Harley-Davidson is announcing that it has completed its initial plan to bring the MoCo back to financial health. It is now ready to implement “The Hardwire.” According to their press release Harley says:
Harley-Davidson, Inc. (“Harley-Davidson”) (NYSE: HOG) today announced it has completed The Rewire, the critical overhaul of its business, setting a strong foundation for The Hardwire, the company’s 5-year strategic plan to deliver profitable and desirable long-term growth and shareholder value. The company will reveal its 2021-2025 strategic plan, along with 2020 fourth quarter and year-end earnings results, on Tuesday, February 2, 2021, via webcast.
Harley’s current CEO, Jochen Zeitz, is making a course correction to the path chosen by former CEO Matt Levatich.
Levatich felt the secret to bringing Harley back to success was to offer more models to a broader variety of people. He was committed to making the MoCo a company that reached out to all riders, not just current Harley riders.
But Harley’s financial performance continued to suffer during Levatich’s “More Roads To Harley-Davidson” strategy. As a result, Levatich and his plan to bring Harley-Davidson motorcycles to a more riders were ultimately and quite unceremoniously dumped.
Zeitz’s big changes
With Zeitz now at the helm, Harley is returning to its previous course. Zeitz plans to cater to Harley’s core customers, namely those who ride large-displacement V-twin cruisers. But this time, he wants to ensure that Harley becomes a “premium brand” and is more desirable.
The first phase of his new plan, “The Rewire” implemented several changes designed to do just that. That is, to increase the desirability of Harley-Davidson motorcycles while increasing the company’s profitability.
During “The Rewire,” Harley implemented many changes that it announced in its press release:
- Reduced complexity and increased speed with a new operating model and organizational structure across every function to provide simplicity, agility, and efficiency
- Reset its global business, resourcing and prioritizing the markets with the highest potential
- Expanded its business focus beyond motorcycles, with a strong commitment to newly established business units for Parts & Accessories and General Merchandise
- Streamlined its product portfolio and rebuilt its go-to-market efforts for maximum impact
- Enhanced and protected the value and desirability of its products by changing the approach to supply and inventory management with a focus on a powerful and profitable dealer network
- Executed Rewire actions expected to deliver ongoing gross cash savings of approximately $115 million starting in 2021
A leaner and more agile Harley-Davidson
What all of the above means that Harley has become a leaner and more agile company. It prioritizes its attention to its most profitable markets and concentrates on selling more parts, accessories, and general merchandise. They have also cut the number of models it offers and is producing less product to increase desirability. Basically, Harley’s business theory is “less is more.”
Commenting about the changes he has made at the MoCo, Zeitz said:
“I am confident the substantial changes we made with The Rewire have set us up to successfully execute our strategic plan. We are now a leaner, more aligned organization, and we are making decisions faster. The right structure, leadership, and principles are in place, and we are ready to execute our strategic plan, The Hardwire, and continue our H-D #1 cultural journey to become a high-performing company.”
More specifically, Harley says that the Hardwire is :
“…its 2021 – 2025 strategic plan grounded in desirability and guided by its vision to build its legend and lead the motorcycle industry through innovation, evolution, and emotion. The company is focused on reigniting the spirit of Harley-Davidson, and returning to winning, delivering the timeless pursuit of adventure and freedom for the soul for riders around the world.
Harley will reveal The Hardwire during an audio webcast on Tuesday, February 2, 2021, from 8:00 to 9:30 AM CST. During that time, Zeitz, Harley’s Chairman, President, and Chief Executive Officer, along with Gina Goetter, Harley’s Chief Financial Officer, will discuss financial results, the Hardwire strategic plan, and Harley’s financial outlook. Harley will make a slide presentation with supporting meeting data 30 minutes before the audio webcast begins.
If you would like to attend the Harley-Davidson investor meeting, log in and register at least 10 minutes before the session begins. Slides will be available at Harley’s investor webpage.
2021 Pan America model unveiling
On February 22, 2021, Harley will reveal its all-new Pan America 1250 adventure touring motorcycle during a global digital event. If you’d like to attend, register before the event at www.H-D.com/PanAmerica. You must register to attend.