruising versus Q2’19, which reduced average motorcycle revenue per bike.
  • Credit losses were down due to lower delinquencies and lower repossessions helped by H-D offering of payment extensions to certain customers.
  • While Q2 results were again terrible, Harley-Davidson was still able to sell over 31,000 motorcycles in the U.S. during a global health crisis that closed off its retail stores.

During the financial call, Mr. Zeitz announced Harley will have yet another roadmap to follow: “The Hardwire,” the motor company’s third visionary plan in two years.

You might recall “The More Roads to Harley-Davidson” plan unveiled in July 2018 which stated the development of 100 new models over 10 years, giving more attention to international markets than in the U.S. market, and putting a much greater focus on electric vehicles.

That plan was largely abandoned earlier this year when then CEO Matt Levatich abruptly left the company and was replaced by chairman Zeitz. The “More Roads” was replaced by the vague and loosely defined “The Rewire” plan, which incorporated some of Levatich’s plan, but would instead focus more on key markets and products to drive the bike maker’s profitability and growth potential.

Now we can look forward to a new 5-year strategic plan; “The Hardwire,” which will be grounded in enhancing the desirability of Harley’s brand and protecting the value (i.e., keep pricing elevated) of the iconic products.” The Hardwire roadmap is expected to take over in the fourth quarter and serve as the strategic plan for the company to follow through 2025.

Photos courtesy of Asphalt & Rubber and Harley-Davidson

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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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American Flag at Willamette Falls

The Fourth of July—also known as Independence Day—has been a federal holiday in the United States since 1941, but the tradition goes back to the 18th century and the American Revolution.

On January 9, 1776, writer Thomas Paine published his pamphlet “Common Sense,” setting forth his arguments in favor of American independence. On July 2nd, 1776, the Continental Congress voted in favor of independence, which ended the monarchy’s hold on America and two days later delegates from the 13 colonies adopted the Declaration of Independence, a historic document largely drafted by Thomas Jefferson.

An interesting sidebar is that John Adams and Thomas Jefferson both died on July 4, 1826—the 50th anniversary of the adoption of the Declaration of Independence.

Clackamas County Marine Unit – Willamette River

From 1776 to the present day, July 4th has been celebrated as the birth of American independence, with festivities ranging from fireworks, parades and concerts to more casual family gatherings and barbecues.

For the 4th of July this year, we’re all burdened by a pandemic and being strongly encouraged to stay home.

An important and notable item to highlight, is that the Clackamas County Marine Unit deputies did something very special: they replaced the tattered American flag at Willamette Falls. If you’ve ever been on the Willamette River or looked out at Willamette Falls from one of the viewpoints, you’ve likely noticed a flagpole with a severely tattered American flag in the middle of the falls.

The flag has been there for a number of years and it was tattered, worn and faded— hanging only from its lower grommet. The Marine Unit deputies did some research to try and determine who was responsible for the flag’s presence at the Falls, but in the end, replaced the flag themselves. Thank you Clackamas Co. Sheriff’s Office and Marine Unit!

If you do go out, ride safe and have an enjoyable 4th.

Photos courtesy of Clackamas Co. Sheriff’s Office

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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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Abernathy’s Harley-Davidson of Union City Tennessee came under intense fire last week for racist posts allegedly made by owner Russell “Tootie” Abernathy II.

Racist posts allegedly made by owner Russell “Tootie” Abernathy II

Abernathy’s family has owned the multi-line (Harley, Honda, Polaris and Brunswick) dealership for 60 years. The dealer was founded in 1955 when Russell Abernathy’s grandfather, the late Clarence Abernathy, began working with Harley-Davidson motorcycles in his garage. In addition, Abernathy’s sold boat brands Lowe and Lund including the engine brand Mercury Marine.

Abernathy stated to the media and on the company website that his social media account was hacked by a disgruntled employee who tried to make him look bad.

Polaris, which is based in Minnesota where the tragic death of George Floyd occured, didn’t pause to determine the nature or extent of the hack and on June 17 stated that Abernathy had agreed to cede ownership of his store. “Should that transfer not occur, Polaris will terminate the relationship with the current ownership.

Honda Statement

Brunswick Corporation terminated their contract with Abernathy’s last week as well.

Honda is taking a more determined approach and investigating the situation before taking immediate action.

A week after the Polaris announcement, Harley-Davidson decided to also cut ties with Abernathy, statingThe dealer owner in question will no longer be part of our dealer network and we are finalizing details on the dealer owner’s exit.”  Before any determination of an employee hack occurred, Harley-Davidson experienced some derision history with Abernathy which didn’t help his “I was hacked” alibi.

Harley-Davidson Statement

Back in 2015, Abernathy was at odds with the motor company over the Confederate flag. The dealer posted on social media that “As of today, we have been informed Harley-Davidson will no longer let any Dealership sell any T-shirts with the Confederate Battle Flag on the back.”  This was an issue for the Tennessee dealer and they made some social media noise about not liking the decision.

We know that small businesses are reeling by COVID-19 and the shut down of the economy.  Then came the last 6-weeks of protests across the country and businesses need to be proactive with more meaningful action against racism.

Abernathy’s “Hack” Statement

Debate is okay, but there is zero tolerance for disparaging racial posts by any employee.

Harley-Davidson stated on Twitter that if you see someone who works for the motor company spreading hate, please call their Customer Care Team at 1-800-258-2464 (Monday through Friday; 8am-7pm CDT). Or you can write to Harley-Davidson Customer Care at 3700 W. Juneau Avenue, Milwaukee, WI 53208.  Of course, social media is faster!

Next up for “Tootie” is a tell all book: The Complete Idiot’s Guide to Running a Motorcycle Dealership!

Photos courtesy of Twitter, Honda, Harley-Davidson and Abernathy’s.

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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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