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[sadunbar]

Keith Wandell comes in and duplicates his Johnson Controls strategy...  Eliminates thousands of jobs, uses threat of plant closures to win significant labor concessions, revamps manufacturing with cost cutting methods, increases use of temporary labor, outsources extensively and reaps personal benefit from the short term effect of his work.  Then, as with Johnson Controls, leaves the company for greener pastures, just before the long term effects of his work begin to effect the results...

Todays Headline...

http://www.bizjournals.com/milwaukee/news/2015/07/21/harley-davidson-sales-profits-fall-as-company.html?ana=yahoo

Harley-Davidson Inc. continued to roll downhill in the second quarter of 2015. Sales of new motorcycles dropped in the United States and around the world, and profits were down 15.3 percent, the Milwaukee-based motorcycle-maker said Tuesday.

[RGlideKid]

Well, my wife and I hopefully helped them out with this new $40k wonder-bike we bought in June.  Harley's been slow to react and rests on their laurels too much, IMO.  They really have a good thing going, or at least did while the baby boomers were in their prime, but any idiot could see that gold mine was coming to a close one day.  Keeping tradition in the line is a must, but admitting times are changing shows forethought, planning, and intelligence.  Creating a new bike line for 2016 may be too late for them, but they need to act now to get it moving...if that's what it's going to take.

[grc]

People didn't believe me when I made some comments about Wandell when they first gave him the job, and again when he started his routine with the threats to the states and towns as well as the union.  It doesn't make me happy to have been right, because I feel bad for all those people he screwed over, including the workforce, the suppliers, and of course the customers, just to make himself look good and haul off plenty of filthy lucre for himself.  Now the board of directors needs to get their heads out of their butts and find someone who can turn the ship around, heal the rift with the workforce, and fix the quality issues.

Jerry

[sadunbar]

People didn't believe me when I made some comments about Wandell when they first gave him the job, and again when he started his routine with the threats to the states and towns as well as the union.  It doesn't make me happy to have been right, because I feel bad for all those people he screwed over, including the workforce, the suppliers, and of course the customers, just to make himself look good and haul off plenty of filthy lucre for himself.  Now the board of directors needs to get their heads out of their butts and find someone who can turn the ship around, heal the rift with the workforce, and fix the quality issues.

Jerry

And look out Exide Technologies!

[iski]

http://www.cnbc.com/2015/02/04/harley-davidson-promotes-from-within-for-new-ceo-effective-may-1.html
http://www.thestreet.com/story/13225609/1/harley-davidson-hog-stock-rises-on-earnings-beat.html

Harley stock as well as the company pre Wandell was doing poorly.  He was hired to cut costs & realign the company.  HD was in a tough spot on labor costs based on union contracts.  Successfully renogiating these plus realigning production was viewed by financial investors as good strategy.  Analysts were expecting $1.39 earnings per share 2nd qtr 2015 earnings, actual eps was $1.44 so better than expected.  Stock is generally rated as a "Buy." 

Long term unless HD attracts a "younger" buyer - 30s-40s, they will lose market share. Like other companies, HD positioned itself to ride the Baby Boom. Discretionary income spending window from the Baby Boomers is beginning to show signs of closing, due to age & funerals. Other problem is younger potential buyers are in a so-so economy with less discretionary income, from actual real incomes declining. 

[Harley Guy]

http://www.cnbc.com/2015/02/04/harley-davidson-promotes-from-within-for-new-ceo-effective-may-1.html
http://www.thestreet.com/story/13225609/1/harley-davidson-hog-stock-rises-on-earnings-beat.htmll

Harley stock as well as the company pre Wandell was doing poorly.  He was hired to cut costs & realign the company.  HD was in a tough spot on labor costs based on union contracts.  Successfully renogiating these plus realigning production was viewed by financial investors as good strategy.  Analysts were expecting $1.39 earnings per share 2nd qtr 2015 earnings, actual eps was $1.44 so better than expected.  Stock is generally rated as a "Buy." 

Long term unless HD attracts a "younger" buyer - 30s-40s, they will lose market share. Like other companies, HD positioned itself to ride the Baby Boom. Discretionary income spending window from the Baby Boomers is beginning to show signs of closing, due to age & funerals. Other problem is younger potential buyers are in a so-so economy with less discretionary income, from actual real incomes declining.

Good comments and true on the baby boomer window plus younger buyers.
.

[2smoke]

I don't care about earnings per share or any other mumbo jumbo newspaper ANALyst banter.  As a consumer I want a quality product for the huge amount of money I am paying for one of these machines.  The price only went up.  Where is the cost savings for me?  Replacing a Timken bearing on a crankshaft with a Chinese bearing to save $3 doesn't help me one bit.  "F" the consumer is the mantra of all these slash and burn greedy B-sturds.  Wandell made his millions and now he's laughing all the way to his next game of golf.  The original 13 bought the company and built it up with their blood, sweat, and sacrifice.  It took years.  This guy (or any one like him) can tear it all down fast.  Welcome to the Amerikan way.

[Twolanerider]

The more disheartening part of the Wandell era, at least to me, isn't what his regime did.  That was expected and to be foreseen based on his track record.  The disheartening factor for me is that the Wandell regime did, knowingly and with intent and foresight, exactly what it was brought on board to do.  So, yes, the Wandell regime led over a period that performed as described.  Just like it was expected and hired to do by the then sitting Board.

[ultrafxr]

I don't care about earnings per share or any other mumbo jumbo newspaper ANALyst banter.  As a consumer I want a quality product for the huge amount of money I am paying for one of these machines.  The price only went up.  Where is the cost savings for me?  Replacing a Timken bearing on a crankshaft with a Chinese bearing to save $3 doesn't help me one bit.  "F" the consumer is the mantra of all these slash and burn greedy B-sturds.  Wandell made his millions and now he's laughing all the way to his next game of golf.  The original 13 bought the company and built it up with their blood, sweat, and sacrifice.  It took years.  This guy (or any one like him) can tear it all down fast.  Welcome to the Amerikan way.

I agree completely.  But unfortunately it ain't just the motor vehicle industry where this mentality pervades.  It seems to be everywhere.  Many years ago I was in the distribution and then manufacture of plumbing products.  I got to know many contractors - plumbing, electrical, wholesaler, etc.  Seems like they would screw over their own mothers if it would save them a few bucks.  Remember aluminum wiring?  How about polybutylene plumbing supply lines?  On yeah and more recently the dangerous Chinese wallboard and now flooring sold by Lumber Liquidators.  Pity the poor folks who had to be inconvenienced and possibly pay mega bucks to correct the problems these inconsequential 'cost savings' cost them.  It's taken years for these problems to be addressed and maybe have some recompense to those folks.  Chit it's everywhere and it's not getting any better.

[grc]

I agree completely.  But unfortunately it ain't just the motor vehicle industry where this mentality pervades.  It seems to be everywhere.  Many years ago I was in the distribution and then manufacture of plumbing products.  I got to know many contractors - plumbing, electrical, wholesaler, etc.  Seems like they would screw over their own mothers if it would save them a few bucks.  Remember aluminum wiring?  How about polybutylene plumbing supply lines?  On yeah and more recently the dangerous Chinese wallboard and now flooring sold by Lumber Liquidators.  Pity the poor folks who had to be inconvenienced and possibly pay mega bucks to correct the problems these inconsequential 'cost savings' cost them.  It's taken years for these problems to be addressed and maybe have some recompense to those folks.  Chit it's everywhere and it's not getting any better.

    So very true, and so very laissez-faire capitalism at it's "finest".  And we have large groups of people who want even fewer regulations on business, so they can do it to more of us more often.

Jerry

[FLSTFI Dave]

While I personally dislike what Wandell did to Harley-Davidson Motor Company.  He did exactly what the board of Directors hired him to do.  Wandell did what the board wanted.  We should not be mad at him, we should be upset with the Board.  They gave the direction.

As for younger customers, I know lots in their 20's and 30's that want a Harley.  I know few that can afford one.  Heck I wanted one form the time I was 10.  Had several used ones in my late teens and early 20's.  After I was 24 did not get another until I was 38 and that was my first new one..  Not due to lack of desire, but due to a wife and three daughters, I had no money left for a Harley. 

Heck I have a 26 year old daughter and a 33 year old daughter that both want a Harley, but can't afford one, same with my Son in law.

[Road Dad]

Judging from the comments above. Not many here that actually runs a P&L. So many opinions made without any knowledge how to run a successful and printable company.

[iski]

The more disheartening part of the Wandell era, at least to me, isn't what his regime did.  That was expected and to be foreseen based on his track record.  The disheartening factor for me is that the Wandell regime did, knowingly and with intent and foresight, exactly what it was brought on board to do.  So, yes, the Wandell regime led over a period that performed as described.  Just like it was expected and hired to do by the then sitting Board.

If Harley had continued on the same track, as it was on pre-Wandell, considering their past costs vs present, the company realignment instead would have been multiple plant closings & big layoffs & an even greater reduction of their dealer network.  As to HDs quality now vs the past - the bikes historically have had issues after each generational reinvention.  After a few years on the market, problems were solved, then HD would put out a new engine and/or model changes, then problems would reappear.  The long term QA problem (over simplified) for HD as I see it is a history of customer beta testing.  People remember the last stuff that was ok before the newer stuff with problems replaced it.  Human nature. 

Demonizing CEOs is a fun hobby for some, the template is set by media mouthpieces, no expectations from me that will change.  The cold hard facts are if investors lack confidence in HDs short or long term ability to perform profitably with a definable solid business model, they will cease to exist.  Maybe some root for that as an outcome, for whatever reasons.  Personally I prefer capitalism as well as the profit (call it planned greed) motive.  Wandell did what he was hired to do.  I suspect HD will continue to increase efficiencies by finding ways to continue to lower certain costs.  The way I see it HDs biggest problem is not the board, the CEO, management, line employees, or dealers.  It's big problem is their customer base is aged & dying & as a group is less willing - in general - to part with the $20-40k needed to purchase the majority of their bikes.

Worth noting: other motor vehicles also suffer the indignity of massive product recalls.  Have experienced same on most every motor vehicle I own across a wide range of brand manufacturers.  Do I think HD could do a lot better in this regard?  Hell yeah.  Do I expect them to?  Hell no.  Why?  History tends to repeat itself.

[ultrafxr]

Judging from the comments above. Not many here that actually runs a P&L. So many opinions made without any knowledge how to run a successful and printable company.

Au contraire.  I've run several private companies.  Nothing near the scale of a large public company of course but had to deliver results nonetheless for the bankers, creditors, other owners, etc., so I know the pressure is tremendous.  But somehow the big three finally got the message and began to deliver the quality their competitors were somehow able to bring to the market.  Organizations like people tend to get sluggish and sclerotic as they age.  It took the Japanese auto makers to deliver the wake up call to Detroit.  Wonder who if anyone can do the same for the moco.   

[grc]

Iski, there are myriad ways to reduce costs and improve efficiencies WITHOUT degrading quality or customer service.  Wandell and H-D just did as they always do, they took the easy way that punishes employees, suppliers, and customers.  I don't expect them to not make profits.  I do expect them to treat the customers and employees right.  Both can be achieved if you're willing to work at it.

Jerry