Issue link: http://cp.revolio.com/i/1363081
22 | WheelsOfGrace.com | #54 Following Harley Davidson's third quarter business update call, the business update went over things like the number of units sold for quarter three versus prior year, the revenue and income for quarter three versus prior year in different segments of their business. It also reviewed their business plan, which includes the rewire initiative, which, is what their plan was for the company through the remainder of 2020. And, it got into the hardwire plan, which is their five-year strategic plan for the company for the years 2021 through 2025. I'm going to touch on some stuff that I think is important from the call and I really want to get into one thing I took away from the call that I think affects all Harley-Davidson customers, and potentially future customers. It doesn't matter if you're planning to buy, sell or just have one currently. I think it's important when you look at this slide, for the five-year strategic plan to remember that, this is designed for investors and stakeholders not for customers. The wording in the beginning stated: "Harley-Davidson is the most desirable motorcycle brand in the world". So, they're focused on desirability they're not talking about making the best machine for the value to make that more desirable; nothing's that specific in this strategic plan, but they're talking about parts and accessories general merchandise how they're going to streamline operations in the work place environment and the much bigger big picture type plan. Let's move on and get into the rewire that was the initiative for the rest of 2020. So the next slide talked about the key elements of the rewire. The first thing listed is about the new operational model and then the next bullet point talked about refreshed leadership structure with new capabilities and fresh perspectives. That doesn't sound very good for the old dogs in upper management and as a matter of fact they filled the CFO position that had been vacant since July. They brought in Gina Goeter who was a top finance executive at Tyson foods. By the way there's no mention of her riding motorcycles in her Bio. The next section was titled "Protecting Value". The first bullet is reduced gap between new and used. This is the one I really WHAT DOES THE FUTURE HOLD want to get into and I think it affects all current and perspective buyers. The second bullet is Q3 dealer inventory was down 30+%, worldwide sales was down 18% from the prior year. The total shipments were down 28.3% versus prior year. Well if they shipped less motorcycles than they sold - remember we're working in negatives here - than that means they sold existing inventory thus further reducing the inventory on the floor. Hopefully everybody is following along cause that's going to be important as we talk about some of the strategy that they're under. The third bullet under "protecting value" is nearly eliminated promotions and discounts, so you know what this all means right there… There is going to be no more special year-end pricing to get rid of old models, because the new models don't come out till Q1 now, which means that, the consumer is going to pay MSRP to get that bike at the end of the year and if they do not the next guy with more cash will pick it up. And, not all models may come out in Q1 but we'll get into that too. Now the goal was expressed during the call that they want to have all bikes selling at or nearly at MSRP to maximize profits. Those are the three things I really want to talk about but we are going to run through some more of the highlights really quick. First: They're going to focus on the fifty highest growth and potential markets, ok I get that. Investments and resources align with projected market potential yeah that sounds good too. Streamlined product portfolio thirty plus percent, well we all know that they're reducing models and they've already cancelled the Bronx. Deliver the first adventure touring motorcycle Pan America in 2021. Well I'm glad to see that happening personally I think the adventure market is a growing segment and I'm glad to see Harley is trying to get into that segment. I think it will be an interesting motorcycle and I think the new design will not break away from the iconic styling that people love and it will give them a chance to introduce some new technology 22 | WheelsOfGrace.com | #54