When Santa Cruz Harley-Davidson went out of business last week, dealer Mike James said, “We may be the first…but we won’t be the last.” James just might have known something.
The bell tolled again Tuesday. After 48 years, family owned Wilwert’s Harley-Davidson of Dubuque, Iowa went bankrupt and locked its doors. Letters painted in the front window spelled, “Going Out Of Business/ Thanks To Our Customers.” Wilwert’s was one of 22 Harley Dealers in Iowa.
Dubuque is a city of about 60,000 people on the Mississippi River near Illinois and Wisconsin. The nearest dealerships to the city are now in Waukon and Waterloo, Iowa about 70 miles away. It is a pretty place to ride but it is not the riding season there now. The high in Dubuque today was 29 degrees.
The Gory Details
The dealership opened in September, 1960 and moved into a new, 53,000 square foot building in 2003. According to Dun & Bradstreet, the dealership employed 32 people and had annual sales of about $3.1 million. The American Trust & Savings Bank, which has branches in five cities including Dubuque, won a judgment of more than half that amount, $1.6 million plus fees and interest, against Wilwert’s last Thursday.
A legal notice printed in the Dubuque Telegraph Herald announced a sheriff’s levy and sale of the property for January 15, 2009 at 10 am.
Dealer Clay Wilwert told Jamie Grey, a reporter for the local NBC television station, KWWL, that “he is working with his attorneys on possible partnership deals that could keep the (dealership) open.”
Dealers In Trouble
The personal catastrophe that the Wilwert family is going through seems to be an instant replay of what happened to Santa Cruz Harley. That dealership experienced a 70 percent decline in sales and simply did not have the cash to cover its expenses including debt. Santa Cruz tried to save the dealership by selling it but Harley corporate vetoed that proposed deal.
But, both Santa Cruz Harley and Wilwert’s Harley may be the victims of a problem that is bigger than either one of them
The Big Picture
Numerous financial wizards are predicting a decline in Harley-Davidson sales. Harley sells big, expensive bikes to aging men. A theory is making the rounds that most of those aging men bought most of those Harleys by cashing out the equity in their homes. And, an article in today’s Los Angeles Times by influential automotive writer Susan Carpenter asserts that any future growth in motorcycle sales will result from more women buying more small bikes.
But, Harley-Davidson’s problems might be even bigger than the motorcycle business.
You may have noticed that a fool has thrown the economy off a cliff and nothing seems to have hit bottom yet. The country is paralyzed by fear of the unknown. And, most people are thinking twice before they spend a dollar let alone twenty or thirty thousand of them for a new motorcycle.