Harley-Davidson continues to search for a way out of the corner into which it has painted itself.
Today the motor company announced that Keith Wandell (pictured above) who has worked for another Milwaukee company named Johnson Controls for the last 21 years, will become the Chief Executive of Harley on May 1st. Wandell succeeds James Ziemer who has worked for Harley for the last 40 years and has been running the company for the last four.
Harley-Davidson had to borrow $600 million in early February to stay in business. Half of that money came out of the pocket of the famous money making guru Warren Buffett. And, the loans are unsecured which means that if Harley goes out of business nobody is going to get paid back. So presumably, these big creditors sat in on the job interviews.
Why This Guy
Wandell’s old company supplies auto manufacturers world-wide. Johnson Controls sells parts to Chrysler, Ford, GM, Honda, Hyundai-Kia, Mazda, Mercedes, Mitsubishi, Nissan, and Toyota. The company has 43,000 employees in the United States.
And, one of the reasons Harley hired Wandell is because the Board of Directors thinks his experience selling parts overseas will help the company sell more bikes on other continents. The market for heavyweight motorcycles in this country is what millionaires like to call “mature.” That means that just about everybody who wants to own a Harley already has one. Sales to new Harley owners are offset by lost sales to bikers who are either content to keep the old bike running or who have traded their motorcycle in for a boat.
Selling More Bikes
There are two ways to increase sales in a mature market.
One way is to make a product that either wears out or becomes out of date. In consumer electronics, for example, people have been forced to replace their computer hardware and software, their cell phones, and the media they use to store their music whether their phonographs and their computers still work just fine or not. Ford Model Ts never wore out so automakers introduced stylish new “models.” With fins! When American Machine and Foundry owned Harley they tried to boost new bike sales, and profit margins, by building really crappy bikes.
The other way is to boost sales is to start selling refrigerators to Eskimos. The logic here is that if Harley can just introduce its brand to people who have never considered buying one of their motorcycles before, like Mongolian shepherds or Afghan tribesmen, the demand for the bikes will grow.
For years Harley has been trying to increase the size of its market by enticing American women and twenty-something men to buy the company’s bikes. In case you are wondering why there is a V-Rod, a Buell and a Women of Harley.
In a press release announcing his appointment, Wandell was quoted as saying, “If you’re only working on today and tomorrow, then things are going to stall out.” Which might just be an example of the kind of safe corporate-speak that reflects the standard corporate thought that got Harley in trouble in the first place.
Wandell is bringing in both a new Minister of Propaganda and a new Warlord. Matthew S. Levatich, who is now the boss of all bosses at a Harley owned Italian motorcycle company named MV Agusta will be the new President and Chief Operating Officer of Harley-Davidson Motor Company. Think of him as the Warlord.
Harley is also creating a new executive position to “oversee motorcycle product planning and development processes.” The title of the new job is Executive Vice-President for Corporate Product Planning. Think of him as the press release guy. A man named James McCaslin will sit in that office.
So at last! Our motorcycle company has been saved!