Managing a Legend

The sun is out and it is slightly breezy. It is a long weekend and you have no obligations for the next 72 hours. You could go to Hastings and rent a couple of DVDs, order some Pizza Hut and bunker yourself in for the duration of your time off of work. If you were more of a sun- lover you could go out and do something sporty such as Frisbee golf. A socialite might take this time to go shopping for that perfect outfit that will wow them all at the club when they go out with their friends at night. However, what if you want something more? What if you want to hit the open road? You want to get on I-70 and drive, or better yet, ride to see the world’s largest prairie dog or the five-legged cow. Now comes the dilemma, what form of transportation are you going to take on this outing of yours. A convertible would be nice; however, an iron horse would truly fit with the spirit of your carefree adventure. Getting on your motorcycle and going where the day takes you would put you in the mindset of the outlaws of yore. No limits, only expectations of the excitement and adventure awaiting you.

The motorcycle as the world knows it was born out of a 10 X 15 foot wooden shed in Milwaukee, Wisconsin, with the words “Harley-Davidson Motor Company” scratched above the door. William S. Harley drew blueprints of an engine that would fit into a bicycle in 1901, when he was 21. By 1903 William S. Harley and his friend Arthur Davidson, only 20 at the time, built their first three motorcycles and a legend was born. The first Harley-Davidson was sold to Henry Meyer, a friend of William and Arthur, and ran for over 100,000 miles over a span of five owners. Harley-Davidson has grown quite a bit from it’s beginning days in that shed in Milwaukee, it is number 355 on the Fortune 500 list, and one of the most respected names in the motorcycle world. This paper will show what management has done over the past 100 years to make Harley-Davidson an American legend.

When Harley-Davidsons were first introduced into the market there was no real individuality about them. True, it was the first motorized two-wheeled vehicle, but all were the same primer gray color, earning it the nickname the gray ghost, with the same body and amenities. William S. Harley and Arthur Davidson realized that they would have to stay on the cutting edge of motorcycle innovations if they were to stay on top of the motorcycle world. Harley-Davidson designed the original 2 cylinder, v-twin engine that would become their trademark engine, the front hand brake and the “teardrop” gas tank. By being the first to develop these design features Harley-Davidson was able to remain the best motorcycle company throughout the 20s.

One of the major reasons for the rise in demand for the motorcycle was World War I, and Harley-Davidson prospered with the export of their motorcycles; however, with the end of the war came the Great Depression. The leadership of Harley-Davidson had to make some decisions on how they were going to continue to make money although it seemed there was no real demand for their product, considered a luxury by most. Harley-Davidson was able to not only stay afloat but also prosper with their sales to the military and police during the depression. The end of the Great Depression brought with it World War II, and this brought even greater gains to the Harley-Davidson Motor Company. Harley-Davidson exported over 90,000 to the United States military and their quality of product earned them four of the coveted Army-Navy “E” award for production during wartime. Due to it’s high sales and excellent reputation with servicemen overseas, Harley-Davidson was the only major motorcycle manufacturer in the United States by 1953.

Like most entrepreneurial companies, Harley-Davidson was sold and taken from a family owned and operated company and turned into a corporate production plant. American Machine and Foundry bought Harley-Davidson in 1969 and ran the company into the ground. Along with the poor level of quality of product this new company was producing, Japan was producing a cheaper and superior product that the American public was now purchasing. By the late 70s American Machine and Foundry had taken a thriving Harley-Davidson with the best product on the market and driven it to bankruptcy; a lay off of 1,800 of its 4,000 employees and a decline in market shares from 77.5% to 23.3% with Honda having 44% of the market. 13 members of the Harley-Davidson management team were saddened by the was they saw the company going and decided to do a leveraged by out from American Machine and Foundry in 1981 and hoped it was not to late to turn the company around. “By mid-June, the buyback is official, and the phrase “The Eagle Soars Alone!” becomes a rallying cry.” (www.harleydavidson.com)

The first thing that CEO Richard Teerlink did was petitioning President Ronald Reagan to increase