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Michelle Kumbier

When handled well, conflict resolution can save a company time and money and help maintain a healthy work environment. Unfortunately, conflict management at Harley-Davidson in the executive staff is imperfect, as they have lost hundreds of thousands of dollars due to workplace disputes.

The latest example is Michelle Kumbier.  

In October 2017, Michelle Kumbier was appointed senior vice president and chief operating officer (COO) of Harley-Davidson Motor Co. with responsibility for overseeing the Milwaukee-based motorcycle manufacturer’s U.S. and international markets in addition to her current responsibilities leading product and operations. Previously, Kumbier served as senior vice president, Motor Company product and operations. In that role, she led a team of more than 4,500 employees worldwide to bring Harley-Davidson motorcycles, parts and accessories and general merchandise to market.

$HOG 10-Q Filing

Obviously she was a failure…  for the new Chief Executive Jochen Zeitz, and wouldn’t be part of getting the company on “a path to winning” —  the ‘scarcity strategy’ called ReWire — so, Kumbier departed Harley-Davidson on April 3, 2020.  In the filing with the U.S. Securities and Exchange Commission, Harley-Davidson did not disclose a reason for her departure.

However, earlier his week, Harley-Davidson Inc. paid the former high-profile executive a settlement of $660,000 after she threatened litigation connected to unspecified events related to her departure, the company stated in a regulatory filing.  I’m not a workplace dispute solutionist, but the reason people sue is often not rooted in money as much as the person does not feel they are being treated fairly.

10-Q Filing Section 10.2

Kumbier, who had been a Harley-Davidson employee since 1997, and the company “have disputes over events that allegedly occurred relative to her resignation from the company,” the Milwaukee-based motorcycle manufacturer said in exhibit 10.2 included in its 10-Q quarterly financial report filed Nov. 5 with the U.S. Securities and Exchange Commission.  

Harley-Davidson said it “has denied and continues to deny Kumbier’s allegations” and also denies that it has any liability to Kumbier on any of her “disputed claims.”

But, went ahead and paid her $660,000 for the general denial of those allegations.

The company will make a lump-sum payment to Kumbier after she signed the settlement agreement that was dated Aug. 14, 2020. The document also states that Kumbier acknowledged the settlement amount is more than she would otherwise be entitled to under the company’s normal policies and procedures and that Kumbier released the company, its executives and its board “from all claims, charges, demands, and liabilities of any kind.”  Kumbier also signed a noncompete clause that prohibits her from working for or consulting with a large list of Harley competitors or potential competitors.

It might be appropriate that Harley-Davidson devise a “conflict calculator” to augment their environmental profit-and-loss accounting method to put a figure on how much the company spends on conflict resolution and executive termination each year.

Harley-Davidson CEO Jochen Zeitz Background

Photos courtesy of Harley-Davidson, Michelle Kumbier and US SECURITIES AND EXCHANGE COMMISSION — FORM 10-Q (November 5, 2020) Filing

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According to a SEC, Form 8K filing, Harley-Davidson (i.e. acting CEO Jochen Zeitz) promoted Lawrence G. Hund to chief commercial officer and will be responsible for the global sales function including the company’s motorcycle Parts and Accessories, General Merchandise and Harley-Davidson Museum businesses effective today.

Hund will be responsible for building and supporting growth strategies, cultivating opportunities in new and existing markets, and increasing demand for Harley-Davidson products globally.

Lawrence G. Hund

I previously blogged about Mr. Hund back in 2009 when H-D re-hired him HERE.  He returned to Harley-Davidson from Tygris Commercial Finance Group, Inc. where he worked only 8-months as its Chief Financial Officer (CFO).

Mr. Hund is 64, and has been the President and Chief Operating Officer of Harley-Davidson Financial Services (HDFS), a wholly-owned subsidiary of Harley-Davidson, Inc. since 2009.

Jonathan Root, 46, vice president of insurance at HDFS, will be promoted to senior vice president of HDFS and take over Hund’s previous role.

Photos courtesy of Harley-Davidson and SEC

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trainThe money train…. Wow … I think I just had a flashback. A warm sunny afternoon sitting on the hill overlooking the river. The birds singing in the trees, everything is so bright and colorful.  Oh wait weren’t we talking about Harley-Davidson?

Harley announced today its second round of job losses since the beginning of the year with a cut of up to 400 more positions, including up to 80 at its Milwaukee-area factories over the next two years.  The company reported a 37% drop in first-quarter profit as net income fell to $117.3 million, or 50 cents a share, from $187.6 million, or 79 cents, in the year-ago period. Revenue declined to $1.29 billion from $1.31 billion. Harley’s worldwide motorcycle sales declined 12%, and U.S. retail sales declined nearly 10% from last year’s first quarter.

And speaking of riding the money train…we learned this week that the new Harley CEO Keith Wandell, will receive a base salary of $975,000 plus other compensation according to SEC filings.  Wandell, replaces current CEO James Ziemer on May 1, and will also participate in the company’s short-term incentive plans with a total opportunity of 120% of his base salary and a maximum payout of 240% of his base salary with a cap of $3 million, his 2009 payout pro-rated based on salary earned for the year.  For comparison purposes, Forbes provides details on Ziemer’s comp plan is HERE.

Talk about a nice run up from his Johnson Controls base salary of $441,670 plus bonuses.  However that number is a bit misleading because compensation for the “chief” executive typically includes: salary and bonuses; other compensation, such as vested restricted stock grants, LTIP payouts and perks; and stock gains which is the value realized by exercising stock options.  In truth, Wandell’s total compensation as reported by Forbes was $9.7M.  Does anyone think he took a salary cut in moving to Harley?  Might I suggest it’s an over payment for services rendered?  Shall we just chant “U.S.A.!, U.S.A.!” and feel good that CEO pay is more than an order of magnitude above the average line worker?

I suspect that Wandell is pinching himself …paid nearly a $1M to lead the premier American based manufacturer of heavyweight motorcycles yet somehow landed the gig without a riding endorsement or owning a motorcycle…excuse me for a minute while I go puke.

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