(Greg Wood/AFP/Getty Images)
By Ameet Sachdev |
Harley-Davidson Inc.’s stock rose nearly 7 percent Tuesday amid
speculation that the company could be the target of a leveraged buyout.
Harley closed at $28.35 on the New York Stock Exchange, up $1.85. More
than 18 million shares changed hands, more than six times normal. But
with a $6.6 billion market capitalization and coming off its first
quarterly loss in 16 years, Harley seems an unlikely takeover mark,
observers say.
Dow Jones reports that the Web’s been chock-full of such chatter recently, boosting, for example, Hologic, GameStop and Supervalu. One common link has been large short positions. Harley recently had 34.3 million in short interest, or almost 15 percent outstanding.
The Milwaukee-based motorcycle maker has been hit by hard times recently as consumers put off buying its high-end bikes. The company ended the fourth quarter with a loss of $218.7 million. The company has laid off workers, closed factories and shuttered or sold unwanted brands.
Harley did not comment on the rumors Tuesday.
The “new” CEO gets 6.4 million in his first 8 months, and the company posts a 200+ million dollar loss for the first time in 16 years. Employees are being let go. Buell (sp) has been scrapped in the process. TYPICAL of today’s corporate America and it’s lack of honor.
Sounds like the AMF takeover of the 70’s again…..
Maybe the new owner will realize that the bikes they make are over priced and unreliable. Most people that ride know that you can get the same style of bike that Harley makes for less and at higher quality from other manufacturers. Plus, you can get other types of bikes (instead of just carbed air cooled cruisers) like sport bikes that are a huge part of the market. I find it sad that if I want a modern style bike (or even fuel injected for that matter) I have to buy Japanese or European. There’s a huge American made market gap here…
Harley does make all fuel injected bikes now. FI has been offered for several years but some prefered Carbs. I ride ‘03 Softail Deuce FI since new and have had zero reliability problems. Harley in the past has had issues but todays bikes are good quality. Some people prefer cruisers others sport bikes. All on 2 Wheels are good with me. Harley does have solid competition from other mfgs, Star, Victory, etc. Make them work for their market share. Most American CEO’s are totally overpaid. When your company loses money usually the boss takes a pay cut and keeps employees working making good products.
Its totally disgusting these CEOs make that kind of money; while the poor working bastards are laid off. He should have taken a major pay cut to show that he is in this for the long haul; and saved employees jobs. Greed has taken over the direction for corporate America. Its all about profit; nothing at all about innovation, quality and producing a fair market priced bike. Case in point; HD removed the passenger handrail after 05 and the wind deflector under the fairing. Did they lower the price after they removed these parts? NOOOOO! They raised the price even more; so they get more profit; you get less bike.
I currently own a 06 Harley Davidson Electra Glide; and Ive had more problems with that bike; than I did with my ‘96 Electra Glide; which I had for 10 years.
Theres a new kid in town for American made V twin touring bikes; called Victory; and they seemed to have fixed all the design flaws that HD had been ignoring for years. Then they wonder why HD is losing money.
Why can you buy a Victory Vision; with a 106 ci motor for $25K; and the HD Ultra Glide SE verison with a 110 ci motor goes for close to $40K? How can HD charge that much more for a directly competitive bike? Thats a real huge price gap; and not enough bang for the buck.
I have been to several HD dealerships in the past few years, depending on where I have been living (retired) at that time. All the salesmen seem to have the same attitude or maybe it’s the company mantra. I’ve been asked many times, “what would it take to put you on this bike(Ultra Classic) today?” My response has always been the same, you want to sell motorcycles, tell the “company” zero interest just like the automakers. Buyers will come out of the woodworks.
I’m flabbergasted….. I can’t believe HD lost money with all their brand awareness… I owned one and it was flawless… For those of you who never rode one I also owned two Jap cruisers…..all the bikes were nice and high quality, but nuthin rides like a HD….
The disconnect between “salary” en results is endemic, not only at HD (Citi/Lehmann anyone?). Frankly the HD board should be held accountable, but that will not happen. And we wonder why the country is going into the crapper……..
If you absolutely need a Harley Davidson, you could probably take one off the hands of a guy who can no longer afford his payments.
from the NYT
http://www.nytimes.com/2009/03/22/business/economy/22harley.html?pagewanted=all
And though Harley’s woes pale in comparison to what the automakers face — Harley’s revenue dipped 2 percent last year while Detroit was crashing — overproduction and loose lending practices have burdened the company’s finances.
In a pattern similar to that of the housing bust, Harley goosed sales by luring many buyers with no-money-down loans. A subsidiary created about 15 years ago, Harley-Davidson Financial Services, made those loans and packaged them into securities to sell to investors. As the credit market skidded, so did this subsidiary.
As much as one-fourth of the $2.8 billion in loans issued by Harley-Davidson Financial Services last year were subprime, with interest rates as high as 18 percent. As the downturn took hold, some borrowers started defaulting on loans and investors stopped buying the securities, forcing Harley to write down $80 million of debt last year, analysts said. Although it recently tightened lending standards, the company is still chasing buyers by offering credit.
Dan D, What are you talking about? Most if not all of Harley’s current line up is fuel injected, and has been for the past 2-3 years.
The VRod line is as modern in style or engine design as any cruiser bike produced by the Japanese.
I agree that Harley would benefit from some diversification; I was shocked and disappointed when they shut down Buell.
But the new XR1200 is, based on the reviews, a very capable sport bike if what you want is handling without the look of a GP bike, and the basic Sportster remains a classic take on what is now called a “Standard”. The Sportster 883 offers the Harley look, feel, and experience at an affordable price.
For the record, I own a Yamaha and have never owned a Harley.
What a real bike, get a BMW…
I owned my first Harley when I was fifteen years old. Didn’t even have a drivers license. I’ve owned nothing but Harleys since 1969
This was a 1959 XLCH Sportster basket case being sold by the widow of a Vietman Soldier in 1969. First year to use a swing arm and not a rigid frame.
Lived in an unincorporated area of my county and rarely saw a sheriff. All of us of had bikes or mini bikes or go karts and enjoyed our rides very much.
Hate to see the problems Harley is having but they screwed up their product line so much, it doesn’t even surprise me.
Has anyone noticed how the screwed up the Sportster for example?
Hey you know, if it aint broke, don’t fix it!
hd is still a lawn mower engine push rods roller bearings they couldnt even design a motor they went to porsche and 11 thousand for a low end is not affordable it all comes down to too much ego and pride no quality
hd is still a lawn mower engine push rods roller bearings they couldnt even design a motor they went to porsche and 11 thousand for a low end is not affordable it all comes down to too much ego and pride no quality