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Posts Tagged ‘The Man’

Harley-Davidson

I’m balancing my checkbook.  I’ve been on the road about a third of the month with ATM and VISA slips from a lot of one-horse towns and I need to know how much money I’ve got.  I’m not a numbers matching up kind of guy, but I do like to know if the bank made a mistake.  It seems they never do!  I’ve joked with friends about the day when there’s a cash machine built into my PC. Click a button and green comes out.  Then again do you even need cash anymore?

And speaking of cash… In 2009, Harley-Davidson CEO, Keith Wandell was paid $1,430,055 in salary.  His total compensation was $6,363,579.  As comparison the average H-D worker made $32,048.  If my math is correct that is 198 times the average worker’s pay.

It’s jaw-dropping, but not all that extraordinary when it comes to CEO pay.

More importantly, is that Mr. Wandell brings fiscal discipline and order to the portfolio of businesses at H-D.  He is an outstanding executive.  He might not be deeply steeped in motorcycle knowledge, but for a numbers guy, Harley-Davidson is a fantasy land, and the path for navigating it couldn’t be clearer.  First off he has the board backing and the mandate, plus the ability to go around the company at different levels to find the people that have the actual answers to the questions.  He has no fear about losing his job or concern about his image as a numbers mercenary and won’t fret if the company morale declines a bit because of cost cutting actions.  I have no personal experience, but don’t cha think once you’ve joined the “million $$ salary club” the guts to cut deep automatically come along with the position power mojo?!  The decision’s that Mr. Wandell has to make is 198 times more difficult than the average worker, right?

Inside H-D

If you don’t think they are difficult then consider this.  Earlier this week the Harley-Davidson Wisconsin steel workers (more than 1800) received a letter from their Union President. In it, he explained that if they want to keep their jobs, they have only one chance.  That is to vote on September 13th, 2010 and approve the new H-D contract.  The Union President went on to say that if they don’t approve the new contract that “Harley-Davidson Board of Directors can vote themselves  on whether to allocate monies to Wisconsin Operations or another state.”

For all who try to blame the economy on the Democrats or the previous Bush administration I say who cares.  The facts are clear.  At the current rate of growth, 150,000-175,000 jobs per month, it will be 2014 before the U.S. unemployment rate drops to 8%.  And if it continues at that pace, it will be late in the year 2016 before the unemployment rate hits 6.5%. Bad news for all of us.

Whether the company board bestows jaw-dropping salaries and benefit packages on the exec’s isn’t a scandal.  Au contraire!  This is the NEW corporate direction and strategy and at the end of the day Mr. Wandell faces difficult choices that until now the previous management and board have been unable or unwilling to make.

Move baby, move may well be the anthem of 2010.

Photo’s taken at the 105th Anniversary Celebration.  Salary Source: AFL/CIO Paywatch Database

All Rights Reserved © Northwest Harley Blog

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About 40 years ago, a social movement arose to destroy the establishment.  People wanted to take on the man and return power to the people, upend the elites and lead a revolution.   Some would argue that today we have a similar movement with the people loosely called the “tea partiers” who today are motivated by runaway federal spending vs. the war during the Woodstock days.

Taking it to “The Man” refers to the government, leaders of large corporations and other authority figures in general.  Sprinkle in an array of conspiracy theories involving the Fed, the big banks and black helicopters and you’ve got Harley-Davidson investing heavily over the last year in what I call taking it to “The Man” advertising.  It’s advertising which appeals to the man who is born free, but he is everywhere in chains…

You see these advertising movements are built by marketing people who hope consumers will put their faith in unrestrained passion and zealotry to buy motorcycles.  The assumption is that the people are pure and virtuous, and that evil is introduced into society by corrupt elites and rotten authority structures so let’s stick it to ‘em.  But, what happens when Harley-Davidson (the motor company) becomes the manipulator and shadowy corporation or the ‘elite and rotten authority figure?’

So it is according to AMC H-D in Albany, OR.  Based on their most recent communiqué, the Milwaukee Motor Company decided that starting in March there would be a policy change which prevents dealers from advertising any sales storewide.  So, taking a page from H-D’s own corporate marketing campaigns and doing their own mini-version of “Stick it to the Man” type of advertising…AMC H-D created their own tea party movement and broadcast there plans to have a 20% off sale (excluding motorcycles) all year long!  If the item you need isn’t in stock then you’ll get a 15% reduction when you place the order.

Talk about counter-establishment.  Pure advertising genius!

So what’s in play here.  First and foremost is a job-less recovery is making it darn hard for any motorcycle dealer.  Second, H-D would like to continue to be viewed as the premium brand or “exclusive” product and thus does not want to be attached to a “sale” image with their brand.  Lastly, the dealers who prefer to operate in the higher margin “dealer markup” mode are likely pressuring H-D to stop the undercutting from lower margin dealers who have yet to succumb to the mega/bistro/resort level expense in renovating a dealership.  Remember Timpanogo?

We all know that if you want service after the sale, knowledgeable and friendly staff, a quality product, and pancakes on Sundays, you’re gonna pay for it!  The question is just how much more.

Photo courtesy of AMC H-D.

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