As fate hangs in the balance, Harley focuses on image

Business analysts and talking heads have, for years now, been saying one thing about Harley-Davidson: The company needs to appeal to a younger customer. Their riders are older and they’re going to age out. It’s proven only too true: after several years of steady declines in sales, the last two quarters have been especially brutal, with sales down 21 percent  in both Q4 2009 and Q1 2010.

Yes, times are tough everywhere, and even American legends are not exempt from the pain. We will know within two months whether Harley-Davidson will move over 1,600 factory positions to another state to help hold down production costs in an economic climate that doesn’t show signs of recovering any time soon.

And whether it is right or wrong to move out of state, the reality is that if Harley does relocate production (the company has stated that the headquarters will stay in Milwaukee), the void left in Milwaukee will be difficult to fill.

So the race is on to retool the product line – and the company’s image – but it may not be enough in the short term to save those jobs, or a core piece of our city’s identity.

After visiting with Chaz Hastings, owner of Milwaukee Harley Davidson, and riding a few of the bikes that hold the hope of the company’s future, it’s clear that Harley-Davidson is serious about moving the needle to the left and wiping out the (well-founded) stereotype of the quintessential Harley rider as a 50-something white guy on a bike that costs more than most people’s cars.

Harley-Davidson has revamped many lines and introduced new ones to appeal to a much younger demographic and hopefully make its core customers feel young again. Knowing that blowing off your base is bad, Harley has introduced this year a new core for the popular touring bike, the Road Glide Ultra.  It has some new tweaks to the fairing, and a more comfortable ride with very little vibration.  And four CVOs (Custom Vehicle Operations) now offer better audio systems and integrated iPod compatibility – three of the models even come with their own iPod Nano. All the better for cranking up “Born to be Wild” on those weekend rides to Holy Hill.

Harley has been trying to reach the under-35 crowd for over five years, most notably with the Dark Custom line. The collection includes the all new Forty-Eight, Cross Bone, Nightster, Iron 883, Fat Boy and Street Bobs. The new Forty-Eight is now the fastest production bike Harley manufactures, and last year’s Iron 883 became the first Harley in 10 years to sell more than half of its volume to riders 35 and younger.  The sticker price of $7,999 surely helped.

It’s a smart, if overdue, strategy, that’s had its positive effect: a study R.L. Polk & Co. states Harley-Davidson has been the best-selling motorcycle to young riders since 2008.

Dealerships like Milwaukee Harley have definitely done their part to keep the spirit alive, with elaborate outdoor events, well-cultivated customer relationships and aggressive dealership incentives. But the question remains as to whether it will be enough to turn the company around. Surely the jobs will leave if Harley can’t trim its costs; that would be true, sooner or later, even if overall sales were stronger.

But one still can’t help but wonder what will happen if Harley-Davidson moves its production facilities out of state, an idea that was unthinkable until recently. Will Harley be widely known as the company that dumped on blue collar Milwaukee?  Will people outside Wisconsin really care where the motorcycle is produced if the quality remains consistent and designs continue to evolve? It’s hard to tell what the perception will be, and ideally we’ll never have to find out for sure.