How to save Harley Davidison - Page 4

 

tomorrow@erols.com wrote:


Were there any govt loans or any other kind of direct aid such as
subsidies or tax relief? I don't know for sure about this,
but at least one blogger mentions loans.

 > ...can be described as a "bail-out" of Harley-Davidson.

Bail-out or not? Other factors aside, the answer depends a lot
on your views on government intervention in a "free" market.

However, "bail-out" is more drastic than a mere "come to the aid of"
for convenience etc. It has the sense of "rescue", as from
dire straits. So I'd say the question really comes down
to whether or not Reagan's tariff saved HD from going under.

I'm no economist but my opinion FWIW is yes. Not only that,
I believe RR would have taken further measures to keep the MoCo
afloat if necessary. It's an American cultural icon after all.

I found an interesting contemporary analysis at this site which
explores a number of aspects; social, economic and political:
http://www.cato.org/pubs/pas/pa032.html
"POLICY ANALYSIS - Taking America for a Ride:
The Politics of Motorcycle Tariffs"

It was published January, 1984 by Daniel Klein,
Economics grad student at NYU. He says:

   Due to the change in market demand, its own entrepreneurial
   deficiencies, and a crushing debt problem, Harley was quickly
   approaching bankruptcy. The firm turned to the government for aid...

Besides aggressive (or predatory) Japanese competition, the MoCo had
other problems in the early 80's. For instance even after the break
from AMF their reputation for quality problems still persisted.

The Wik sez, "Most analysts consider the Evolution to be the engine
that saved the reorganized Harley-Davidson company from certain
bankruptcy." However true this may be, the Company would have needed
a few years of good sales to recover the investment in the Evo's
R&D cost.


A good thing? I'd tend to agree. But a VERY good thing? There was
a downside to the results, so this at least is debatable.

SQ

 



I am the last one to condone governments messing with the free market,
but it wasn't a free market. The Japanese had already screwed it up.
They had used similar techniques in the past to dominate the consumer
electronic product business.  

I don't like protectionism, but with out government action in this
case it is conceivable HD could have died. Whether you like the Motor
Company's bikes or the image, HD is a very successful American Company
and a lot of people rely on it for their livelihood.  

 



For bikes, it was.


Non sequitur. "Because they did it here" does *not* mean "They did it
there". "Post hoc ergo propter hoc" still holds good.

The Japanese did not screw over HD's business. They weren't even making
the same sorts of bikes[1]. They had a zillion different models and
(unsurprisingly) a lot of consumers decided they'd rather be riding a
big bike that didn't shake itself to bits all the time. Or they just
preferred the Japanese style. Or they just didn't like HD's style.

HD was making crap bikes of appalling quality. I'm sorry, but
early-1980s HDs were dire. They were just showing signs of improvement
(the Evo und so weiter) but HD's massive quality upgrade still lay in
the future.

There's a slightly separate issue, which is the question of *why* there
were so many Japanese bikes floating around at the time, and nobody here
has addressed that, quite possibly because nobody here knows the answer.
I do, and I'm waiting to see if someone else throws it into the
discussion.


It was. It isn't right now. It probably will be again.



On that logic, then Russia should have kept Lada going as a massive
concern.

[1] Unless you really believe that something like a Suzuki GS1000L was
equivalent to a Harley.


--
BMW K1100LT  Ducati 750SS  Honda CB400F  Triumph Street Triple
Suzuki TS250ER GN250  Damn, back to six bikes!
Try Googling before asking a damn silly question.
chateau dot murray at idnet dot com

 



Erm, in the sense that it's an example of how *not* to reason, that is.


--
BMW K1100LT  Ducati 750SS  Honda CB400F  Triumph Street Triple
Suzuki TS250ER GN250  Damn, back to six bikes!
Try Googling before asking a damn silly question.
chateau dot murray at idnet dot com

 

On 7/13/2010 2:20 AM, The Older Gentleman wrote:

Or they wanted motorcycles made by a motorcycle company and not a
bowling-pin-setter company.