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Running on Fumes

Harley-Davidson in the Financial News

Wednesday, August 4, 2010
MSN’s The News Hub recently ran interesting spot on Harley-Davidson and The Motor Company’s second quarter results. I say interesting, because it’s refreshing sometimes to hear motorcycle news in the mainstream press perspective.

For example hearing one analyst say H-D has done a good job “moving unprofitable businesses off its balance sheet” he’s referring to the unceremonious axing of Buell Motorcycles. The decision to kill Buell may have been unpopular to enthusiasts, but for the dispassionate guys in the suits crunching the numbers it made sense. After all, the company rebounded to turn profit in quarter 2 after posting its first quarterly loss in 16 years in Q1.

One of the guests on the news spot was the Wall Street Journal’s Mike Ramsey, who reports on the automotive industry (may have seen his face during the Toyota recall news cycle, which he reported on extensively). When asked about the general opinion of financial analysts regarding the man behind the tough decisions at Harley, new CEO Keith Wandell, Ramsey said most believe in the short term he “has done a very good job" and "not been afraid to break some China.”

Again, reference to Buell and the attempts to sell off H-D’s newly acquired MV Agusta.

One thing critics of Harley both inside and outside the industry agree on, however, is the company’s biggest challenge – an aging demographic. While the introduction of the new Iron 883 and “48” help Harley’s bid for the younger rider, the Boomers fueled H-D’s massive growth and profitability. When their riding years expire, does Harley have the ability to replace them?

As Ramsey says in the video clip: “Are they [Harley] heading towards a cliff, when their core riders get too old to really drive a Harley?”

Not that there aren’t even more immediate troubles Harley must face. There’s the little issue of sorting out labor agreements with the company’s Wisconsin manufacturing sites, with reports of H-D considering moving production out of state. More on that story as it develops.

Watch The News Hub report on MSN
Post Tags: Harley-Davidson Financials, MSN Harley-Davidson
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