The first thing you should do when you meet a Harley-Davidson rider is check the back of his—or her, but let’s be honest, it’s probably his—jacket. The patches tell you who you’re dealing with. First, there’s the insignia. It might be a bald eagle atop the company’s logo to let everyone know this is a Harley guy—not a Honda guy, not a BMW guy, but a red-blooded, flag-waving American patriot. If this particular Harley guy belongs to one of 1,400 company-sponsored Harley Owners Group (H.O.G.) chapters around the world, the insignia will be coupled with a second patch that specifies which H.O.G. he belongs to: the Duluth H.O.G.s, the Waco H.O.G.s., or, today, the H.O.G.s of Long Island.
Sometimes there’s a third patch, for bikers who belong to an independent club—the Blue Knights are cops, the Hells Angels hate cops—but two-patch groups tend not to associate with them. “It’s a different mindset,” says Frank Pellegrino, who on weekdays is a vice president for a plastics outsourcing company and on weekends a Long Island H.O.G.
Pellegrino, who got his first Harley for his 65th birthday last year, is about to spend this cloudless summer Sunday exploring 100 miles along the back roads of New York and Connecticut with about 25 other Harley guys.
With him today are Joe, Marty, Dennis, Grover, Richie, Bob and his girlfriend, Dawn, and two Mikes, one with an American flag bandanna tied around his head. No one is younger than 45; many are well past 60. They’ve gathered behind a BP station at 8 a.m. in mid-July, sipping coffee and admiring one another’s bikes. At one point, Dennis talks politics with Joe and one of the Mikes.
“What’s the deal with all this fake news about a Europe plant?” Mike without a bandanna asks. “Harley was already going to build overseas, and now they’re just blaming it on the president.”
In June the European Union slapped what’s effectively a 31 percent retaliatory tariff on Harley in response to President Trump’s steel and aluminum tariffs. To avoid them, Joe says, Harley will stop making the bikes it sells to Europe in the U.S. The company already has plants in Brazil and India and is in the process of opening one in Thailand.
“Oh, is that the case?” Mike asks. He swears he read something different on the internet.
“I see where they’re coming from,” Dennis says, crossing his arms over his We Stand For The Flag T-shirt. “How are they going to sell over there with millions in tariffs placed on them?”
“I still don’t like it,” Mike says. “Harley ought to be focused on us.”
Three weeks later, and about 1,000 miles away at its headquarters in Milwaukee, Harley-Davidson Inc. announced what executives called the most ambitious overhaul in its 115-year history with a plan that, for the first time in decades, wasn’t focused on riders like Frank or Dennis or the Mikes.
In the next few years, Harley will release more than a dozen motorcycles, many of them small, lightweight, even electric. The new Harleys are intended to reverse years of declining sales and appeal to a new rider: young, urban, and not necessarily American. Harley wants international riders to be half its business in the next 10 years. “We are turning a page in the history of the company,” says Matthew Levatich, chief executive officer. “We’re opening our arms to the next generation.”
The two-patch H.O.G. clubs and three-patch biker gangs that made the brand famous have saddled the company with an uninviting reputation that Harleys are only for older white men who roam the highways on rumbling, two-wheeled beasts. Young riders, women, people of color, or anyone who lives in a city and wants a motorcycle for commuting rather than joyrides—the bikers send the message that Harley isn’t for them.
And without new customers, the company can’t grow. Nor can it fully recover from the Great Recession. It’s shipping almost a third fewer motorcycles to its dealers than at its prerecession peak in 2006. After rebounding slightly, retail sales have steadily declined again since 2014, tumbling almost 14 percent in the U.S. The average Harley rider’s age has inched up to almost 50. “It’s not just the brand, but the people associated with the brand,” says Heather Malenshek, Harley’s vice president for global marketing. “We’ve made a tonal shift to think about ourselves as being more inclusive.”
Among motorcycle fans, Harley’s new image met with astonished enthusiasm. “We looked at pictures of the new bikes and were like, Harley did this? That’s pretty wild,” says Zack Courts, features editor of Motorcyclist magazine. Riders who generally preferred Honda or Yamaha said maybe they’d try a Harley. It should have been a marketing coup.
Then the president of the United States called on motorcyclists to boycott the company. (...)
Harley has been selling bikes overseas since 1912 and today has 800 international dealerships, more than in the U.S. Still, its image and reputation remain thoroughly American. Harley-Davidson motorcycles are one of those rare products, like Coca-Cola or Mickey Mouse, that have become shorthand for 20th century America. They show up in pictures of civil rights marches, as part of President John Kennedy’s Dallas motorcade, and at the Apollo 11 astronauts’ ticker-tape parade. The company supplied military motorcycles in both world wars. Marlon Brando, Elvis Presley, and the Terminator rode Harleys. Evel Knievel broke so many bones stunt-riding Harleys that for a while the company paid his medical bills.
“From a practical perspective, riding a Harley doesn’t make sense,” Courts says. “It’s heavy. It’s expensive. But when you talk to Harley people, they don’t talk about how the motorcycle performs. They talk about what it represents.” As Michael Abiles, a Harley owner from Brooklyn, says, “You don’t get a tattoo of Honda.”
Trump embraced the motorcycle’s mystique. Two weeks after taking office, he invited Harley executives to the White House and held them up as an example of American manufacturing at its finest. “In this administration, our allegiance will be to the American workers and to American businesses like Harley-Davidson,” he said in February 2017.
Trump embraced the motorcycle’s mystique. Two weeks after taking office, he invited Harley executives to the White House and held them up as an example of American manufacturing at its finest. “In this administration, our allegiance will be to the American workers and to American businesses like Harley-Davidson,” he said in February 2017.
It was a shrewd move on the president’s part. “Most of us are just right of Attila the Hun,” jokes Pellegrino, the Long Island H.O.G. Republicans have long courted the biker vote: Ronald Reagan visited a Harley factory, and John McCain attended the Sturgis Motorcycle Rally in 2008. During the 2016 election, some of Trump’s most vocal supporters belonged to a 30,000-member group called Bikers for Trump. As the president said recently, “I guarantee you everybody that ever bought a Harley-Davidson voted for Trump.”
Maybe, but not that many people in the U.S. are buying Harleys—or any motorcycle. (This is a chicken-or-egg situation. Harley accounts for about half of U.S. motorcycle sales, so it’s hard to tell which one is dragging the other down.) In the U.S., motorcycles are generally used as leisure vehicles, costing from $5,000 to $45,000. Harleys average about $15,800. The baby boomers who want them already have them, and since the 2008 recession, that price is something younger people—especially millennials, who’re now in their early 30s and should be getting into the hobby—are unwilling to pay. According to the Federal Reserve’s Survey of Consumer Finances, the average millennial household owes almost $15,000 in student loans. Throw in a mortgage, children, and frozen purchasing power—it’s barely budged for 40 years in the U.S.—and what was once a middle-class luxury is out of reach. “For young adults, especially, we’re finding there’s a financial pressure that might not have been there in the past,” says Harley’s Malenshek.
Add that to the unappealing stereotype, and the problem becomes even more intractable. “That whole biker-with-his-T-shirt-sleeves-cut-off image has finally caught up with them,” says Randy McBee, author of the motorcycle history book Born to Be Wild. According to the Motorcycle Industry Council, only a quarter of all riders are age 25 to 40; just 14 percent are women. “I’m concerned about the core business, the hobby itself,” says Kevin Tynan, a Bloomberg Intelligence senior analyst. “I just don’t think young people are connecting with motorcycles the way previous generations did.”
While ridership has declined in the U.S., it’s growing in Europe and Asia. People in crowded Asian cities are turning to small, lightweight motorcycles for daily transportation. According to the Pew Research Center, 80 percent of households in Indonesia, Thailand, and Vietnam own a motorcycle or scooter. Europe is similarly promising. The number of motorcyclists there is larger than in the U.S. That’s good news for Harley, because Europeans use bikes to commute and for long-distance touring. Today, Europe accounts for 16 percent of the company’s business, and that number is growing. Last year, Harley’s sales in Europe rose 8 percent. (...)
The recession changed Harley’s perception of itself. Until then, it had never done much consumer research. “We’d mostly gone on gut feel. We thought we knew our existing customer base and what they wanted,” says Michelle Kumbier, Harley’s chief operating officer. She’s been with the company for almost 21 years and riding for more than a decade.
That gut feel led to some embarrassing oversights. In 2011, Harley’s top engineers and executives were at its test track in Arizona trying out new versions of its luxury touring bikes—ones designed for long-distance travel—when somebody remarked that couples rode 70 percent of touring motorcycles. When Levatich, who was COO at the time, heard that, he blanched. Neither he nor the engineers had considered the passenger, who is still generally a male rider’s wife or girlfriend. Kumbier was the only woman there. “She was the only one who’d ever been a passenger,” Levatich says. “We realized we were designing a product, but only listening to half the customer.”
Harley needed to do some emergency passenger-testing. The company is deeply proud of, and notoriously secretive about, its designs and technology. It won’t even let curators display old prototypes in the company museum. Harley wasn’t about to just show people its bikes—that would be ludicrous. Instead, it asked employees to try its motorcycles with a passenger. They returned with a lot of opinions: The armrest wasn’t right. The seat was too small to comfortably fit a rider and passenger, especially those made of “hardy Midwestern stock,” as Levatich says. A decorative bar around the saddlebags rubbed against the passenger’s leg. Later, Levatich’s wife, Brenda, attended the redesigned bikes’ unveiling. “When they announced the bar change, I get this jab in my ribs,” Levatich says. It was Brenda, who was thrilled they had redesigned it. “She’d never mentioned, ‘Hey, you need to fix this bar, it’s rubbing my leg all day long,’ ” he says. “We learned so much.”
Harley was supposed to be the master of touring bikes. If it could improve them that drastically, what else was it doing wrong? “We needed to talk to people in a more constructive way. In the past, we’d just go talk to customers at rallies,” Kumbier says. But those people already owned Harleys. If the company wanted new riders, it was going to have to court them, even if they didn’t like Harleys, or didn’t ride motorcycles at all.
by Claire Suddath, Bloomberg | Read more:
Image: Julian Berman
Sometimes there’s a third patch, for bikers who belong to an independent club—the Blue Knights are cops, the Hells Angels hate cops—but two-patch groups tend not to associate with them. “It’s a different mindset,” says Frank Pellegrino, who on weekdays is a vice president for a plastics outsourcing company and on weekends a Long Island H.O.G.
Pellegrino, who got his first Harley for his 65th birthday last year, is about to spend this cloudless summer Sunday exploring 100 miles along the back roads of New York and Connecticut with about 25 other Harley guys. With him today are Joe, Marty, Dennis, Grover, Richie, Bob and his girlfriend, Dawn, and two Mikes, one with an American flag bandanna tied around his head. No one is younger than 45; many are well past 60. They’ve gathered behind a BP station at 8 a.m. in mid-July, sipping coffee and admiring one another’s bikes. At one point, Dennis talks politics with Joe and one of the Mikes.
“What’s the deal with all this fake news about a Europe plant?” Mike without a bandanna asks. “Harley was already going to build overseas, and now they’re just blaming it on the president.”
In June the European Union slapped what’s effectively a 31 percent retaliatory tariff on Harley in response to President Trump’s steel and aluminum tariffs. To avoid them, Joe says, Harley will stop making the bikes it sells to Europe in the U.S. The company already has plants in Brazil and India and is in the process of opening one in Thailand.
“Oh, is that the case?” Mike asks. He swears he read something different on the internet.
“I see where they’re coming from,” Dennis says, crossing his arms over his We Stand For The Flag T-shirt. “How are they going to sell over there with millions in tariffs placed on them?”
“I still don’t like it,” Mike says. “Harley ought to be focused on us.”
Three weeks later, and about 1,000 miles away at its headquarters in Milwaukee, Harley-Davidson Inc. announced what executives called the most ambitious overhaul in its 115-year history with a plan that, for the first time in decades, wasn’t focused on riders like Frank or Dennis or the Mikes.
In the next few years, Harley will release more than a dozen motorcycles, many of them small, lightweight, even electric. The new Harleys are intended to reverse years of declining sales and appeal to a new rider: young, urban, and not necessarily American. Harley wants international riders to be half its business in the next 10 years. “We are turning a page in the history of the company,” says Matthew Levatich, chief executive officer. “We’re opening our arms to the next generation.”
The two-patch H.O.G. clubs and three-patch biker gangs that made the brand famous have saddled the company with an uninviting reputation that Harleys are only for older white men who roam the highways on rumbling, two-wheeled beasts. Young riders, women, people of color, or anyone who lives in a city and wants a motorcycle for commuting rather than joyrides—the bikers send the message that Harley isn’t for them.
And without new customers, the company can’t grow. Nor can it fully recover from the Great Recession. It’s shipping almost a third fewer motorcycles to its dealers than at its prerecession peak in 2006. After rebounding slightly, retail sales have steadily declined again since 2014, tumbling almost 14 percent in the U.S. The average Harley rider’s age has inched up to almost 50. “It’s not just the brand, but the people associated with the brand,” says Heather Malenshek, Harley’s vice president for global marketing. “We’ve made a tonal shift to think about ourselves as being more inclusive.”
Among motorcycle fans, Harley’s new image met with astonished enthusiasm. “We looked at pictures of the new bikes and were like, Harley did this? That’s pretty wild,” says Zack Courts, features editor of Motorcyclist magazine. Riders who generally preferred Honda or Yamaha said maybe they’d try a Harley. It should have been a marketing coup.
Then the president of the United States called on motorcyclists to boycott the company. (...)
Harley has been selling bikes overseas since 1912 and today has 800 international dealerships, more than in the U.S. Still, its image and reputation remain thoroughly American. Harley-Davidson motorcycles are one of those rare products, like Coca-Cola or Mickey Mouse, that have become shorthand for 20th century America. They show up in pictures of civil rights marches, as part of President John Kennedy’s Dallas motorcade, and at the Apollo 11 astronauts’ ticker-tape parade. The company supplied military motorcycles in both world wars. Marlon Brando, Elvis Presley, and the Terminator rode Harleys. Evel Knievel broke so many bones stunt-riding Harleys that for a while the company paid his medical bills.
“From a practical perspective, riding a Harley doesn’t make sense,” Courts says. “It’s heavy. It’s expensive. But when you talk to Harley people, they don’t talk about how the motorcycle performs. They talk about what it represents.” As Michael Abiles, a Harley owner from Brooklyn, says, “You don’t get a tattoo of Honda.”
Trump embraced the motorcycle’s mystique. Two weeks after taking office, he invited Harley executives to the White House and held them up as an example of American manufacturing at its finest. “In this administration, our allegiance will be to the American workers and to American businesses like Harley-Davidson,” he said in February 2017.
Trump embraced the motorcycle’s mystique. Two weeks after taking office, he invited Harley executives to the White House and held them up as an example of American manufacturing at its finest. “In this administration, our allegiance will be to the American workers and to American businesses like Harley-Davidson,” he said in February 2017.
It was a shrewd move on the president’s part. “Most of us are just right of Attila the Hun,” jokes Pellegrino, the Long Island H.O.G. Republicans have long courted the biker vote: Ronald Reagan visited a Harley factory, and John McCain attended the Sturgis Motorcycle Rally in 2008. During the 2016 election, some of Trump’s most vocal supporters belonged to a 30,000-member group called Bikers for Trump. As the president said recently, “I guarantee you everybody that ever bought a Harley-Davidson voted for Trump.”
Maybe, but not that many people in the U.S. are buying Harleys—or any motorcycle. (This is a chicken-or-egg situation. Harley accounts for about half of U.S. motorcycle sales, so it’s hard to tell which one is dragging the other down.) In the U.S., motorcycles are generally used as leisure vehicles, costing from $5,000 to $45,000. Harleys average about $15,800. The baby boomers who want them already have them, and since the 2008 recession, that price is something younger people—especially millennials, who’re now in their early 30s and should be getting into the hobby—are unwilling to pay. According to the Federal Reserve’s Survey of Consumer Finances, the average millennial household owes almost $15,000 in student loans. Throw in a mortgage, children, and frozen purchasing power—it’s barely budged for 40 years in the U.S.—and what was once a middle-class luxury is out of reach. “For young adults, especially, we’re finding there’s a financial pressure that might not have been there in the past,” says Harley’s Malenshek.
Add that to the unappealing stereotype, and the problem becomes even more intractable. “That whole biker-with-his-T-shirt-sleeves-cut-off image has finally caught up with them,” says Randy McBee, author of the motorcycle history book Born to Be Wild. According to the Motorcycle Industry Council, only a quarter of all riders are age 25 to 40; just 14 percent are women. “I’m concerned about the core business, the hobby itself,” says Kevin Tynan, a Bloomberg Intelligence senior analyst. “I just don’t think young people are connecting with motorcycles the way previous generations did.”
While ridership has declined in the U.S., it’s growing in Europe and Asia. People in crowded Asian cities are turning to small, lightweight motorcycles for daily transportation. According to the Pew Research Center, 80 percent of households in Indonesia, Thailand, and Vietnam own a motorcycle or scooter. Europe is similarly promising. The number of motorcyclists there is larger than in the U.S. That’s good news for Harley, because Europeans use bikes to commute and for long-distance touring. Today, Europe accounts for 16 percent of the company’s business, and that number is growing. Last year, Harley’s sales in Europe rose 8 percent. (...)
The recession changed Harley’s perception of itself. Until then, it had never done much consumer research. “We’d mostly gone on gut feel. We thought we knew our existing customer base and what they wanted,” says Michelle Kumbier, Harley’s chief operating officer. She’s been with the company for almost 21 years and riding for more than a decade.
That gut feel led to some embarrassing oversights. In 2011, Harley’s top engineers and executives were at its test track in Arizona trying out new versions of its luxury touring bikes—ones designed for long-distance travel—when somebody remarked that couples rode 70 percent of touring motorcycles. When Levatich, who was COO at the time, heard that, he blanched. Neither he nor the engineers had considered the passenger, who is still generally a male rider’s wife or girlfriend. Kumbier was the only woman there. “She was the only one who’d ever been a passenger,” Levatich says. “We realized we were designing a product, but only listening to half the customer.”
Harley needed to do some emergency passenger-testing. The company is deeply proud of, and notoriously secretive about, its designs and technology. It won’t even let curators display old prototypes in the company museum. Harley wasn’t about to just show people its bikes—that would be ludicrous. Instead, it asked employees to try its motorcycles with a passenger. They returned with a lot of opinions: The armrest wasn’t right. The seat was too small to comfortably fit a rider and passenger, especially those made of “hardy Midwestern stock,” as Levatich says. A decorative bar around the saddlebags rubbed against the passenger’s leg. Later, Levatich’s wife, Brenda, attended the redesigned bikes’ unveiling. “When they announced the bar change, I get this jab in my ribs,” Levatich says. It was Brenda, who was thrilled they had redesigned it. “She’d never mentioned, ‘Hey, you need to fix this bar, it’s rubbing my leg all day long,’ ” he says. “We learned so much.”
Harley was supposed to be the master of touring bikes. If it could improve them that drastically, what else was it doing wrong? “We needed to talk to people in a more constructive way. In the past, we’d just go talk to customers at rallies,” Kumbier says. But those people already owned Harleys. If the company wanted new riders, it was going to have to court them, even if they didn’t like Harleys, or didn’t ride motorcycles at all.
by Claire Suddath, Bloomberg | Read more:
Image: Julian Berman
