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Posts Tagged ‘H-D Executive Leadership Team’

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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Purpose-2012With a cocktail of high-strength steel, aluminum, magnesium, rubber and plastic Harley-Davidson adds flexibility, functionality and refreshed paint schemes to their model lineup each year.

By the numbers, 2012 was a pivotal year for Harley-Davidson.  Earnings per share up 16.7%, revenue growth up 6%, $280M annual savings from restructuring, sales outreach with the 18-34 demographic grew at twice the rate of core customers, but in the first ever Consumer Reports’ motorcycle reliability survey, conducted by the Consumer Reports National Research Center about 1-in-4 owners of Harley-Davidson motorcycles reported experiencing a major problem with the motorcycle in the previous four years.

Twenty-five percent had a major problem!

H-D Executive Leadership Team

H-D Executive Leadership Team

It turns out that BMW motorcycles were even less reliable than a Harley-Davidson with about 1-in-3 owners reporting problems in the previous four years.  How did the Japanese manufactures perform?  Only about 1-in-10 Yamaha owners experienced issues during that time, followed closely by Kawasaki and Honda.

However, reliability problems don’t seem to affect the satisfaction scores of owners and their bikes.  When asked whether, considering everything, they would buy their bike again if they had to do it over, 75% of Harley-Davidson owners said definitely yes, closely followed by 74% of BMW owners and 72% of Honda owners.  In contrast, only 63 and 60% of Yamaha and Kawasaki owners, respectively, would buy their bike again.

Both BMW and Harley-Davidson riders have segments that skew more toward the enthusiast and hardcore, meaning they tend to keep bikes longer and I wonder if this says something about the riders than the bikes.  Could H-D riders be more critical about problems?

AZ Proving Grounds Video

AZ Proving Grounds Video

In 2012, the average U.S. retail purchaser of a new Harley-Davidson motorcycle had a median household income of approximately $89,500. The Company defined its U.S. core customer base as Caucasian men over the age of 35 and its U.S. outreach customers as women, young adults, African-American adults, and Latino adults. (Sources: 2012 Company 10K and 2012 Annual Review)  The motor company no longer provides data on age demographics which had been rising in recent years.

Reliability is only one of several factors buyers consider when purchasing a Harley-Davidson motorcycle.  Among the bikes that needed repairs, survey respondents reporting having the most trouble with accessories, such as lights, instruments, switches, and radios (21 percent), brakes (20 percent), the electrical system (16 percent), and the fuel system (15 percent).  Most of the repairs were fairly inexpensive, but for a company whose reputation relies heavily on the quality of its products the 1-in-4 number is perplexing.

The survey results can be viewed by subscribers at the ConsumerReports.org web site and in the May issue of Consumer Reports.

Photos courtesy of H-D.  

H-D Executive Leadership Team photo: (Left to Right — Tonit Calaway (VP, Human Resources); John Olin (Sr. VP and CFO); Keith Wandell (Chairman, President and CEO); Lawrence Hund (President and COO HDFS); John Baker (GM, Corp Strategy and Business Development); Joanne Bischmann (VP, Communications); Paul Jones (VP, General Counsel))

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