Harley trouble

[Jack]

Not new but interesting story .  http://www.nytimes.com/2009/03/22/business/economy/22harley.html?_r=1&em

[Momz]

Well, whats next?

Could they be possibly be getting ready to go to Congress and ask for a bail-out?

I shutter to think!

[Big IV]

It is odd that they talk about over production and under sales. Probably true enough. However, it is odd, because Dad was just quoting me a DealerNews article the other day. In that article, second hand from someone else, it was saying that HD dealerships are less effected because they can order a lower numbre of bikes per year, or even one at a time for special orders. Japanese makers end up shipping by the container and pre-selling to the dealers in advance.  The article said that the stacks of crated bikes, atvs, and other big units stacked up behind Jap dealers made it harder for the dealers to turn a profit, as opposed to the HD dealer that is only dealing with the inventory on the floor.

And though Harley's woes pale in comparison to what the automakers face — Harley's revenue dipped 2 percent last year while Detroit was crashing — overproduction and loose lending practices have burdened the company's finances.

I figured the loans with the 'no money down' was going to hit them too. The one thing that they do that should be fine is the HD buy back program that they do occasionally. That is the program where you can buy a sportster, make the payments, and then trade it in a year later on a larger bike, without losing the payments that you have made. They do that in a much lower quantity I expect than the 'no money' prgoram. And the used sporsters are sold abroad so they don't clog up the American market for the most part. Tax laws in Europe make it possible to resell the bikes for more over there and still make it a good deal. Although I've never really understood how.

In a pattern similar to that of the housing bust, Harley goosed sales by luring many buyers with no-money-down loans. A subsidiary created about 15 years ago, Harley-Davidson Financial Services, made those loans and packaged them into securities to sell to investors. As the credit market skidded, so did this subsidiary.

HD may be the most visible of the bike manufactuers to suffer from this, but they won't be alone. Honda is probably offsetting with car and jet money and spreading it around. I think Indian is in a good place, because they are still selling such a small scale to collectors with deep pockets, and not yet to the 'every-rider.'  It seems like if Indian can survive the next few years they will grow along with the econonmy upswing.

I'm suprised HD isn't asking for a bail out, and taking all the free money that they can. Why not. If the gov is going to offer it, you might as well take it.

Flynn asked for the American made porn industry to be bailed out. Cheaper imported porn is making the highly regulated industry non-competitive.

[Tropic traveler]

I think HD got caught up in the credit crunch the same way the banks did with home loans. Too many bike loans {big-uns too!} to folks with questionable credit-worthiness. When tough times come, the toy payment is the first thing to get skipped. A lot of the buyers "on the fence" will not buy right now either. You can't throw a dead possum and not hit a Harley Davidson in my neck of the woods! It is a buyers market right now for nice used bikes of all makes, buyers with cash that is.

Double whammy for the MoCo is a shrinking customer base {old farts our age} and their product line isn't very diverse. The leaders and the R&D dept. better get crackin' on some new products or HD's future aint lookin' so bright either!  

I just hope there isn't a lot of Harley dealer closures due to all the economic troubles. We love riding to them & visiting. They throw the greatest bashes!  

[solo1]

I just recently read that HD is getting a government loan.  Don't remember where I saw it.  Might not be true.

Either way, i can remember not too far back that HD had enough well paid lawyers to sue for the "patotoe" sound.

[Zorba]

I spend a lot of time at my friends bike repair shop and he has had Harley's by the dozen come in this year because the plastic tensioner to the oil chain for the oil pump wears out around 35 to 40000 miles and if not caught causes damage between $3000 and $3500 , if replaced early he'll put in S&S gear to gear
oil pump set up for $900 or so, no more plastic or chain and Harley has told all of them ,sorry we don't warrenty the oil pump problem, it's a "Wearable" part but we'll fix for $3500 to $4000 depending on the damage done, shame on them!
The old "Evo" motors where "Gear to Gear" , no chain and plastic tensioner to wear  out, so Harley went from a great idea to a poor one with the Twin 88 , go figure! Some of these guys say no more Harley's for them!
The shop tells me the plastic and chain came in when Harley started having their engines made in Taiwan and assembled in Penn/Wis,wow?
Bottom line is a lot of Harley owners are not happy with the warrenty on their $28000 bikes or lack of!

[Lyn-Del]

I remember hearing, some years ago, that a large part of the Harley mystique was the waiting time between ordering the dream bike and getting it.  Rumor was that HD sold more than it could make, but it was just a good marketing ploy.  Once they decided they had to compete with the "get it now" imports, the showrooms became crowded with bikes looking for riders.  Which forced the dealers to build new showrooms (which, of course, had to conform to the HD style) and put everyone in a position to end up in a world of hurt.

This is my conjecture, based on what I've observed.  I know of others who agree.  And others who don't.

[Al in AK]

I guess you could just keep the one and only one you ever bought.1983 FLHS, bought new for $6,435.00.