Harley-Davidson Visionary (Remember When an American Co. Restructured Right?)

http://www.amadirectlink.com/magazine/jan2009/public/HOFInductees.pdf ^ | January 2009 | Staff

[longtermmemmory]

The import of large bikes blockade was ended after three years, two years early.

Honda makes their Goldwings in the USA so if there is a tarriff it would not apply to them.

Are you sure about that? seems a tarrif on big bikes would be more about keeping manufacturing in the USA rather than protecting Harley Davidson.

[longtermmemmory]

Harley Davidsons are environmentaly friendly fuel efficient vehicles. They are allowed to use the HOV lanes at any time of day per federal code.

What proof do you have to sub prime loans?

What proof do you have about sales since Harley has been pretty good about controlling production to demand.

Also don’t forget their MERCHANDISING makes far more money than their motorcycles.

If you can’t afford a Harley, you can always buy a Victory made by Polaris.

[longtermmemmory]

Sound business decisions are a universal constant.

so is stupidity.

Seems GM and the GM unions are focusing on constance in stupidity rather than making sound business decisions.

The unions want a double down give back. IOW they want to give back now but “get back” later ON TOP OF their resored legacy costs.

The Harley Davidson revival is a very sound and appropriate business comparison. It does not matter that it is cars, motorcycles, or whatever.

Harley is a product, just as Obama is a product , just as Democrat and Republicans are products.

[steve86]

When I went to my bank for a loan on a brand new 2007 Piaggio BV500, the dorks at the bank labeled it "used" and gave me a terrible rate of 11.72%. The bike had 2 miles on it.

I wonder what's with the 2-3 mile thing on delivery. There's a 2009 in Caldwell with 3 miles. Customs crew taking a spin on the Italian scooters? I like the Aprilia line (of motorcycles), especially the 2008-9 SVX550. Already have an Italian scooter, an Oxygen. Never seem to get around to renewing the tab so I just ride it close to home.

[steve86]

The comment period for the new 100% tariff on European motorcycles ended Monday. Beef hormone ban retaliation.

[HamiltonJay]

No it was put in place to protect Harley, yes the Goldwing is made in Ohio.

Not a blockade a TARRIF and its still in place to this day anything over 750CC’s if memory serves imported pays the tarrif.

And, though some “free traders” will attack me for it, I am all for this sort of thing. Free trade is a scam in my book not backed by conservative thought or the constitution, the fact this garbage has fallen in as a near requirement by some to being conservative is laughable.

[Skid Marx]

Anything from the Yamaha Star line is superior to any of the junk HD produce.

I still ride my '78 FL every day, AMF that it is. 145,000 miles on it. Been all over the U.S., with a sidecar and solo. I can still get any and all parts, retail. I'll ride it until the pistons fly through the tank, which won't likely happen soon. Original bottom end, cases were never apart after thirty years of abuse. Junk indeed, sir!

[Myrddin]

I think the 2-3 miles on the odometer was a mix of customer test rides and pushing the vehicle around on a daily basis to show outside the showroom.

My big bike is a 2009 Suzuki DR650SE. I purchased it because I intend to do lots of dual sport riding. My wife's BV500 is strictly a street machine. It is well suited to long trips. The DR650 is not a long distance touring bike off the shelf. It really needs a windshield an a better seat (Renazco/Corbin seat) to be tolerable for a long cruise. A cruiser class Star bike would be superior to trying to put a bandaid on a bike designed for an entirely different type of use.

I took my last good ride for 2008 on Dec 7. Yesterday, we had 3" of snow. The streets are covered with patches of ice. The ambient temperature is +29F. I'm probably finished riding until April or May. The good off road areas are closed until April 15th at the earliest.

[Skid Marx]

Harley-Davidson bought MV Agusta a few months ago. I guess they missed having an Italian make in their line. Seeing some of the world’s most excellent bikes at a H-D dealer will be something else.

[Jack Black]

I seem to recall Harley got some legislation protecting them from imported competition, which ain’t a great idea btw

Harley got a tarrif (imposed by Reagan, BTW) on motorcycles over 700cc imported from Japan for four years. (It was scheduled to run longer but Harley asked ot have it removed as they were back to being profitable. Can you recall any other company acting in this manner?) I believe it was about $500 on a average 750cc bike at its height.

Was it needed? Maybe. Was it deserved? Probably.

The Japanese had no commpunction about selling below costs to gain market share. Given their interlocking business cartels ("Keiretsu") this is not hard for them to do. They have done the same play in several industries - memory chips, programable chips, etc.

Harley was the last American motorcycle company at the time, if we had not had the tarrif we would probably have lost them.

America needs industry. The Cato institute vision of holier-than-though free markets is working great ... for CHINA!

Here is a quote from their 1984 article: "Harley- Davidson still must compete on equal terms with the American plants of Kawasaki and Honda (the second of which is very strong). Thus, even with the new tariff, Harley-Davidson's inability to live up to the demands of the market may still make bankruptcy inescapable." I believe Honda is phasing out motorcycle production in the USA. Harley is probably not moving their plant to China.

[papasmurf]

“Harley is a product, just as Obama is a product , just as Democrat and Republicans are products.”

LOL

There are MANY of us that would disagree with you on that point.

[Skid Marx]

Tools are products, they sell’em cheep nowadays.

[pikachu]

Goldwing is made in Ohio.

Not any more. They and the VTX productions lines are now in Japan. :-(

[Jack Black]

I own a Road Star. It’s been a very reliable bike. Still it doesn’t have the fit and finish of the Harleys. Harley’s have really awesome paint, including the logos on the tanks. The Star has glue’d on plastic widgets.

Still it’s got a good motor, is super comfortable and has taken me on several 3000 mile trips without a failure. I like my RoadStar, but I couldn’t agree that it’s better than any Harley.

It’s different. It has some strengths compared to Harley and some weaknesses. For instance the windsheild mount snapped after a week of high spped travel. Too much wind load & weak welds. The add-on parts (yes, they are Yamaha brand) are not nearly as nicely thought out an integrated as the Harley ones.

[Jack Black]

Wow! That’s interesting. I had no idea. Will they end up at Harley dealers? I doubt it. Not if they are smart. The MV’s are at the Ducati dealer here. Ducati buyers are a lot more likely to buy and MV than Harley buyers. Most Harley riders won’t even FIT on and MV !!! (YES! I know this for a a FACT!)

[Badeye]

‘Remember the horrible reputation of the 1970’s Harley motorcycles.’

Yep. ‘Its supposed to leak oil’ is still one of the most hilarious, gut busting comments I ever heard from a harley rider.

[2banana]

What proof do you have to sub prime loans?

You mean besides their debt being cut and their stock down 66% this year...? BusinessWeek
Harley-Davidson Slips on Subprime Consumers
Friday October 17, 8:08 am ET
By Matthew Boyle

Not long ago, a national marketing campaign from motorcycle maker Harley-Davidson (NYSE:HOG - News) addressed the sputtering economy with a heavy dollop of devil-may-care attitude. The tag line: "Screw It. Let's Ride.

Harley seems to have applied the same logic to its loan portfolio. In a pattern eerily similar to the housing bust, the $5.7 billion Milwaukee company used its in-house finance unit to chase after subprime borrowers, making it easy for them to buy $20,000 hogs with no money down. The risky lending -- which forced Harley to take a $6.3 million write-down amid rising default rates and decreasing interest among buyers for its securitized loans -- could foreshadow problems in other industries. Companies from retailers to blue-chip manufacturers such as Caterpillar (NYSE:CAT - News), Deere (NYSE:DE - News), and Boeing (NYSE:BA - News) used finance arms to pump up sales and maintain an additional profit stream.

[papasmurf]

The actual wording...

Proclamation 5727 -- Termination of Import Relief on Certain Heavyweight Motorcycles



October 9, 1987 By the President of the United States of America

A Proclamation

1. In Proclamation 5050 of April 15, 1983 (48 FR 16639), pursuant to section 202(b)(1) and (c) of the Trade Act of 1974, as amended (Act) (19 U.S.C. 2252(b)(1) and (c)), I proclaimed import relief with respect to heavyweight motorcycles having engines with a total displacement over 700 cubic centimeters, provided for in item 692.50 of the Tariff Schedules of the United States (TSUS) (19 U.S.C. 1202). This relief took the form of a tariff increase implemented through tariff-rate quotas and the suspension of preferential tariff treatment under the Generalized System of Preferences (GSP) for such heavyweight motorcycles entered, or withdrawn from warehouse for consumption, during the period April 16, 1983, through April 15, 1988.

2. On June 19, 1987, the United States International Trade Commission (USITC) reported to me the results of an investigation (Inv. No. TA - 203 - 17) pursuant to section 203(i)(2) - (5) of the Act (19 U.S.C. 2253(i)(2) - (5)) with respect to the early termination of the heavyweight motorcycles import relief as requested by petitioner Harley-Davidson, Inc. The USITC advised that the early termination of the import relief would have no significant economic effect on the domestic industry producing heavyweight motorcycles.

3. Accordingly, pursuant to section 203(h)(4) of the Act (19 U.S.C. 2253(h)(4)), after taking into account the advice of the United States Trade Representative, the USITC, the Secretary of Commerce, and the Secretary of Labor, I have determined that it is in the national interest to terminate the import relief in effect with respect to the articles concerned. I have further determined that it is appropriate to terminate the suspension of GSP treatment for such articles required by section 503(c)(2) of the Act (19 U.S.C. 2463(c)(2)) during the period of effectiveness of the import relief.



Now, Therefore, I, Ronald Reagan, President of the United States of America, acting under the authority vested in me by the Constitution and the statutes of the United States, including sections 203, 503, and 604 of the Act (19 U.S.C. 2253, 2463, and 2483), do proclaim that --

(1) Part I of Schedule XX to the General Agreement on Tariffs and Trade (GATT) (61 Stat. (pt. 5) A58; 8 UST (pt. 2) 1986) is modified to conform to the actions taken in this Proclamation.

(2) Subpart A, part 2 of the Appendix to the TSUS is modified by striking out headnote 9 to such subpart and item 924.20.

(3) In order to restore GSP treatment for the motorcycles subject to import relief, part 6B of schedule 6 of the TSUS is modified by inserting in the Rates of Duty Special column for TSUS item 692.52 the symbol ``A'' immediately before the symbol ``E'' in parentheses.

(4)(a) Paragraphs (1) and (2) of this Proclamation shall be effective with respect to articles entered, or withdrawn from warehouse for consumption, on and after the third day following the date of publication of this Proclamation in the Federal Register.

(b) Paragraph (3) of this Proclamation shall be effective with respect to articles both (1) imported on or after January 1, 1976, and (2) entered, or withdrawn from warehouse for consumption, on and after the third day following the date of publication of this Proclamation in the Federal Register.

In Witness Whereof, I have hereunto set my hand this 9th day of October, in the year of our Lord nineteen hundred and eighty-seven, and of the Independence of the United States of America the two hundred and twelfth.

Ronald Reagan

[Filed with the Office of the Federal Register, 4:33 p.m., October 9, 1987]

[Jack Black]

HD is in almost the same mess as is Detroit. Subprime loans to riders, massive over capacity, overpriced (and a toy, not even needed), sales going over a cliff, etc.

There are some similarities but they are no where near with the Big 3 are, more like where Toyota is at.

• That is with the credit crunch and recession buyers are less able and motivated to sign up for a big purchase. That's true.
• 3rd Quarter revenue declined from $1.54B to $1.42B. GM wishes it has a Q3 like that.
• Net income was down to $166M, or .71 a share. compared with $267m and $1.07 a share same quarter last year.
• They paid a .33 dividend.
• Gross margin is 35%. (Ford and GM are near zero I suspect.)
• The did write down about $63M in finance related "impairment".

Here are some statements from the 10Q:

• During the second quarter of 2008, the Company finalized a plan to ship fewer motorcycles to its worldwide dealer network in 2008 than it shipped in 2007. The Company achieved this reduction through temporary plant shutdowns, adjusted daily production rates and a workforce reduction involving approximately 730 positions. As a result of the workforce reduction plan, the Company recorded an $11.5 million charge during the second quarter of 2008 within Selling, administrative and engineering expense
• Worldwide retail sales of Harley-Davidson motorcycles in the third quarter of 2008 were down 9.6%. U.S retail sales of Harley-Davidson motorcycles in the third quarter of 2008 were down 15.5% while international retail sales were up 11.3%. However, sales growth in certain European countries slowed more during the third quarter of 2008 than the Company anticipated as a result of deteriorating economic conditions.

In summary - its not a nice climate for them, to be sure. Q4 could be pretty bad, but they have done the right things to survive a downturn.

I think comparing them to Ford and GM is pretty much off base.

[RickB]

I’ve owned Jap bikes before and while they are fun to ride they just are not made as well as Harley’s are. The metal is thinner and some parts that look metal are plastic made to look like metal. They are bikes for temp use. How many Jap bikes last 30 or 40 years and hold their value? Or for that matter how many last 30 or 40 years and are still running? How many can you get parts for?

I own 2 Harley’s now, a 1995 Sportster and a 2008 Cross Bones and I can tell you they are better built than any rice bike being sold.

For those who spend money on a rice bike and say “but they are made in America” I point out to you, they are assembled in America, but the parts are made in japan. The profits go back to Japanese companies and help out their economy over ours. So when you lose your job in America due to cut backs caused by loss of profits then maybe you can ask Japan for welfare.