I've read it but don't understand it, which either means I'm thick (high possibility) or the new CEO is an ex politician. They want people to order top end models at a premium price without customisation possibilities.
Upt'North.
...or, it may be that the company is simply out of cash and cannot continue with their product development programs - and the new CEO finally developed the
cajones to tell everyone that. If that is the case, the
only thing they can do is build their present models with the tooling and parts they have available and hope that:
- the economy turns around and H-Ds demographic who like those bikes gets back to work soon;
- these folks have a hankering for a new scoot' and either have a wad-'o-cash or are OK with making payments <again>;
- these bikes sell and generate some profits to fund new product development.
I'm sure that the recent share buy-back and big pay-outs to failed executives have helped an awful lot with this whole situation.
Product development is a crucial activity - which Harley Davidson has muffed pretty badly in recent years. The problem is that
no new products = dropping sales and
dropping sales = reduced profits. Eventually, sales will drop to
no sales =
no money for new products. It is a vicious circle - but the key is sales of existing and new products. All companies go up and down in the market (that is why there are occasional promotions with incentives - to drive sales of lagging products). However, a company whose sales are dropping
year-over-year is in trouble.
Quite a number of car companies have found themselves in the same pickle and while some have recovered, others did not....DeSoto (dead in '61), Studebaker (dead in '63), DeLorean & Checker (both dead in '82), American Motors (dead in '87), Oldsmobile (dead in 2004), Pontiac (dead in 2010), General Motors & Chrysler (both bankrupt in 2008-09), Fiat (nearly dead in 2012-13), Victory motorcycles (dead in 2017), Renault-Nissan (in trouble right now), etc. etc. etc.
I am not a financial wizard but I do know a thing or two about product development. New product development is beastly expensive and the hundred of millions of dollars (if not
billions of dollars, in the case of a new model car with sexy new technologies) that it costs can only be funded by:
- taking on debt (mortgaging the company and its assets - but banks are pretty conservative, particularly with companies whose press is not positive) or,
- raising equity (i.e. stock offerings which can dilute the value of existing shares - and who wants to invest in a company that pays-off failed executives or buys-back its own shares to drive up the stock price so that the Board of Directors can get a bigger bonus - this year) or,
- the sales of existing models - which in Harley's case have been dropping for years.
How many existing bikes are on the road now and how many stickers are on pickup truck tailgates today - simply doesn't matter
at all in any of this. All that tells you is how many people drank the kool-aid
in the past. The company (Harley)
already has their money (and has likely already blown it on share buy-backs and executive pay-outs).
Just remember the words way above in this thread about going to a BSA vintage bike rally. You'll see lots of nice shiny bikes and nice crisp made-in-China tee-shirts - but just try to ring up the Birmingham Small Arms company and ask about purchasing a new 2020 BSA bike.
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