While Harley-Davidson has successfully fought off the boardroom coup brought forth by H Partners Management, along with a number of other shareholders, things aren't likely to just back to normal anytime soon. Concessions were made, and things will change at the Motor Co.
Now, I still stand by my assertion that H Partners Management and its allies lost this vote, although they later claimed victory. I think the pissing match it instigated was one brought forth by pentulance rather than searching for good corporate governance. Maybe it was, maybe it wasn't. However, as I've stated in prior articles, I do agree with some of their takeaways and pain points they outlined.
To quote the late-great Sam Cooke, " A change gon' come."
Change is required at Harley-Davidson, and some of the things outlined in the board vote do just that. Some of these items, as released after the vote occurred, were things already in the works. The biggest of which is finding a successor to outgoing CEO Jochen Zeitz. The board had already been in the process of doing this when H Partners set upon this attempted coup. That search, however, was sidelined due to all this chaos, but it can now begin again.
In that respect, the board says it will search outside the company for its next CEO. That's something that H Partners says it was pushing for. Or so they say, as we don't know since they voted with the board in every single instance, so it's unclear who they were pushing for to begin with. But where I'll add my two cents to this fight is, I'm not necessarily sold that the next CEO needs to come from outside the Milwaukee brand. Nor am I sold on someone from within the brand, too.
Zeitz's tenure, while plagued with outside forces, was heralded as just that—an outsider to help restore the company's path. Hardwire aimed to lock in its core demographic and double down on it. It focused on the profit drivers, the brand's large cruisers, and it didn't work. And those within the company have been operating with the weight of the brand's legacy for so long, it's unclear if their own ideas of how to move forward be the right ones.
Right now, the powersports industry is at a crossroads. Global economic factors have made it harder and harder for high-priced vehicles to be sold to the average person. EVs are facing infrastructure headwinds, as well as the common person just not seeing the benefit of EV powersport machines in real, practical ways. And even luxury goods, as Harley thinks of itself at present, are being affected. What Harley needs in a CEO is someone who'll not be beholden to heritage, look past the minefield that are internet shit-talkers, speak with the conviction of the brand's heritage it belies, and find where the new, the next, Harley buyer is.
I'll give you a hint, it isn't in continuing down the road of $30,000 cruisers and $30,000 cruisers only, or just catering toward old white dudes.
And to that end, it was the announcement of the brand working on an entry-level motorcycle. That's something I, and countless others, have been writing about for years at this point, as Harley doesn't have one. I had this conversation with their press relations folks during the Softail launch, where I told them directly to their faces that they didn't have the cornerstone that every other brand has. And that while some will point to the sub $10,000 Sportster, that ain't an entry-level anything.
Likewise, the used market cannot be your entrance into a brand, which Harley's is and is often touted by dealership groups aiming to sell you high-priced used bikes. It's all untenable. I firmly believe that the brand needs to bring its QJ- and Hero-produced sub-500cc motorcycles to the global audience, including here in the States. Yes, it'll roil some Harley purist feathers, but those folks aren't buying motorcycles. Clearly. Nor do they have the best interest in the brand's longevity. You cannot have a shrinking market demographic support the weight of a company as large as Harley forever; see its fiscal year 2024 financials as proof.
Likewise, it needs a sub-1250cc Pan America, to kill most of the LiveWire offerings and bring the brand back under the HD flag fully, and launch an electric dirt bike. But those are my own thoughts.
Other changes set to occur, however, will see the retirement at the end of the year of targeted board members Thomas Linebarger and Sara Levinson. This one is an interesting aside, as it was an integral sticking point in H Partners Management's fight.
When H Partners launched its campaign—which in their presentation in the Stakeholder Toolkit section, they used an image of a Moto Guzzi—they not only demanded Zeitz step down immediately, but they also wanted Linebarger and Levinson to do so as well. And in their subsequent rebuttals to Harley-Davidson, in regard to rumors that Levinson and Linebarger were considering retiring as a concession to vote for Harley's board, H Partners asked whether or not shareholders should even believe that concession.
It did occur, and two seats will open on the board at the end of the year. It's unlikely that with Linebarger and Levinson's departures, H Partners would be able to reclaim either seat, however. But again, I do think Harley-Davidson needs fresh blood to right the ship. Change, though, doesn't normally come from board members, as they're only looking to please shareholders. That's often at odds with change as a whole. Maybe the right board member can do that, but like finding a new CEO, it needs someone who can look toward the future and not be bound by what Harley has done or is right now. That's a tall order.
Change, however, is coming for Harley-Davidson. "Oh yes, it will." Nothing is stopping that. As for how that change affects the Motor Co., that's yet to be seen. But the brand has survived two world wars, multiple recessions and changes in demographics, and countless administrations.
It'll survive this, of that I'm sure.
