Plan 2003
Plan 2003
UP FRONT
David Edwards
ALL THINGS CONSIDERED, IT WAS A legitimate question.
The Austrian journalist, an informed, thoughtful man who'd traveled halfway around the world to be in Milwaukee for Harley-Davidson's 1998 new-model intro, leaned across the press bus aisle and almost in a whisper, asked, "Do you know why Harley invited all of us here? Seems like a lot of effort for a couple of extra sparkplugs, a new fairing and two-tone paint, doesn't it?"
It did.
You can read about the quad-plugged 1200 Sporty, the new Road Glide bagger and the be-spoked, be-leathered Road King Classic in this month’s Roundup. Nice bikes all, but hardly the stuff of banner headlines.
No, Harley-Davidson had flown in moto-scribes from all points of the globe for one reason and one reason only. It was time to deliver a message-one meant for H-D customers, yes, and for motorcycle enthusiasts in general, but also for other bike-makers and perhaps most important of all, for the mainstream financial community.
The message? The Motor Company is about to kick it up another gear.
Item: The unveiling of the Willie G. Davidson Product Development Center, a $25 million facility with another $15 mil of high-tech stuff-everything from sound cells to engineering labs to design studios-tucked under its artistically arching roofline. “The PDC is a cornerstone of Harley-Davidson’s plan to remain the motorcycle market leader long into the future,” said new company CEO Jeff Bleustein. “This facility allows us to bring new products to our customers more quickly.” The man for whom the building is named said, simply, “This is our ammunition for the future; we’re loaded and ready.”
Item: A Porsche-Harley engineering link-up, announced at the press intro. Quoting from the news release, the joint venture’s purpose is to “source and assemble powertrain components for use in potential new motorcycle products.” A Cycle World contact in Europe says the German company is already at work on new gearbox internals for the Big Twin. Asked if Porsche-penned engines or complete machines, say a mid-displacement cruiser, were a prospect, a non-com-
mittal factory insider would only say, “Anything is possible.”
Item: The purchase of an 800,000square-foot facility (that’s 16 football fields, give or take) just outside Milwaukee to serve as the new assembly plant for Big Twin motors. The current powertrain plant on Capitol Drive will be turned over exclusively to Sportster engines. Final assembly of Big Twin motorcycles remains in York, Pennsylvania, but Sportsters will be put together in a new facility in Kansas City, Missouri, due to come online in 1998. Factor in two new distribution centers, one in Wisconsin, one in Europe, and Harley says it will invest approximately $200 million in capital expenditures during 1997.
All this movement is part of a longrange strategic action plan that calls for production to ramp up from
135.000 motorcycles this year to
145.000 next year to 160,000 in 1999. Dubbed “Plan 2003,” it has 200,000 units popping off assembly lines by the time H-D celebrates its 100th year in the motorbike biz come 2003.
Big numbers befitting a big business. And make no mistake: HarleyDavidson is Big Business. The most current data shows Harley holding down almost 50 percent of America’s large-displacement sales (651cc and above). For the first six months of 1997, the company’s net sales totaled a record $870 million, some $107 million, or 14 percent, over January-June 1996. In fact, publicly traded Harley-
Davidson has posted record earnings through 29 consecutive quarters, a tally that makes hard-bitten Wall Streeters feel all warm and fuzzy.
There is room for concern at the House of Harley, though. The company sends 30 percent of its motorcycles overseas, and while export sales in Japan and Australia remain steady, Europe has suffered a downturn. Through May, sales were off a disturbing 6.5 percent, and Harley’s share of the Euro big-bike market dropped to 5.8 percent. On the home front, stock-market analysts and portfolio managers have taken note of newcomers Excelsior-Henderson and especially Polaris, both with plans to have heavyweight V-Twin cruisers on sale in 1998. Japanese models are hitting progressively closer to home, as well, not to mention the blatant rip-offs that make up the burgeoning clone market. Some financial types may be beginning to wonder if any of this indicates a burn-out in the rocket of success that has propelled Harley into high orbit for the past 10 years.
Hence, Plan 2003, which includes much more than amplified production capabilities.
“We’re in the process of an extensive new product development program,” said Bleustein, a man with the credentials to speak knowledgeably on the subject. Recently named president and chief executive officer, he joined Harley in 1975 as VP of engineering. Before that, he was on the engineering faculty at Yale University, and holds both a master’s and a Ph.D. in engineering mechanics. Back to the future, Bleustein said, “This has been our dream for a very long time-a brandnew generation of products from Harley-Davidson.”
Whether that means new engines or new models, next year, by the year 2000 or by the company’s 2003 centenary, no one is saying.
“There are lots of rumors floating around,” said a coy Bleustein to the assembled press corps, “and I can confirm...that there are rumors.” After waiting for the chuckles to subside, he continued, “There’s lots of fire burning within Harley-Davidson these days, so it’s not surprising there’s some smoke wafting about.”
Translation? Things are about to heat up at Harley-Davidson. U
