Harley-Davidson Is Sad And Getting Sadder

Image: AP
Image: AP

Things are getting worse for Harley-Davidson, the maker of motorcycles that your dad aspired to ride. They will be closing a plant in Kansas City, Missouri, the company disclosed today, while reporting fourth-quarter profits that fell 82 percent (!) compared to the fourth quarter of last year. They also announced they’ll be making an electric motorcycle, so there’s that, too.

Harley made $8.3 million in the fourth quarter of 2017, compared with $47.18 million in the fourth quarter of 2016, according to the Milwaukee Journal Sentinel. The company has been in decline for years now, as sales have sagged because consumers are worried about things like safety. In addition, baby boomers, who bought a very large amount of motorcycles back in the day and remain a big part of Harley’s demographic, are also getting older.

From the Journal Sentinel:

Harley-Davidson worldwide retail motorcycle sales fell 6.7% in 2017 compared to 2016. The company’s U.S. sales fell 8.5% and international sales were down 3.9%.

Harley has taken steps to counter what’s been a prolonged downturn, including tightening motorcycle inventories.

“Our actions to address the current environment, through disciplined supply and cost management, position us well as we drive to achieve our long-term objectives to build the next generation of Harley-Davidson riders globally,” Matt Levatich, president and CEO, said in a statement.

“We finished 2017 with over 32,000 more Harley-Davidson riders in the U.S. than one year ago, and we delivered another year of strong cash generation and cash returns to our shareholders,” Levatich said.

Harley says it plans to tighten its manufacturing operations through a multi-year initiative anchored by the consolidation of its motorcycle assembly operations in Kansas City, Mo., into its plant in York, Pa.

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Around 800 people will lose their jobs because of the Kansas City plant’s closure, while Harley will hire some 450 in York. The slow death of Harley has been a bit painful to watch, though the company is still trying. Also today, it said it would be bringing its first electric motorcycle to market within “18 months.” I honestly can’t imagine who the market is for an electric motorcycle—the main appeal of riding a motorcycle is feeling and hearing the engine—but, at this point, Harley doesn’t have much else to lose.

News Editor at Jalopnik. 2008 Honda Fit Sport.

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DISCUSSION

This death spiral is a long time coming though. HD has focused on its core brand and image to the detriment of future survival. I ride a Buell, so I have to venture into HD dealers for parts. I also grew up with a father who had a Fat Boy as well as his S2 Thunderbolt and spent many weekends at HOG meetings.

Some of the issues I’ve noticed with HD are:

-Dealerships are cliquey places to go into. You are either hardcore HD or you can GTFO. The parts people are cool but the sales people are all about “The Brand”. If you don’t ride up in an F150 or on a HD they wont talk to you. I showed up to one in my Japanese convertible and sales people actively avoided me until I was at the parts counter.

-They offer NOTHING that is not a cruiser or with forward controls. The sportster is the closest they have to a “non-cruiser” and its still a leisurely bike. They had an entire sub-brand built on the idea of taking risks and innovating and they killed it off. Millennials don’t want the same huge cruiser their dentist owns. 

-The bike prices. These are machines using 1940s or 1950s technology (save for fuel injection). Why in god’s name do the expect me to pay $20,000 for a product they have been stamping out like cookie cutter works for generations. And then expect me to pay extra on top to customize it.

It’s sad to see the end of an american icon, but I don’t see how they will recover from this self-inflicted wound.