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[muddypaws]

Harley-Davidson to Cut Jobs as Results Miss Expectations
Motorcycle maker lowers shipment guidance
By Anne Steele
Oct. 20, 2015 8:40 a.m. ET

Harley-Davidson Inc. said it will lay off employees and damped its shipment guidance for the year as its third-quarter earnings dropped more than expected on slower retail sales.

[ultrarider123]

Helpin' ya out, Bill....

Here's the link before anybody asks him for it....
http://www.wsj.com/articles/harley-davidson-to-cut-jobs-as-results-miss-expectations-1445344845

[9 1/2 Beers]

stocks off 6.50 on this news, trading at 49.50

[muddypaws]

To pick up sales they might have to think of a bit of discount. Last few bikes all I got was a shirt...

[9 1/2 Beers]

Now down 8 bucks 

[gadgetz]

Why Harley-Davidson, Inc. Plunged 15% Today
Increased competition and a decline in market share is part of the reason behind Harley-Davidson's stock decline.


Longview
What: Harley-Davidson (NYSE:HOG), one of the most storied and recognizable brands in America, saw its stock plunge more than 15% on Tuesday morning after it reported a disappointing third quarter, due to increased competition and foreign exchange remaining a headwind.


Harley-Davidson Chief Executive Matt Levatich put it bluntly: "The third quarter did not unfold as we expected."


So what: Harley-Davidson's worldwide retail sales declined 1.4% to 72,178 units, which was dragged down by a 2.5% decline in U.S. retail sales. Furthermore, revenue from motorcycles and related products rose a meager 0.9% to $1.14 billion, which fell short of analyst estimates of $1.21 billion. While revenue did post a 0.9% gain over last year's third quarter, it was offset by a 5.2% unfavorable currency exchange, which is a headwind likely to persist at least through the remainder of 2015. Earnings per share checked in flat year over year at $0.69, but that also fell far short of the $0.78 estimated by analysts.


Perhaps most concerning was Harley-Davidson's 3.9 percentage-point decline in U.S. new 601+ CC (heavyweight motorcycle) market share, or 390 basis points, from 56.3% during last year's third quarter to 52.4% currently. Year-to-date market share tells a similar story, as Harley-Davidson's retail market share of the new 601+ CC segment sits right at 50%, compared to 53.7% through the same time period in 2014.


Now what: A challenging third quarter forced management to reduce its worldwide shipment projection by 11,000 to 265,000-270,000 -- that's down about 2% compared to 2014, and down from the previously expected 276,000-281,000 range. Furthermore, in part due to the disappointing results, Harley-Davidson expects to incur between $30 million and $35 million in fourth-quarter expenses due to looming layoffs and related costs.


Going forward, Harley-Davidson plans to increase product and brand awareness through increased advertising, grow new ridership in the U.S. market through its rider training programs, and open between 150 and 200 dealerships globally by 2020 to try to stoke growth for investors. 





STOCKS



Harley-Davidson, Inc.
NYSE:HOG
$47.25  $-8.80(-15.70%)

[sadunbar]

Got to believe increased spending in engineering intended to improve quality and substantially improved customer service/customer service training at the dealership and mothership would yield more bottom line results.  Of course, that would require a paradigm shift.  If their analysis indicates more spending on advertising and marketing is the answer, who am I to second guess...  But my background is in engineering and operations, so perhaps I am biased?   



par·a·digm shift:
noun:  a fundamental change in approach or underlying assumptions.

[FLSTFI Dave]

I think, people know all about harley.  Advertising the one of the most Iconic brands in the world is not what they need.  Heck they have the best brand loyalty of anyone.

What they need is QUALITY improvement to keep customers, and get owners talking positive.  To keep us from looking at Indian and BMW or such.

[murphy]

Don't forget Victory too!

[hdguy1]

I think, people know all about harley.  Advertising the one of the most Iconic brands in the world is not what they need.  Heck they have the best brand loyalty of anyone.

What they need is QUALITY improvement to keep customers, and get owners talking positive.  To keep us from looking at Indian and BMW or such.

X2

[2smoke]

I watched Matt Levatich's 8 minute video on Monday night.  Video was released after the Stock Market closed for the day.  The dude is in a tough spot.  Wandell murdered that company and now Matt is sticking his fingers into the gushing bullet holes.  The hourly workforce was ravaged. Quality quickly suffered and the consumer is angry.  Wandell's pet project of selling chitty little bikes that are waaaay over priced is failing.  Pile all that on an economy that is flat at best and bam! You find yourself in the dog house.  Best of luck.  I DO NOT have any intention of buying a new Harley (I have purchased about 10 since year 2000) because they are not giving me any reason to. 

[ultrafxr]

I watched Matt Levatich's 8 minute video on Monday night.  Video was released after the Stock Market closed for the day.  The dude is in a tough spot.  Wandell murdered that company and now Matt is sticking his fingers into the gushing bullet holes.  The hourly workforce was ravaged. Quality quickly suffered and the consumer is angry.  Wandell's pet project of selling chitty little bikes that are waaaay over priced is failing.  Pile all that on an economy that is flat at best and bam! You find yourself in the dog house.  Best of luck.  I DO NOT have any intention of buying a new Harley (I have purchased about 10 since year 2000) because they are not giving me any reason to.

He definitely is in a tough spot.  But don't forget he was right there with Wandell the wonder helping him commit mayhem on the company. 

[RonandJanet]

Brand equity is the driver just as in any branded business. It is hard to gain the equity and it is just as difficult to keep it.  There are at least three key components the actual value of the product to the consumer (economics [reliability, etc.]), the marketing (advertisements) and the emotional attachment to the brand.   I think HD is struggling with the value proposition which is eroding the emotional connection.  When the economy is not strong this becomes even more of an issue. The marketing brings new people in but if the economics are not there it will not work. HD is missing the real issue which is providing a good product that is reliable and meets the consumer's desires (performance, looks, customer service, etc.).  When the consumer value drops so will the all the merchandizing and this will lead to "bad" word of mouth advertising. They need to take a closer look at the real problem.   

[2smoke]

He definitely is in a tough spot.  But don't forget he was right there with Wandell the wonder helping him commit mayhem on the company.

Most definitely!  Wandell was hired for one reason- to slash and burn.  And he did a great job of it.  But only a fool would poison his own meal.  Remember,  Levatich was at the MoCo when Rich Teerlink and Jeff Bleusteen were CEO (Both part of the original 13 buy-out people) so he was there in the glory years.  Levatich is a long term employee. Why mess with success? (Answer: enormous greed) All of the original 13 are gone now.  Where is the vision for the company coming from?  Matt has to turn this around. He is wearing the Daddy pants now.  This could be his swan song or his waterloo. Does he have the moxxy to do it?

[JCZ]

Bumping advertising?  What other company has brand recognition to this level?  What other company does men and women tattoo all over their bodies.

Their direction is proof positive that they're not listening to their customers......bump the quality control and the rest will take care of itself. Must be rocket science for those at the top.....those only concerned about the stock holders.

I don't think any of us that have been riding Harelys for years, decades is surprised by this.....we were calling this out 5-8-10 yrs. ago.

[sadunbar]

I watched Matt Levatich's 8 minute video on Monday night.  Video was released after the Stock Market closed for the day.  The dude is in a tough spot.  Wandell murdered that company and now Matt is sticking his fingers into the gushing bullet holes.  The hourly workforce was ravaged. Quality quickly suffered and the consumer is angry.  Wandell's pet project of selling chitty little bikes that are waaaay over priced is failing.  Pile all that on an economy that is flat at best and bam! You find yourself in the dog house.  Best of luck. I DO NOT have any intention of buying a new Harley (I have purchased about 10 since year 2000) because they are not giving me any reason to.

 

[mark]

Their market is aging away, the economy is still dragging, and quality has declined.  If I can figure it out, surely they can too. 

[Harley Guy]

Their market is aging away, the economy is still dragging, and quality has declined.  If I can figure it out, surely they can too.

I agree:
- market is aging
- economy is dragging
I don't agree
- quality has declined.
I think quality has been the same - not as good as it should be, but not much of a difference.
.
If a company is losing money/market share, cost cuts are one of the items that should be implemented. HOWVER, at some point you can't cost cut yourself into profitability. I have no idea, as the majority of us don't, have any idea as to the internal financial condition of the company.
.
.
EDIT - additional comments.
- 3M announced layoffs today 10-22-15  - - - they join recent Twitter, Amazon, etc layoffs - The MoCo is just another in the line to announce layoffs.

[FLSTFI Dave]

I don't agree
- quality has declined.
I think quality has been the same - not as good as it should be, but not much of a difference.

Based on times in for warranty issues on my 09 SERG, 12 SERG, 13 SERK and 15 SERGU, quality is clearly on the decline.  I have had more issues on my 15 than any off the others.  Right at twice as many issues as any of the other bikes.  Heck the clear coat is so soft I have more scratches than any of the others did where your legs touch the tank.  My 13 has had more issues than the two before it.

Based on my wife bikes her 09 Heritage with 98K on it has had less issues than her 11 Street glide, or her 13 street glide or her 15 Road glide.

Lets see head unit is on the market for 3 years now still with significant issues on the 14, 14 and 16 bikes.

[Harley Guy]

Based on times in for warranty issues on my 09 SERG, 12 SERG, 13 SERK and 15 SERGU, quality is clearly on the decline.  I have had more issues on my 15 than any off the others.  Right at twice as many issues as any of the other bikes.  Heck the clear coat is so soft I have more scratches than any of the others did where your legs touch the tank.  My 13 has had more issues than the two before it.

Based on my wife bikes her 09 Heritage with 98K on it has had less issues than her 11 Street glide, or her 13 street glide or her 15 Road glide.

Lets see head unit is on the market for 3 years now still with significant issues on the 14, 14 and 16 bikes.

You make good claims based on your personal experience.  I can see why you have that opinion.
.
In my experience, my 2009 CVO Ultra Classic was in the shop twice per year for warranty years and extended service plan work. - 5 years worth including two complete engine rebuilds. My 2015 is ONLY one year old (10,000 miles) and with my fingers crossed and knocking on wood, NO ISSUES.

[Para Bellum]

Every time I think about upgrading to a new HD, I go in and test ride what I'm interested in.  Then I compare the ride, handling, power, paint, and features of the new vs. old.  Then I look at how much it's going to cost after trade-in or sale, and weigh that against the amount of (un)improvement.  The last two times I did this, I haven't been impressed nearly enough to lay out that amount of cash.  So I haven't.

HD is going to have to improve reliability and quality significantly, without boosting prices, before I buy another.  They've been trading on their name for many years to jack up prices while reducing quality, and it's catching up with them.

And don't get me started on the lack of knowledge (and candor) in the local sales, financing, and service departments.

[iski]

Test rode 14's & 15's.  Meh.  Not a bad ride but not enough interest to even be interested in trading.  Part of the reason is the electronic issues.  Price tag is another.  Some of the Rushmore features are good but not enough interest yet to get me to shop seriously.

Know of more than several others with the same opinion.  More competition from other brands will cause me to at least consider them prior to the next bike which will probably be in the next 2-3 years.

That HD is struggling is not a surprise.  That they are trying to advertise there way out of it is not a surprise.  It's a sort of McDonald's type philosophy, a consumerable take in a durable market that they wish was more disposable.  Trade your old bike with problems for: a new bike!.....that may have other problems but dammit, it's new!

This time, they may discount more seriously.  If they do, the used market falls.  Will be interesting to see if they wish to maintain market share or profits.

[grc]

Every time I think about upgrading to a new HD, I go in and test ride what I'm interested in.  Then I compare the ride, handling, power, paint, and features of the new vs. old.  Then I look at how much it's going to cost after trade-in or sale, and weigh that against the amount of (un)improvement.  The last two times I did this, I haven't been impressed nearly enough to lay out that amount of cash.  So I haven't.

HD is going to have to improve reliability and quality significantly, without boosting prices, before I buy another.  They've been trading on their name for many years to jack up prices while reducing quality, and it's catching up with them.

And don't get me started on the lack of knowledge (and candor) in the local sales, financing, and service departments .

Exactly.  And don't leave out the rocket scientists at H-D customer disservice, where knowledge and honesty are unknown quantities as well.

While still not "right", one can more easily justify continuing to buy products they know are not of the best quality and reliability IF they can be confident any issues will be promptly and properly corrected by the dealer and manufacturer.  With H-D, there is no such confidence.  There are no standards for dealership service capabilities, and the mothership is just as clueless as the dealers on many issues.  There is much more effort expended trying to BS their way out of fixing defects than there is just fixing the damned things.

Personally, I'm well past the age where I would accept such crap and just fix it myself.  I'm not so desperate for something to spend my money on that I have to consent to being bent over and violated repeatedly.  If anyone wants to sell me a product these days they need to make it right the first time and stand behind it completely and competently.  H-D fails miserably, thus my refusal to buy a new one since 2005.

Jerry

[RGlideKid]

This has been an interesting thread discussion to read so far.  Every one of you brings up good and valid points.

I'm still waiting for my '15 to leave me stranded or really disappointed (or both), but I only have 4,000 miles on it so far in 4 months.  Now, as I write that and look at those words and the meaning behind them, isn't it sad that I put it that way?  It's almost like I'm just waiting on a failure with the bike, and in a way...I am.  Why?  Notoriety.  Harley doesn't need better or more ads or marketing schemes, they need to elminate the bad press and hard feelings.  Forums like these are replete with guys who are having problems or letdowns with their new bikes.  The word is out there for anyone to read, and I know folks believe that the MoCo reads these forums, but if they do...it makes you wonder what their thoughts are about our posts, and how much weight they actually put on them.

It would be different if all these posts on all these forums that describe bad things that are happening to relatively new bikes were being made by guys with their first or second Harley, but many if not most of us are on our number X Harley.  We're brand loyal.  We love our bikes and the heritage and legacy that goes with them.  We want the MoCo to succeed. 
But tell me something...if you were running your own business and you had a constant barrage from the "old faithful" customers talking to you about your product and what's weak about it and even how to fix it, what would you do?  Advertise more?  Run more glitzy ads or campaigns?  I think not!

My '07 had 40,000 miles on it when it was totalled and it never let me down.  It had me feeling like it was always going to be dependable and there for me.  But when I read all the letters on this forum about the '15 RGU's it makes me wonder when it will be my time for a quality or premature wear problem to surface with my very expensive but prone to have problems bike.

The Rushmore idea looked good in the marketing realm, and many of us were initially hopeful about it, but now, many of us who have '14's or '15's are highly skeptical or dubious about the benefits Rushmore actually brought to the table.  I am one of them.  To me it was smoke and mirrors, with some "benefits" thrown in for good measure. 
But guys, when you produce and sell as many bikes as Harley has in the last 15 years or so, why the heck weren't those "benefits" or improvements long developed and established in bikes long ago?  Why wouldn't you be ensuring the longevity of the brand with a quality product, plus great service and loyalty from dealers instead of hype like Rushmore brought to the table, and dealers who truly deserve the name stealers?

It's not a joke with us, Harley.  It never has been.  We want you to be a profitable and successful company, and we want you to be there for another hundred years. 
All we really want in return is a bike that was designed and built with love and care and concern and honor and the same heritage and legacy and dignity we've come to associate with your brand, and then we'll be just fine with that $40,000 we paid for the privilege.

And everyone's entitled to their opinion, but in my mind until that happens, the MoCo's lost the formula...or worse, they've consciously chosen a path that takes them away from that formula.

[RonandJanet]

I have not had any real problems with any my HD bikes. There have been recalls (more than I would like) but they were all handled quickly and I was on my way.  My wife's Cherokee has more recalls. I think they have issues as many companies do and the advertising is to get the younger group in.  But as I mentioned before if the value isn't there they will not buy or stay.  As mentioned earlier I want HD to succeed and drive the value up so my bike is worth more!     

[TN]

Harry, for every horror story ya hear on the forums there are many more success stories you hear nothing about. While I agree that there are some weak points, such as lifters, you can worry yerself to death. If it makes you feel warm and fuzzy you can be proactive instead of reactive. 

As you can tell I've had my dose of kool-aid this morning and I'd like to share. 

you need to get out and ride man.



TN

[chicoman]

Based on times in for warranty issues on my 09 SERG, 12 SERG, 13 SERK and 15 SERGU, quality is clearly on the decline.  I have had more issues on my 15 than any off the others.  Right at twice as many issues as any of the other bikes.  Heck the clear coat is so soft I have more scratches than any of the others did where your legs touch the tank.  My 13 has had more issues than the two before it.

Based on my wife bikes her 09 Heritage with 98K on it has had less issues than her 11 Street glide, or her 13 street glide or her 15 Road glide.

Lets see head unit is on the market for 3 years now still with significant issues on the 14, 14 and 16 bikes.

Why should they try to improve, reading all the bikes you owned, sounds as if you have more money than common sense, if you keep buying them they wont try to improve much.
Myself i've owned 2 harleys, an old evo, and my 2007 se ultra. The evo never gave me trouble, the 2007, thats another story, and there will not be a 3rd harley in my life.

[ultrafxr]

When we talk about quality what does that mean?  IMO there are several facets to this question:

Consumer reports seems to focus on initial quality - what was wrong with the vehicle when it was delivered or shortly thereafter.  This seems to be more of an assembly type issue imo and my Harleys have fared well in this regard but I read about others who had less than stellar experiences oftentimes due to inattention by the dealer during PDI.

It has been my experience that Harley falls down in the longevity / reliability department perhaps due to under engineered or purposely cheapened / weakened components in order to save a buck.  For example:  cranks that scissor; cranks with huge runout tolerances; elimination of Timken bearing for the crank; outer cam bearing failure in early TCs (had that) which was 'fixed' I think by eliminating the bearing and using the 'parent material' of the cam plate instead; inner cam bearing failure (had that on both my bikes); lifter failure (had that on both my bikes); valve guide failure (had that on my '07).

My '07 has left me stranded twice - once 250 miles from home; once 60 miles from home.  My '12 left me stranded over 500 miles from home.  I've had two complete engine replacements on my '07 and one on my '12.  I ride a bit (98k on the '07 and 52k on the '12 along with almost 20k on the '11 RGU I had for a year (no failure on it thank goodness) but I don't think it unreasonable for the motor to hold together for 100k.  That would be acceptable to me.  But total catastrophic failures just past the 20k mark which is what I had on my '07 and my '12 is ridiculous.  And I don't even want to get started on the horrific problems on the early 110s which of course my '07 had.  It was in the shop off and on the first year for almost 90 days getting 'repaired.'

Yet I still have both bikes and love riding them.  I've found nothing more comfortable, more pleasing to ride nor with the features my wife and I want than the offerings from Harley.  But I doubt I'll be buying anything new in the foreseeable future - or maybe never.

[ultrarider123]

Why should they try to improve, reading all the bikes you owned, sounds as if you have more money than common sense, if you keep buying them they wont try to improve much.
Myself i've owned 2 harleys, an old evo, and my 2007 se ultra. The evo never gave me trouble, the 2007, thats another story, and there will not be a 3rd harley in my life.

Dave is actually a great litmus test for us all.  He and his bride ride the fool out of their bikes.  He's in the great position to trade more often than the rest and can attest to the quality or lack thereof to the newer, improved-er "Rushmore" bikes.  Reading his threads over the years, I believe he wasn't saying he wasn't going to purchase anymore HD's, he was just eloquently stating the problems he's had over the years/models.

Harry, for every horror story ya hear on the forums there are many more success stories you hear nothing about. While I agree that there are some weak points, such as lifters, you can worry yerself to death. If it makes you feel warm and fuzzy you can be proactive instead of reactive. 
As you can tell I've had my dose of kool-aid this morning and I'd like to share. 
you need to get out and ride man.
TN

Well said!  We've all had bikes/cars/trucks that may have had their share of problems but we still enjoyed them.  I can say I've never been stranded because of an issue with any of the HD's I've owned over the years.  I've said many a word that I've had to ask the Lord for forgiveness for but the bike got me to my destination.

We all seem to forget about the AMF years.  I remember going into the local HD/Yamaha/Honda shop in Scottsboro, AL to look at the Yamaha selection (I wanted that 125 street/trail BAD).  HDs all over by themselves in the corner and NOBODY looking at them....plus the NEW Harleys all had oil doilies under them to collect the drippings.  The salesman didn't even direct my Pop and me toward anything HD related.
I will concede the point the MoCo desperately needs a shot of QA in the design and manufacturing plants to include the parts suppliers.  However, I'll take today's Harley over what was the "standard" for the MoCo in the '70s any day.

[ultrafxr]

I will concede the point the MoCo desperately needs a shot of QA in the design and manufacturing plants to include the parts suppliers.  However, I'll take today's Harley over what was the "standard" for the MoCo in the '70s any day.

I absolutely agree Haird.  But then we also accepted pos cars from Detroit.  Things have changed, the bar has been raised - and the prices also!  So our expectations are higher and the moco must deliver a world class experience in both product and customer service.  I still love 'em and will continue to ride 'em but I'm pretty full of the kool aid now.

[FLSTFI Dave]

Why should they try to improve, reading all the bikes you owned, sounds as if you have more money than common sense, if you keep buying them they wont try to improve much.
Myself i've owned 2 harleys, an old evo, and my 2007 se ultra. The evo never gave me trouble, the 2007, thats another story, and there will not be a 3rd harley in my life.

Do the math, I average 25K a year on a bike, and my wife closer to 30K.  Other than her Heritage which in just under 3 years had just over 80K and trade was not enough for us to let it go we trade every two years, bike under 50K.  Funny story on her Heritage, the stator went out, two miles from the dealer.  21 month old bike, 53K on it.  New Service writer looks at the bike writes down mileage and tell me its around 500 for the new stator and labor.  I said nope, under factory warranty.  He said I ride the hell out of the bike, I said nope rode it once its my wife's.

Cost me 5K to go from her 13 Street glide to a 15 Road Glide special.  I figure 2500 a year is not bad.  Over 25K miles a year.

Usually costs me 6500 to get a new CVO every other year. 

07 was first year of the 110, way high number of issues. 

A friend tried to trade a 5 year old bike with 110,000 miles on it, they told him to keep it, and they would take 1K off a new bike.

Again why I trade before 50K, unless I plan to keep the bike until I can no longer ride.  Makes economic sense to me.  This also means the bikes are traded when the warranty is up, so I do not buy extended ones.   My wife and I both love to ride.  This is our bond and something we both love.   My 06 truck just hit 60K three weeks ago.  I have traded 5 of my bikes with over 45K on each in that amount of time.

[JCZ]

Well you your wife gets her money's worth out of her bike. 

I've always been of the mind set that I have to ride it to get my money's worth (14k miles since xmas....just under ten months....when I brought it home from Chip & Nancy's).  If you don't ride them, then they're just expensive garage jewelry. 

I know what it was like to ride an old flathead, panhead and shovel head before the evo came out.....haven't forgot those days.  And never rode near as far as I do now.  However, the MoCo has dropped quality control and just one example is crank run out.  They keep loosening the standard to keep the stock holders happy.

[FLSTFI Dave]

Well you your wife gets her money's worth out of her bike. 

I've always been of the mind set that I have to ride it to get my money's worth (14k miles since xmas....just under ten months....when I brought it home from Chip & Nancy's).  If you don't ride them, then they're just expensive garage jewelry. 
.

I fully agree.  We both got our 15's in Sept of 15.  She has just over 30K on hers and I have just over 27K on mine, and we each have another bike we ride.  We do almost all our traveling by bike, and take at least four trips a year, or more.

[BigLew]

I really think the advertising monies that HD spends is all about trying to sucker a new generation of riders into the big black deep rat hole that we are all in. Would I buy a new bike, not sure but I don't think so. Pretty happy with mine, but there is not much left on her that is stock. Fixed all of the issues with higher quality parts from somebody other than Harley. To be honest I don't much care what the motor co does. I'm in this rabbit hole because I chose to be. When I bought my last bike I wasn't planning to keep it stock so I never really thought about what was going to go wrong. My plan is to develop a good relationship with my local dealers and wrench turners. I know most of us don't like the current status of the Motor Co but its now big business, things will never be like whatever the good old days were like. I think the 110's have a few issues that I wish they would fix, but that would mean they would have to admit there is a problem. I do think HD is very forgiving on warranty and sometime it takes a little longer to fix because we are constantly changing things on the bikes and expecting not to get caught or acting like it shouldn't matter. Well that's just stupid. Lets see go buy a new Bmw M3 and change the cam and springs, remove the cats and replace the mufflers and retune the brain. Then have a warranty issue and expect them to fix it at no charge. I can tell you how that will end up.

BigLew