Feeds:
Posts
Comments

Posts Tagged ‘Economy’

Flexible-WorkersWe read everyday how the economy is ever so slowly improving and there was some good news this week for the long-term unemployed.

According to news reports the motor company is hiring 400 temporary workers as part of a seasonal surge in production at the assembly plant in York, Pa.

York is where Harley-Davidson assembles heavy weight motorcycles.   You might recall the widely publicized dispute with the union a few years ago that allowed them to use “casual” workers to do some of the production work at all their existing plants.  A “casual” worker is a temp worker, not employed year ’round, to manage temporary high volume.

According to Harley spokeswoman Bernadette Lauer the jobs start at the end of January and run through the end of May with salaries ranging from $16.75 to $23.30 per hour.  To apply or request to be contacted visit H-Dflexibleworkforce.com.

Harley’s revenues are still well below their pre-crisis highs, but they get credit for revenues and unit sales which have enjoyed a nice bounce over the last year and there is new swagger in the brand.

Photo courtesy of H-D.

All Rights Reserved © Northwest Harley Blog

Read Full Post »

 For employees at our Kansas City, Mo., plant, building bikes is more than just a job.


From 2012 Annual Report — “For employees at the Kansas City, Mo., plant, building bikes is more than just a job.”

Falling sales and rising profits.

It’s a contradiction that many companies experience and one that Wall Street is impressed with if the HOG stock price is any indicator.  It closed at a 52-week high ($59.48) today.

Despite the surging profit in Q1, WDAF-TV in Kansas City is reporting today that H-D plans to lay off between 130 and 140 employees effective June 30th.  Seventy-five of the workers are “casual-employees” or seasonal workers who typically help during a surge in production.  The remaining employees that will be let go are full-time.  The Kansas City plant produces the Sportster, Dyna and VRSC models.

Harley management has consistently stated a restructure goal to have a more flexible work force and to permanently be in a position to generate strong profits on a lower revenue base.  You might recall the restructure move is all part of a new labor agreement signed in February 2011 that went into effect in August 2012.  The agreement included reducing the overall full-time employment at the plant to about 540.  Harley-Davidson management advised Kansas City workers that if they didn’t agree to the concessions, the plants work would be moved to York, PA.

It now seems that H-D is conserving cash and keeping a close eye on production.  It might be because there continues to be uncertainty about the stability of the recovery or it’s as simple as they’ve reached the end of their 2013 production run.

In the TV video the interviewed employee, Benjamin Stark stated that workers were walking around like zombies.  Not good.

American businesses have gotten used to being much leaner and the joblessness shows only a few signs of easing.  There is nothing I can say that will help ease the effects of being laid off, but I sincerely hope everyone affected rebounds quickly.

Photo courtesy of H-D.

All Rights Reserved © Northwest Harley Blog

Read Full Post »

welcome-vegasI’m talking about Las Vegas where the average tourist gambles only four hours in their 4-day stay.

After a couple decades of being the fastest-growing city in the U.S., Las Vegas has seen its growth stall in recent years.  Portions of the strip are dotted with steel and concrete shells as construction was halted and developers attempted to refinance projects and avoid bankruptcy.  Just as Americans did with their homes, casino owners borrowed way too much money to build hotels that were way too big.  The unemployment rate ballooned and for a while the city had the honor of having the highest foreclosure rate in the country of ANY metro area with at least 200K people.

I visit the city often for various work conventions or when attending motorcycle rally’s and recall getting gouged on the rooms and expensive food so, over the last few years I could not be more unconcerned or feel less guiltless in taking advantage of the town when it was down.  Hotel room rates have been slashed and suites that a few years ago went for $400 were recently selling for $125 a night.  And, I’ve wanted to get some of my money back from the card tables for a while now.

An artist rendering of the new Las Vegas Harley-Davidson dealership near the "Welcome to Fabulous Las Vegas" sign on the south end of the Strip.

An artist rendering of the new Las Vegas Harley-Davidson dealership near the “Welcome to Fabulous Las Vegas” sign.

But, economic defeat on the strip in this dirt wasteland is being reset by none other than Harley-Davidson.

Mr. Andress and Tim Cashman are building an $18M flagship dealership on the south end of the strip.  You may remember that this is where the “Welcome To Fabulous Las Vegas” sign attracts large numbers of tourists for a photo op.  The Cashman’s plan to tap into the 40M annual visitors and build a 50,000 square-foot, two-level motorcycle complex which will clearly draw visitors off the strip.  They purchased the 5.25-acre site at the bargain basement price of $8M and expect construction of the dealership to be complete in October 2014.

The Cashman’s are no strangers to Las Vegas where they have three other Harley-Davidson dealerships and also control 10 alternative retail outlets (ARO’s) that sell everything in the alphabet with a H-D logo sans the motorcycle.  Their total annual sales in 2012 was about $60M.

Clearly the strip is on its way back!

Photo taken by author and dealership rendition courtesy of Las Vegas Review.

All Rights Reserved © Northwest Harley Blog

Read Full Post »

Slowly but surely, things are getting better—or so we’d like to believe.

The unfortunate truth is the recession has sent an alarming number of families into financial distress for the first time. Unemployment remains high. Home foreclosures continue. The Portland Police Bureau respond to what seems like an ever increasing number of calls involving people struggling with mental health crisis, including suicides.  Visits to food banks have reached record levels. The increasing demand for services—and diminishing state and local resources—is straining the community safety net for people in need.

I don’t have answers to the economic issues.  But undeniably, the sensation of air molecules colliding with one’s face is refreshingly life-affirming.  To be in the wind: Free. Untethered. Sans obligations, financial, agendas, appointments, offices, annoyances.  Life’s problems just don’t seem as bad…

In part, it’s the reason for the tag line of this blog Whatever it is… it’s better in the wind” which I created back in July 2007.  The thinking was all a person needs is a few bucks for a used bike, $20 bucks for some fuel, a couple t-shirts, some free time, and a couple like-minded friends to enjoy the sensation. If you can’t scrape that together, then at least roll down the windows on the SUV, and enjoy a few moments of well-deserved Wind.

And speaking of wind in the face… a couple years ago I blogged (HERE) about Scott G. Toepfer — an emerging documentary photographer with a love of motorcycles and adventure.  His posse set out across the Western U.S., to experience the spaces between here and there, and to see what becomes of them on the road.

It turns out that Mr. Toepfer finally aggregated the content he captured from their rides over the last two years and release the short film (HERE – 17 min) which tells the story of their adventures.  It’s certainly worth a watch and may even be an inspiration for getting out in the wind!

Photo courtesy of Scott Toepfer.

All Rights Reserved © Northwest Harley Blog

Read Full Post »

A long time ago… back in 2010, Victoria Doyle, who along with her husband Mike owned Doyle’s Harley-Davidson in Eugene, Oregon (aka Duck Country).  They had recently closed their store in Roseburg because of the economy and were in a meeting at the Oregon Election Station talking about the impact to their Harley-Davidson business if Measures 66 and 67 passed.

You remember those “tax fairness” measures, right?

It was a special election where the public employee unions spent millions on “yes” campaigns to raise taxes on what they deemed were the wealthy.  Unlike previous failed tax measures, 66 and 67 was positioned to pit the financially challenge against the wealthy.  The wealthy should pay even more tax because there was a need to fix the broken tax system and funding structure in the state – it was portrayed as a “fairness issue” which resonated with many who were un/under-employed at the time because it would not affect them.

In the meeting hall, Victoria Doyle boldly stated “we’ll either lay people off or raise prices.”  At the same time, H-D corporate was pressuring Doyle’s to upgrade the building of which they didn’t own to come more in line with their other dealer “mega stores.” All this pressure had to create anxiety for the owners on whether the business could remain profitable given the weak sales environment.

Steve Dorn (L) and George Latus

Jump ahead a couple years and the dealership was sold last month to George Latus of Latus Motors.

On my recent trip to the Street Vibrations  we rode past the dealer and noticed the temporary Latus signs on the building.  As we rolled by on I-5 I was reminiscing about my Road Glide purchase from Mark Doyle last August.  He and his wife Janie were absolutely a joy to work with and Melody McCauley made signing the paperwork quick and easy.  This would have been Doyle’s 18th year anniversary celebration and I’m sure it was a difficult decision to sell the business.

There was a part of me that was sad for the Doyle’s, but I’m sure the new owner will do right in Eugene.

Back in the 80’s Mr. Latus was a motorcycle mechanic and Harley-Davidson had suffered a very bad decade.  It was an era when you could waltz in from Montana and open a dealership in Spokane and then later in Portland/Gladstone with relative ease.  Mr. Latus is  heavily involved in various racing activities from sponsorship of racers on the AMA Flat Track series and is the primary sponsor of Steve Dorn, Top Fuel racer for the All Harley Drag Racing series.  He is passionate about motorcycles and has established a good reputation with customers in all his dealerships.

I wish the Doyle’s the best of luck and much success in whatever they decide to pursue.

Photo courtesy Shetech/Flickr, and Latus Motors.

All Rights Reserved © Northwest Harley Blog

Read Full Post »

Humpty Dumpty Prevention Program

Most chief executives are entering 2011 with big decisions to make—especially how to revive sales.

But, some have deeper problems to address.  Facing down “significant cost, efficiency and production flexibility gaps” as well as fierce competition for some, such as Harley-Davidson who last November told Kansas City union officials that it might move operations to Harley’s Springettsbury Township plant if a contract wasn’t ratified by early March.

Well it’s March and their “no blink” management style resulted in the members of the International Association of Machinists and Aerospace Workers Local 176 and United Steelworkers Local 760 not letting “Humpty Dumpty” fall.  They ratified a contract by a vote of 467 to 185 and the new labor agreement takes effect in August.

The “fall prevention program” has been implemented and proven to be an effective tool in the loss of all jobs in Kansas City.  Congrats to Local 176 and Local 760.  The new contract is a 7-year deal that, when implemented, will result in the Kansas City plant having about 540 full-time, hourly unionized employees compared with about 685 today.  Yes, it’s a loss, but it does keep many high-paying manufacturing jobs in Kansas City and brings all H-D plants under one umbrella for production flexibility.  The company stated that the new contract, which will be implemented in phases, will result in about $15M in annual savings starting in 2013.

To all the folks who railed on my public union previous blog post, you see private unions have to adjust to economic conditions.  Unlike the Wisconsin public union members who have protested for days because they have been ask to pare back their benefits, Harley-Davidson has budgetary constraints that can’t be fixed by raising taxes. If we used the public union mentality I suspect they would ask Harley-Davidson to respond by raising prices and demand that motorcycle enthusiasts just pay more for a scooter instead of buying something else?

And if all that wasn’t enough… this item falls into the “what were they were thinking” category… I read that in Minnesota a local pipefitters union has purchased the Hillcrest Golf Club in St. Paul, paying $4.3M – yes, you read that correct at $4.3M – for the private club and vowing to keep it private for at least two years.  That does a lot for the unions  being frugal perception…

Photo courtesy of NYTimes.

All Rights Reserved © Northwest Harley Blog

Read Full Post »

HOG Bank

Start with the “charisma and swagger” of Charlie Sheen, add a little Lady Gaga recklessness, mix it all together with the sensibility of John Mayer, and you’re well on your way to a vibrant digital marketing campaign.

Or at least that’s what Harley-Davidson’s, CMO, Mark-Hans Richer seems to believe.

Taking a page from celebrities and musicians who blazed the path before them they’ve embarked on a crowd-sourcing recipe with Victors & Spoils, a Boulder-based crowd sourcing agency who intends to deliver successful digital marketing.  It would seem that every American company on the planet is amassing a rapidly growing list of crowd sourcing digital data to give marketers an even more precise method for targeting their ad messages to specific consumers.

I know, you hate social media.  More people despise Twitter than use it.  You thought Foursquare was a church.  You like Facebook, but you fear its Big Brother qualities.

Well, you probably don’t understand that Twitter is the number one news source for news happening right now.  But if you can’t wrap your head around that, maybe you should look into SproutSocial, which allows you to track your company in social media.  And if you don’t think social media is key to any company’s future, you’re on the road to extinction.

Mr. Richer totally gets it.  H-D has a multi-generational and multicultural customer strategy with a need to get potential customers more engaged in the brand.

You do that through social media.  But, part of the problem for the motor company is its audience knows too many people, who connect with each other online.  Once consumers start talking to each other not only do they spread the word about the so-called “motorcycle lifestyle,” but they also let each other know which products are good and which ones are bad.  Suddenly, the dealers can no longer jam any old product down the motorcycle riding public’s throat.  It’s bad enough when new products leak in advance and are dead on arrival due to bad word of mouth, but even those that make it to the release date intact are not guaranteed sales.  Because by the end of the week, the target audience knows whether the product is worth owning via references from friends.

It all comes down to who you know.

But, the reason I’m writing this is because of the job market.  Unemployment.  It’s steady at 10.5% here in Oregon.  About a point above the national average and has remained there most of the past year.  Just this past week the Oregonian reported another 300 layoffs by 3 different companies closing down operations.  And if that wasn’t enough did you happen to catch Federal Reserve Chairman Ben Bernanke last night on 60 Minutes?  He painted a grim picture.  Stating that the U.S. recovery is still not self-sustaining while defended his $600B bond purchase to help keep interest rates low.  Heady stuff.

Oregon and U.S. Unemployment - Dec 2010

I hate to frighten you, but all your partying and drunken pictures are going to work against you in the job market. Inebriation is not a criterion for employment, not even at Miller Brewing.  You see you’re building your resume every day online.  And whether you can get a job or not is based on this resume and who you know.  People always complain how they can’t get a job in this industry or that industry because they aren’t connected.  Hate to tell you, but it just got worse!  No one’s going to hire anyone without a history, who can’t be recommended by someone.  The days of placing a blind ad and taking on all comers is history.  That doesn’t even work on Craigslist, and have you seen the type of jobs on that site lately?

If you want to succeed in the future, you’ve got to know people.  Who can vouch for you.  Ever get called for a reference?  You never lie if you know the caller, it’s your reputation on the line.   And now that we’re all networked through social media, there’s always someone who knows you, who if they won’t say something negative, certainly won’t say something positive.

And you thought you were just playing online?  You see we all live in a social media world.  Scary huh?!  And as if to help prove my point the CEO of Facebook, Mark Zuckerberg, was also interviewed and talked about changes coming in a redesign.  For example, instead of a single profile picture, people who visit your page will soon see a row of photos you’ve been recently tagged in.

It might be time to start making deposits in the persona-curating bank account…

Photo courtesy of Harley-Davidson, SocialSprouts and Google.

All Rights Reserved © Northwest Harley Blog

Read Full Post »

It started as whispers, but lately we’ve heard more and more about the “R” word.

Recovery of the economy.

Economists are starting to down play the recession and clearly chatter from our D.C. representatives is all about a turning point as retail sales beat forecasts and for the first time in 10 years 160K jobs were created in the month of March.  However, the unemployment rate remains steady at 9.7% nationally and it really looks like the pace of growth won’t drive rapid improvement in the labor market.

And speaking of job growth, Harley-Davidson has taken some of the oxygen out any recovery in Milwaukee.  According to the Biz Journal the motor company filed a mass layoff notice this week with the Wisconsin Department of Workforce Development informing the agency that it was undergoing a permanent reduction in force and will lay off 94 employees at its distribution center in Franklin beginning June 7.  Unemployment remains steady at 8.7% in Wisconsin.  This news was not unexpected as the motor company announced more than a year ago that it was closing the distribution center as part of a major reduction in operations, with a third-party company picking up parts, accessories and general merchandise distribution.

Clearly the labor market distress remains high and I’m not making light of hard working folks difficulties.   But, if it’s any consolation – plus the fact that this week Tiger returned to the Masters, launched a new 3D PGA Online Game and Nike’s greedy geniu$ made us feel CREEPY for the multimillionaire after rolling out a new ad featuring his dead father’s voice – Wisconsin is ranked among the top states for its ratio of golfers to courses and during this most distressful time, might I suggest a round of golf to reduce stress?  Better yet, maybe you could snag a 4-some in the middle of the day with Mr. Keith Wandell (H-D CEO) who according to a number of press reports is an avid golfer and discuss etiquette or share tips!

Photo courtesy of GoGo Caddy and H-D.


All Rights Reserved © Northwest Harley Blog

Read Full Post »

Harley-Davidson reported its first quarterly loss since 1993!

No surprise given home foreclosures, unemployment fear, stalled economy and ice-cold demand for high-end, premium priced motorcycles.

For Q4’09, H-D reported revenue of $764.5M and a loss of $147.2M.  Affecting Q4’09 results was the previously announced 53.1% reduction in motorcycle shipments from the year-ago period and $167.1M in restructuring, on the Buell end-of-life costs and the MV Agusta discontinued operations.  For all of 2009; revenue was $4.29B compared to $5.58B in 2008, a 23.1% decrease; income was $70.6M in 2009 compared to $684.2M in 2008, a decrease of 89.7%.  And don’t forget all the non-cash charges related to Harley-Davidson Financial Services (HDFS).

There was a surprise in today’s financial call.  Keith Wandell, (H-D President and CEO) stated: “We also feel good about where we’re at.” Huh?

Isn’t that the kind of thinking that would have Kodak saying that they’re relying on film, or newspapers saying they’re relying on print, or music labels saying they’re relying on CDs.  Just because you can’t see the cliff from where you are, that doesn’t mean it doesn’t exist.  Remember when everyone said no one would read a book on a hand-held electronic device, and suddenly now everyone’s saying the opposite, Kindle’s got so many new competitors and Apples yet-to-be released tablet gets more press than a starlet without panties getting into a car outside a pub.

Mr. Wandell may be referring to his reactive changes the past 8 months and the hope they will restore growth. I’m skeptical, and time will tell if they are the right decisions or if management can execute with a renewed intensity.  But isn’t that just the point.  REACTION to events vs. pro-active change?!  From the outside looking in, the majority of action the company has taken seems REACTIVE.  They curb demand, shrink manufacturing, reduce structural costs, pullback on spending, slash and cut employees, sell off businesses based more on profit margins not on the contribution to the customers soul.  Motorcycle sales are down more at H-D than other manufactures.  Why?

There is a saying: “Businesses should concentrate on their customers’ needs, not on specific products.” — “Marketing Myopia” (1960); Theodore Levitt, Harvard Business School

My opinion is that H-D needs to relearn customer needs.  If you desire to appeal to your core fans, then they’ll want to know that you are in it for the motorcycle hobby/sport, not just the money.  Stop calculating how to get to millions of revenue in a spreadsheet by maximizing this and that.  Just create something rawly desirable, then the revenue will come.  A great hit is more powerful than any marketing campaign.  People don’t need motorcycles, but they want one.  When the product is great.  When it speaks to them.  When it’s seen as integral to their lives.  You’ll have something!

Photo courtesy of JupiterImages.

All Rights Reserved © Northwest Harley Blog

Read Full Post »

Out Of Busines

Harley-Davidson has undergone a grueling restructuring over the last year to better compete amid less demand.

The economy and housing bubble depleted consumers’ wealth and left a lot of folks unwilling to spend on Harley’s high-end bikes.  I anticipate that Harley will remain at least three quarters away from achieving positive retail sales trends in the U.S., especially given the companies lapse of a successful promotion in the first quarter.

I’m genuinely concerned.   More so about the decay of prosperity in the local motorcycle shops, parts suppliers, and dealers.  Be it routine service or customization, the local shops most often operate on their ability to make sure YOU are happy. They know if you leave satisfied, you will tell your friends about your experience with the shop.  Word of mouth is an integral part of a shops reputation in the local area and carries a lot of weight in generating new business.  “Giving” local shops rebuild, repair, or service work on your bike, while appreciated, is not going to keep a shop in business.   The industry at large will need sales to rebound or the local motorcycle businesses will lay-off their skilled workers or worse – close down operations.

Unless you own or work in a local shop, you have no idea of what it takes to stay in business.  Facility overhead, staff salaries, phones, heat/electricity and advertising are things everybody thinks of.  But what about insurance, hazmat costs, licensing fees and money paid to local city and state governments for all the TAXES they require?

And speaking of taxes, I’m very skeptical of government spending our way to prosperity.  Increasing the tax liability on small business owners does nothing to encourage businesses to take care of their employees.  In fact, in Oregon there is a special ballot measure on personal and corporate tax increases.  In my opinion this one-size-fits-all legislation may well force motorcycle shops to shut down.  You’ve heard of Measures 66 and 67 and read more about net profits and corporate structures to last a life time so I’ll avoid explaining the details.  Instead, let me ask a simple question.  Did you get a raise last year?  I know I didn’t.  And if you’re lucky enough to still have a job, I’m willing to bet that you didn’t either.  Most likely you took a pay cut.  Or had your hours reduced.  Or were required to pay a larger share of your health insurance coverage.

At the same time you and I were taking cuts the Oregon Legislature voted to increase the tax burden on higher incomes and businesses by $750 million dollars, it also authorized $248 million in pay raises for state employees.  Yep, that’s right.  State workers got raises during the worst economy we’ve been through since the Great Depression.

Still don’t care?  Then how about this.  The legislature approved a budget that increased state spending by 9%.  If I was operating a motorcycle shop I can assure you that if my business increased 9% over the past two years I’d be most happy.  The legislature increase is about $4.7 billion more than the previous two years.  Time for another question.  Do you think state services have improved as spending has increased?  Are the schools better? Is our infrastructure better?  At a time when Oregon has lost over 120,000 private-sector jobs in the past 18 months the state has added 10,000.  It would seem that in Oregon, government has become the ONLY growth industry!

I’m not sure about where you live, but in Oregon during the winter many think about what customization you can do to your bike in the off-season.  Before long you’ll be sitting at your MacBook, surfing the web looking to make some modification dreams come true.  You’ll likely have questions and find yourself on the phone calling the local motorcycle shop trying to get all those questions answered.  Before long you’ll have spent most of an hour discussing scenarios, getting advice and prices from the local shop expert.

What if they don’t answer your call because the parts expert is no longer employed?  What if they’ve gone out of business?

We’re told by the “spinsters” in Salem that the state is making “budget cuts.” Huh?  In fact it means simply they can’t have as much of an increase as legislators would like.  A 9% increase is NOT a cut!  It’s my opinion that the private sector creates wealth.  Government does not.  I hope you’ll join me in voting NO on Measures 66 and 67 to send a clear message to the Oregon legislators that a CUT means CUT.   

Increasing taxes on motorcycle shop owners means more will go out of business.

Source: Statistics from The Oregonian

Photo courtesy of Flickr.

All Rights Reserved © Northwest Harley Blog

Read Full Post »

Older Posts »

%d bloggers like this: