The Game

Thoughts on Harley CEO’s Interview With Cycle World

Harley's main dude offers insight into where the company and the industry are, and where they're headed

Last month, Cycle World published an extensive interview with Harley-Davidson CEO Matt Levatich. It’s an interview I keep coming back to when thinking about the motorcycling industry and one that I suggest checking out.

READ MORE: Let’s Tell Harley-Davidson What to Do

It’s pretty long – running in excess of 9,000 words – and a little tricky to read because CW’s ad-heavy website isn’t as user-friendly as it could be, but it’s worth the effort. CW goes over the top in referring to Levatich as the “leader of the free motorcycling world” (uhm, anyone looked at Honda’s sales numbers?), but it is fair to say that Harley is very much a weathervane and tastemaker for the industry in Western countries. What Harley does reflects what the overall industry is doing and will do.

Chris Cope_0025

Also, there are some interesting things for motorcyclists to think about. The Five Whys were inspired by something Levatich said in this interview, but there are also observations on what we all could or should do to make motorcycling better.

Hanging over the interview was Harley’s relatively unsteady ship. The company had recently announced plans to close its plant in Kansas City, Missouri, thereby putting 800 people out of work.

RELATED: Harley’s Bad News Could Be Worse Than We Think

The hot take when all this happened was that Harley was hurting as a result of several consecutively bad quarters. But, well, that wasn’t quite right. Firstly, there’s the fact Harley will be adding 450 casual workers (read: employees who are easier to fire) to its plant in York, Pennsylvania. It will also be revving up a manufacturing plant in Thailand later this year (If you’re reading this outside the United States, I’d bet good money your next Harley will come from Bangkok).

3

Meanwhile, an article in Vox this week suggests Harley has used the savings from the Republican tax cut to initiate a stock buyback, a move that will benefit shareholders. But not necessarily, you know, all those Missourians who have lost their jobs.

That’s all some pretty corporatey bullshit right there but Harley-Davidson is a corporation. And one of the quiet themes of Levatich’s interview was the feeling that, well, e pluribus unum – Harley-Davidson being the one in this case.

‘It’s impacting a lot of employees, obviously, which we don’t like to do, but ultimately it is reducing the overhead that we carry by having excess capacity. And that money, that savings, we can turn into other investments to grow the business. We are working hard at growing the business.’

Corporate sleight of hand will only work for so long, however, and Levatich conceded that Harley faces some challenges as it rolls toward the future. Somewhat amusingly, one of those challenges comes from Harley itself. Because the company has been so successful in the past, and because it spent a long time not really changing stuff, and because Harleys hold their value pretty well, it finds that new Harley-Davidson models often face the stiffest competition from the abundance of used Harley-Davidson models.

FXFBS Softail

This is most keenly felt with the Sportster platform where, but for the addition of ABS, the bikes of today aren’t a whole hell of a lot different than the bikes of a decade ago. The company has done a great job in recently overhauling its Softail line, making them markedly better – worth-trading-up-for better – than Softails of even a year ago, and Levatich suggested the same sort of radical change may be coming for the Sportsters.

‘Our emphasis on new product is to put space between new and used. We haven’t done as much with Sportster recently so it’s the last example of a platform that doesn’t have that space, content-wise.’

However, Levatich also implied the company may take the approach of believing that better is not actually better. The company makes good, reliable motorcycles these days, so the way to attract more customers may not be to throw more bells and whistles on the bikes, but, instead, to put effort into creating more customers overall.

2

Levatich used a good analogy from the world of skiing, pointing out that a company can make the very best ski gear in the world but it won’t matter much if no one’s interested in skiing. So, he says, Harley will be partially shifting its focus to the task of encouraging more people to ride.

‘When we have riders, the motorcycles will follow.’

You have to admit there’s some method to that madness. Rather than wasting time and money chasing after ever more niche segments – eg, sport tourer guys who would just piss and moan that any H-D attempt at the genre isn’t as good as such and such Honda/BMW/Kawasaki – it is easier and perhaps more intelligent to put resources into widening the pool. You can see Harley doing this already in its promotion and expansion of riding schools.

RELATED: 2018 Harley-Davidson Sport Glide – First Ride

A quiet knock-on effect of all this may be that we’ll see more motorcycle publications go under as Harley and other manufacturers reach beyond the trade press to find people who haven’t actually ridden. I mean, you’re unlikely to convince people to take up skiing by writing a bunch of articles in skiing magazines – that audience has already committed. So, in other words, I should have come up with a better name for my site than The Motorcycle Obsession.

‘It might be granddad who rides, but his son doesn’t ride, and he is therefore a firewall to the grandson. How does granddad help build the next generation of Harley riders?’

Levatich seemed to acknowledge that saying “We need to encourage more people to ride” and actually successfully encouraging more people to ride are two dramatically different things. It can actually be very difficult for an existing rider to encourage new riders. Especially in light of how much work is involved. To that end, Levatich stressed that rider training isn’t the be all end all of rider creation

‘An insight from my younger son, he finished the Riders Academy here locally, the dealer said to the class, “Congratulations, you’re now qualified to ride around in a parking lot.” And he shared that with me and I said, “That’s a perfectly accurate statement.” The journey is from there; that’s like step one of a 100-mile march, to be trained.’

Levatich spent a long time – I mean, a very long time – talking about the challenges of how to encourage new riders but never really hit on techniques to do so. I think this is a quandary facing many facets of the motorcycling world. Though, I think it’s something that every passion-driven interest deals with. Whether you’re talking about motorcycling, fishing, or listening to jazz, there is always an element of thinking: “Why don’t other people love this as much as I do? How can I change their minds?”

‘It’s hard to convey to somebody what’s on the other side. The joy of riding. We know it. That’s why we ride.. How do we help people understand what the payoff is?… This is the promised land, but it is hard to communicate.’

Levatich also addressed the fact that many would-be riders find themselves overwhelmed by the financial challenge of getting into motorcycling, pointing out that many in the Western world carry a far greater debt burden than folks of previous decades. But again, he offered few answers. It’s unlikely that Harley (or anyone) will be making cheaper bikes in the future.

5

Levatich spent a little time imagining what that future will look like. For reasons I can’t quite understand, a lot of moto-journalists are scared shitless of autonomous cars and the implications they may or may not have on society. Thankfully, Levatich has less of a Chicken Little attitude and suggested there will always be space for leisure activities like “driving a ’65 Mustang or riding a Harley.”

I’m slightly concerned Levatich sees riding a Harley as simply a leisure activity, rather than a viable transportation alternative in a world where roads are increasingly congested, but I suppose he’s simply being realistic about who’s buying his product.

‘Our industry is a sport, not transportation, even though the motorcycle does have practical use.’

In speaking of the big scary future world, Levatich stressed Harley will be a part of it in the form of electric motorcycles. And he says he believes those electric motorcycles will deliver on the things people are seeking from motorcycling and Harley-Davidson motorcycles in particular. He reiterated that the LiveWire is on track to become a reality and said that the positive response to that bike has actually helped Harley-Davidson to be more forward thinking.

‘The biggest thing that it demonstrated to us is that the customers are much more willing to see innovative and progressing things from Harley than probably we are allowing ourselves to do.’

Because this was an interview with Cycle World, it spent a good amount of time talking about racing – namely Harley’s flat track efforts and the challenges created by Indian’s sudden dominance of the sport. I glossed over it because, quite honestly, I don’t care. As Harley (or any manufacturer) looks to create and foster new riders I’m not 100-percent sure they’ll be found at race tracks. Sure, there may be plenty of folks in the stands who don’t ride, and could therefore be seen as potential riders, but I’m inclined to believe those folks will have already made up their minds. But I could be wrong.

James Cope BO_006

Meanwhile, as Harley settles into its 115th anniversary celebrations this year the focus will be on outreach and encouraging existing riders to be visible and good ambassadors for not only the brand but motorcycling in general.

RELATED: Help Me Think of Cool Things to Do With This Harley-Davidson Street Bob

It’s a call to arms that I feel strongly, if not simply because Harley has given me one of its bikes to use for the summer, and I find myself thinking a lot about how I can encourage more people to ride. I don’t really know. Just get out there and ride, I guess.

‘This business is about inspiration – this business is not about rational. There are rational components. But rationality doesn’t sell motorcycles.’