Episode 32 of the Brap Talk podcast is now out for your two-wheeled audio pleasure, and as always, it is packed with some interesting motorcycle discussions.
Actually, the show really only has two main topics for conversation, but we take a deep-dive on them, which we think you will find interesting.
Well before the firing of Harley-Davidson CEO Matt Levatich (and it was a firing, no matter how much the Bar & Shield brand touts its “mutual decision” narrative), there has been a wrestling of control over the future of the iconic American motorcycle brand.
Dwindling share prices on the New York Stock Exchange necessitated a change of regime at Harley-Davidson, as shareholders saw a continued loss on their investment with the Milwaukee firm; and thus, a loss of confidence in management’s ability to run the company.
Now with Matt Levatich out and Jochen Zeitz taking on the role of interim CEO and President of Harley-Davidson, a new battle is being fought – what is known in the investing world as a proxy fight.
In an attempt to bury the news in the Friday rush for the weekend, we now get a surprise announcement from Harley-Davidson saying that the Bar & Shield brand has parted ways with President and CEO Matt Levatich.
Harley-Davidson maintains that the move was “mutual” in its published statement about the news, but any broken hearted teenager can tell you that is never mutual, and in the business world this is especially the case when the news is dropped at the end of the weekly news cycle, and no permanent replacement is announced.
The yearly results for Harley-Davidson are out, and once again they paint a dark figure for the iconic American motorcycle brand, as its total worldwide sales collapsed like a dying star, with a decline of 4.3% to bring the company to a total of 218,273 units sold worldwide.
Things were worse in the domestic market, with Harley-Davidson’s sales in the USA showing a 5.2% drop (125,960 units) from 2018’s figures.
This leaves the Bar & Shield brand’s international sales down an even 3% (92,313 units) – for those doing the math.
When we broke the news that Harley-Davidson and Alta Motors were parting ways, we teased the idea that the Bar & Shield brand might go it alone with its electric future. Since that breakup, there have been murmurings that Harley-Davidson was going to build its own EV design and research center, right in the heart of Silicon Valley, and today those rumors became true.
Announcing the plans during the company’s 115th birthday celebration, Harley-Davidson CEO Matt Levatich described the plan as an extension of Harley-Davidson’s commitment to make electric vehicles, and the move is an obvious grab at some of the top electric vehicle talent that resides in Northern California.
We bring you big news this first day of March, as Harley-Davidson has announced its strategic investment in Alta Motors, which will see the two American companies co-developing two new electric motorcycle models.
As one can imagine, the news has big ramifications for both brands. For Harley-Davidson, it means having access to cutting-edge electric vehicle technology, and a technical partner that can help them navigate the coming shift to electric drivetrains.
And for Alta Motors the news is perhaps even more impactful, as Harley-Davidson brings not only a key monetary investment into the San Francisco startup, but the deal likely provides access to a variety of assets for Alta, namely purchasing power with parts supplier, access to a worldwide dealer network, and instant credibility with other future investors.
For the immediate future though, Harley-Davidson and Alta Motors foresee their collaboration including two new electric motorcycles, which will be branded under the Harley-Davidson name.
Two labor unions have ended a partnership agreement with Harley-Davidson, citing differences with how the Bar & Shield brand handles staffing issues at its factories (Harley has been accused of replacing hourly union workers with temporary seasonal workers).
The move comes after a meeting on Monday, which saw leaders from the International Association of Machinists & Aerospace Workers (IAM), United Steelworkers (USW), and Harley-Davidson President & CEO Matt Levatich unable to agree on how to handle staffing issues going forward.
While the disagreement ends an accord that has existed between the unions and Harley-Davidson for the past two decades, it does not affect the collective bargaining agreement that the unions have with Harley-Davidson, which has been incorrectly reported elsewhere.
Any hopes of the US motorcycle market making gains in 2017 appear to be going out the window, as Harley-Davidson reports that its Q2 2017 sales are down a whopping 9.3% – prompting the Bar & Shield brand to readjust its delivery numbers to dealers in the United States.
Sales worldwide were equally bleak for the American company, with international figures down 2.3% for the same time period. This means Harley-Davidson’s combined worldwide sales numbers are down 6.7% for Q2 2017.
As a result, Harley-Davidson CEO Matt Levatich said that Harley-Davidson would see a reduction in its workforce, though he would not offer specifics on what that could look like for its mostly union workforce.
As motorcycle manufacturers report their 2016 numbers, we see the continued trend that last year was a tough year for OEMs in the USA. Harley-Davidson reports that its sales dropped 1.6% overall (262,221 units) in 2016, but that number doesn’t paint the full picture for the Bar & Shield brand.
Harley-Davidson sales were down 3.9% in the USA for the 2016 sales cycle (161,658 units), which is a stark contrast to the 2.3% growth Harley-Davidson saw abroad with its international sales.
These losses translated to Harley-Davidson’s balance sheet, with the company posting an 8% decrease in net income, making $692.2 million in 2016. Consolidated revenue remained steady however, at $6 billion.
No matter your political leanings, you cannot deny that the upcoming presidential election is grabbing a lot of headlines, and dominating our social discourse – and that is perhaps the way it should be, as electing the leader of the free world is no trivial matter.
Whoever leads the United States of America after January 20th will have a dramatic affect, not only on the American public sector, but also on the American private sector. The daily business and life of America are intrinsically linked to this country’s politics.
It is therefore not that uncommon to hear of American business leaders voicing their opinions, and endorsing political candidates for office – sometimes they themselves even run for office – so, maybe we shouldn’t be that surprised to hear that Harley-Davidson CEO Matthew Levatich weighed in on the 2016 election cycle.
It is a bit surprising to hear what he has to say though…