Topic: Rumors of Honda purchasing Harley????

[Bikebuff]

Hi Everyone,

I live in Milwaukee, WI-home of Harley Davidson, beer, and polkas.  Anyhow, in the local newspaper The Milwaukee Journal-Sentinal, I saw this today:

FRIDAY, June 22, 2007, 1:42 p.m.
By Rick Barrett

Sketchy Harley report stirs trading
Trading in options to buy Harley-Davidson Inc. (HOG) shares surged to a record on speculation that the company may be acquired by competitor Honda Motor Co.

Bloomberg News reported that the number of call options jumped to 42,074 contracts, an all-time high, after a writer/analyst for California-based Optionetics.com reported rumors of a potential takeover. Forbes.com early this afternoon reported "dubious" rumors that Honda was a potential suitor.

In a telephone interview with the Journal Sentinel, Optionetics writer/analyst Frederic Ruffy said he knew little about Harley and that he did not cover the company as an analyst.

"But I cover the options market, and I look for unusual activity," he said. "Based on what was going on with Harley-Davidson's options, it seems like people are expecting an announcement."

Ruffy went on to say that he checked several investor Web sites and found rumors that Honda was interested in acquring Harley.

"But I have no idea whether those rumors are credible," he said.

"My gut feeling is that I don't see a takeover of Harley Davidson. At this point I think that it is pure speculation," said George Ries, president of George Reis Investment Group, in Two Rivers.

Harley-Davidson spokesman Bob Klein declined to comment.

Harley shares were up 4% to $62.40.


*******This is the first rumor I've heard about this.  But then again, I'd also heard rumors of H-D purchasing Ducati, which have been unconfirmed as far as I know.

Aside from this being rumors at best, I wonder if there's anything to read into about this, or if this is a H-D marketing ploy to get more buyers into the dealerships since they had lower sales for the first quarter this year.

[xtalon]

I think this is highly unlikely given the fact that as a company, Harley-Davidson is pretty strong right now.  If they were fighting to keep their head above water like some of the US auto makers, I could see it would be more likely.  I'm not saying it couldn't happen, just highly unlikely.

Imagine what would happen to all the die hard Harley guys if Honda did buy them?  Hell, it would probably throw the planet off it's axis!     Plus they would be forced to wave when passing all 'rice burners'!   

--xTalon

[toycollector10]

I guess the bottom line is that Harley shares are up 4 percent.  The big players have ways to influence the market before they quit a big bundle of shares. They know the right people to drop the right hints to so that the price rises. It's pretty common sort of behaviour. Just my opinion.

[nickjtc]

It's pretty common sort of behaviour. Just my opinion.

I agree. And the above comment about how the faithful would react is spot on!

[aptech77]

HD and DUCATI

http://www.ft.com/cms/s/209fe0b8-18a6-11dc-a961-000b5df10621,dwp_uuid=e8477cc4-c820-11db-b0dc-000b5df10621.html

[BobbyR]

This may be what feuld the rumor:

Investors may have been eager to ride the coattails of the Honda rumor because of Harley's lackluster performance as of late. Since November, shares of Harley have fallen 17%. In the first quarter, profits plunged 18% amid tepid sales and a three-week strike at a major production plant. While the strike was a negative one-time event, weak demand and an industry-wide slowdown was at the crux of the slip. Harley is also an unexpected victim of the subprime crunch, its financial services arm battered by higher defaults on its subprime loans.

http://www.forbes.com/markets/2007/06/22/harley-davidson-honda-markets-equity-cx_er_0622markets19.html

[merc2dogs]

well, you can only sell so many jackets....

 Harley has always been a rollor coaster as far as staying alive, amf etc.

 I like Harley, just not the new image they have, think that's mostly from the 60's/70's though.
 the only other real market they're into is clothing, and that's through licensing, other companies are into a wide spectrrum of related products.
 
    Harley's, as they stand are image and luxury items, image items WILL change with the seasons. and luxury items are always unpredictable.

 Used to hear people talking about the latest jesse james or OCC episode ALL the time, now you -may- hear a reference to them once a week or so, it's faded, it's run it's course, this time next year the biggest thing depends on what the marketers grab and run with, maybe mopeds and pocket protectors?

 I recognized that when a lot of the harley clone companies started closing up, market got flooded, anyone who wanted one and had the cash bought one, people who wanted one and didn't have the cash, well, joe's selling his year old bike for $4000 off list......
   
Been seeing a lot of harleys listed for well under $10k, a few weeks ago a 97 or 98 wide glide was listed at $6800. almost unheard of for the big ones to sell for less than $10k if they were rideable and less than 10 years old.

Just today there were four harleys (and a 'big dog') posted on craigs list, only a sportster is over $10k (big dog $17k) http://grandrapids.craigslist.org/mcy/ (I'd love to jump on that 81 fxwg for $6500 shovelhead)

 to put it in perspective, 10-15 years ago $5-$6 grand was about average price for a used harley.

Ken.

[Jerry Rxman Griffin aka MuthaF'er]

I certainly hope not! I haven't had to replace any parts on my Harley since I bought it new in 10/02 (except battery as expected a month ago & tires). I can count on being able to buy replacement parts from Harley almost forever but not Honda. Honda-Davidson would probably start discontinuing parts after 15 years or so. Anyone seen a new left side control, front fender, tank, exhaust, side covers, caliper, etc etc etc for a 75 750F from Honda lately?!!!     

[Raul CB750K1]

I certainly hope not! I haven't had to replace any parts on my Harley since I bought it new in 10/02 (except battery as expected a month ago & tires). I can count on being able to buy replacement parts from Harley almost forever but not Honda. Honda-Davidson would probably start discontinuing parts after 15 years or so. Anyone seen a new left side control, front fender, tank, exhaust, side covers, caliper, etc etc etc for a 75 750F from Honda lately?!!!     

What??? I can find 90% of the parts for my 36-year-old CB750K1 right from the Honda dealer. The only things that are discontinued are the body parts as tanks, sidecovers etc. Even the oil caution sticker is available. You can buy the starter button for one buck; I doubt harley or any other make will sell you the button alone but the whole assembly.


Benelli was bought by the chinese a couple of years ago, so you never know what could happen. If Honda plans to takeover, I guess they will do it through a satellite company.

[xtalon]

well, you can only sell so many jackets....

 Harley has always been a rollor coaster as far as staying alive, amf etc.

 I like Harley, just not the new image they have, think that's mostly from the 60's/70's though.
 the only other real market they're into is clothing, and that's through licensing, other companies are into a wide spectrrum of related products.
 
    Harley's, as they stand are image and luxury items, image items WILL change with the seasons. and luxury items are always unpredictable.

 Used to hear people talking about the latest jesse james or OCC episode ALL the time, now you -may- hear a reference to them once a week or so, it's faded, it's run it's course, this time next year the biggest thing depends on what the marketers grab and run with, maybe mopeds and pocket protectors?

 I recognized that when a lot of the harley clone companies started closing up, market got flooded, anyone who wanted one and had the cash bought one, people who wanted one and didn't have the cash, well, joe's selling his year old bike for $4000 off list......
   
Been seeing a lot of harleys listed for well under $10k, a few weeks ago a 97 or 98 wide glide was listed at $6800. almost unheard of for the big ones to sell for less than $10k if they were rideable and less than 10 years old.

Just today there were four harleys (and a 'big dog') posted on craigs list, only a sportster is over $10k (big dog $17k) http://grandrapids.craigslist.org/mcy/ (I'd love to jump on that 81 fxwg for $6500 shovelhead)

 to put it in perspective, 10-15 years ago $5-$6 grand was about average price for a used harley.

Ken.

Very interesting and well thoughtout perspective Ken.

I know when I go riding up into the mountains, the vast majority of bikes I see out and about are cruisers... and I see a lot.  I'm pretty sure the majority of these are Harley's, but from a distance, I'm sure it is possible to mis-identify a cruiser from the land of the rising sun.  However, just because I see a lot of Harley's, doesn't mean any of them were purchased this year.  They could have been purchased a few years ago.

I made my comment in my previous post about Harley being strong based seeing all these bikes and my own assumptions from the past severarl years and not on this quarters actual financial reports, so obviously, things could be on a down turn.  I still find it highly unllikely that Honda would buy them though.   

Not to change the subject, but something that also interests me is that I see very few sportbikes riding to and from and in the mountains I ride.  It used to be they were the majority.  Now it seems I only see them riding in and around town and hanging out in the local mall.  That's actually good for me, because I got tired of the immature 'x-gamer' mentality kids racing up and down my favorite roads, totally inconsiderate of others on the road and usually crashing and/or killing themselves and drawing unnecessary attention and bad publicity to motorcyclist, and not to mention the roads I ride.

As you mention, Harleys are luxury items to the majority of their owners and also image projecters.  Granted there are still the diehard true motorcyclist and Harley lover that is going to buy/own a Harley no matter what, but I don't see those people being the majority anymore.

The economy is changing.  Globalization is causing people to lose their jobs or be less job secure.  Maybe that $20,000 luxury item doesn't seem so appealing right now.  Also, keep in mind that the lastest motorcycle fatality statistics show the majority no longer being the young immature rider, but more middle aged (and probably inexperienced) rider (and probably on a large overweight and ill handling machine).  How many of these new riders have seen their buddy go down or even die and had a change of priority or had their wife (or husband to you female riders) change it for them?  I would think part of the downtrend could be caused by this too.

This is all just speculation by me, so take it for what it's worth.  I just enjoy the conversation.   

--xTalon

[Jerry Rxman Griffin aka MuthaF'er]

"What??? I can find 90% of the parts for my 36-year-old CB750K1 right from the Honda dealer. The only things that are discontinued are the body parts as tanks, sidecovers etc. Even the oil caution sticker is available. You can buy the starter button for one buck; I doubt harley or any other make will sell you the button alone but the whole assembly."

You sure are right about Harley selling a button. Rare. H-D actually stands for Hundred-Dollars. I got something for under $10 US recently and about #$%*!

Wiring harness, tach or speedo base plate (forgot which one), handle bars, shocks, seat, rear cowl and trim and there are many more that are not available. Only seems like what I want. Yes, many parts are still available for a K but not as many for my F. The 75 750F0 aka KO Super Sport is probably the most rare 750 made. Not sure about the 750A. Seems that only the interchangable parts are plentiful. Hopefully they will continue to produce engine parts and gasket kits for some time. I understand it is expensive to manufacture smaller lots but I for one am willing to pay that premium to get what I want. I just wish Honda would produce these small lots to take care of their loyal followers. 

[mlinder]

Well, I wouldnt mind a bike with ducati frame and the little sportster engine, keep weight down, make it sorta a cafe-standard, sell it for cheap.
Would be a huge seller, I think.
People are really getting into sporty standards. Ducati has been really good at making sub 400 lb twins. Just build a cheaper, twin powered standard. Would kick ass.

[Bikebuff]

I think that if Honda actually has been contemplating a buyout of H-D, I wonder what that effect would have on Buell.  In spite of Buell being owned by H-D, I think Erik Buell has some interesting ideas (ie: oil in frame, etc).  I wonder if Buell would then have access to a proper motor and transmission to put in their Firebolt/Lightning frames.  I've never ridden one yet but my plans are to ride one later this summer for a friend's bachelor party, so I can't vouche for the current engine/tranny setup.  But...just imagine a Superhawk/Firestorm type of Buell.  Could be interesting. 

Who knows?  Maybe there's no credence to these rumors.

Prost!

[pyro139]

all the manufactures work together and own shares in each other cause every bike pretty well has parts from other manufactures in it, good point gillera german afiliate of piagio/vespa is working on a 800cc twin-v scooter, it's engine is a honda.

[BobbyR]

I think if Honda took over Harley you would see little if no observable change. I work for the Japanese and they measure everything carefully and move slowly. You will find they will change some of the internal engineering and reliability. They are very good at refining manufacturing and you may see Honda bikes built in a combined facility with Harleys. Kawasaki began building bikes in Nebraska back in 1974. All Kawasaki ATVs and watercraft for Worldwide distribution are made at that plant. What you would probably have a is a better made Harley.

[pyro139]

youll have confused harley owners being "what you mean maintnence every 1000km, thats is atleast 3rd engine rebuild time"

[Bar50]

No wonder the 2007 Harleys have 17 inch, import style tires....hmmm  Hoping it would have been Yamaha, a V-max styled after a Sportster Nightster....

[Jeb]

Unrelated but  - - - one of my favorite old t-shirts say "Moto Guzzi - Going out of business since 1921". I sure love (& hate) those Guzzis.  I wish Honda would buy them.  They could use a touch of that organizational Honda magic.