Harley Davidson Financial Woes

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RhadamYgg
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#31 Unread post by RhadamYgg »

koji52 wrote:Debt holders have zero control over a company's operations.

I don't think HD's going anywhere.
Oh, I don't think HD is going anywhere, but I've been in companies where their debt is purchased by other groups. Depending on the agreement it can be a no-touch kind of deal.

But where they become a significant stake holder and they would lose their money if the company is mismanaged - they take precautions and offer 'guidance' to the company to ensure they don't lose their investment.

Not sure what kind of deal HD has. As has been mentioned, they are still selling bikes, so personally, I'd probably stay hands off with the making and selling division. The finance section on the other hand might get a little micro-managed.

Or not - I don't get paid the big bucks so who knows what kind of decisions get made.

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#32 Unread post by NewGuy »

Why can't we at least be honest about these discussions:
Gummiente wrote:. . .a "Made in the USA" tag does not always mean an inferior and/or overpriced product.
I didn't see anyone saying or even implying that all "Made in the USA" products are inferior and/or overpriced, so why even try to throw this into the mix.

Then there is this:
But, specifically with regards to Harley, at the time they applied for tariff protection they did have an inferior, over priced product. However, the company turned around in a short time and began to rapidly improve their quality and reliability issues to the point where today's bikes are vastly superior to the AMF era ones. Whether or not you or anyone else feels they are inferior to any other brand is a whole other topic, but consistent sales totals of over 300,000 units per year is not the mark of a company that wasted it's time, money and effort under the protection of a tariff on their competition.
Come on now. Putting aside how ludicrous is it to defend tariffs and other government interference into the free market, why be dishonest about the tariffs in this particular case. Blaming AMF control of H-D and inferior products as the "need" for tariff protection is completely dishonest. H-D was bought back from AMF in 1981. The tariffs didn't start until TWO YEARS LATER in 1983. The new management had two years to after their scapegoats lost control of the company to turn the company around, yet two years later they were seeking protection from the government rather than competing in the market.

What's my source for the actual time line? The H-D website: http://www.harley-davidson.com/wcm/Cont ... cale=en_US

Funny though that the new management at H-D after the buyout from AMF originally said that if the company couldn't compete they had no one to blame but themselves. "In 1981, after 12 years as a subsidiary of AMF, Inc., Harley-Davidson was purchased from the parent company by a group headed by Vaughn Beals, vice president at AMF since 1976. After the purchase, Beals left AMF to become chairman and chief executive officer for Harley. Beals felt optimistic when the purchase was made. Upon leaving the frustrating hierarchy of AMF, Beals explained his happiness with his new situation: "It's the independence, the satisfaction you receive when something works. And if it doesn't work, you have no one to blame but yourself."
http://www.cato.org/pubs/pas/pa032.html

Two years later they weren't blaming themselves, but instead were putting the blame elsewhere and asking for the government to protect them rather than compete in the market.

I'll also add, I am not a "Harley Hater." I'd love to have a SuperGlide AND a RoadKing. I'll probably never have both, but I am saving up to get one or the other. However, unlike the Harley-Davidson faithful, that will make excuses for the failings of the company both past and present, I'm more pragmatic about the issues.

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#33 Unread post by Gummiente »

NewGuy wrote:Why can't we at least be honest about these discussions
I am being honest. After 26 years of living and breathing motorcycles, I don't need to lie when I'm talking about them.
Come on now. Putting aside how ludicrous is it to defend tariffs and other government interference into the free market, why be dishonest about the tariffs in this particular case. Blaming AMF control of H-D and inferior products as the "need" for tariff protection is completely dishonest. H-D was bought back from AMF in 1981. The tariffs didn't start until TWO YEARS LATER in 1983. The new management had two years to after their scapegoats lost control of the company to turn the company around, yet two years later they were seeking protection from the government rather than competing in the market.
If you think that two years is sufficient time to completely redesign, retool, secure finacing for and to launch production of an improved product, then you clearly have no understanding of how a manufacturing industry works.
However, unlike the Harley-Davidson faithful, that will make excuses for the failings of the company both past and present, I'm more pragmatic about the issues.
I don't consider myself as one of the "faithful", nor am I making excuses for the company, I am simply presenting my opinion on the subject as I see it, based on my experiences. And if you really are as pragmatic as you say, you would have taken a bit more time to research the issue and to read my posts more carefully before shooting off your mouth in response.
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#34 Unread post by NewGuy »

Gummiente wrote:If you think that two years is sufficient time to completely redesign, retool, secure finacing for and to launch production of an improved product, then you clearly have no understanding of how a manufacturing industry works.
I understand how the process works, and I understand that two years isn't a great deal of time in large scale manufacturing. However, I also know that the only big innovation H-D made during the tariffs, was the intro of the 1340cc Evolution engine in 1984, less than a year after the tariffs were granted. However, they began development of that SEVEN YEARS prior to it's introduction. Yet, they asked for and were granted tariff protection the year prior to it's release. They didn't start in '81 on that project, but back in 1977.

They asked for tariff protection for one reason and one reason only, they were afraid they could not compete with the foreign bike makers. Hell, the H-D website even alludes to that:
"Harley-Davidson makes both business and American history. H-D petitions the International Trade Commission for early termination of the five-year tariffs on heavyweight motorcycles. In effect, the move demonstrated confidence in H-D's ability to compete in the marketplace." http://www.harley-davidson.com/wcm/Cont ... cale=en_US

Please note the portion in bold. They didn't have confidence in their ability to compete in '83, but did in '87. The ONLY major innovation made during the tariffs was the intro of the Evo engine, and that project was in development long before '81, and long before the tariffs were put in place in '83, and it was introduced less than a year after the tariffs were put in place in '84.

So what exactly was the big redesign, retooling, securing of financing, and launch into the market place that "necessitated" the tariffs?

That's rhetorical, as the only major change to the H-D line was already on it's way before the tariffs were put in place. Further, the word "necessitated" is in quotes, because even if your thesis were correct (which it's obviously not), it's BS to ask the government to interfere in the market place rather than have a company compete on it's own merits. Hell, in '81 CEO Beals (who was a VP when the Evo project started) said that if the couldn't compete then they were the only ones to blame (see my previous post). However, in '83 Beals and the rest of the H-D management was putting plenty of blame on their inability to compete in areas other than H-D itself.
I don't consider myself as one of the "faithful", nor am I making excuses for the company, I am simply presenting my opinion on the subject as I see it, based on my experiences.
No it's very obvious that you are trying to make excuses for the inability of H-D to compete in the free market in the mid 80s.
And if you really are as pragmatic as you say, you would have taken a bit more time to research the issue and to read my posts more carefully before shooting off your mouth in response.
I think anyone that has read my posts on this thread can see that I certainly did take the time to research the subject.

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#35 Unread post by Gummiente »

NewGuy wrote:They asked for tariff protection for one reason and one reason only, they were afraid they could not compete with the foreign bike makers.
Wrong. They were not afraid, they were at the brink of bankruptcy and needed help to reorganise. Here's some light reading for you:
http://www.cato.org/pubs/pas/pa032.html

http://query.nytimes.com/gst/fullpage.h ... wanted=all
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#36 Unread post by NewGuy »

Gummiente wrote:
NewGuy wrote:They asked for tariff protection for one reason and one reason only, they were afraid they could not compete with the foreign bike makers.
Wrong. They were not afraid, they were at the brink of bankruptcy and needed help to reorganise.
Really, why are you being deliberately obtuse? They most certainly were afraid of bankruptcy. They were afraid that they could not compete in the market, and would therefore go bankrupt. Do you even read your own posts before you hit submit?
Here's some light reading for you:
http://www.cato.org/pubs/pas/pa032.html
Gee thanks! :roll: I guess you didn't notice that I originally linked to that same CATO editorial, when I got the quote from Beals. :roll:

Regardless, YOU might want to actually read that editorial, as it's not supportive of the tariffs.

I, and obviously Mr. Klein of the CATO Institute, agree that H-D was on the brink of bankruptcy. However, I, and obviously Mr. Klein, disagree with H-D seeking government protection in the form of government interference in the market through tariffs.
This does nothing to bolster your point. It merely shows that H-D sought government protection, and after four years of government interference in the market place decided it could once again compete fairly.

I quote Beals (from that article):
''We're profitable again. We're recapitalized. We're diversified. We don't need any more help.'' The CEO's own statement shows why they wanted the tariffs, and why they felt they no longer needed them. They were unable to compete in the free market, and needed "help." When they no longer needed "any more help," they asked that tariffs be lifted.

Again, quit looking at this stuff through your rose-colored glasses, and face reality. H-D wasn't cutting it in the mid 80s, and had to have it's big Uncle protect it from the tougher/smarter kids.

It's actually quite "un-American" that a company would ask for government controls to be placed on the market, rather than either sink or swim on it's own merits in the capitalist market place.

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#37 Unread post by Gummiente »

NewGuy wrote:Really, why are you being deliberately obtuse?
Actually, I was trying to counter your points and enter into a civil discussion about them without resorting to personal attacks. Obviously, a waste of time and effort on my part.
Again, quit looking at this stuff through your rose-colored glasses, and face reality.
I am well grounded in reality, thank you. And as you seem to be blind to the fact that I am not, as you describe it, one of the "faithful", perhaps this might remove the blinders from your eyes - I am a Canadian that happens to ride a Harley, which is for the most part made in the USA. It is therefore a foreign bike from my perspective and I hold no loyalty or allegiance to the manufacturer or the country it is made in. It is also not the only bike in my garage, nor is it the only brand I have ever ridden.

When you are mature enough to accept this, perhaps you can put aside your prejudices and asinine assumptions so that we can discuss Harley and other motorcycle topics again... in the mean time, welcome to my Ignore list.
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#38 Unread post by NewGuy »

Gummiente wrote:
NewGuy wrote:Really, why are you being deliberately obtuse?
Actually, I was trying to counter your points and enter into a civil discussion about them without resorting to personal attacks. Obviously, a waste of time and effort on my part.
No you were continuing to ignore the facts. It was not an attack, it was a question about why you refuse to be objective about the facts of the matter. I notice that you do not answer any of the substance of my points, rather you linked to two articles that did not support your claims, and now wish to pretend that I am being irrational about this, rather than you.
I am well grounded in reality, thank you.
No you are not, or you would not have made statements that are not supported by the facts, and would not have stubbornly clung to those irrational claims.
And as you seem to be blind to the fact that I am not, as you describe it, one of the "faithful", perhaps this might remove the blinders from your eyes - I am a Canadian that happens to ride a Harley, which is for the most part made in the USA. It is therefore a foreign bike from my perspective and I hold no loyalty or allegiance to the manufacturer or the country it is made in. It is also not the only bike in my garage, nor is it the only brand I have ever ridden.
None of which changes the fact that you are a fan of H-D, and have tried to make excuses for seeking tariff protection rather than competing in the market without the help of the government. Your status as a Canadian has no bearing all on the relevant facts, and your continued refusal to look at them objectively or rationally.
When you are mature enough to accept this, perhaps you can put aside your prejudices and asinine assumptions so that we can discuss Harley and other motorcycle topics again... in the mean time, welcome to my Ignore list.
Ah yes, you claim I'm immature and prejudiced, but it is you who refuses to acknowledge the facts, and it is you who choose to hide from the truth by putting me on the "Ignore List" rather than answer the substance of my posts. It's apparent to all who read this objectively who has not researched this topic, who is prejudiced, and who is immature, and it certainly is not me. You are losing this debate, because the facts do not support you, so now you are running away to hide.

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#39 Unread post by RhadamYgg »

But the real question is what is going to happen to HD now? Will they remain the company they are at present (good or bad) or will they be forced through re-organization, funds sources, etc - to become a different company which is more commercialized/productized.

Here is an article about how the stimulus may affect and re-invigorate HD motorcycle company in specific and also impact other bike manufacturers as well.

But I think, that purchasing a new bike is low on the list if you are searching for enough money to pay your current mortgage on a house. I'm fortunate that at the moment I've got a reasonably stable job, but that could just be an illusion.

So, I might get some money back at the end of the year for buying a new bike. I don't think it is going to spur sales, but it might weigh in as a factor in someone in a position to consider buying a new bike right now.

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#40 Unread post by ceemes »

RhadamYgg wrote:But the real question is what is going to happen to HD now? Will they remain the company they are at present (good or bad) or will they be forced through re-organization, funds sources, etc - to become a different company which is more commercialized/productized.

Here is an article about how the stimulus may affect and re-invigorate HD motorcycle company in specific and also impact other bike manufacturers as well.

But I think, that purchasing a new bike is low on the list if you are searching for enough money to pay your current mortgage on a house. I'm fortunate that at the moment I've got a reasonably stable job, but that could just be an illusion.

So, I might get some money back at the end of the year for buying a new bike. I don't think it is going to spur sales, but it might weigh in as a factor in someone in a position to consider buying a new bike right now.

RhadamYgg
Sadly in today's world, having a "secure job" is illusionary. Last year I was really considering buying a new bike, but felt rather uneasy about what I was seeing in the trucking industry. When freight numbers start dropping right across the market place, that tells me no one is buying as they once were and the economy could be in trouble......this was long before the melt down really got ink in the press.

So I didn't buy, and that was probably a good thing. A couple of weeks back my company, one of the largest and profitable 3 PL's went into lay off mode.

As for HD, their machines have been marketed as a status symbol for a long time. This could be their undoing, as people a more likely to cut back on such items. Whereas Honda and the like have a solid foundation in the basic personal transportation markets, especially in the South East Asian markets This will allow them to weather the current economic storm better then HD.
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