Santa Cruz Harley Is History

November 13, 2008

All Posts, News

Maybe this is why some people are starting to think that maybe somebody might finally want to consider pistol whipping that smart ass smirk off President Stupid’s face.

Canceling Christmas, burning your life savings, foreclosing on your house and telling you to quit whining about it was bad enough. But, now the Harley dealerships are starting to fold.

For the last 25 years, owning a Harley dealership has been a bullet proof way to get rich. Now that’s all gone and the first Harley dealership to fail is Santa Cruz Harley-Davidson in California which suddenly shut down Tuesday night.

Santa Cruz

Santa Cruz is a beach town at the northern end of Monterey Bay. For most of its history it has been a fishing town. The Santa Cruz boardwalk has long been a summer vacation spot for working class families. More recently it has become home to a campus of the University of California, a technology center and a bedroom community.

There had been a Harley-Davidson dealership in Santa Cruz since 1923. The dealership survived the great depression, the Second World War, the Japanese Bike invasion of the 1960s and the maiming of Harley-Davidson by the American Machine and Foundry Company in the 1970s.

But, Santa Cruz Harley could not survive the current catastrophe. This year motorcycle sales plummeted by 70 percent, from an average of 50 motorcycles per month to only fifteen motorcycles in October.


The dealership moved to its most recent location, at the corner of Seabright and Soquel in Santa Cruz in 1997. It was a popular destination for weekend bikers in the San Francisco Bay Area because the dealership included a small Harley-Davidson museum. The museum displayed antique bikes and memorabilia and of course it also gave visitors the opportunity to buy souvenirs. Obviously, it did not sell enough of those.

Santa Cruz Harley suffered a classic cash flow crisis. The company had more money going out than it had coming in and it could not secure loans to cover the difference. Last weekend, the dealership sold merchandise at half price at an “End of the World Sale” just to meet its payroll.

What Happened

Dealer Mike James told the Santa Cruz Sentinel that the business was, “a victim of what’s happened to consumer confidence.” James also ominously warned, “We may be the first Harley dealer (to close) but we won’t be the last.”

James told the paper that he had arranged to sell the dealership but that the deal was vetoed by Harley-Davidson’s corporate headquarters.

Dealer’s Last Words

On the dealership’s website, James wrote: “Plain and simple, compounding debt upon debt to try to ride out a long and painful economic downturn was not prudent. Lots of good people are adversely affected. And, I am sick about that.”

“I am proud to say that our employees to a person were there for the dealership, for each other, and for our customers. Technicians working on their own time and without pay to complete customer jobs. Other employees delivering parts that were special ordered. Again, on their own time and without pay.”

“What was disappointing was Harley’s self-absorbed, garbled response. Avoid. Don’t make a decision. Lack of care and concern for the welfare of the customer and the welfare of good and decent employees. With a buyer willing to invest and carry our collective vision forward, this never should have happened. A grave lack of focus and leadership resulted in a wonderful opportunity slipping away. Shame on you Harley. As we learned long ago-you take care of your customers and you take care of your employees at all costs. Perhaps the importance of that has been lost among the cubicle rats.”

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