| Author | Message | ||
     Johnboy777 |
Killing Buell and buying (now selling) MV are simply two in a series of bad decisions at HD. HD's troubles have just begun. They borrowed money at 15% to make thousands upon thousands of questionable loans (sound familiar) on their motorcycles so as to increase their sales above and beyond 'normal' demand - these loans are now (and will continue to be) defaulting like crazy. all of these recovered bikes 'flooding' the market will no doubt drive down prices on used Harleys and in turn slow the sales of new product. This will be a double wammy, as slow new bike sales will decrease cash flow just at the time when they most need it to cover not only operations, but all of their 'bad' debt. Without this type of money in the pipeline, their sales will plunge - add to that, the driving force behind a large portion of their sales have been baby-boomers (like me) who will soon be too old to ride. They haven't really been able to capture the younger market (those riders who have never seen 'Easy Rider') From my perspective, this is the perfect storm - a recipe for disaster, looming on HD's horizon. And let's not forget (regardless of all of HD's cache), these things are really just high-priced 'toys', after all. John | ||
| Moonrunrs |
I haven't been seeing scores of used Harleys on the market that have been repossessed, has anyone? If Harley's subprime loans are all defaulting now, there should be thousands of used Harleys coming back to dealerships. | ||
| Khelton |
Accurate assessment. They find themselves with the same market and demographic problems which confronted them years ago, only worse. The Harley demographics are so unique, narrowly focused, that I don't know if a Harley rider will buy anything except a Harley ( generalizing I know). If they had bought Ducati, I doubt those two brands would have mixed in the same showroom either. | ||
| Khelton |
Harley's are being repo'd like crazy and being auctioned at the national auctions. | ||
| Electraglider_1997 |
Hating on Harley ain't going to help. Everyone on this board is only preaching to the choir. | ||
| Johnboy777 |
""Hating on Harley ain't going to help. Everyone on this board is only preaching to the choir"" EG, who said anything about hating Harleys - I was pointing out that Harley has a lot of problems facing them in the future. Based in fact, on their business decisions. In that light, from my perspective at least, it makes it easier to understand their Buell decision. EDIT: I think they are in crisis mode. (Message edited by johnboy777 on October 18, 2009) | ||
| Tom_barnyard |
Where are these "national auctions"??? I am looking for a 2009 ultra glide...... | ||
| Moonrunrs |
Yeah, where can I find a repo'd bike at auction in California? | ||
| Nipsey |
Adesa PAR North America KAR Holdings And many many others - Our business is ancillary to auctions and we are seeing huge increases in repo's and this is in the credit union market - much more conservative lending than many others including HD | ||
| Moonrunrs |
Thanks. I also found this article. http://www.tradingmarkets.com/.site/news/Stock%20N ews/2290744/ | ||
| Khelton |
These national repo and auction companies work for the manufacturers, as such they only sell to dealers..that keeps them from competing with their own dealer network... | ||
| Khelton |
Hmm..Moonrunrs article says Harley will now sell auction bikes to an individual, new and not a good sign for Harley. | ||
| Conchop |
Wait until this time next year. Ugly times are here and until the re-pops get "digested", people get good jobs, and the markets stabilize, you can bet the HD management teams errors will smell. The stench will be here for a while. Here comes more layoffs. | ||
| Johnboy777 |
The more I read about Harley-Davidson Financial Services, the more unbelievable this becomes. Early in 2007, HD brings in Saiyid Naqvi as president of their wholly owned credit division. Naqvi was president and CEO of a Cleveland, Ohio online mortgage company, specializing in (you guessed it) sub-prime mortgages. 1/3 of their new bike loans are sub-prime at 18%, or so. Naqvi has since left HD Financial Services. LINKS (source): http://milwaukee.bizjournals.com/milwaukee/stories /2008/05/05/story1.html http://milwaukee.bizjournals.com/milwaukee/stories /2007/01/29/daily50.html . | ||
| Sfarson |
"Killing Buell and buying (now selling) MV are simply two in a series of bad decisions at HD." Well, Milwaukee is losing $55,000,000 a quarter on Buell, and MV is a fountain of red ink... has been so even before H-D bought them; it will take one patient and deep pocketed investor to keep MV afloat for awhile. So I'm not there this is another series of bad decisions from H-D. I would give their analysts and executive board some credit for doing due diligence with these decisions. That said, Milwaukee has an uncertain future ahead for them, with market and demographic realities keeping many of their executive strategic planners up late at night. If economic conditions continue to improve (and I believe they will), and H-D diversifies their line (they have stated they are going to do so), and they crack the enormously big potential markets of China, India, and elsewhere with thoughtful products (They are very active on these fronts), then I think they will be OK. The H-D brand has enormous value and cachet. I'm not there yet that H-D is going to collapse or "meltdown". | ||
| Babired |
If HD keeps losing money I'm wondering what is next for the chopping block at HD I'm thinking the rentals program will be next and I know Rider's Edge is one of the most expensive programs to run at a dealer. I would hate to see the Rider's Edge dept go. I have friends there who have worked for RE in the past and moved on with promotions. After seeing Buell fall I'm scared. | ||
| Atoms |
Well, Milwaukee is losing $55,000,000 a quarter on Buell... How is that even possible? 180 employees, if they cost $50k a year each that works out to only $2.25 million a quarter. I'm sure there are a lot of other costs; marketing, warranty work, capital costs for the factory and stuff, but seriously, where could $55 million a quarter be going? Did a couple of zeros get added by mistake? | ||
| Mikef5000 |
Yes, please cite a reference for the $55,000,000 per quarter. | ||
| Nobuell |
$55,000,000.00 ? Thats a quarter billion dollars a year from a company with 180 employees! I would love to see where that number came from. Seems impossible to me. | ||
| Electraglider_1997 |
Maybe it is figured like this. The board of directors tells Erik that "in ideal times" the money they front Buell with would make HOG 55 million/quarter if that same money "in ideal times" would have instead been invested elsewhere. That "elsewhere" probably meant "invested in a ponzi scheme with Bernard Madoff. | ||
| Eulysses |
55M Probably configured for tax write-down. | ||
| Johnboy777 |
""55M Probably configured for tax write-down."" I thought that $125,000,000 was the write-down number on Buell...no? The Business Journal of Milwaukee: Wandell (Keith Wandell, CEO of Harley-Davidson) said that the company intends to reinvest capital that would have gone into the Buell brand into the Harley-Davidson brand. The corporation made a $6.6 million capital investment in Buell last year and a $4 million investment so far this year. In return, the brand lost $18 million in 2008 and $27 million so far in 2009, including the $14.2 million impairment charge, he said. The Business Journal of Milwaukee: Discontinuing Buell will cost Harley-Davidson about $125 million in one-time expenses, with about $115 million of that total to be incurred in fiscal 2009. LINK (source): http://milwaukee.bizjournals.com/milwaukee/stories /2009/10/12/daily59.html . | ||
| Johnboy777 |
"and [a loss of] $27,000,000 on 2009, etc." That works out to $150,000 per employee or $2,700 per bike. . | ||
| Hughlysses |
John- That statement about the losses on Buell doesn't appear in HD's 3rd quarter press release here: http://www.harley-davidson.com/wcm/Content/Pages/HD_News/Company/newsarticle.jsp?locale=en_US&articleLink=News/0581_press_release.hdnews&newsYear=2009&history=news The press release also lists net revenue for Buell & MV Agusta (lumped together):  Something doesn't add up.  | ||
| Sfarson |
I saw the $55 mil in a report (it looked authentic) placed at another site, but can't remember the location or which of the bazillion message threads about this at every motorcycle forum it came from. Will post if I come across. | ||
| Uncleron |
HD hired a ceo (criminal executive officer) who had never even owned a motorcycle. The actions of current HD management demonstrate that they are far more interested in pandering to wall street than in doing right by their employees and customers. The situation reminds me of AMF, their mismanagement almost killed off the Motor Company; looks like history is getting ready to repeat itself. | ||
| Rightpecial |
Well they've certainly lost me. I've owned two Buells and a V-Rod. Guess how well the dealerships treated me overall? I'm really not hating on HD, but I just got through taking a ride on a friend's homebuilt chopper and if I want something that is slow and doesn't corener, and I know that I'll have to work on it myself then I'll build my own. Just my two cents, but the entire culture that HD created made them wealthy but will also be their undoing. |
