Harley Has a History of Survival

January 23, 2009
Bryan Harley
Bryan Harley
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Our resident road warrior has earned his stripes covering the rally circuit, from riding the Black Hills of Sturgis to cruising Main Street in Daytona Beach. Whether it's chopped, bobbed, or bored, metric to 'Merican, he rides 'em all.

Harley-Davidson is cutting production and laying people off. The headlines are splashed on every moto industry news service on the web. Seems like the American automotive makers aren’t the only ones suffering from the current economic downturn. The Motor Company said it’s slashing production by 10-13% and 1100 workers will lose their jobs in the next two years.

But this isn’t Harley-Davidson’s first rodeo. It has demonstrated the ability to withstand the peaks and valleys of the unpredictable global marketplace before. The Motor Company has a habit of adopting the right strategies at the right time. The year before The Great Depression struck, the Harley-Davidson name was first stitched on a leather jacket. Now H-D merchandise is its third leading seller behind motorcycle sales and parts and accessories.

1933 Harley-Davidson with the first art deco  eagle  logo.
Who could have known that simple things like a splash of color and a cool eagle graphic would help your company survive during an economic depression? Apparently, someone at Harley-Davidson did.

Another strategy it adopted to stimulate sales during the Depression was using art deco paint schemes and vibrant colors on their motorcycles. Prior to then, most bikes were drab and monochromatic. H-D gave buyers customizable options at little cost to the Company. In 1933, they began painting an art-deco “eagle” design on all of its gas tanks, and the artistic graphic design would become inextricably linked with Harley-Davidson motorcycles.

In 1932, it came out with its first Servi-Car, a three-wheeler with a large cargo area in the rear. The utility trike was originally used by auto dealerships to make service calls and during car sales. It was designed to be towed behind a car, and when the vehicle was delivered to the customer’s home, the Servi-Car was then unhitched so the mechanic could ride back to the dealership. It was a practical workhorse for small businesses, and would become a mainstay in many police departments. The Servi-Car helped them make it through the Depression and remained in production until 1973.

Continuing the development of its V-Twin engine also kept them afloat. In 1936, H-D introduced the EL, a motorcycle with an overhead valve, 61 cubic-inch engine. The distinctive shape of the round knobs on the valve covers would earn the bike’s powerplant the nickname “Knucklehead,” an engine that still has a cult-like status among custom builders and old school riders today.

H-D also remarkably survived the AMF Years. Following its merger with the American Machine and Foundry Company in 1969, the new partner quickly streamlined production and slashed the workforce. Labor strikes ensued. Prices on the bikes they did put out were high in comparison to the Japanese makes that were flooding the market. The quality of their motorcycles suffered as well, and their reputation was tarnished.

But on Feb. 26, 1981, all that would change. Thirteen Harley-Davidson senior executives signed a letter of intent to buy back The Motor Company. And by June of that year, the deal was officially consummated, inspiring the rallying cry “The Eagle Soars Alone.”

The  Hillclimber  statue that sits outside of the Harley-Davidson Musuem was donated by the Davidsons.
Harley-Davidson will have to summon the spirit of the ‘Hillclimber’ as it has an uphill battle if it wants to return to its former prominence.

Despite regaining ownership, it was far from smooth sailing. In 1985, the bank that had financed Harley’s debts threatened to pull its financing and to begin liquidating its assets. It was New Year’s Eve, and time was running out. Like a last second pardon from death row, The Motor Company finally received the financing it was looking for. By 1987, Harley-Davidson went public and was listed on the New York Stock Exchange, staving the demise of America’s oldest motorcycle manufacturer.

Now the most recent crisis will again test Harley-Davidson’s resourcefulness. The Motor Company is already responding with appeals to a younger demographic by virtue of its Dark Custom series of motorcycles and by sponsorship of events like the UFC. More of its marketing is tailored toward the burgeoning women riders segment than ever before. It just released its newest rendition of a three-wheeler, the Tri Glide, which it hopes to market to police agencies once again. The Tri Glide received national attention as it led the procession down Pennsylvania Avenue earlier this week during the inaugural parade. And since people might be hesitant to shell out the dough for a new motorcycle right now doesn’t mean that they won’t be thumbing through the massive H-D Parts & Accessories catalog searching for ways to add a new wrinkle to their ride.

Weathering the turmoil is never easy. Righting the ship won’t come overnight, and unfortunately hard-working, dedicated employees will be the latest victims of the downturn. Sacrifices regrettably have to be made. But don’t count them out just yet. Harley-Davidson has proven to be a resilient bunch; otherwise it wouldn’t have made it through the first 106 years, and if history has a habit of repeating itself, I have a suspicion the “Eagle” will once again soar.

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