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New Year’s Eve is one of the largest global celebrations, marking the last day of the year and for this year marking the end of the decade.

Are you one of those? You know… the type who likes to argue that 2019 isn’t *really* the end of the decade. Because there is no year 0 in the Anno Domini system which our calendars are based on and the first year ever was year one (1) therefore, the first year of any and all subsequent decades is the one ending in one (1).

Merriam-Webster offers up that it’s defined by popular culture and common usage so, decades end after the 9 year and I’m holding steady with that definition to close out the decade!

Lets move off the Anno Domini system.

A new year is a naturally introspective time, it’s a renewal—starting with a clean slate so’s to speak. Most will consider the year’s past challenges, celebrate the year’s past accomplishments and look forward to the future. It often provides a time to set new goals. Maybe a new motorcycle adventure, new gear, a new project bike, set a new mileage goal, turn the motel miles in and really tent camp at the 80th Sturgis Rally or maybe you dream of a cross-country adventure on Harley’s new Pan America(ADV) motorcycle and resolve to ride the Trans-America Trail across the U.S. from coast to coast—off road!

I don’t typically make a New Year’s resolution, but I think if pushed for something in 2020, I am going do more of what I enjoy—ride more, learn something new with a wrench, and improve my riding. Then again, I resolve to ride more often than annually anyway.

Some of you are already aware of this, but for those who aren’t, Team Oregon has an outstanding rider training program for all skill sets. Check them out.

Happy New Year to you and yours! Lets ride into a happier year and watch out for yourselves and watch out for your brothers and sisters in the wind.

Photo courtesy of Harley-Davidson

All Rights Reserved © Northwest Harley Blog

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Nobody ever thinks it will happen to them or their systems.

I’m talking about building a digital defense and cybersecurity vulnerabilities.

Heads up Harley-Davidson!  The more connected motorcycles become, the more likely they are to get hacked.  Each new “connected” motorcycle feature introduces greater complexity, and with complexity inevitably comes vulnerability.

Motorcycle enthusiasts have spoken and Harley-Davidson listened.  Riders want increased connectivity not simply for productivity’s sake, but also for convenience.  It’s easier to, for example,  interact through the head unit and display an interactive map as the motorcyclist drives towards their destination, versus putting the address into the user’s cell phone’s app and trying to watch the map on the phone and drive.  So, riders use apps for Android and iPhone (Apple CarPlay), that leverage the smartphone for the head unit (HU) display.

At what point does the motorcycle become a data center on two-wheels?  Any part of the motorcycle that talks to the outside world is a potential inroad for attackers. And malicious actors have been incredibly productive, creating immense numbers of threats world-wide.

Do you think I’m ‘inflating’ this out of proportion?

Car versus motorcycle hacking makes great headlines and let’s take a look at a few recent vehicle examples: a moving Tesla Model S is hacked and the hacker remotely controls the brakes (Tesla was forced to develop and distribute a software update to resolve); a Jeep Cherokee was remotely accessed via the UConnect entertainment center from a laptop miles away and disabled it’s transmission (Fiat Chrysler, was forced to recall 1.4M vehicles); a 100M Volkswagen vehicles can be unlocked by hacking the signals from their keyless entry fobs; and then there was Hyundai’s Blue Link, a cell phone application for users to interact with their vehicle.  Users are able to lock, unlock, start and stop the air conditioning or heat, and start the vehicle from a remote location. In addition, the app allows for stolen vehicle recovery and vehicle health reports to be emailed to the user and other parties for scheduling service etc.

SOUND FAMILIAR?

Consider that earlier this year the Harley‑Davidson™ App and the H-D™ Connect service launched which allows owners to connect remotely to select 2020 Touring and LiveWire motorcycles.  The H-D Connect service provides cellular connectivity that can link a Touring and LiveWire owners with their motorcycle through their smartphone using the Harley-Davidson App. H-D Connect allows owners to connect remotely to their motorcycles and allows for viewing of key vehicle health information as well as stolen vehicle recovery and other parties for scheduling service etc.

A computerized motorcycle’s main defense against hacking used to be the fact that all of its systems were separated from any network. But with the rise of telematics systems, connected apps, and onboard WiFi, that’s no longer the case. Harley-Davidson owners now face similar security issues to computers or smartphones and, like those devices, “ironclad” software is the main line of defense and will be as susceptible to attack, just as the user’s home and office PC are.

I’ve previously posted about the larger Internet of Things (IoT). Basically, this means everything in your home that connects to the world wide web. Smart TVs, digital assistants, smart watches, fitness trackers, home security devices, thermostats, refrigerators, and even light bulbs are all on the connected list. Add to that all of the fun stuff: remote-controlled robots; games and gaming systems; interactive dolls; and talking stuffed animals … the list is endless.

And now we have connected Harley-Davidson motorcycles.  What do all of these have in common?   They send and receive data.  The essence of the Harley-Davidson digital transformation is interconnectivity. Interconnectivity is about more than the connections between devices — it is about the connections between customers, partners, and suppliers.  But, do you know how that data is collected, where it is stored, for how long and where it is going?

It’s not clear how serious Harley-Davidson takes the threat of potential cyberattacks on their motorcycles. Given the concerns of hackers doing a “drive-by” on your digital life and the number of malicious actors I’d like to see more transparency from them in regards to motorcycle digital defense — or we risk ending a road trip before it really begins.

Harley-Davidson Privacy Policy – HERE
Harley-Davidson Information Sharing Policy – HERE
FBI 2018 Internet Crime Report (PDF) – HERE

Photo courtesy of Cyber Defense Magazine and FBI

All Rights Reserved © Northwest Harley Blog

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Today is a day where we celebrate all the things we’re thankful for. We get together with family; over-eat a traditional Thanksgiving Day meal, and then watch some football, grab a quick nap — It’s a perfect day.

I am very grateful for the many blessings in my life, and wanted to take a few minutes to share the things I’m thankful for this Thanksgiving Day.

In no particular order, (except the first one).  I’m thankful….

  1. that I was a little late to be my wife’s first, but glad we found each other and I want all of my lasts to be with you
  2. when I hear the ringtone that lets me know my son is texting me
  3. for the “Skip” button on YouTube ads
  4. for Kona Coffee
  5. for Frasier reruns
  6. for my sisters laugh
  7. for Netflix and Amazon Prime
  8. for that first cup of coffee in the morning
  9. for big greasy double-cheeseburgers served in restaurants whose cleanliness is so suspect that most in my posse would never eat there
  10. for anytime I drive up to our house, and see the grand kids sitting out front
  11. for the kind people who read my blog each day
  12. for all the little things
  13. for our cozy couch for watching TV
  14. for our tradition of watching “The Polar Express” again every Christmas
  15. for living in the Northwest
  16. for all my guitars
  17. for having such wonderful, loving, and just plain awesome parents
  18. for being able to play musical instruments
  19. for the trips with my Harley motorcycle brothers that we take together every year
  20. for all the times my wife texts me a kiss emoji
  21. for black t-shirts with logos on them
  22. for the smell of coffee brewing
  23. for having great life-long friends
  24. for loving every minute with my family
  25. for the men and women of our military (and thank you for your service!)

Happy Thanksgiving from our family to yours!

All Rights Reserved © Northwest Harley Blog

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A motorcycle braking system’s primary function is to adequately dissipate heat in order to increase the fade resistance and stop the vehicle.

The Italian company, Brembo, and their brake systems dominate the legendary circuits of the MotoGP and Superbike World Championships.

Solid Block of Aluminum

Brembo has recently introduced a new braking system for the Harley-Davidson flagship models as well as the new LiveWire with distinctive elements of performance, lightness and style.

It all starts with a solid block of aluminum, a material with extraordinary properties that not only have eye-catching surface finishings, but is able to combine low weight and stiffness.

The new radial monoblock caliper with 4 pistons (30 mm) boasts a unique design and the result takes full advantage of the material characteristics.

Motorcyclists know that caliper changes, even for an object of this small size may seem insignificant, but calipers are unsprung weights: even a few hundred grams more increase the braking distances, reduce the acceleration and make changing direction less stable/smooth.

New Radial Monoblock Caliper

Brembo manufactures braking components to ensure constancy of performance and that lever response is immediate with adjustable deceleration in any riding condition. Clearly, Brembo leveraged their 40-years of MotoGP success, to help improve the Harley-Davidson braking systems.

Another distinguishing feature of Harley-Davidson or Brembo’s OE braking system is the use of color.  Call it Italian creativity, but it is appreciated for its high quality standard, attention to detail and the importance of the braking systems’ aesthetics.

But, more to the point of aquatic habitats.

The Pacific Northwest is well known for its beer distilleries, marijuana shops, and hipster-forward culture (and lots of beards). It’s an attraction for foodies, coffee bean experts, hikers and features a diverse landscape of twisty back roads just outside the metro areas for wind in the face relief.

Salmon and the Pacific Northwest go hand in hand, but did you know that every time you grab and engage the brake lever, minute amounts of copper from brake dust is chemically degrading aquatic habitats, often in the form of toxic stormwater runoff which contributes to the killing of coho salmon?  It’s true.  Multiple studies demonstrate that stormwater runoff is unusually lethal to adult coho that return to spawn each year in watersheds.  The Washington State University study is HERE and the Ecological Society of America study is HERE.

To be fair, urbanization along with polluted runoff from automobile (268+ million in the U.S.) brake dust poses a greater challenge to fish species conservation, but motorcycle braking contributes to toxic stormwater runoff and recurrent coho die-offs.

Brembo Colors

I should’ve produced a truck load of “Save a Salmon, Don’t Brake” t-shirts hoping to get wealthy, but didn’t.

Are you looking for a way to get involved?  It’s expensive and not very practical for Harley-Davidson, but upgrading to carbon ceramic brakes don’t produce the same amount of toxic dust.

Motorcyclists can plant trees along the network of streams and rivers.  Or build rain gardens (vegetated basins or depressions which capture and absorb runoff) at their homes or neighborhoods to intercept stormwater that would otherwise flow onto city streets then to the rivers with polluted runoff — the main culprit for the decline of urban salmon populations.

Photos courtesy of Brembo and Harley-Davidson

All Rights Reserved © Northwest Harley Blog

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Pan America™

At the EICMA (Esposizione Internazionale Ciclo Motociclo e Accessori), motorsports show in Milan, Italy, earlier this week — Harley-Davidson debuted two new bikes.  Important to note is the difference in the terms “launch” vs. “debuted.”

The Milwaukee MoCo has aimed one of motorcycles at a market segment in which Harley-Davidson has never really participated.

It’s my view that Harley-Davison is slowly trying to build higher walls to keep “enemies” (competitors) from invasion. Marketing types call this “relevance” and “barriers to entry.”  Multiple financial reports from the company clearly indicate a struggle to fire up a new generation of riders.  The growing presence of electric vehicles is undeniable, but the premium-priced electric (LiveWire) motorcycle — is a non·start·er in terms of revenue!

And at the same time, there’s been an invading army (BMW, KTM, Triumph, Yamaha, Honda or Ducati counterparts) of adventure touring bikes (ADV).  Importantly, this segment is where customers seem particularly excited to buy new models year-after-year.  Even Italy’s floundering boutique bike builder, Moto Guzzi, has had to double the workforce in its Mandello del Lario plant to keep up with demand for the new V85 TT adventure bike ($12,990).  It’s simple.  A fresh new design, a fresh new motor, and a capable around town, comfortable on freeways and durable enough for off-road riding gets customers excited to put down money!

We could have a long-debate on why Harley-Davidson spent millions of R&D dollars much too early as part of their electrification strategy and if the mainstream motorcycle market is ready to encourage motorcyclists to switch to electric vehicles.

But, lets return to the point at hand.

The first new motorcycle is an adventure touring bike (ADV) called the Pan America™.  Astute readers are likely to have déjà vu as it looks very similar to the Pan America concept motorcycle teased out back in 2018.

The Pan America has a new liquid-cooled 60-degree V-twin engine labeled the Revolution Max that displaces 1,250-cc and is reported to make 145 horsepower and more than 90 pound-feet of torque. Impressive stats, especially for the MoCo, which typically has built larger displacement engines with less power and more torque.  The new ADV motorcycle differs from traditional Harley models.  The first item, is exchanging the belt-style final drive for a chain drive that allows simpler gearing changes and improves on the ability to repair if something goes sideways on the trail.  The ADV also leverages a rear trellis-style subframe for strength and reduced weight, which allows motorcyclists to mount different types of adventure-isk luggage to it.

Other advancements include new radial monoblock four-piston caliper brake system developed in collaboration with Brembo and an inverted fork setup, which is common on ADV bikes.  From a styling perspective, you’ll either love the bird-beak nose and squinty cyclops-like headlight or not.

Harley-Davidson® Bronx™

The second new motorcycle is a middleweight class and called the Harley-Davidson® Bronx™. It’s reported to have a smaller 975-cc version of the Pan America’s Revolution Max engine and produces 115-horsepower and 70 lb.-ft. of torque.  Style wise, the Bronx looks somewhat cookie-cutter in this crowded “streetfighter” market segment.  From press photos the motorcycle appears to be belt-driven.  Both motorcycles will roll on new co-branded Michelin tires.

Harley-Davidson says that it’s aiming to have both the Pan America and the Bronx in showrooms by the end of 2020.

Huh?!  A year away?

I like the adventure touring bike (ADV) lineup, but if I was in the market to purchase, it’s unlikely that I’d stall buying for a year to purchase an unproven ADV motorcycle.  I also think it will be a mistake if the MoCo expects its Harley-Davidson name to garner an ultra-premium price in this new segment as it has in the EV market with the LiveWire.

The Pan American should launched and be in showrooms in March 2020, not “late” 2020.

Photos courtesy of Harley-Davidson

All Rights Reserved (C) Northwest Harley Blog

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It became evident today, that creative instincts, an innovation mindset, deep brand and consumer experience along with bottom-line orientation is no longer enough for Harley-Davidson executives.

I’m talking about Neil Grimmer (Twitter) — a San Francisco-area entrepreneur and previously, the Founder/CEO of a personalized nutrition life science company Habit, joined Harley-Davidson on April 5, 2019 as president of Harley’s global brand development.

200 days later it’s been reported by the Milwaukee Business Journal he is “no longer with the company.”  Of course that is an executive management euphemism for ‘You’re Fired’ — however, in the parlance of our times and to clarify he was — sacked, dumped, bounced out, canned, axed, eighty-sixed, let go, ran-off, given walking papers, given the pink slip, or given the old heave-ho.  To put a more cheery spin on it:  one could say he was “constructively discharged,” or “freed up for the future.”

In a memo to employees it was communicated that Harley-Davidson management received multiple complaints about Grimmer’s code of business conduct.   I’m being snarky, but apparently, those day-long seminars in workplace sensitivity never paid off?!

It’s been my experience that company execs get fired because of poor change management, maybe ignoring customers, or for tolerating low performers, or for denying reality or worse, for too much talk and not enough action.  But, it could be as simple as his ‘left coast‘ leadership style was just inappropriate for the MoCo’s particular culture.

I’m sure Mr. Grimmer is an extremely accomplished executive, but the reference by CEO Matt Levatich of multiple violations is a BIG deal.  The MoCo has a set of core values and principles along with a Code of Conduct HERE for employees and suppliers.

It’s not clear if Harley-Davidson has an executive non-fraternization policy, but clearly they prescribe to conducting business with honesty and integrity.  In addition, they prescribe to providing a workplace free of harassment based on personal characteristics and do not tolerate harassment of employees by managers or co-workers.

Harley-Davidson (HOG) stock was up today!

 

Harley-Davidson Code of Business Conduct:  HERE
Harley-Davidson Supplier Code of Conduct:  HERE

Photo courtesy of Harley-Davidson

All Rights Reserved (C) Northwest Harley Blog

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Harley-Davidson, Inc. (NYSE:HOG) reported the third quarter 2019 financial results in a press release HERE.

Key indicators the motor company reported was revenue from motorcycle and related products fell 4.9% Y/Y to $1.07B in Q3.  Motorcycle shipments were down 5.8% to 45,387 and gross margin fell one point to 29.9% of sales.  The company stated it expects shipments of 38,500 to 43,500 motorcycles in Q4 and 212K to 217K for the full year.

In other interesting financial sound bites; Harley’s Q3 marketing spend was up over 30% with efforts on the LiveWire and LowRider S television spots running in major markets across the U.S.  International retail sales were up 2.7% driven by growth in both developed and emerging markets.  In addition, Harley-Davidson gained 2.2 percentage points of market share during the quarter within the Touring and Cruiser segments, which represents approximately 70% of the total 601cc plus industry.

In the attracting more people to riding and keeping riders riding space (i.e. the 2027 strategic imperative) — in Q3 the company gained deeper analysis and insights on why people engage, participate and disengage from riding.

Lets call it a “participation lifecycle!”

H-D Marketing and Brand Amplification

Harley-Davidson now has an acute focus on how to influence each customer at their buying decision points to build the total number of committed Harley-Davidson riders.  By 2027,  the company will expand to 4M total Harley-Davidson riders in the U.S., grow international business to 50% of annual HDMC revenue, launch 100 new high impact motorcycles and do so profitably and sustainably.  Lastly, Harley added Amplified Brand as a growth catalyst in the More Roads to Harley-Davidson’s growth plans.

For example Harley-Davidson refreshed their brand look at major events during Q3 including Sturgis, World Surf League and Spartan races and recently announced we will be the presenting sponsor at next summer’s hotly anticipated Hella Mega music experience tour featuring Green Day, Weezer and Fall Out Boy.  The Hella Mega Tour being promoted by Harley-Davidson is the co-headlining tour of rock bands Green Day, Fall Out Boy, and Weezer. The tour was announced on September 10, 2019 and includes dates from March to August 2020.

Navigating Section 301 Tariff Process

You can’t have a finance report these days and not talk about TARIFFS!  The dizzying series of trade and tariff events over the last few months has pushed the trade war front and center into Harley-Davidson.  How to navigate the Section 301 Tariff process, prepare for any impact etc., is a challenge in of itself.  For the full year 2019, Harley-Davidson now expect impacts of recent EU and China tariffs to be approximately $105 million. This is a $5 million increase from prior expectations and is driven by an increase in Section 301 tariffs, which continue to shift with the breeze as part of global trade negotiations.

It appears that some developed nations will slip towards recession, and governments and companies keep hoping the signs of economic weakness in China would push all the parties to a “deal” table faster.  Harley-Davidson looks to continue mitigating the impact of tariff increases through tariff classification, tariff engineering, first sale, and other methods.  Some of which may have an impact on U.S. manufacturing jobs.
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Q3’19 Press Release:  HERE
Investor Slides:  HERE
Transcript of Q3’19 Financial Call:  HERE
More Roads Plan:  HERE
Hella Mega Tour:  HERE
Section 301 Tariffs:  HERE
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Photos courtesy of Harley-Davidson
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All Rights Reserved (C) Northwest Harley Blog

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