The great brand was all but finished. Until a brave band of visionaries refused to allow it to die…
Harley-Davidson owned a massive 80 per cent share of the US market for big motorcycles in 1969.
The yanks just couldn’t get enough of the big beasts and all looked very rosy for the great American eagle. But things were not to stay that way.
A short ten years hence, that figure had dropped to just 20 per cent.
What went wrong? Well, the Japanese had filled a market niche with dependable and relatively cheap motorcycles, and the cringe over bikes from the Land of the Rising Sun was not affecting the new generation of questioning youth.
Added to this, the US was in recession in 1981 and this severely threatened Harley-Davidson. Soon, the then current owner AMF began to lose interest in keeping the struggling business afloat.
To save the company, and to affect a turnaround, 13 Harley-Davidson executives, led by Vaughn Beals, put together a plan for a leveraged management buyout. With the financial support of Citicorp, the management team succeeded in taking control of Harley-Davidson from AMF on June 16, 1981, at a cost of $81.5 million.
The group’s turnaround strategy was to improve quality via new management and manufacturing techniques, including adopting such management techniques as decentralised quality discussion groups and “just-in-time” inventory control.
After the company’s top management toured Honda’s Marysville plant in 1981, Vaughn Beals noted in Fortune, “We were being wiped out by the Japanese because they were better managers. It wasn’t robotics, or culture, or morning calisthenics and company songs – it was professional managers who understood their business and paid attention to detail.”
In an effort to do likewise, management at the York plant developed three principles for change: worker involvement, manufacturing materials available as needed and statistical operator control.
While the company is currently experiencing real difficulty due to the global financial crisis, it returned to full health due to the foresight of those 13 brave men who sat up late and devised a revolutionary plan back in 1981.
Fast forward to 2020, and the company is again facing financial difficulties, reporting a profit drop of 45 per cent year-on-year.
Snag’s career in motoring journalism spans 29 years with stints at major bike mags Australian Road Rider, Motorcycle Trader and AMCN along with contributions to just about every other outlet worth a hill of beans. He was editor of Unique Cars magazine and hosts his legendary podcast ‘Snag Says’ when he gets off his date.