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Posts Tagged ‘CEO Jochen Zeitz’

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

All Rights Reserved (C) Northwest Harley Blog

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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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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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Q1’20 Harley-Davidson Retail Motorcycle Sales + Motorcycles and Related Products Segment Results

Let’s jump right to that impressive Q1’20 financial result:

  • Harley-Davidson (NYSE:HOG) posted earnings of $69.7 million compared with $127.9 million in the same period a year ago.
  • The dividend was slashed to 2 cents a share from 38 cents.
  • The motor company is in talks with major U.S. banks to secure $1.3 billion in liquidity.
  • Harley’s U.S. retail sales were down 15.5% compared with the same period a year ago.
  • International retail sales were down 20.7% compared with 2019.
  • Harley’s U.S. heavyweight motorcycle market segment share was down 2.2 percentage points, to 48.9%.

Another quarter, another poor performance from Harley-Davidson, though the market seemed to buy into the promise that this time it will be able to turn things around.

Déjà vu…

Management promising to fix things again by “crafting strategy accelerants” to deliver improved sales and better returns.  However, it admitted that its efforts thus far haven’t worked and also said it was “refining” the plans it had already devised, but it wouldn’t reveal how it was going to achieve them until this summer. Granted the financial problems Harley-Davidson encountered this quarter aren’t necessarily all of its own making, though it hasn’t helped itself along the way.

It’s important to note that the Harley-Davidson trends in the U.S. have been weak for years despite the economy being strong for so long. That is a major problem and the acting Harley-Davidson CEO, Jochen Zeitz, remains vague on what the motorcycle company is going to do to change that dynamic.

The “ReWire” Board

The fact that management chose the term “ReWire”, emphasizing the electric future to describe their refining plans reads like a satirical article in The Onion.  It’s as if CEO, Jochen Zeitz said, “I’ve heard some concerns going around, and I want to impress upon each and every one of you that I’m taking every possible step to ensure that we tap into a market that has traditionally been neglected by motorcycle manufacturers, Harley-Davidson is announcing a new line of motorcycles designed specifically for men.”

The “ReWire” plan consists of five main points:

  • Enhance core strengths and better balance expansion into new spaces.
  • Prioritize markets that matter.
  • Reset product launches and product line-up for simplicity and maximum impact.
  • Build the Parts & Accessories and General Merchandise businesses to their full potential.
  • Adjust and align the organisational structure, cost structure and operating model to reduce complexity and drive efficiency, to set Harley-Davidson up for stability and success.

The ReWire playbook abandons some of the previously ratified “More Roads” plan, but there is so much “CEO Speak” — “designed to address top priority opportunities, drive consistent execution and reset the company’s operating model in order to reduce complexity, sharpen focus and increase the speed of decision making.” — in that investor call its difficult to know what exactly remains “committed” to or what will stop.

Little is certain these days, but there’s one sure thing: in a situation where 30+ million people were laid off or furloughed in the past 6-weeks, people are definitely thinking about their wallets.  And living with ever-present, crushing uncertainty and the knowledge that people all around us are dying isn’t the stimulus to rush out and purchase a new motorcycle.

Let us face facts.  It’s going to be a different world for a while. After all, temperature checks, touch-less payments, masks, wipes, take-out and distancing were not part of the Harley experience before the March closures.

If Harley-Davidson is about anything, it’s about bringing people together. Lots of them. And really, really close — with motorcycle rallies, music festivals, HOG events and all the cross country rides.  Looking at you Sturgis!

The whirlwind of 400,000+ motorcycle enthusiasts half-hearted adherence to CDC guidelines, while gathering all week in a number of local bars, and eating VEGAN-burgers could be viewed as a controlled experiment to determine the virus’s true incubation rate.

I have some gray in my hair and beard, something you will see in a majority of Harley enthusiasts.  I find the idea of a Harley specifically aimed at men deeply patronizing.

Photos courtesy of Harley-Davidson.

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Remember that outsider who kept Harley-Davidson on the road?

Keith E. Wandell (retired H-D CEO) grabbed the handlebars at the company in the heart of the economic crisis in 2009. Harley lost $55 million that year, as buying a motorcycle stopped being an option for many consumers.

Wandell made some big statements. “Don’t let Harley-Davidson become General Motors!” Look in a mirror, he told staff – Harley was already so far down that same path [as GM] “it wasn’t even funny.”

Wandell took bold action and made quick decisions to focused the company on doing what many say it does best: Making big, powerful, premium-priced cruisers.

Keith Wandell

Keep in mind, this was when the great recession and credit crisis sent shockwaves through Harley-Davidson. In less than one year, bike shipments dropped about 25 percent.

Wendell cut the workforce – at least 2,700 hourly workers and 840 administrative employees. The economy was in the tank, the motor company had a big union labor force and old manufacturing processes.  People were just churning and everything was upside down at the company.

Imagine…

I’m not talking about celebrities’ filming themselves singing John Lennon’s ‘Imagine’, from their multi-acre estates and whining about their COVID-19 pandemic isolation.  Never has disproportionate privilege been so apparent and I for one am really fed up with their self-serving need to be in the public spotlight with style-over-substance videos.

But, I digress…

Mark-Hans Richer

It is equally important to recall Wandell’s right-hand “stunt man” — you may remember him as that over-the-top marketing genius who had women screaming, grown men crying and Oprah jumping up and down, chanting: “Everybody gets a car!

I’m talking about Mark-Hans Richer, who was Sr. VP, Chief Marketing Officer at Harley-Davidson, prior to his 2015 departure. Granted, Richer is currently employed at Fortune Brands, but with the mass exodus at Harley-Davidson and salary decreases across the executive staff it’s plausible to pull him back into the H-D team.

Richer, generated the most bankable kind of publicity: controversy.  He made the difference between a motorcycle brand being a rock star versus more employees working in the rental lot.

He’s the charismatic dude that dropped a Dyna Super Glide on Pope Francis at the Vatican.  Then turned around at a press briefing and said, I would be really upset if you felt our strategy was about “meeting the nicest people on a Harley” because I can tell you that ain’t the strategy.  Later he pontificated that a Harley costs less than “another tattoo, a parking ticket, a gas station burrito, and a lip ring” in an appeal to what makes millennials tick.  In 2002, he helped the company get named Company of the Year by Forbes magazine.

110th Anniversary Celebration

In a university commencement speech, he stated: “Everything I ever learned from business, I learned from Willie the Wildcat stuffed animal,” a business he started right out of college.  Richer secured the first major worldwide sports sponsorship for Harley-Davidson at UFC and was instrumental in X-Games marketing.

No, I don’t have a man crush.

Richer was a key contributor of the “Ride Home” anniversary events.  Do you remember when returning to the mecca of motorcycling in Milwaukee was truly an EVENT i.e. the 110th Anniversary festivities featured 60 bands, including Aerosmith, Kid Rock and ZZ Top.  Remember that 3 ½-hour set by Bruce Springsteen and E Street Band at the 105th Anniversary?   How about when Foo Fighters, Dave Grohl, committed a major sin on stage by cracking open a Coors in Miller Town?

100th Anniversary Celebration

There was the surprise headliner (Elton John) and outright disaster for the centennial anniversary. Musical highlights included Billy Idol, Kid Rock, Joan Jett, Poison, REO Speedwagon, the Doobie Brothers and Tim McGraw for the 100th anniversary so, people booing and walking out might have been overstated in the media.

Then came 2018 and time to celebrate 115 years of the open road.  Harley-Davidson CMO, Heather Malenshek tells the media the event is all about returning to its roots with a focus on the motorcycle, not the entertainment.  Huh?!  It was an unmitigated flop for entertainment.  She very quietly departs the company in October 2019.  Coincidence?

Indian is challenging Harley’s cash cow, the Road Glide.  BMW has market segment share in the ADV or “adventure motorcycle” sector and recently introduced the new R 18 touring, cruiser configuration to compete head-on with Harley-Davidson and Indian.  Rumors started circulating recently that Honda is introducing a new 1100 Rebel to compete directly with Harley-Davidson.

Pan American

Harley needs more than anything a fast start for a new model to become a breakout hit.  Is that the Pan American, ADV?

The ADV segment is crowded and entrenched with BMW, Honda, KTM, and newcomer Ducati, among others with decades, of dirt-tested refinement.  Harley doesn’t have the luxury of burning up stacks of cash on a another “vanity project.”

The Milwaukee motor company has a very narrow window to establish that hit. Gone are the days when a slow seller can be nurtured into a hit.  Here’s looking at you LiveWire and the “Field of Dreams” marketing of distressed or stigmatized merchandise!  I truly wonder if acting president and CEO Jochen Zeitz or Harley-Davidson management really understand why the LiveWire product is failing?

It’s logically time to recall Mr. Wandell and “CMO head-honcho,” Richer back from spending their days taking lunch at the Polo Lounge and crank up the H-D buzz machine.

What the media’s hourly drumbeat of “panic porn” on the COVID-19 trauma has shown us, cannot be unseen.  A motorcycle-less Los Angeles.  Coyotes wandering on the empty Golden Gate Bridge.  A quiet New York, where you can hear the birds chirp in the middle of Madison Avenue.

We’re in it. Stores are closed. Restaurants are empty. Streets and multi-lane freeways are barren.  Body bags in tractor trailers.  The Oregon beach is an eerie ghost town.  The economy has collapsed and a devastated 22+ million Americans have lost their jobs in four weeks.  It’s a dark feeling of rust, rot and ruin.

Illegitimi non carborundum.” The Latin phrase loosely translates to, “Don’t let the [COVID] bastard get you down.”

Motorcycle enthusiasts are the ones who understand why dogs stick their heads out the window.  In the famous words of a previous H-D CEO, Jeffrey Bleustein, “We (Harley) have to pretend ten fiery demons are chasing us at all times,” and “make the right bikes, at the right time, and get them to the right place!

Let’s all take a deep breath and get ready for a potential Harley-Davidson tsunami. What is about to be unleashed will be the greatest campaign ever created to get you to feel normal again.  Every brand will come to our rescue, dear consumer, to help take away that darkness and get life back to the way it was before the crisis.

The great American return to normal is coming and you won’t be able to ignore that deafening motorcycle exhaust noise.

Photos taken by author and courtesy of Harley-Davidson and Wikipedia.

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According to a SEC, Form 8K filing, Harley-Davidson (i.e. acting CEO Jochen Zeitz) promoted Lawrence G. Hund to chief commercial officer and will be responsible for the global sales function including the company’s motorcycle Parts and Accessories, General Merchandise and Harley-Davidson Museum businesses effective today.

Hund will be responsible for building and supporting growth strategies, cultivating opportunities in new and existing markets, and increasing demand for Harley-Davidson products globally.

Lawrence G. Hund

I previously blogged about Mr. Hund back in 2009 when H-D re-hired him HERE.  He returned to Harley-Davidson from Tygris Commercial Finance Group, Inc. where he worked only 8-months as its Chief Financial Officer (CFO).

Mr. Hund is 64, and has been the President and Chief Operating Officer of Harley-Davidson Financial Services (HDFS), a wholly-owned subsidiary of Harley-Davidson, Inc. since 2009.

Jonathan Root, 46, vice president of insurance at HDFS, will be promoted to senior vice president of HDFS and take over Hund’s previous role.

Photos courtesy of Harley-Davidson and SEC

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COVID-19 Cancels Business

Recall back on March 19, 2020,  Harley-Davidson announced the closure of most U.S. production until March 29th.

The facilities that temporarily ceased production were York Vehicle Operations in Pennsylvania, as well as two Wisconsin operations, including the powertrain operation.  The majority of its global production employees continue to be on temporary layoff.

Today, Harley-Davidson announced additional actions it is taking in response to impacts of COVID-19 on its business:

• Significantly reducing all non-essential spending
• Temporarily reducing salaries
– CEO and the Board of Directors will forgo salary/cash compensation
– 30 percent reduction for executive leadership
– 10 to 20 percent reduction for most other salaried employees in the U.S.
– No merit increases for 2020
• Implementing a hiring freeze

The press release stated that medical benefits remain intact for all global employees.  Outside of the U.S., the motor company will take similar actions as based on regulations governing each of its operating locations. Salary reductions will be reassessed at the end of the second quarter as the company continues to closely monitor business conditions.

Not included in this announcement was information related to dealerships.  To my knowledge few if any have suspended operations.  The mandates and closures of nonessential businesses, left the question of whether dealerships, sales rooms, or repair shops should be included as the various city, county and state rules have been ambiguous.

More background reading at:

H-D Executive Mass Exodus
H-D MIA with Coronavirus Response Ads
H-D Entrepreneur and New Mastermind

Photo courtesy of Instagram

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“Top-Dogs” Existing Harley-Davidson

Companies often don’t announce their troubles in advance — it’s a strategy that prevents mass exodus. But, when “top dogs” start leaving a company in packs, it’s probably time for you to consider the same.

The latest Harley-Davidson departure is senior vice president and chief operating officer Michelle Kumbier. In a filing with the U.S. Securities and Exchange Commission, Harley-Davidson did not disclose a reason for her departure, which is set for April 3rd.

For Harley-Davidson workers, the question of whether—and how long—to stick with a beleaguered employer is one that hits plenty of people at one time or other. Deciding whether to stay or go is always a tough call, and compounding the decision this year is that COVID-19 is an equal opportunity offender for job displacement.

A number of high-ranking executives have left Harley-Davidson in the span of six months:

  • October 2019 — Neil Grimmer was removed from his post as president of global brand development following an investigation that the company said showed violations of the company’s code of conduct.
  • October 2019 — Heather Malenshek, who was chief marketing officer and senior vice president, marketing and brand, left the company.
  • November 2019 — Paul Jones left his role as vice president, chief legal officer, chief compliance officer and secretary of Harley-Davidson.
  • February 2020 — president and CEO Matt Levatich announces his departure, but the hedge fund, Impala, stated he was fired by the board.
  • March 2020 — senior vice president and chief operating officer Michelle Kumbier leaves the company.

The motor company announced that Bryan Niketh has been promoted to senior vice president of product and operations and will assume Kumbier’s former responsibilities. Kumbier’s global sales responsibilities as chief operating officer will be assumed by acting president and CEO Jochen Zeitz.  In addition, assistant general counsel Paul Krause, who has been serving as interim chief legal officer, has been hired for the role permanently.

Harley’s drip, drip, drip of declining sales is well-trodden media territory.  If negative media coverage is unrelenting, the business stands little chance of bouncing back very soon.

I’m not going to pretend that this is easy stuff, especially given all the uncertainty. The lockdown situations in the U.S. and abroad in markets like Italy, Spain and France, will clearly impact Harley’s production and sales.  And after lifting a two-month or more lockdown are there going to be any buyers if there is a sharp recession or are people going to curtail their discretionary spending given “respectful exits” and the economic consequences?

Harley-Davidson needs to nail the fundamentals and it’s now more important than ever to continue to develop and produce amazing new products.

Photos credit: Patrick J. Endres

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CEO’s That Made Harley-Davidson

Recently it was reported that the typical CEO at the biggest U.S. companies received an 8.5 percent raise last year, taking in $11.5 million in salary, stock and other compensation, according to a study by executive data firm Equilar for the Associated Press.

Over the last 5-years, median CEO pay has jumped by 19.6 percent not accounting for inflation.  That’s nearly double the 10.9 percent rise in the typical weekly paycheck for full-time employment across the country.

It could be, but this isn’t a rant about the typical line worker vs. CEO wage-gap.

If we’re being intellectually honest, CEOs today are required to master a broader range of skills than in the past, when top executives might have climbed the ranks with just one discipline. Companies are bigger, more global and increasingly complicated, and there’s accelerating competition in countries such as China, India and Brazil. Executives must also adapt to quicker technological change, including shifts brought on by autonomous driving, electric vehicles and the widening use of mobile devices.  And then there is the Board, and the increasing requirement that CEOs push their stock price ever higher to collect their maximum possible payout.

So, who are those CEOs at Harley-Davidson, that made Harley-Davidson?  Below is a historical snapshot of the motor company leadership:

Jochen Zeitz — Credit: Liam Sharp

Jochen Zeitz — born in Mannheim, Germany, the 57-year old was appointed May 7, 2020 as President and Chief Executive Officer (CEO). Zeitz served as Acting President and CEO since February 2020 when the previous CEO, Matt Levatich resigned. Zeitz also continues to serve as Chairman of the Board.

For more background please see this post.

Prior to being named Chairman, Acting President and CEO in February, Zeitz was a member of the Harley-Davidson Board of Directors since 2007 and established the Company’s Brand and Sustainability Committee. He served as Chairman and CEO of Puma for eighteen years from 1993 to 2011 and was also PUMA’s CFO from 1993 to 2005. Zeitz remained Chairman of Puma after being appointed CEO of the Sport and Lifestyle division at luxury goods company Kering (formerly PPR) from 2011 to 2012. He then served as a director on Kering’s Board of Directors from 2012-2016.

He also sits on the boards of financial services company Cranemere, and the Kenya Wildlife Service, as well as running his own charitable foundation (The Zeitz Foundation) and co-chairing The B Team, a non-profit that he co-founded with Richard Branson in 2012 to promote sustainable business practices. He has won the Financial Times Strategist of the Year award three times, been awarded the German Federal Cross of Merit, and co-authored two books – one of which, a dialogue with Benedictine monk Anselm Grün called The Manager and the Monk: A Discourse on Prayer, Profit and Principles, has been translated into 15 languages.

About fifteen years ago, he started his own business – Segera, a 50,000-acre luxury resort retreat on the Laikipia plateau in Kenya’s central highlands.  In addition, Zeitz launched other projects in Africa: The Zeitz Collection of contemporary art from Africa and its diaspora; the Zeitz Museum of Contemporary Art Africa, a complex of 100 galleries in a 1920s granary in Cape Town converted by Thomas Heatherwick, which houses work from both its own and Zeitz’s collections: and The Long Run, which rates sustainable tourism projects according to Conservation, Community, Culture and Commerce (4Cs).

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, the ranch in Kenya and has property in west London.  One would also assume he now has a home in Milwaukee!  His favorite thing is a Scottish Bailey.

Matthew S. Levatich

Matthew S. Levatich — Resigned on February 28, 2020 after a 26-year career at Harley-Davidson with the last 5-years as CEO.  For more info see this post HERE.

Harley-Davidson promoted Levatich to President/CEO in May 2015 when Keith E. Wandell retired.  Mr. Levatich was named COO during CEO Keith Wandell’s tenure.

Mr. Levatich, joined Harley-Davidson in 1994. Prior to becoming COO in May 2009, he held wide-ranging roles in the U.S. and Europe. Those roles included Vice President and General Manager of Harley-Davidson’s Parts and Accessories business, Vice President of Materials Management, and President and Managing Director of the Company’s former MV Agusta business. In addition to an undergraduate degree in mechanical engineering from Rensselaer Polytechnic Institute, Levatich holds a graduate degree in engineering management and an MBA from Northwestern University. He has served on the board of directors of Emerson, a St. Louis-based global manufacturing and technology company, since 2012.

Mr. Levatich is known as an avid rider and an engineer, that demonstrates a clear vision for the company and talks constantly about focus and alignment and helping the organization remain clear on what it is they’re here to do.  No longer is the motor company the “voice of the executive” rather it’s the “voice of the customer.

Interestingly, Harley-Davidson has evolved from platform teams. Dyna platform, Softail platform, which was largely modeled like the automotive industry. Each platform team was competing for the next big capital investment so they could say now it’s Dyna’s turn to have a major refresh. Or now it’s Softail’s turn. Or now it’s Touring’s turn.  And that doesn’t exist anymore.

In an interview with Cycle World Mr. Levatich stated: “We’re not really in the business of manufacturing motorcycles. We’re in the business of building customers.”  

Keith Wandell

Keith Wandell —  hired from Johnson Controls to serve as Harley-Davidson President/CEO in 2009 — retired May 1, 2015 — only 6-years later.

Credited for leading Harley-Davidson back to profitability by cutting jobs and making its production more efficient he transformed manufacturing through a restructuring plan that generated more than $300 million in annual savings.

Mr. Wandell cut millions of dollars in costs and eliminated several thousand jobs in the manufacturing plants. He brought a sense of urgency to the company, saying he did not want it to be like General Motors and the auto industry that had fallen into deep trouble.

Under his leadership, Harley made significant gains in reaching new customers through growth in international markets and sales to “outreach” segments in the U.S., including young adults, women, African-Americans and Hispanics.  Mr. Wandell also was credited with stoking excitement for a planned electric bike, called Project LiveWire.

Mr. Wandell has been the Non-Executive Chairman of Dana Incorporated since October 27, 2016 and served as its Interim Chairman from September 9, 2016 to October 27, 2016.

James Ziemer

James Ziemer — served as President/CEO from 2005-2009.  Retired in 2009.  Mr. Ziemer is a native Milwaukeean who grew up in the neighborhood next to Harley-Davidson’s original Milwaukee factory location on the city’s west side.

He started with the motor company in 1969 as a freight elevator operator while attending the University of Wisconsin-Milwaukee. He worked at Harley-Davidson for 40 years.  Upon earning his undergraduate degree in accounting at UWM, he joined the accounting department where he spent the majority of his career. He was named the Company’s Chief Financial Officer in 1990. In 2005, he was named President and Chief Executive Officer of Harley-Davidson.  When he retired, employees presented Mr. Ziemer with the original wood doors from the freight elevator he operated when he first was hired at Harley-Davidson.

As a sidebar, also in 2009, eleven years after being bought by Harley-Davidson, Erik Buell leaves the company to establish Erik Buell Racing.

Jeffrey L. Bleustein

Jeffrey L. Bleustein — retired as Chairman of the Board of Harley-Davidson in April 2009.  He was Chairman from December 1998 to April 25, 2009.  Previously, he served as CEO from June 1997 to April 2005.

He served at Brunswick Corp in many capacities and was President of Trihawk, Inc., a subsidiary of Harley-Davidson, 1984 to 1985. Remember Trihawks?

Mr. Bleustein was a technology consultant with American Machine and Foundry Co. (AMF).  In 1969, AMF merged with Harley-Davidson and in 1975, AMF assigned him to help reorganize Harley-Davidson engineering operations.  Led by AMA Hall of Famer Vaughn Beals Jr., and 11 other Harley-Davidson executives (including Willie G. Davidson), Bleustein helped execute an $81.5 million leveraged buyout of the company from AMF on June 16, 1981.

To commemorate the buy-back, approximately two dozen company officers, along with their wives and select motorcycle press, made a cross-country motorcycle trek from the production facilities in York, PA to Harley-Davidson’s main offices on Juneau Avenue in Milwaukee. This 900-mile independence journey was also a ride to support the Muscular Dystrophy Association, now the official charity of Harley Owners Group (HOG). The ride followed a host of ceremonies at York which included the signing of documents that marked the ownership change, and pulling the first “new Harley-Davidson” motorcycle off the assembly line. This 4-day celebration began a new chapter in the company’s “new” future.

Mr. Bleustein was responsible for notable engineering innovations which included the rubber engine mounts, redesign of the V-Twin and introduction of the Kevlar drive belts.

During Mr. Bleustein’s tenure (circa: 1998), Harley-Davidson bought Buell Motorcycle Company and named founder Eric Buell Chairman of Buell Operations. The first Buell’s hit showrooms in late 1999.

Rich Teerlink

Rich Teerlink  — served as Chairman and CEO until 1999 at Harley-Davidson until he retired.  Mr. Teerlink joined Harley-Davidson in August 1981 as CFO where he enjoyed great success over his 18-year career.  He started with the company just two months after the group of 13 Harley-Davidson managers had bought the company from its then parent company, American Machine and Foundry Co. (AMF), in a leveraged buyout.

Mr. Teerlink’s greatest accomplishment was establishing the Harley Owners Group (HOG) in 1983.  Mr. Teerlink joined the Vertex Board in 2002, and while serving on the Vertex Board, he also served on the Boards of Johnson Controls, Snap-on Tools and Quad Graphics.

Mr. Teerlink is also a notable author of More Than a Motorcycle, The Leadership Journey at Harley Davidson book.  Mr. Teerlink retired from the Vertex Board of Directors, effective February 4, 2015.

Mr. Teerlink was inducted to the AMA Motorcycle Museum Hall of Fame in 2015.  Mr. Teerlink was awarded an Honorary Degree, Doctor of Laws from Marquette University on May 22, 2005.

Vaughn L. Beals Jr.

Vaughn L. Beals Jr. — served as CEO of Harley-Davidson from 1981-1989 and as Chairman from 1981-1996.

In June 1981, it was a challenging time as American Machine and Foundry Co. (AMF) wanted to cut and run, but no one wanted to buy a company with a limited line of high-priced, obsolete products and a reputation for unreliability.  Vaughn Beals Jr., and 13-other** Harley-Davidson executives (including Willie G. Davidson), led an $81.5 million leveraged buyout of the company from American Machine and Foundry Co. (AMF).

Mr. Beals previously served as a research engineer for North American Aviation and Cummins Engine Company where he negotiated the purchase of logging equipment manufacturer Formac International as he was a minority owner and CEO.  This proved to be valuable during the AMF Harley-Davidson buyout.  He was named Harley-Davidson CEO after the buy-out option.

In 1982, the motor company won an anti-dumping judgment from the International Trade Commission (ITC). This led then-U.S. President Ronald Reagan to impose additional tariffs on imported heavyweight Japanese models, as allowed by the ITC.  The additional tariffs–45 percent on top of an existing 4.4 percent measure–were meant to decrease gradually over five years, until April 1988.

In June 1986, Harley-Davidson went public with a stock offering to raise capital to help pay off the buy-out option.  This was very successful increasing share price from $11 to $24.  Harley-Davidson  used some of the stock sale revenues to buy Holiday Rambler, a U.S. maker of recreational vehicles, for $150 million.  The Holiday Rambler sale pushed Harley-Davidson into the Fortune 500 category for the first time at number 398.  In March 1987 the company asked the ITC to remove the tariffs imposed on Japanese motorcycle imports a year earlier than scheduled.

Willie G. Davidson, V.P. Styling (Left); Vaughn Beals Jr., CEO and Charles Thompson, President (Right)

Mr. Beals was inducted to the AMA Motorcycle Museum Hall of Fame in 2008.

Charles Thompson — served as President and CEO of the restructured Harley-Davidson after American Machine and Foundry Co. (AMF) buy-out option.

Mr. Thompson was a long-time Harley-Davidson employee, well-liked throughout the motorcycle industry and served as president and CEO of the restructured company until his health failed in 1982.

William Herbert “Bill” Davidson — was president of Harley-Davidson Motorcycles from 1942 to 1971.  He was the son of William A. Davidson who quit his regular paying job with the Milwaukee Road railroad in 1903 to get into the business of making motorcycles.

William Herbert “Bill” Davidson

Bill Davidson, started working on the Harley-Davidson shop floor of the family business in 1928 after attending the University of Wisconsin.  He won the AMA National Enduro Championship in 1930 and when he wasn’t winning motorcycle races, Bill worked his way up through the company, becoming a foreman, manager of many departments, and finally president of Harley-Davidson in 1942.

In 1963, Bill brought in his son William Godfrey Davidson (Willie G.) on to head up the styling department of the company. Willie G. would end up creating some of the company’s more popular designs, including the legendary Low Rider and the Super Glide which was inspired by the ideas of bike customizers.

In 1965 Harley-Davidson went public as the two families decided to give up control and put the company’s shares on the market.

In 1969, Harley-Davidson was bought by American Machine and Foundry Co. (AMF), a leisure equipment manufacturer.  The arrangement proved, at least initially, to be a good one for Harley-Davidson, for it was in the mid-1960s that the company experienced its first real competition after Indian went out of business. The financial resources and stability that AMF was able to provide helped the company battle Japanese motorcycle manufacturers, who had begun exporting their vehicles around the world, placing themselves in direct competition with Harley-Davidson.

Bill stayed on as president under the control of AMF reporting to it’s then current chairman and CEO Rodney C. Gott (Mr. Gott served as AMF president, starting in 1962, and chairman and chief executive, from 1968. He retired in 1978).  Mr. Gott was a Harley-Davidson rider and big motorcycle fan.  As a sidebar: In World War II, Mr. Gott was a decorated veteran who served in Gen. George S. Patton’s Third Army and on the staff of Gen. Lesley James McNair, chief of ground forces, and was also commander of the 79th Infantry Division Artillery.

In 1971, Bill Davidson was made Harley-Davidson chairman, but reported that he had little power while under AMF’s control.  It was noted that he was chairman of the Harley-Davidson board that never met.  Conflicts with AMF’s strategy and chaotic market conditions led to Bill Davidson’s resignation in 1973.

It was a period of high CEO turnover at Harley-Davidson.  During this time, AMF named John O’Brian and then Gus Davis as president, marking the first time someone other than a Davidson would sit in the company presidents chair.  Other Harley and Davidson family members continued on at the company under AMF’s ownership.  Bill Davidson’s son John was vice president of Sales, and then moved up to become president after Gus Davis.  William J. Harley was engineering vice president until his death in 1971.  His brother John Harley remained at the company until his death in 1976 as the last Harley at Harley-Davidson.

In 1975, AMF put Vaughn Beals Jr. at the head of Harley-Davidson, and Jeff Bleustein was named chief engineer. Bleustein was charged with making manufacturing improvements, which had  become increasingly necessary as production grew and quality declined.  A limited line of high-priced products and a reputation for unreliable motorcycles marked this timeframe in history.  AMF began to lose interest in keeping the struggling motorcycle business afloat.

Rodney C. Gott (Left) and John Davidson, President Harley-Davidson

In a bit of irony, (circa: 09/1977), the motor company unveiled a motorcycle museum in York, PA., that was named after AMF’s CEO — Rodney C. Gott Motorcycle Museum.  A video HERE.

In June 1981, to save the company, and to effect a turnaround, thirteen Harley-Davidson executives, led by Vaughn Beals Jr., put together a plan for a leveraged management buyout. With the financial support of Citicorp, the management team succeeded in taking control of Harley-Davidson from AMF on June 16, 1981, at a cost of $81.5 million.

The role of the new officers after the company buy-out option included: Charles Thompson, president and chief operating officer; Jack Hamilton, Chris Sartalis, Jim Paterson, Kurt Woerpel, Peter Profumo, Jeffrey Bleustein, Thomas Gelb, William Davidson, and Tim Hoelter, all vice presidents. The president of the various divisions were: John Davidson, golf; David Caruso, parts and accessories; Ralph Swenson, York; and David Lickerman, Harley-Davidson International.

Even though he was no longer actively involved with the company, Bill Davidson lived to see the renewal and success that Harley-Davidson enjoyed starting in the late-1980s.

Bill Davidson died in 1993.  He was inducted into the AMA Motorcycle Museum Hall of Fame in 1999.

Walter Davidson — was president from 1907 to 1942.  Bill Harley was chief engineer and treasurer. Author Davidson is secretary and general sales manager and William A. Davidson is the works manager.

In 1936, six sons of the founders are working at Harley-Davidson.  Walter Davidson’s sons Gordon and Walter C.; and William Davidson’s sons, William Herbert “Bill” and Allan; and Bill Harley’s sons, William J. and John.

In 1942 from his death bed,  Walter Davidson named his nephew William Herbert “Bill” Davidson as president and his own eldest son Gordon, as vice president of manufacturing.

Historical Principal H-D Subsidiaries: Holiday Rambler Corporation; Utilmaster Corporation; B&B Molders; Creative Dimensions; Nappanee Wood Products.

Article References:

Vaughn Beals Jr. – Wikipedia
Growing Up Harley-Davidson – Jean Davidson
Harvard Business Review – Harley Leadership U-Turn
Jeffrey Bleustein – Wikipedia
The Morning Call – Harley Is A Classic Turnaround Story
Rodney C. Gott Obituary
Gus Davis Obituary
Cycle World Magazine – Interview with CEO, Matthew S. Levatich
Cycle World Magazine – Rodney C. Gott Motorcycle Museum
Chicago Tribune – The Real Harley-Davidson Story
James Ziemer – Northwest Harley Blog
People – Buy Back Article
Rick Barrett – Journal Sentinel
Richard Benson – Wired UK

Harley-Davidson (Buyout) Management Team

**The Harley-Davidson managers post buy-out option: left to right standing: John Hamilton, Dr. Jeffrey Bleustein, Kurt Woerpel, Chstopher Sartalis, and William G. Davidson.  Left to right, seated: James Peterson, Timothy Hoelter, David Lickerman, Peter Profumo, David Caruso, Ralph Swenson, Charles Thompson, and Vaughn Beals Jr.

 

Photos courtesy of Harley-Davidson

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