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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.

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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.

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Autumn leaves are falling rapidly around the northwest and it’s earnings time for Harley-Davidson.  Will it be continued progress or sputtering along?

We’ve got a crisis in America.  No jobs.  And those with the money want to keep it!   We live in a society.  And right now our society is not cohesive.  It’s about the haves and have-nots.  Those who want to be in everybody else’s personal business under the guise of freedom and those who want to be able to pursue happiness in their own individual way.

Speaking of pursuing happiness with the wind in your face…

HOG released their Q3, 2010 earnings.  Third-quarter retail sales of new H-D motorcycles decreased 7.7% worldwide, 9.4% in the U.S. and 3.6% in international markets compared to the year-ago period.  Revenue from H-D motorcycles in Q3, 2010 was $798.8M, down 0.6% compared to the year-ago period. The Company shipped 53,293 motorcycles to dealers and distributors worldwide during the quarter, compared to shipments of 54,236 motorcycles in the third quarter of 2009.  Revenue from Parts and Accessories totaled $219.0M during the quarter, down 1.2%, and revenue from General Merchandise, which includes MotorClothes apparel, was $64.1M, down 9.4% compared to the year-ago period.  Overall the results were not as bad as the industry-wide retail decline in the U.S. of 14.4%, but it’s still in decline.  The CEO stated:

“Despite the continued challenges in the economy, we are making solid, steady progress at transforming our business,” said Keith Wandell, President and CEO of Harley-Davidson, Inc. “With our strategic focus on future growth initiatives and continuous improvement, we are positioning Harley-Davidson to succeed at today’s volumes, as well as to grow and restore greater profitability longer term.”

The company lowered its capital expenditures outlook to $190M – $210M and adjusted the range of motorcycle sales to 207,000 to 212,000 for 2010.  This is down 6-7% from 2009 levels.  Mr. Wandell went on to say:

“The Harley-Davidson brand has remarkable strength globally. Few products or brands rank as highly in terms of awareness and affinity on the part of customers and non-customers alike. We have continued to gain market share in the U.S. and Europe. Since 2008, we also have been the U.S. leader in new motorcycle sales to young adults for the entire on-road motorcycle category. Going forward, we will continue to build on this brand strength and leadership position,” said Wandell.

One bright spot was operating income from financial services (HDFS) was $50.9M in Q3, 2010, compared to an operating loss of $31.5M in the year-ago quarter. The improvement in year-over-year operating income is largely the result of a lower cost of funds and improvement in credit losses.

Read the full press release HERE.

Photo taken in Milwaukee during 105th Anniversary.

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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.


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Arial View of H-D Arizona Proving Grounds (Yucca)

The motor company delivers on its promise.

Not a new innovative motorcycle model, but to consolidate testing operations into one single location in Arizona – called the Arizona Proving Ground (AZPG).

Reports out of Kingman, AZ indicate that a local contractor (T.R. Orr, Inc.), received two building permits from the county Development Services Department, one for commercial renovation at the proving grounds and another for the construction of a brand new industrial plant.

You may recall that H-D moved into the Chrysler Proving Grounds at Yucca less than a year ago after it was booted from the General Motors proving grounds in Mesa, which had been closed and sold off the previous year.  The motorcycle company is shuttering testing operations in Talladega, Ala., as well as Naples, Fla., as they are in the process of moving those operations to AZPG through 2011.  I’ve previously reported as far back as 2008 on H-D plans of AZPG HERE and HERE.

According to H-D spokeswoman Pat Sweeney, the changes being made to the existing facilities and the new industrial plant will not only provide H-D the space and equipment it needs to make the most use of the proving grounds it will also – and are you ready for the “E” word – improve its efficiency.  Details on the cost of the new industrial plant or the need for any new employees from the local workforce were – incomplete – as Ms. Sweeney cited an obvious benefit to the community just because we’re consolidating there, but “we’re just still not really sure at his point in time” when referring to hiring plans.  I anticipate they offered folks in the shuttered operations an opportunity to move to AZ and are waiting on the final acceptance ratio before opening job req’s.

And speaking of jobs… the nearby and sprawling Arizona State Prison, Cerbat Facility (20 buildings on 45 acres) was a 2,000-bed minimum custody facility that just completed a major renovation and expansion into 3,400 beds.  I see an inmate labor force expansion in the near future and it couldn’t come at a better time according to local reports.

Photo courtesy of Chrysler

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The WAIT is over.

Sometimes, fame comes to York.  The famous author, John Grisham wrote about York, PA in “The Associate” as it was the main characters hometown.  In fact, many of its residents have gone on to fame.

But, in the case of Harley-Davidson the bleak economy means financial fame in York.

It’s been a rough year for the factory tour capital of the world.  After a reduction of over 600 employees earlier this year the company announced today it will keep its operations in York, after ratifying a new labor agreement with IAMAW which involves nearly a 50% cut in jobs.  Under the new agreement structure, the plant will have about 1,000 hourly workers reduced from the current level of 1,950. Of the 1,000 workers, 700-800 will be full-time unionized workers and about 200-300 will be unionized “casual” staff, who work according to seasonal demand and as managers deem.

H-D expects to have about 150 salaried employees, or a little more than half of the current number.  The company will invest about $90 million in the restructuring of the plant and expects about $200 million in restructuring charges tied to the plant into 2012.  The restructuring is expected to generate about $100 million in annual operating savings compared with the current structure.

Many claimed that H-D employees were out-of-touch with the ‘real’ work world.  But, being faced with the prospect of operations moving to Kentucky they voted to cut their workforce, change their work rules to allow managers to shift workers around to various tasks in the plant and agreed that new hires will earn significantly less.

Sure it’s a positive note in a sea of bad news, but isn’t that just the point, the plethora of bad news?  The companies statement can be read in full HERE.

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Or_SummaryI decided to write Harley-Davidson and personally shout out that they are welcome and the state is open for business!  The letter is below.

Mr. Keith E. Wandell

President and CEO

Harley-Davidson, Inc.

Milwaukee, WI 53201

 

Dear Mr. Wandell:

After reading Senators Arlen Specter and Bob Casey letters on the potential York plant closure I wanted to let you know there is something about Oregon that ignites poetic inspiration, even among the most level-headed business types of your stature.

I could wax on about you (after you get a valid motorcycle license) and your executive team riding motorcycles in the spectacular Cascades, the dreamy coastal towns and rich farmlands of the Willamette Valley, but it’s really about America’s best kept secret…the quality of life.  Oregon has it in spades.

You may know us as the “Silicon Forest” when in the 80’s and 90’s the chip manufactures fled the high cost of California.  The state provided deep tax breaks and the suburbs were attractive to technology workers who could afford a far better quality of life in terms of schools and housing.  The tax breaks (although no longer as deep) have been extended to an increasingly dominate green movement and ever increasing public sector.  Did you know we were the first state in the union to pass a nickel “tax” on bottles and it’s been nothing but rainbows and butterflies ever since. 

Rain?  Don’t let visitors discourage you about the rain.  It’s rare, but when it occurs it’s more like mist.  And with more and more of us working in the solar panel industry we smile at the rain.  And don’t forget the trendy places like Portland’s Pearl District where the York plant management “sophistos” can sashay into all the charming restaurants from high priced condo’s.  You’ll find java beans with extra whip for the chauffer driven commutes along with Northwest brew pubs to sample the hops late into the night.

Sure we’ve been hit by the debilitating housing addiction like all other states after the California bubble collapsed and they stopped buying homes, but the best part is the spectacular vacation home market in the high-desert of Bend amid the volcanic peaks in the center of the state.  We now have record low prices and high availability where many of the H-D execs will want to relax after a long work week.

And speaking of talent, Oregonian’s are here for a reason and it’s not because of the left-leaning lifestyle.  It’s a great jump point in preparation for H-D’s future plans across the Pacific in China.  For example in the 90’s there were many manufactures that thrived in the state — printers, DVD players, digital projectors, memory chips, etc., — who moved to Asia as those sectors matured and profit margins evaporated, sending production to the places in China where labor costs are lowest.  We’re fully aware of this phenomena and would not be alarmed by such a move should H-D look to reduce the cost structure even more.

As you weigh various options and consider the long-term competitiveness of Harley-Davidson, I strongly urge you to give serious consideration to any option that will move the 2,000 jobs at stake to Oregon.  Don’t let the Governor, “Lazy-Ted”, distract you about hybrid technology.  He’s a short timer and spends much of his day looking for electrical outlets.  But, for the record here is the Oregon Economic Summary  (.pdf) for your review.  So, do the unexpected and create additional market buzz for the motorcycle company.  Create a new Harley-Davidson presence in the Northwest region….your gateway to China!

Sincerely,

Mac — Editor, Northwest Harley Blog

I’m thinking he’ll respond.  What do you think?

Photo courtesy State of Oregon.

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pink_slipI’m fascinated by the decline or some might say the “fallout” of the Harley-Davidson management team.

HD announced a couple days ago that effective immediately the CFO, Tom Bergmann was leaving the company.  Labeling the hasty departure with the all too familiar and politically correct words; “seeking other career opportunities” to describe his abrupt exit.   Mr. Bergmann had been CFO since 2006 and in January 2009 it was announced he would take on the additional responsibility as president of Harley-Davidson Financial Services (HDFS) after Sy Naqvi’s sudden departure.  So it’s rather odd that on the very first day that the new CEO, Keith Wendell comes to work Mr. Bergmann would choose it as the most optimal time to leave?! 

I smell “Mr. Clean”… and I even provided Keith a 10-step success plan, but forcing out the CFO in the first 8 hours on the job was not on the list!

On the day of his departure, Tom had just completed a transaction that would provide about $1B in funding capacity that the company could use for consumer lending in 2009. The new funding was important, since the firm finances roughly one of every two HD motorcycle purchases.  HDFS increased the size of an existing $500 million asset-backed commercial paper conduit facility to up to $1.2B, based on the level of outstanding receivables. The facility expires April 29, 2010.  In addition, Tom negotiated to have replaced a 364-day, $950M bank credit facility expiring July 31 with a new 364-day, $625M credit facility expiring April 29, 2010. Together, the two agreements provide additional available credit of up to approximately $375M over the term of the agreements for the lending activities of HDFS. 

Getting the funding covered is a monkey off their back and a fairly impressive accomplishment to tell the new boss on day #1, but to turn around and say “Hasta la vista, baby”…I’m outta here.  WTF?  Whether Mr. Bergmann was run off the road or decided no more black leather, but instead it’s time for touring suits with leg guards and time to gear-up for a sound different than a low rumble…we’ll never know.

The HD press release stated that Controller John Olin would serve as interim CFO at the company.  Bergmann also served as President of Harley-Davidson Financial Services (HDFS) and Treasurer Perry Glassgow would take over on an interim basis.  Lastly it named Mark Kornetzke, senior director of financial reporting, as the company’s chief accounting officer.

Photo courtesy Henny Ray Abrams/Reuters.

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1973_vetteI have a weakness for muscle cars.  

A Ford Hybrid Escape just doesn’t do it for me.  Over the years I’ve spent a fair amount of time wrenching a ’67 Camero, but these days it’s been on a mid-sixties Vette.  Given my experiences and looking over parts receipts I can expertly state that vintage auto’s are primarily a money sink hole.  None the less, it’s my sink hole and it’s how I elect to spend my hard earned $$.

But, along comes the BART riding ideals of House Speaker Nancy Pelosi (D-CA) who views the world through some hybrid reality-distortion field, imagining it as some sort of amazing green technology and will not rest until she has saved the planet for all of us!! 

It’s a misguided attempt to spur new car sales and help create jobs by the Washington lawmakers.  They have determined “we” need a nationwide automobile scrap program which would give U.S. tax dollars to consumers who turn-in older cars to have them crushed.  On the surface it sounds like a reasonable idea, but the unattended consequences of the bill will threaten vintage enthusiasts nationwide with the loss of valuable parts and part-cars for repair, restoration, and customization projects. The programs also risk destroying classic, historic and special-interest vehicles that are part of our American heritage.  Once passed how long do you think it will be before they amend the law to include vintage motorcycles?

Pelosi introduced a bill as part of the Economic Stimulus Plan and is looking for President Obama to sign it into law.  If you oppose the use of U.S. Taxpayer $$ for “Cash for Clunkers” then I suggest that you contact House Speaker Nancy Pelosi IMMEDIATELY.  You can call: (202)225-0100 or send an email HERE. To help guide any conversation below are a few talking points:

  1. I am [calling/writing] because I oppose the use of U.S. taxpayer $$ and urge lawmakers not to include a “Cash for Clunkers” provision in the economic stimulus bill. Owners who turn in vehicles for crushing would receive a “minimal” payment to purchase a new car. This is a misguided attempt to spur car sales and claim that the country’s air quality or fleet fuel mileage is being improved.
  2. “Cash for Clunkers” programs threaten enthusiasts nationwide with the loss of valuable parts and parts-cars for repair, restoration, and customization projects. The programs also risk destroying classic, historic and special-interest vehicles in our American heritage.
  3. Cars turned in for scrap often barely run, or are rarely-driven second or third vehicles that have a minimal impact on overall fuel economy or emissions.
  4. “Cash for Clunkers” programs will reduce the availability of affordable transportation and repair parts used by low-income drivers. It will also compete with the Salvation Army, the Purple Heart and other charities that rely on vehicle donations to raise money.

Photo courtesy of Flickr.

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