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Posts Tagged ‘American Machine and Foundry Company’

amf-hdThis year marks a couple of interesting historical points on the Harley-Davidson calendar.  It’s coincidental that 2009 marks the first time a non-motorcycle riding enthusiast (CEO, Keith Wendell) was hired to run the company, and this occurred exactly 40 years after Harley-Davidson merged with American Machine and Foundry Company (AMF).  I don’t know if that is ironic or just business karma?!

At any rate, back in 1965 Harley-Davidson went public when the two families decided to give up control and put the company’s shares on the market.  Four years later, in January 1969 it merged with AMF.  The AMF merger started in 1968 when HD was looking for someone to buy the company.  In May of that year Bangor Punta (BP)** stepped in with an offer of $27 per share.  The HD board was skeptical of BP’s reputation and tenacity in pursuing acquisitions.  They continued to shop the company around.  In October they announced that AMF had struck a deal (at $29) and then a bidding war erupted.  Finally on December 18, 1968 there was a shareholder’s meeting to vote on the AMF merger at $40 per share which was $9 less than the BP offer.  The HD board like AMF’s motorcycle fanboy, Rodney C. Gott, and believed AMF had better alignment.  It was approved and in January 1969 the acquisition became final. 

hd-cartAt the time of the AMF merger, Harley-Davidson was producing 14,000 motorcycles per year.  AMF used the merger as a marketing opportunity to slap the Harley logo on many non-motorcycle-related things they produced, such as their golf carts. Management at HD was overrun by AMF personnel and they streamlined production, and slashed the workforce. The tactic resulted in a labor strike and lower quality motorcycles. The bikes were expensive and inferior in performance, handling, and quality to Japanese motorcycles. Sales declined, quality plummeted, and the company almost went bankrupt.

The marriage between motorcycles and one-time tobacco production equipment company lasted but 12 years.  The 1981 recession severely threatened HD’s share of the market for heavyweight bikes and AMF began to lose interest in keeping the struggling business afloat.  Then Vaughan Beals – who had joined HD in 1975 as VP – and a group of 13 HD exec’s raised $100M and bought the company for $81.5M from AMF on June 16, 1981 and restored the company to an independent status. The marketing phrase “The Eagle Soars Alone” became a rallying cry.  In 1986, HD again went public.

Given that HD is laying off and previously asked the union to approve wage cuts and reduced benefits for everyone in exchange of factory expansion… it’s easy to draw a parallel toward the AMF days?  What do you think?  Will HD roll strikes during this economic recession or gutter balls?

**Bangor Punta Corporation (abbreviated BP and was traded on the NYSE under BNK) was an American conglomerate and Fortune 500 Company from 1964 to 1984. It owned a number of well-known companies primarily in the pleasure craft, firearms and general aviation industries.

Photo courtesy HD.

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