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Posts Tagged ‘COVID-19’

#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.

All Rights Reserved (C) Northwest Harley Blog

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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.

All Rights Reserved (C) Northwest Harley Blog

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ODOT Traffic Volume Report

Did I shower today or was that yesterday?

When did this all start? February? That feels like ancient history.

March ended without March Madness. April started with Arizona Bike Week and the Laughlin River Run being canceled.  May graduations were canceled.  Friday happy hours have been called off indefinitely.  For those who still remain employed, but working from home, daily cues like commuting, rush hour traffic and socializing after work have disappeared

Workdays blur together, and weekends are just weekdays with fewer obligations. I know I’m not going out today so, it’s just, every day is today.

The good news…

On all major interstates in the Portland metro area, traffic is down 46% from levels last year, according to a report compiled by the Oregon Department of Transportation.

Interstates 5, 405, 84 and 205 are all seeing significant traffic declines. For example, average speeds on I-5 northbound during what used to be the afternoon rush hour were up to 60 miles per hour in the most recent week of figures. Back during the week of March 1, the average rush hour speed there was 33 mph.

I-5, in particular, is seeing the most significant declines of metro-area freeways. The average weekend traffic was down 64% for the most recent full week of data available (March 30-April 5). State officials compiled the data from 38 traffic monitoring locations across 13 freeways and highways in Oregon.

The number of car crashes has plummeted due to lower traffic volumes.  However, evidence is beginning to emerge that absent traffic jams during the coronavirus crisis, many drivers are getting more reckless.

Speaking of reckless…

Pavel Vasilyevich Krechko

The latest example in Portland, Oregon happened on Tuesday, April 14, 2020 at 3:34 p.m., East Precinct officers responded to the intersection of Southeast 148th Avenue / Southeast Powell Boulevard on a report of a traffic crash involving a motorcyclist.

Investigators learned that the suspect, Pavel Vasilyevich Krechko (19-year-old), was involved in a minor traffic crash on Southeast Powell Boulevard just west of Southeast 148th Avenue and was fleeing from that traffic crash when he then crashed into a motorcycle head-on killing Brandon Cody Reid (32-year-old).

Krechko, fled the scene immediately (a 2nd time!) after the crash and abandoned his vehicle.  Investigators responded to Krechko’s residence in Troudale, Oregon where he was taken into custody about an hour later. Krechko initially denied being involved in either crash, and said his car had been stolen a few hours earlier. But, police said he eventually confessed to crashing and fleeing both scenes.

Krechko was arrested and booked into the Multnomah County Detention Center on one count of Manslaughter in the Second Degree, one count of Failure to Perform the Duties of a Driver (felony), one count of reckless driving, and one count of Failure to Perform the Duties of a Driver (misdemeanor).

Now for the MOST important part of this post, which should wipe away that stupid smile on Mr. Krechko’s booking photo!

Senate Bill 810 became effective January 1, 2020.  It was signed into law back in June, 2019, and modifies the definition of “vulnerable user of a public way” to include persons operating or riding on a moped or motorcycle.  The law (801.608, “Vulnerable user of a public way”) enhances penalties for motorists who kill or injure motorcyclists, as well as other vulnerable road users such as pedestrians, highway workers or bicyclists.

It is very distressing to write about this type of idiotic negligence.  My hope is that Oregon taking this important step to protect motorcycle riders by significantly enhancing the penalties against careless and criminally negligent drivers will slow down people making bad choices.

Photos courtesy of ODOT and Portland Police Bureau

Oregon Crash Statistics & Reports    |    Invest in yourself and Stay Sharp HERE!

All Rights Reserved (C) Northwest Harley Blog

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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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President Ronald Reagan With CEO Vaughn Beals

In 2020, April Fools is passé and pranks are out.  The pandemic crisis has changed humor!

The popular metaphor for speech is “Shouting fire in a crowded theater,” which may cause panic.  The seriousness of COVID-19 has the capacity to frighten in a visceral way the public and dedicating a blog post to misleading people just seems like a very bad idea.

Do you remember a long time ago in a galaxy far far away, when tariffs were being used to control unfair trade practices (labor, environment and other issues).

Former H-D CEO Matthew Levatich With Recode’s Kara Swisher Discussing Tariff’s

Recall the hysteria of — Tariffs bad, Harley good?

Harley-Davidson execs and investors panicked when the European bloc raised its 6% tariff to 31% on motorcycles. That made each motor company motorcycle about $2,200 more expensive to export, and forced the company into opening another manufacturing plant in Thailand.

Thirty-seven years ago today, President Ronald Reagan took bold steps to protect Harley-Davidson from foreign competitors.  It was April 1, 1983, when Reagan ordered massive tariffs on large Japanese motorcycles to help the last surviving maker of American-made motorcycles.

President Ronald Reagan at H-D York, Pennsylvania on May 6, 1987

I’ve previously written about how during the 1970’s, Japanese motorcycle manufacturers flooded the U.S. motorcycle market decreasing Harley-Davidson’s market share. It had only been a few years since Harley-Davidson executed the epic buy back from AMF.  Their sales hadn’t reached the levels they envisioned, in part, because the AMF era was famous for shoddy quality, bikes requiring a lot of maintenance and the Milwaukee motor company was getting knocked down publicly and in need of some sunshine.

With poor quality and high-maintenance requirements, Harley was skiding toward bankruptcy.  In 1982, Harley-Davidson sought protection from the International Trade Commission (ITC) and requested a tariff on all overseas heavyweight motorcycles. This was the first and only time such a request was made to the ITC. They also lobbied the Reagan administration to raise tariffs on Japanese manufacturers because of “Dumping,” which in this context refers to exporting a product at a lower price than is charged in the home market, or selling at a price that is lower than the cost to produce it.

President Ronald Reagan and CEO Vaughn Beals at H-D York, Pennsylvania on May 6, 1987 — Recieving Appreciation Award

It was a different time and President Reagan used tariffs, versus tweets, to change the course of the American motorcycle industry.

On April 1, 1983, April Fools Day, President Reagan signed into law an act that imposed draconian import tariffs for a five-year period on Japanese motorcycles with displacement of greater than 700 cc’s.  This would give the American motorcycle maker some breathing room from intense competition to retool, get its act together and turn profitable. While the act was supposed to last for five years, then CEO Vaughn Beals asked that it be lifted a year early in 1987.

It was as good then and just as good today… Remarking about the celebrated Harley-Davidson turnaround in 1987, President Reagan quipped (recorded in this Podcast), “Never bet against Americans.

If you are in need of some reading humor, check out these previous April Fools posts:
Harley-Davidson Boom Box Infotainment Virus
I Quit
Harley-Davidson Launches Blackline L-Edition
Keith Wandell Retirement Revs Up Harley
Wagoner Tapped As Harley CEO

Bonus:  President Reagan’s Remarks (Video) to Harley-Davidson Company Employees in York, Pennsylvania on May 6, 1987.

Photos courtesy of Harley-Davidson, Recode and Ronald Regan Foundation

All Rights Reserved © Northwest Harley Blog

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Is Harley-Davidson committed to lending a hand?

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

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

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

Digital Advert — ‘Breathe’ by Droga5

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

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

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

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

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

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

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

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

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

Photos courtesy of Harley-Davidson

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