Rider's Edge Courses

[RhadamYgg]

Not to beat to death the er death of Buell, but my understanding is that the Rider's Edge course offered by HD follows the rules of the MSF course.

Being that bikes used in the course need to be 500cc or less and have a certain lower horsepower.

Also, the theory with Rider's Edge courses at HD was that people would start out there, shop around sit on a bunch of HD or Buells and pick one out and be a lifelong buyer of HD or Buell or both.

But, giving the Buell's the axe, unless there is a low displacement HD bike to be forthcoming, this might be the end of HD offering Rider's Edge learning courses.

Or did I miss something? It comes to mind that the replacement for the Buell Blast was going to be a high HP version and probably unsuitable for training of beginners as well...

Anyone have any inside intel on this? I would hate to see a resource for people learning to ride to disappear, but I wouldn't believe for a second that they would offer the course on metric bikes at a HD dealership.

RhadamYgg

[Gummiente]

But, giving the Buell's the axe, unless there is a low displacement HD bike to be forthcoming, this might be the end of HD offering Rider's Edge learning courses.

Very good point! I think that given the current mindset of HD's bean counters, the Rider's Edge will soon be history.

[jstark47]

But, giving the Buell's the axe, unless there is a low displacement HD bike to be forthcoming, this might be the end of HD offering Rider's Edge learning courses.

Very good point! I think that given the current mindset of HD's bean counters, the Rider's Edge will soon be history.

Thereby eliminating another channel by which new customers were funneled into H-D dealerships?

Either their impending cash flow crunch (HD Finance) is worse than I thought, or they're not thinking this through very clearly.....

[Gummiente]

Either their impending cash flow crunch (HD Finance) is worse than I thought, or they're not thinking this through very clearly.....

You're still thinking like a rider and not like a businessman.

[Johnj]

Either their impending cash flow crunch (HD Finance) is worse than I thought, or they're not thinking this through very clearly.....

You're still thinking like a rider and not like a businessman.

So your saying by not cultivating new customers Harley will be able to weather the current economic downturn.

[Gummiente]

So your saying by not cultivating new customers Harley will be able to weather the current economic downturn.

That is not what I said at at all. What I'm saying is that attracting new riders is not the prime mandate at this point in time, the big panic is to cut costs and keep the company afloat and one step ahead of Chapter 11. The Rider's Edge is an expenditure and does not give a solid return for every dollar spent. Therefore, it will most likely get the axe especially since the motorcycle used on the course is no longer being built. If every student who took the course immediately bought a Harley at the completion, THEN it might make sense to keep the program going. But even then they still wouldn't have a proper bike to use now.

It doesn't matter that Buell, MV Augusta and (probably) the Rider's Edge have been cut and the CEO doesn't know the immediate value of the savings at this point in time - the point is cuts were made and there will be some savings that will be realised down the road. And, again, that is what makes shareholders happy.

[jstark47]

Thinking like a businessman....... H-D got into their current predicament by excessive focus on short term growth. When they saturated their market of qualified buyers, they continued to leverage growth by financing to unqualified buyers via subprime loans, thinking that selling packages of subprime loans to investors was going to work forever. More of the same thinking isn't going to get them out of their predicament. Subprime financing is no longer viable. The market for their core product is saturated, and is now shrinking due to demographics.

To continue to survive, they need to reach market segments they haven't penetrated well with product they can build at a reasonable cost and sell without owning the financing. While Rider's Edge, MV Agusta, and Buell weren't outstandingly successful, they were the best channels H-D had. Now they've been replaced with.... nothing. No strategy. No ideas, just keep pushing the old core product and brand harder hoping somehow it will appeal to new market segments. I don't care whether they sell motorcycles, i-pods, or shoelaces.... they need to find a product that broadens their market.

It doesn't matter that Buell, MV Augusta and (probably) the Rider's Edge have been cut and the CEO doesn't know the immediate value of the savings at this point in time - the point is cuts were made and there will be some savings that will be realised down the road.

It does matter. There are costs involved with the Buell and MV Agusta actions. Without a financial plan (it was the CFO that didn't know), they cannot assess their savings or effect on cash flow. Look for challenges to some of these write-downs in the coming year or two.

Don't misunderstand me. While I'm not personally interested in heavyweight motorcycles with old-style v-twin engines, I think it's beneficial to motorcycling in the USA to have at least one large viable manufacturer. Wish we had two or three. I think H-D's business approach, which was so successful in the 1990's, has run it's course. Their management has been slow to adapt, and I'm disappointed in them. They need to stop drinking their own Kool-aide; it's the General Motors syndrome.

[Gummiente]

Thinking like a businessman....... H-D got into their current predicament by excessive focus on short term growth. When they saturated their market of qualified buyers, they continued to leverage growth by financing to unqualified buyers via subprime loans, thinking that selling packages of subprime loans to investors was going to work forever. More of the same thinking isn't going to get them out of their predicament. Subprime financing is no longer viable. The market for their core product is saturated, and is now shrinking due to demographics.

Exactly. Which is why they have taken the drastic steps that they have in the past couple of weeks and why they have appointed a non-enthusiast to the helm. Harley was in trouble, the shareholders were not happy and something had to be done about it NOW.

To continue to survive, they need to reach market segments they haven't penetrated well with product they can build at a reasonable cost and sell without owning the financing. While Rider's Edge, MV Agusta, and Buell weren't outstandingly successful, they were the best channels H-D had. Now they've been replaced with.... nothing. No strategy. No ideas, just keep pushing the old core product and brand harder hoping somehow it will appeal to new market segments. I don't care whether they sell motorcycles, i-pods, or shoelaces.... they need to find a product that broadens their market.

No kidding. But where is all the money to undertake this plan of action going to come from? Harley is concentrating on the core of its business right now and for the immediate future - anything that is not essential to survival is going to be offloaded, no matter how silly it sounds to you and me. Their line of big, heavy cruisers are selling well (all things considered). Their line of exotic, high performance bikes were not. You choose which one gets dumped first when the "poo poo" hits the fan. You wanna know which one I think is next on the chopping block if the situation doesn't improve? Kiss the V-Rod goodbye.

I'm not arguing with your logic or reasoning, I'm just saying that it is not the same way that HD is thinking right now because they are presently very occupied, as a business, with:

1) keeping the shareholders happy
2) taking steps to prevent Chapter 11 status.

[koji52]

Thinking like a businessman....... H-D got into their current predicament by excessive focus on short term growth. When they saturated their market of qualified buyers, they continued to leverage growth by financing to unqualified buyers via subprime loans, thinking that selling packages of subprime loans to investors was going to work forever. More of the same thinking isn't going to get them out of their predicament. Subprime financing is no longer viable. The market for their core product is saturated, and is now shrinking due to demographics.

To continue to survive, they need to reach market segments they haven't penetrated well with product they can build at a reasonable cost and sell without owning the financing. While Rider's Edge, MV Agusta, and Buell weren't outstandingly successful, they were the best channels H-D had. Now they've been replaced with.... nothing. No strategy. No ideas, just keep pushing the old core product and brand harder hoping somehow it will appeal to new market segments. I don't care whether they sell motorcycles, i-pods, or shoelaces.... they need to find a product that broadens their market.

It doesn't matter that Buell, MV Augusta and (probably) the Rider's Edge have been cut and the CEO doesn't know the immediate value of the savings at this point in time - the point is cuts were made and there will be some savings that will be realised down the road.

It does matter. There are costs involved with the Buell and MV Agusta actions. Without a financial plan (it was the CFO that didn't know), they cannot assess their savings or effect on cash flow. Look for challenges to some of these write-downs in the coming year or two.

Don't misunderstand me. While I'm not personally interested in heavyweight motorcycles with old-style v-twin engines, I think it's beneficial to motorcycling in the USA to have at least one large viable manufacturer. Wish we had two or three. I think H-D's business approach, which was so successful in the 1990's, has run it's course. Their management has been slow to adapt, and I'm disappointed in them. They need to stop drinking their own Kool-aide; it's the General Motors syndrome.

I guess you didn't read my post in the other thread. HD will almost definately default on debt in April if they can't generate some cash to increase liquidity and hopefully refinance (OR pay off those loans which isn't likely). The receivables that they've sold to investors in the past are not selling anymore. The company is generating negative operating cash flow which means they probably won't be paying off loans via sales of motorcycles. Short-term, it's necessary. The cutting of Buell will save some cash, and selling MV will generate cash. Long-term, it's no good for the reasons you mentioned. But the point is, there is a possibility that there may not be a long-term if short-term issues aren't met right now.

[Gummiente]

I guess you didn't read my post in the other thread.

Actually, I did. I don't pretend to follow every word of the discussion as posted by people like you and jstark, as you have way more in depth knowledge of the subject than I, but I do believe that my opinions are not far off the mark. I guess we'll just have to wait and see how this all plays out.

But one point is hard to argue; since buying itself out from under AMF all those years ago, Harley has established itself as a business icon that others are trying to emulate in many ways. They did not become successful by making popular business decisions all the time, but they sure knew how to target a specific market and get rich off of it. If you think about it, they're not the only ones that have made a fortune by catering to the baby boomers and they are certainly not the only ones facing a crisis because of it as that market slowly dwindles. I do believe that, for the most part, they still know what they are doing but time will tell if they have the savvy to survive the future.

And for the record, I personally don't care either way if they survive or not. I already have my Harley, with no plans to purchase another and own none of their stock, so their demise will not personally affect me. Just thought I should make that point clear in case someone mistakenly believes I am drunk on the Kool-Aid.