Back To The Bricks- A Return To Juneau Ave.
I'll admit that I have been pretty critical of a lot of the decisions being made by Harley-Davidson's executives over the past several years. I believe I've earned that right, after all, considering that I've given an obscene amount of money to the MoCo over the past 17 or so years. Don't get me wrong, I'm not critical of the company, but rather, some of the decisions being made by the suits in charge. So what about the latest strategic plan that was recently launched by our newest CEO? Let's take a look at what "Back To The Bricks" means, and how it might affect us.
More Roads To Harley-Davidson
Not all the ideas have been bad, for example- Matt Levatich's "More Roads To Harley-Davidson" was innovative and brought us the Livewire and the new RevMax engine powering the Pan America, the Sportster S and the new Nightster. Truth be known, it was the first real new innovation from the Cream City motorcycle maker in decades. The downfall of that strategy was that it was terribly expensive... and the MoCo was already struggling financially. It's not that Matt's idea was bad, but it was a bit too broad and ambitious, and I don't think it quite factored in the costs of designing a new engine, tooling for the new models and the expenses of the tech in the new machines. The Livewire alone was a huge financial burden for Harley-Davidson, forcing them to price the all-electric motorcycles at a whopping $30 grand on the showroom floors. H-D purists weren't ready, and definetly weren't asking, for an electric motorcycles, and they damn sure weren't prepared to drop CVO money on a bike that didn't even look like a Harley-Davidson.
Hardwire
Enter the German. Now, I give Jochen Zeitz a really hard time, I know... but Jochen, if you're reading this, buddy... no hard feelings- jump on your bike, ride down to the Coast and let's have a beer. Seriously, you seem like a nice guy, but damn... what were you thinking with Hardwire? You were literally pricing H-D out of the grasp of its core consumer- the blue collar, working class Americans.
Jochen's Hardwire leaned in to the concept that Harley-Davidson is, and should be marketed as, a premium brand. While one might think that this is a good thing, the problem was that his strategy leaned too far in to it- aiming to increase overall revenue by increasing the prices of the motorcycles and really focusing on the higher-end offerings like the CVOs, instead of entry or mid level motorcycles. Sure, the concept seems to work well for companies like Lamborghini, Ferrari and Bugatti... but the problem for applying those ideas to a company like Harley-Davidson, is that H-D was born and bred by the working class, for the working class, where the aformentioned companies were, and are still, built for the ultra rich.
Jochen also saw an opportunity to cut overhead costs during the 2020 COVID pandemic, by shutting down operations at Juneau Avenue, and having everyone work remotely from home, instead. I'm sure that the original intent was to keep everyone safe from the, at the time unknown, illness that took our world hostage for months, but after seeing how much lower the power bill was at the historic site... well, let's just say that was an easy way to reduce some operational costs. It... sort of... makes sense, I suppose. Juneau Ave is a very large facility and, while it's a significantly historic campus, it is very old and I can''t imagine that it's very energy efficient. Jochen might have been able to save some money by turning the lights off, but the problem is that it's very difficult to maintain teamwork, company pride and camaraderie, when a few thousand people are working remotely- after all, how can a team win, when all the players are at different fields?
The Order To Return to Juneau
One of the first things that Artie Starrs did after taking over, was send out a company wide memo, ordering everyone that was working remotely to return to the "Bricks", the common nickname for the famous Juneau Avenue campus. Having everyone return to a central office was part of his strategic plan to get H-D back on course, and it's a great move, so I think it's kind of funny how some of the different media outlets are saying he was "forcing" them to return, like it's a bad thing. It's as if they are implying that the new CEO is doing something wrong by telling everyone that they have to report to the office again. Millions of workers, worldwide, have to report to an office, or a jobsite everyday- very few workers get to work remotely. It just makes sense for a few reasons- one in particular, is if Joe is having a problem with something, he doesn't have to try to call, Skype (is that still a thing?), or have a Teams meeting with Jill and Bob, and hope they're available, to get help. He can simply walk over to them at their workstations and ask for help, which is much more efficient.
You may be asking why this efficiency is so important now? Well, for several reasons. First of all, efficiency equals money. Time wasted is money wasted and, let's be honest, over the past several years, money has been tight for the MoCo. Secondly, when your goal is to develop new machines, more on that later, everyone on the project needs to be present- the designers, engineers, mechanics, materials experts, and the product specialists. The same goes for the behind the scenes operators, too- the accountants, the human resources staff, the administrative assistants, and every other unsung hero working to keep the company running. When everyone is on site, including the bosses, then it becomes a work family again. A sense of pride in the company, the culture and the products will return. Leaders, good leaders, don't sit by the pool and tell everyone what to do- they lead from the front; they lead by example. If I worked for Harley-Davidson, I would be proud to ride my Harley-Davidson to work every day, knowing that it was designed at Juneau Ave, the engine was built a few miles away at the Powertrain Operations facility and that it was assembled into the big, gorgeous machine that it is, over at the Vehicle Operations facility in York, PA. It would also impress the heck out of me, if I saw the CEO of the company ride in on his own Harley-Davidson motorcycle.
Leadership isn't granted by the title of CEO, leadership is earned from the people that work for you. A CEO has to earn the trust, and then the commitment of his, or her, people. The employees have to know that the CEO is going to do the right thing and that he will take care of the company, and also take care of them. This isn't exclusive to the CEO, either. This applies to everyone in supervisory and management positions in the company. Artie recognized that being able to see your supervisor every day, working alongside you and your team, is not just a good thing, it is mandatory for success. Back to the Bricks is more than just a power move by the new boss, it is an effort to restore a culture of accountability, company pride, and corporate success.
Dealer Relations
Another aspect of Artie Starrs' strategy is to improve dealer relations and make them more profitable, which is an extremely smart move. As we've seen over the past few years, several Harley-Davidson dealerships have been forced to close their doors. I'm not trying to pick on Jochen again, but I can't help but think that those closures were, at least in part, his fault. One of the things I used to love about going into dealerships, was looking at the different models. When I first got into Harley-Davidson, my local dealers had, easily a half dozen Sportsters in different trims and colors, as many Dynas, and probably even more Touring machines. It was so easy to ride to the dealership on a Road King, and ride home on a Road Glide (yeah, that actually happened). It was also nice to go in, have a salesman introduce themself, then walk away to let me browse the bikes on my own, compared to the way most of them are now.
While we were in Milwaukee last month, my son and I went into a few of the local dealerships. One was awesome- when my son and I walked in, the salesman greeted us, said "if you need anything, holler at me" then walked away. Super cool guy and if I had been in the market to buy a bike at the time, I would have bought it from him. Another, larger, dealership (I won't put them on blast here), swarmed us. Two different salesmen approached us from two different angles, like hyenas going in for the kill. One gave up immediately when we said we were just looking, but the other wouldn't leave us alone. If we walked away, he followed us. When he asked us where we were from, he immediately insulted our hometown. He tried to redeem himself after he realized what he had done, but to be completely honest, even though that shop had more inventory than the other, I still wouldn't have bought from them. Partly because of him and his insults, but also because I know that sales staff don't aggressively pursue potential customers on their own- they are directed to do that by their sales managers. They are directed to do that when the dealership is struggling. The other dealership had been around for a long time, had been well established and they were obviously doing well. The salesman was friendly, talked with us when we engaged him, then he let us look around and he didn't bother us. Even if I would have had to pay a few bucks more by buying from them, I would have just because I liked their style.
When Jochen decided to start cutting models, reducing inventory to save money, redesigning the touring bikes and making them more expensive, dealerships that were already having trouble started struggling even more. With fewer bikes to draw people in, higher prices that scared off potential buyers or pushed them to bigger dealerships that could offer slightly better prices, and desperate owners forcing their staff to be overly aggressive to make sales and upcharge services, it created a recipe for disaster. When those dealers sought help from corporate- there was no help to be given, and they were forced to shut the doors.
Artie seems to understand the importance of the dealer network and knows that the dealerships are the places where potential customers, become Harley-Davidson customers. By recognizing the need for dealers to be successful, Artie's strategic plan should increase profitability for those independent representatives of the MoCo, as well as increase overall profitability for the company. It's a smart move. Another smart move is adding more inventory to the showrooms.
Return of the Sportster 883
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| SWM Stormbreaker V 1200 |
A major announcement this week, was Artie's claim that a new, air-cooled, 883 Sportster with flat bars, and a peanut tank will return in the 2027 model lineup. He is saying that it will be a "blank canvas for customization" and will come in around the $10k mark. Now, I'll be completely honest with you when I say that I have my doubts about how they are going to pull this off. The reason for my skepticism isn't because I don't believe him, but rather... the MoCo appears to have sold the rights to the air-cooled Evolution Sportster to SWM, who is currently building several of the 1200cc versions under the new name "Stormbreaker V". Unless, that is, the speculation that Harley sold the rights for the air-cooled Evo Sportster to the Chinese owned SWM isn't true. If our previous speculations were wrong, and SWM is, in fact, building a blatantly copied motorcycle, then Harley-Davidson has one hell of a lawsuit for copyright infringement on their hands. I've read that China doesn't have copyright laws, which is why they are able to make so many ripoff products and sell them for pennies on the dollar. But, while the Chinese company Shineray owns the controlling stock of SWM, SWM is located in Italy, which does have pretty extensive copyright laws in place. It will be interesting to see how this all pans out over the next year or so, if Shineray and SWM didn't pay for those designs.
More New Models?
Another exciting announcement from Artie this week was his claim that we will see "20 new models in the next three years." Sounds a bit like Matt Levatich's strategic plan, eh? This was something that I was excited to hear from Matt a few years ago, and the MoCo was able to get a few new models out before he was replaced by Jochen, but it was far from the goal. With the changes that Artie has made so far, I'm thinking that we might actually see a return of some of our favorites, as well as some all-new machines. We have been told that the Sprint, which is almost guaranteed at this point to be one of the Chinese made "X" bikes- the 350RA (the riding academy bike), or the 440 or 500 model. Artie has said that we will see the debut of the Sprint later this year, so we shall see.
I'll also tell you that I've noticed some other interesting things, too. Harley-Davidson corporate has been posting job listings in some interesting fields, such as toolmakers, designers and engineers for frame, exhaust, manufacturing, materials, and powertrain. At the surface, these might just look like the MoCo is replacing people who have quit (or been fired), but for the creatively speculative mind like mine, they could also indicate the MoCo's desire, or need, to get fresh people in, in order to design a new engine, frame, exhaust, etc. for an all-new machine. Positions like toolmakers, for example, could indicate that they need to create new tooling for new machines, after all, why would they need to re-tool existing models? Toolmakers, for those of you who may not know, don't make wrenches and ratchets, they make the specific tools used to form parts, like fuel tanks, frames, engine cases, etc. The MoCo's need for new tooling, is a clue that something new is coming, whether it's a newly redesigned Road King, a return of a twin shock Dyna model or an all-new model like we saw with the RevMax bikes. Either way, it's pretty exciting.
Final Thoughts
Overall, I feel like things are looking up in the 414 and I have a gut feeling that Artie Starrs is gonna do great things for our beloved MoCo. I'm hopeful that we are going to see a resurgence of success. Maybe we'll some stronger dealers, improvements in overall quality, a return of some previously successful models, and maybe even some cool new models that will get more riders turned on to this iconic American company. Who knows, maybe I'm being naive and overly hopeful, but as we celebrate 250 years of American freedom, I feel like the best way to celebrate freedom and independence, is on the back of a Harley-Davidson motorcycle.
I may be reaching here, but I have a feeling that we are going to see the Eagle soaring high, once again. I sure hope so, anyway.
Until next time MotoReaders...
Ride safe, and make good choices!
