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Riding High

Wait Two Years for a New Harley-Davidson? That's How Long It Can Take to Get Delivery on America's Motorcycle Wait Two Years for a New Harley-Davidson? That's How Long It Can Take to Get Delivery on America's Motorcycle
Mark Vaughan
From the Print Edition:
Ron Perelman, Spring 95

(continued from page 3)

"From the beginning, we decided that our emphasis was going to shift from volume to quality," says Teerlink, who joined the company as chief financial officer in 1981. "We took a hard look at the Japanese motorcycle industry, and we realized that their success had nothing to do with culture. They were just better managers than we were."

In an attempt to beat them at their own game, Harley's new owners introduced three standard Japanese manufacturing techniques: full employee involvement in problem solving and quality control; just-in-time inventory to lower the cost of holding large inventories of parts and have greater control of parts quality; and operator control, which calls for giving all workers the statistical training necessary to be able to measure the quality of their own output.

"None of these concepts are revolutionary," admits Teerlink. "The problem has always been one of implementation. We were in a fight for our lives, and once people began to realize that and to understand that we didn't want them to come to work and check their brains at the door anymore, things began to click."

In 1982, arguing that Honda and Yamaha had amassed huge inventories that they intended to dump on the U.S. market, Harley-Davidson petitioned the International Trade Commission for tariff protection. A similar request had been turned down by the Carter administration in 1978. This time, the ITC responded positively, and in April 1983, the Reagan administration imposed stiff tariffs on imported motorcycles with engines of 700 cc's or greater for a limited five-year period.

"It was really a symbolic gesture, since Honda's and Kawasaki's U.S.-assembled bikes were exempt from the tariff, and Yamaha and Suzuki shortly came out with motorcycles that were slightly less than 700 cc," says Teerlink. "But it did send a message that the United States was not going to let its motorcycle industry die by the side of the road."

By 1987, in an unprecedented move, Harley's new masters were confident enough to petition the ITC again--this time to ask that the 1983 tariffs be lifted a year ahead of schedule. "It might seem like a strange thing to do," admits Teerlink. "But it really gets down to values. We'd upgraded and refined our designs, revamped the entire production process, and sales and customer satisfaction were high. We just didn't believe it was right to continue operating in a protected market because we'd accomplished what we'd set out to do."

Mike Lombardi agrees that Harley made a spectacular recovery. "The situation completely reversed," says the Staten Island motorcycle dealer. "Now when you sell a unit to a customer and you see him the next day, you don't have to hide. He comes back in, and he's got a gigantic smile on his face. Harley-Davidson really got tuned in to what the customer wants in design and quality."

Another measure of Harley's renewed success lies in the difficulty that many new customers have in purchasing their first Harley bike. Virtually all the motorcycles rolling off the line that day at the York plant had been presold, as is the company's entire 1995 production run. Because factory shipments are now on an allotment-only basis, most motorcycle dealers will give preferential treatment to established customers, with new buyers having to wait as long as two years or more to take delivery on a bike.

"Our '95 and '96 allotments are completely sold out," says Mike Laugerman, co-owner of Laugerman's Harley-Davidson in York. "We won't start taking orders for the '97 models until August 1, 1995." At Brunswick Harley-Davidson in Brunswick, New York, manager Adam Ginsburg notes that there are still some 1995 Sportster models available. "But if you want one of the heavier bikes, you are going to have to wait at least a year to get it, if not longer," he says.

To keep up with growing demand, Harley has steadily increased production to about 100,000 units a year. But with memories of the disastrous '70s still fresh, the company is determined to take a conservative approach to expansion. "We don't ever want to get into an excess production situation again," insists Teerlink.

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