Harley: The Brett Favre of Motorcycles?

[SacDuc]

Oh sure Harley Davidson, why don't you just go ahead and abandon Wisconsin too. Fine. No, go ahead. See if we care.

http://www.msnbc.msn.com/id/38561236/ns/business-autos/


sac

[Porsche Monkey]

Whoa

[MotoCreations]

it's business reality unfortunately.  I doubt if city, county or state has any "tax perks" for HD -- probably not for decades.  Thus the "threat" of moving will help HD in terms of negotiating a worthwhile deal.  Boeing did it in Washington State -- and the state called the bluff -- and thus why Boeing is moving elsewhere.  Craig at Barrett Jackson auctions did it in Scottsdale AZ -- threaten to move his auction to Las Vegas -- Scottsdale came back with millions of tax and property upgrades once they realized the economic losses they might have incurred per hospitalality/dining/etc -- the event rakes in big bucks for locals.

It wouldn't surprise me if the the people at HD are answering phones right now -- irate customers/workers but also from many city/county governments from around the country making calls in the hopes of putting a deal together or how to put a RFP in for consideration.  Remember it isn't just the HD facilities itself, but it's a lot of the outsourced manufacturing that will move as well.  I currently know of many business ventures (seattle/kent/everett/auburn) putting in new facilities and moving people to be adjacent to Boeing facilities now on the East Coast. 

At least HD at this time aren't considering at this point in moving production to Mexico, Phillipines, China or India...

Unfortunately for Milwaukee -- the beer producers have left, HD leaves -- who is next?

[SacDuc]

Unfortunately for Milwaukee -- the beer producers have left, HD leaves -- who is next?

Actually HD would be late to the manufactures-who-left-Milwaukee game. Even those who have kept head quarters there (Allen-Bradley and Briggs & Stratton may be recognizable names) have sent a whole bunch of the actual manufacturing to Mexico, etc. The drain started after NAFTA and hasn't really let up. As far as manufacturing goes, Milwaukee is certainly a rust belt city as much as Cleveland, Buffalo, etc.

As for HD, their brand is so tied into being American made that I don't see how it would be possible to move manufacturing to another country. Although from what I understand a lot of HD parts are made in China. So what you really end up getting is a motorcycle assembled in the USA.

I hope for the sake of Milwaukee's heritage that HD stays. It is a good employer for the city and certainly a source of pride.

sac

[bluemoco]

The marketing professor (quoted in the article) says that this is not a 'threat', and that the Motor Company is more concerned about the next 100 years than they are about the previous 107 years.  That said, there's a sense of deja vu when one considers recent Harley events at their York, PA facility:

http://www.pennlive.com/midstate/index.ssf/2009/08/harleydavidson_tours_4_sites_a.html

[muskrat]

It started with the York, PA, plant and now this. 
I don't own HD stock anymore but can say that my previous history with them on the business side leads me to think there's no way they built that new museum without making at least a 5 year commitment.  I think they are playing hardball just like most employers do but I'll bet part of their operation will be moving in the near term.  Lets hope not but I just don't see how they can survive now that their clothing accessory line has taken such a hit and HD financial took a huge sum from the Gov.

[Düb Lüv]

HD was considering my area for construction of a new plant.

[triangleforge]

The marketing professor (quoted in the article) says that this is not a 'threat', and that the Motor Company is more concerned about the next 100 years than they are about the previous 107 years.

The problem for HD -- from a marketing perspective -- is that those previous 107 years are all they've got to sell right now, especially since they pulled the plug on Buell. It's hard to name a vehicle manufacturer more dependent on tradition to move product -- I can't think of one.

I don't envy any motorcycle builder trying to chart a path through this economy, and I know HD has been hit pretty hard. But if the Harley board isn't taking into account the fact that the market is going to punish them in the short term merely for entertaining the idea of a move, then they deserve every drop of red ink (again, probably short/medium term) that will result from decamping Milwaukee. Boeing's customers really don't care where the company's planes are built; Harley's customers do, and intensely.

[greenohawk69]

Part of the issue with HD leaving or possibly leaving, is that the Guv "Diamond" Jim Doyle changed the taxing of companies in WI with HQ in WI sometime in '09.  It is called "combined" reporting...add up all revenue, and you are taxed on that at WI's tax rate.  This resulted in ~ a $22M hit.  That is a significant hit to any company.  But, that is the idiotic policticians in Madison.  History also repeats itself...back around 1980, Kiimberly-Clark (KC) was HQ in WI...the then-Guv, Tony Earl, enacted more tax increases and KC moved their HQ's to Dallas, TX. 

It pains me that "Diamond" Jim and the other tools in Madison keep raising taxes 'cause they were spending wildly.  The state has a debt that is comparable to Cali's on a per person basis.  But, you vote for these tools, this is what you get.  WI is a tax hell anyway...one reason I moved from Milwaukee. 

[mitt]

I don't think there is that much HD manufacturing left in WI anyway.  As I understand it, mainly the "Engine Works" plant.  The V rod and Sportster are made in Kansas City I am pretty sure.

mitt

[muskrat]

either way you can't continue to levy excessive taxes to repair a budget shortfall and expect things to improve.  How many times does this need to prove itself before people see the consequence?  Manufacturing in America is going to be in the history books only if we don't fix the situation soon.

As for the loyalists.....they will stick around, trust me I am one and ride with many of them.  Never thought I'd be an HD convert but am now and absolutely love the Geezer Glider I own.  And to be fair I wouldn't care if the situation were reversed and we were discussing Ducati.  What HD needs to do is re-brand themselves and market to another generation if they want another 100 years.  The well is drying up and most people I see are enjoying the Sport Touring bikes before stepping into the heavy cycles known as HD's.  The only reason I have both is because I can afford it right now but if things changed and I was down to one I'd be on a Sport Touring machine most likely.

Oh, and it SUCKS what they did to Buell IMO. 

[bmonty72]

I don't think there is that much HD manufacturing left in WI anyway.  As I understand it, mainly the "Engine Works" plant.  The V rod and Sportster are made in Kansas City I am pretty sure.

mitt

I live in KC and have been to the Harley plant once for a tour.  They do build the Sportster there and some dynas.  The V-Rod engine is assembled in Kansas City.  And there is a CVO (Custom Vehicle Operations) area where they do some Screaming Eagle Editions.  There may be more going on there, but that's all i recall for certain.

[psycledelic]

My current manager was the chrome quality manager for HD before moving to NC.  He talks about all of the bullshit the union creates.  One of the reasons he sought after new employment in a non-union environment.  I doubt they will be very keen on lowering wages.  I wonder if HD knows about the 50 acre land next to where I work?  I wonder if they would mind a Monster parked in their employee parking lot?

[Monstermash]

The problem (financial issues) with HD is not at the manufacturing level or where their facility is. Unless they move to Asia for significantly less expensive labor, it isn't going to make a difference.
 The problem is at the dealership level. There is little to no training for he sales people/management on the actual sales process. They spend too much time telling you how great HD is and just expecting you to buy one based in the company's history and lifestyle rather than following a sales process.
 There are specific steps to selling anything whether it be a HD or a Ducati or a television. The lack of sales ability in every HD dealership I've ever been in is borderline comical.

[Popeye the Sailor]

Idk-from what I hear, one can at least take a Harley on a test ride at a dealer.

It's harder to get one on some of the other bikes I've looked at-seriously-I'm going to ride this thing, and you want me to spend how much without letting me see how it feels?