Benign Bailout

Welcome! We’ve had several positive reinforcements from readers in the past few days, giving us courage to continue. Enjoy Friday Letter No. 102.

The Harley bailout

Back in the 1970’s, The Harley-Davidson Motor Company was in a world of hurt.

Historically, Harley had become complacent in the face of the rather weak-kneed competition from both domestic and imported motorcycles.

Indian, Cushman and Excelsior and other U.S. makers couldn’t, somehow, ride along on Harley’s considerable mystique.

There wasn’t much in the way of a comparable product from Germany (BMW) or Italy (Ducati, Moto Guzzi) to interfere with Harley’s niche.

British bikes were always poorly made and lacked durability and dependability. The Brit machines could be expected to fail on the road due to faulty “Lucas” company electrics.

In fact, Triumphs were notorious for using Lucas stuff that would malfunction frequently, stranding riders and passengers, either without lights or with dead batteries or failed ignition systems. Lucas was laughingly known as “The Prince of Darkness.”

Harleys, notorious in their own way for leaking oil and breaking down on the road, were at the same time leagues better than the competition.

So Harley was a laid-back U.S. company, fat, lazy, unafraid of the future.

BMW tried to crowbar its way into the American market, but most riders didn’t care for the look or even the manufacture. BMWs were ugly – they still are. Oddly, the usual vaunted “German engineering” was absent from BMW at that time.

I remember seeing the cast wheels on a brand-new 1978 Beemer. The casting squirts hadn’t even been cleaned up. The fit and finish was poor to mediocre. The seat was hard as a board and upholstered crudely. There didn’t seem to have been a final inspection at the factory before export.

And, if you rode a Beemer, your boots would always smell of gasoline.

The down-low cylinders on the opposed-twin engine were just barely above the rider foot-pegs, and the carburetion was sort of leaky and shoddy. So you would endure stinky boots if you rode a BMW.

I remember going from Sun Valley to Twin Falls with a friend of mine who had just purchased a brand-new 1979 Triumph.

The man was a waiter at Sun Valley Lodge, and he had bought the Trumpet with cash – money he had saved from generous diner gratuities.

The waiter rode behind me on my bike to Twin Falls, and we found the Trumpet dealer and headed back up the valley.

It was only a few miles before the taillight fell off the new machine. Fell right the hell off in front of me. I almost hit it.

A few miles further and both foot-pegs fell off the Triumph simultaneously. By that time, I was following more cautiously at a safer distance. It was interesting watching my friend try to stay upright with nowhere to rest his feet.

Point being, Triumph, BSA, Vincent weren’t serious competitors for Harley. (They still aren’t. The Brits keep trying, but their taillights most likely still fall off when they’re brand-new.)

Enter, the Japanese

Harley was blind-sided by the Japanese motorcycle manufacturers, Honda, Yamaha, Kawasaki. Harley didn’t see it coming.

The Japanese, thoroughly convinced by the outcome of World War II, had determined that the way to “overcome” the Yankees was at the market, not on the battlefield.

Honda in particular was a cutthroat operation. The Board of Directors wanted into the U.S. market so badly that they put in place a plan to sell Hondas well below manufacturer’s cost. And they flooded the market.

Since then, people continue to believe in the myth that Japanese bikes are less expensive than Harleys. You’ll hear guys rationalizing their new Harley-look-alike machines by saying, “I could never afford a Harley.”

Truth be known, today’s prices are very competitive. If you can afford a Honda, you can afford a comparable Harley. You just think you can’t because of the early below-cost, market-flooding technique, the folklore that Japanese bikes are less expensive.

The bailout

With the aggressive and ungentlemanly entry of Japanese bikes into the field, Harley’s market share began to dwindle.

Things got so bad so quickly that Harley had to seek help from its longtime corporate friend, American Machine and Foundry. AMF saved the day – but required Harley to put those awful three letters ahead of Harley-Davidson on gas tank emblems.

To this day, there is misunderstanding of the AMF label. I happen to own an AMF-Harley, and that tank logo is part of its charm, part of its distinctive history. AMF was the hero, not the bad guy here.

AMF also had a division that made bowling and golf equipment, so there was a kind of slim connection with the “sport” of motorcycling.

In addition to selling controlling stock to AMF, Harley also put its Public Relations guys to work lobbying the federal government.

“Help us, help, help, help,” Harley whimpered. The government dutifully responded, and a huge import tax was imposed on all foreign made bikes.

Hindsight proves the dual bailouts worked.

Today, the fit and finish of the Harley product is as close to perfection as we’re ever going to see. Paint on a modern Harley is unequalled. Rolls Royce painting isn’t as good as Harley factory paint.

Harley performance is superb. Dependability is unprecedented. All Harley models are dry, quiet, quick, comfortable and pretty.

Unlike its automotive brother manufacturers, Harley is currently riding high on a considerably large wave of popularity.

Harley engines are quiet, efficient, long-lasting, fun. Really, it’s just difficult to find anything on a Harley that isn’t done extremely well.

The import tax is long gone, no longer needed. The original “family” stockholders were able to buy back controlling shares from AMF.

Today, Harley-Davidson is far and away the most popular motorcycle in Japan despite a shocking 100 percent import tax imposed by the Japanese government.

The people who run Harley these days are still the same haughty jackasses they always were. But they wouldn’t be so glib today if it hadn’t been for a couple of timely bailouts back in time.

A couple of benign bailouts, by today’s standard, right?

-0-

Word of the week: Listerine. Baron Joseph Lister, an English surgeon who lived from 1827 to 1912, introduced antiseptic surgery to the world. Hence, an early antiseptic mouthwash took the name “Listerine.” “Listerism” is the practice of antisepsis and aseptic surgery. Just FYI.

Next week’s word: Epiclesis.

Gripes? Complaints? Whines? Comments? Adoration? Puppy love? Reciprocal rant? Feel free to express yourself in the comments below!