Topic: Hard Times for Harley

[BobbyR]

This is a pretty good article. Since Harley was a symbol of oppulent excess, the bottom fell out:

http://www.bloomberg.com/apps/news?pid=20601103&sid=ayUExPsdc9VI&refer=us

Here is another small article on the rise of the Japanese motorcycle industry:

http://www.kenoshanews.com/news/run_off_the_road_4235532.html

[Bob Wessner]

Yeah, saw in the news yesterday. I guess it's no surprise given the economy, $20,000+ for a motorcycle puts it in the discretionary category. I just hope there weren't too many financed with second, adjustable rate mortgages.

[bert96]

 WOW!! Bobby who is the beautiful girl in your avatar

[MCRider]

Yeah, saw in the news yesterday. I guess it's no surprise given the economy, $20,000+ for a motorcycle puts it in the discretionary category. I just hope there weren't too many financed with second, adjustable rate mortgages.

From what I've read, the bulk of them were financed with mortgage equity loans, whether you call them 2nds, or Home Equity Line of Credit (HELOC) or whatever. They were based on home equity, and that financing has dried up.

Federal Reserve data on MEWs (Mortgage Equity Withdrawals) has dropped from $80b annually to $0! in 2008. MEWs financed 20% of all discretionary consumer spending pre-2007. So when we see the drop in MEWs it translates directly to a drop in consumer spending that cannot be replaced.

While I've never been a fan of Harleys, this does not bode well for the industry at large. So much business (money) in the Harley aftermarket trickled down to the smaller niche markets that we play in. Without the Harley money to grease the industry wheels, we'll see stress everywhere.

[BobbyR]

 WOW!! Bobby who is the beautiful girl in your avatar

Bert, she was described as "Pretty Girl with Striking Eyes"

[BobbyR]

Yeah, saw in the news yesterday. I guess it's no surprise given the economy, $20,000+ for a motorcycle puts it in the discretionary category. I just hope there weren't too many financed with second, adjustable rate mortgages.

From what I've read, the bulk of them were financed with mortgage equity loans, whether you call them 2nds, or Home Equity Line of Credit (HELOC) or whatever. They were based on home equity, and that financing has dried up.

Federal Reserve data on MEWs (Mortgage Equity Withdrawals) has dropped from $80b annually to $0! in 2008. MEWs financed 20% of all discretionary consumer spending pre-2007. So when we see the drop in MEWs it translates directly to a drop in consumer spending that cannot be replaced.

While I've never been a fan of Harleys, this does not bode well for the industry at large. So much business (money) in the Harley aftermarket trickled down to the smaller niche markets that we play in. Without the Harley money to grease the industry wheels, we'll see stress everywhere.

I would agree. If you like Harley or not, any job loss and pull back in American industry or any other Country will have a trickle down effect. This stuff has an effect directly or indirectly on all of us.

[754]

Speaking of BIG TWINS........

 perhap we could put BoobyR,s avatar  onto Berts avatar..heh heh...

[tramp]

bad times for all bike's
i noticed they weren't dropping thier prices down
just laying off people  and closing plants
makes sense

[MCRider]

bad times for all bike's
i noticed they weren't dropping thier prices down
just laying off people  and closing plants
makes sense

First stage of discounting...don't make it obvious. Here there is a harley dealer that says for the first 26 bikes sold this year, each will receive a voucher for $1500 of Harley Brand accessories.

Clear the inventory first, cut expenses, then cut prices. If you cut prices first buyers will wait for the next price cut, then the next and inventory never clears.

[ofreen]

If you want a Harley, no need to wait for them to drop prices.  Just make them an offer.

The same with the local Honda dealer that has 10 2008 CBR1000RRs in crates.  Just make an offer.  Lots of deals out there if you have the cash.

[Markcb750]

The company I was chief engineer for sold & I designed three machines to bore connecting rods for two size rods "on demand", Just in Time, what ever you want to call it.

My machines where perfect, their tooling sucked, would not take responsibility for it the A**holes.  We fixed it all for them, and they still bought Japanese machines for the next set of improvements after the American Taxpayer backed up their corporate, bean-counting nonsense.

They are a clothing sales group, think of them as weavers, not machine people.










  

[syth82]

I would agree. If you like Harley or not, any job loss and pull back in American industry or any other Country will have a trickle down effect. This stuff has an effect directly or indirectly on all of us.

Keep telling friends and family the same thing in regards to the auto industry. Any of the big three go down its bad news all around. Especially gm or ford. Toyota and honda both have shared products with gm (vue redline engine is honda, vibe is a rebadged matrix, among other examples). Point is, on these and many smaller less obvious levels the whole industry is tied togeather. A part supplier loses one big line, they might not be able to keep the doors open for the other 3 companies who depend on them for parts.
I'm a tech for BMW any I've already felt the squeeze from the top. All warranty pay has been cut by 20%. And they're still saying that if things keep their present course BMW will be bankrupt in 2 years
-Luke.

[seaweb11]

Yeah, saw in the news yesterday. I guess it's no surprise given the economy, $20,000+ for a motorcycle puts it in the discretionary category. I just hope there weren't too many financed with second, adjustable rate mortgages.

From what I've read, the bulk of them were financed with mortgage equity loans, whether you call them 2nds, or Home Equity Line of Credit (HELOC) or whatever. They were based on home equity, and that financing has dried up.

Federal Reserve data on MEWs (Mortgage Equity Withdrawals) has dropped from $80b annually to $0! in 2008. MEWs financed 20% of all discretionary consumer spending pre-2007. So when we see the drop in MEWs it translates directly to a drop in consumer spending that cannot be replaced.

While I've never been a fan of Harleys, this does not bode well for the industry at large. So much business (money) in the Harley aftermarket trickled down to the smaller niche markets that we play in. Without the Harley money to grease the industry wheels, we'll see stress everywhere.

In The US you guys can write off your mortgage, explains a lot of toys in front yards. 
It's simple to see how it would be easy to get jammed up    
"Complete Generalization" Down there it's what you can get out of your house $$ not paying it off.

No such free mortgage tax luxury here in Canada.
We seem to be taught the sooner you burn the mortgage the better.

My guess is there a lot of used Harleys,Jet skis, Ski boats, ATVs etc. at great deals for cash.

[eldar]

I feel that this is a rebirth for motorcycles. Let them bottom. It will force them and others to redesign and get moving again. Harley and honda are both sitting stagnant. If they start losing ground, they will finally get off their assses and get going with cheaper bikes that perform better and are simpler.

[BobbyR]

Yeah, saw in the news yesterday. I guess it's no surprise given the economy, $20,000+ for a motorcycle puts it in the discretionary category. I just hope there weren't too many financed with second, adjustable rate mortgages.

From what I've read, the bulk of them were financed with mortgage equity loans, whether you call them 2nds, or Home Equity Line of Credit (HELOC) or whatever. They were based on home equity, and that financing has dried up.

Federal Reserve data on MEWs (Mortgage Equity Withdrawals) has dropped from $80b annually to $0! in 2008. MEWs financed 20% of all discretionary consumer spending pre-2007. So when we see the drop in MEWs it translates directly to a drop in consumer spending that cannot be replaced.

While I've never been a fan of Harleys, this does not bode well for the industry at large. So much business (money) in the Harley aftermarket trickled down to the smaller niche markets that we play in. Without the Harley money to grease the industry wheels, we'll see stress everywhere.

In The US you guys can write off your mortgage, explains a lot of toys in front yards. 
It's simple to see how it would be easy to get jammed up    
"Complete Generalization" Down there it's what you can get out of your house $$ not paying it off.

No such free mortgage tax luxury here in Canada.
We seem to be taught the sooner you burn the mortgage the better.

My guess is there a lot of used Harleys,Jet skis, Ski boats, ATVs etc. at great deals for cash.

You are almost correct, the actual amount of your interest you can deduct is based on your tax bracket. In fact I paid off mine since the deduction was so small I opted for piece of mind.
I did a year and a half in lending. People began looking at their house as an investment vehicle rather than a home. They were led into this thinking, now they know better. I hauled a lot of people out of 25% CC debt and into 6-7% debt. To my credit, I never wrote an adjustable. i was not that greedy or heartless.

[MCRider]

I feel that this is a rebirth for motorcycles. Let them bottom. It will force them and others to redesign and get moving again. Harley and honda are both sitting stagnant. If they start losing ground, they will finally get off their assses and get going with cheaper bikes that perform better and are simpler.

As painful as it will be, its time for a cleansing. Saving GM and Ford et al, in their present form does no one any good. Capital needs to flow from the incompetent to the competent and thats done through recessions and bankruptcies. Often we don't even know who the next "competents" will be. Somebody is doing something in their garage right now, like Honda and Apple did, and their time is coming.

The stimulus that has already occurred in the banking system and less elsewhere is likely all that should be, it was a crisis situation. With the patient stable, though still very sick, the balance of the healing must take its own course.
Or so I think.

[syth82]

I somewhat agree on that point, except for the millions of jobs which gm and ford provide. Also I could point out that microsoft is still out there, and harley is too (for now anyway). No auto upstart could replace what this country would lose if detroit went down. Though it may give the Chinese the open they've been looking for for the last several years. I rue the day you can buy a Chinese car in the US.

Then again people probably felt the same about the korean brands many years ago and now they are selling some of the best cars per dollar on the road.

[rbmgf7]

I somewhat agree on that point, except for the millions of jobs which gm and ford provide. Also I could point out that microsoft is still out there, and harley is too (for now anyway). No auto upstart could replace what this country would lose if detroit went down. Though it may give the Chinese the open they've been looking for for the last several years. I rue the day you can buy a Chinese car in the US.

Then again people probably felt the same about the korean brands many years ago and now they are selling some of the best cars per dollar on the road.

I believe the Chinese already make Buicks and the thought of importing them has been tossed around if not already happened. Chinese always labeled Buick as a real luxury car.

I'd buy a korean vehicle over a chinese one.

[syth82]

The chinese do make their own buicks, but only for their market. Completely different cars from what we get. Several different chinese makes have been shown at the detroit auto show over the past few years, but they are still too far behind on quality, safety, and emissions to actually sell anything here.

Personally, I rather like many of the korean offerings and would sooner buy a hyundai before most any of the overpriced japanese cars available today.
-Luke

[Ichiban 4]

Back to the issue of Harley's downsizing..and what it may mean for the bike industry in general..especially in the U.S.

I too tend to agree with Ron's and Bobby's assessments that somehow there needs to be a cleansing of sorts..in not only the bike industry..but the consumer economy in general.

Think Harley's biggest problems have come from 1.) over pricing their bikes and 2.) extending way too much credit through their financing branch.  I believe BTW..that they're closing their financing division..maybe someone else can clarify that point? 

Think also Honda has some problems with extending too much credit to buyers..but their product line seems much more diverse in offering and price than Harley.

"Extended credit" has been so much a way of American business..and for so long here (certainly since I remember from the late 50's)..I think this will require a major re-adjustment on the part of many businesses..given the way the economy has pretty much tanked over the past 6-months.  And I don't think it's going to turn around anytime soon.

Interesting to note: the consumer spending in Japan..South Korea..and China hasn't changed much since the financial melt down here.  However in Japan for instance..they save about 30% of their disposable income..compared to about zilch in the U.S. [I'm not saying they're better off than here financially..because their average income levels are considerably below ours..excepting Japan.  Just that when the credit markets dry up..as here..they aren't affected so drastically.]

As some on this thread have suggested: Harley's downsizing could be an indicator that the less expensive bikes coming from Japan..perhaps Korea..will be more attractive to buyers here.  Also think that with the "gas price trauma" of the past year or so..more people may be attracted to bikes as a more economical/efficient mode of transportation.  We'll all see..probably within the next couple of years or so..I guess.

Al / Ichi

[dusterdude]

say what you want about korean vehicles,except for the lack of patriotism,i would buy another kia in a heartbeat.

[eldar]

Yeah well patriotism got us where the big 3 are today. It only works as long as the product is good. I am generalizing here. So if that kia did good by you, then get another one. Chrysler now has an unlimited warranty now though but I am not sure what all it covers.

[Bob Wessner]

I'm not posturing for, or against KIA, but my daughter has a KIA Sedona and it's pretty nice in terms of fit, finish and appointments with a good warranty. Pretty reasonably priced as I recall.

Back to Harley. 

[BobbyR]

I just leased my wife a new Lincoln. I was llooking at the sticker over the weekend. I knew the AWD sysyem was Mazda. The engine American. Oh yeah, the car was assembled in Mexico. So I bought a Mexican car from an American company.

[eldar]

So it makes you wonder. If they are paying crap ass wages to mexican workers, then why are they so expensive. Oh wait, poor management and unreal union costs.