Harley-Davidson Motorcycle Company History.
Type
Public (NYSE: HOG)
Founded
1903
Founder
William S. Harley
Arthur Davidson
Walter Davidson
William A. Davidson
Headquarters
Milwaukee, Wisconsin, USA
Key people
James L. Ziemer (CEO)
Thomas E. Bergmann (CFO)
James A. McCaslin (div. President & div. COO)
Sy Naqvi (President, Harley-Davidson Financial Services)
Industry
Recreational vehicles
Products
Motorcycles
Revenue
? 8.8 billion (USD) (2008)
Employees
9,700 (2006)
Subsidiaries.
Buell
Harley-Davidson Motor Company (NYSE: HOG, formerly HDI) is an American manufacturer of motorcycles based in Milwaukee, Wisconsin. The company sells heavyweight (over 750 cc) motorcycles designed for cruising on the highway. The Harley-Davidson motorcycle (popularly known as "Harleys") have a distinctive design and exhaust note. They are especially noted for the tradition of heavy customization that gave rise to the chopper-style of motorcycle and the Harley motorcycle helmet.
Harley-Davidson motorcycle attracts a loyal brand community, with licensing of the Harley-Davidson logo accounting for almost 5% of the company's net revenue ($41 million in 2004).[4] In 2003, the Buell Motorcycle Company became a wholly-owned subsidiary of Harley-Davidson, the same year that the Motor Company celebrated its 100th birthday. The H-D Motor Company supplies many American police forces with their motorcycle fleets.
History.
Work was immediately begun on a new and improved second-generation machine. This first "real" Harley-Davidson motorcycle had a bigger engine of 24.74 cubic inches (405 cc) with 9-3/4 inch flywheels weighing 28 pounds. The motorcycle had an advanced loop-frame pattern was similar to the 1903 Milwaukee Merkel motorcycle (designed by Joseph Merkel, later of Flying Merkel fame.) The bigger engine and loop-frame design took it out of the motorized-bicycle category and would help define what a modern motorcycle should contain in the years to come. The boys also received help with their bigger engine from outboard motor pioneer Ole Evinrude, who was then building gas engines of his own design for automotive use on Milwaukee's Lake Street.
The prototype of the new loop-frame Harley-Davidson was assembled in a 10- by 15-foot (3 by 5 meter) shed in the Davidson family backyard. Most of the major parts, however, were made elsewhere, including some probably fabricated at the West Milwaukee railshops where oldest brother William A. Davidson was then toolroom foreman. This prototype motorcycle was functional by 8 September 1904 when it competed in a Milwaukee motorcycle race held at State Fair Park. It was ridden by Edward Hildebrand and placed fourth. This is the first documented appearance of a Harley-Davidson motorcycle in the historical record.
In January 1905, small advertisements were placed in the "Automobile and Cycle Trade Journal" that offered bare Harley-Davidson engines to the do-it-yourself trade. By April, complete motorcycles were in production on a very limited basis. That year the first Harley-Davidson dealer, Carl H. Lang of Chicago, sold three bikes from the dozen or so built in the Davidson backyard shed. (Some years later the original shed was taken to the Juneau Avenue factory where it would stand for many decades as a tribute to the Motor Company's humble origins. Unfortunately, the first shed was accidentally destroyed by contractors in the early 1970s during a clean-up of the factory yard.)
In 1906, Harley and the Davidsons built their first factory on Chestnut Street (later Juneau Avenue). This location remains the Motor Company's corporate headquarters today. The first Juneau Avenue plant was a modest 40 by 60-foot single-story wooden structure. That year around 50 motorcycles were produced.
1907 model.
In 1907, William S. Harley graduated from the University of Wisconsin-Madison with a degree in mechanical engineering. That year additional factory expansion came with a second floor and later with facings and additions of Milwaukee pale yellow ("cream") brick. With the new facilities production increased to 150 motorcycles in 1907. That September a milestone was reached when the fledgling company was officially incorporated. They also began selling their motorcycle to police departments around this time, a tradition that continues today.
Production in 1905 and 1906 were all single-cylinder models with 26.84 cubic inch (440 cc) engines but as early as February of 1907 a prototype model with a 45-degree V-Twin engine was displayed at the Chicago Automobile Show. Although shown and advertised, very few dual cylinder V-Twin motorcycle models were built between 1907 and 1910. These first V-Twins displaced 53.68 cubic inches (880 cc) and produced about 7 horsepower (5 kW). This gave about double the hill-climbing power of the first singles. Top speed was about 60 mph (97 km/h). Production jumped from 450 motorcycles in 1908 to 1,149 machines in 1909. [10]
The success of Harley-Davidson motorcycle (along with Indian's success) had attracted many imitators. By 1911 some 150 makes of motorcycles had already been built in the United States -- although just a handful would survive the 1910s.
In 1911, an improved V-Twin motorcycle model with mechanically operated intake valves was introduced. (Earlier V-Twins had used "automatic" intake valves that opened by engine vacuum). Displacing 49.48 cubic inches (810 cc), the 1911 V-Twin was actually smaller than earlier twins, but gave better performance. After 1913 the majority of bikes produced by Harley-Davidson would be V-Twin models.
By 1913, the yellow brick factory had been demolished and on the site a new 5-story structure of reinforced concrete and red brick had been built. Begun in 1910, the red brick factory with its many additions would take up two blocks along Juneau Avenue and around the corner on 38th Street. Despite the competition, Harley-Davidson was already pulling ahead of Indian and would dominate motorcycle racing after 1914. Production that year swelled to 16,284 machines.
Ralph Hepburn on his Harley racing bike in this 1919 photo.
World War I
In 1917, the United States entered World War I and the military demanded motorcycles for the war effort. Harleys had already been used by the military in border skirmishes with Pancho Villa but World War I was the first time the motorcycle had been adopted for combat service. Harley-Davidson provided over 20,000 motorcycle units to the military forces during World War I.
The 1920s.
By 1920, Harley-Davidson was the largest motorcycle manufacturer in the world. Their motorcycles were sold by dealers in 67 countries. Production was 28,189 motorcycle units.
In 1921, a milestone was reached in motorcycle racing. A Harley-Davidson was the first to win a race at an average speed of over 100 mph (160 km/h).
During the 1920s, several improvements were put in place, such as a new 74 cubic inch (1200cc) V-Twin, introduced in 1922, and the "Teardrop" gas tank, still seen today, in 1925. A front brake was added in 1928.
In the late summer of 1929, Harley-Davidson motorcycle introduced its 45 cubic inch flathead V-Twin to compete with the Indian 101 Scout and the Excelsior Super X motorcycle.
The Depression.
Harley-Davidson WL.
The Great Depression began a few months after the introduction of their 45 cubic inch model. Harley-Davidson's motorcycle sales plummeted from 21,000 in 1929 to less than 4,000 motorcycle sales in 1933. In order to survive, the company manufactured industrial powerplants based on their motorcycle engines. They also designed and built a three-wheeled delivery vehicle called the Servi-Car, which remained in production until 1973.
In the mid-'30s, Alfred Child opened a production line in Japan with the 74ci VL, which became the Rikuo motorcycle after Harley-Davidson motorcycle employees were expelled.
An 80 cubic inch flathead engine was added to the line in 1935, by which time the single cylinder motorcycle had been discontinued.
By 1937, all the flathead engines were equipped with the dry-sump oil recirculation system that had been introduced with the 61E and 61EL "Knucklehead" OHV models. This caused the 74 cubic inch V and VL motorcycle models to be renamed U and UL, the 80 cubic inch VH and VLH motorcycle to be renamed UL and ULH, and the 45 cubic inch RL to be renamed the WL motorcycle.
In 1941, the 74 cubic inch "Knucklehead" motorcycle was introduced as the F and the FL, replacing the 80 cubic inch flathead UH and ULH models.
World War II.
Harley copied the BMW R71 motorcycle to produce its XA model.
One of only two American cycle manufacturers to survive the Great Depression, Harley-Davidson again produced large numbers of motorcycles for the US Army in World War II and resumed civilian production afterwards, producing a range of large V-twin motorcycles that were successful both on racetracks and for private buyers.
Harley Davidson, on the eve World War II, was already supplying the Army with a military-specific version of its 45" WL line, called the WLA. (The A in this case stood for "Army".) Upon the outbreak of war, the company, along with other manufacturing enterprises, shifted to war work. Over 90,000 military motorcycles, mostly WLAs and WLCs (the Canadian version) would be produced, many to be provided to allies.
 WLC.
Shipments to the Soviet Union under the Lend-Lease program numbered at least 30,000 motorcycle units. The WLAs produced during all years of war production would, unusually, have 1942 serial numbers. Production of the WLA stopped at the end of the war, though it would resume production from 1949 to 1952 due to the Korean War.
The U.S. Army also asked Harley-Davidson to produce a new motorcycle with many of the features of BMW's side-valve and shaft-driven R71. Harley largely copied the BMW motorcycle engine and drive train and produced the shaft-driven 750 cc 1942 Harley-Davidson XA motorcycle. Due to the superior cooling of an opposed twin, Harley's XA cylinder heads ran 100 °F (55 °C) cooler than its V-twins. The XA motorcycle never entered full production: the motorcycle by that time had been eclipsed by the Jeep as the Army's general purpose vehicle, and the WLA—already in production—was sufficient for its limited police, escort, and courier roles. Only 1,000 were made and the XA motorcycle never went into full production. It remains the only shaft-driven Harley Davidson motorcycle ever made.
Small Harleys - Hummers and Aermacchis. 
Aermacchi-built AMF H-D single-cylinder bike.
As part of war reparations, Harley-Davidson motorcycle acquired the design of a small German motorcycle, the DKW RT125 which they adapted, manufactured, and sold from 1947 to 1966. Various models were made, including the Hummer motorcycle from 1955 to 1959, but they are all colloquially referred to as "Hummers" at present. BSA motorcycle company in the United Kingdom took the same design as the foundation of their BSA Bantam.
In 1960, Harley-Davidson consolidated the Model 165 and Hummer lines into the Super-10, introduced the Topper scooter, and bought fifty percent of Aeronautica Macchi's motorcycle division. Importation of Aermacchi's 250 cc horizontal single began the following year. The bike bore Harley-Davidson motorcycle badges and was marketed as the Harley-Davidson Sprint.
After the Pacer and Scat motorcycle models were discontinued at the end of 1965, the Bobcat became the last of Harley-Davidson's American-made two-stroke motorcycle. The Bobcat motorcycle was manufactured only in the 1966 model year.
Harley-Davidson's motorcycle entry in the lightweight two-stroke market for 1967 was the M-65, built by Aermacchi motorcycle company and offered in base form with a semi-step thru frame and tank and as the M-65S (Sport) with a larger tank (later used on the 1968 Rapido). The company re-entered the 125 cc two-stroke market in 1968 with the introduction of the Aermacchi-built Rapido, a 125 cc bike to replace the American-made 2-stroke bikes.
The engine of the Sprint was increased to 350 cc in 1969 and would remain that size until 1974, when it was replaced by the 250 cc two-stroke SX.
Harley-Davidson purchased full control of Aermacchi's motorcycle production in 1974 and continued making two-stroke motorcycles there until 1978, when they sold the facility to Cagiva.
Tarnished reputation.
AMF H-D Electra Glide.
In 1952, following their application to the US Tariff Commission for a 40% tax on imported motorcycles, Harley-Davidson was charged with restrictive practices. Hollywood also damaged Harley's image with the many outlaw motorcycle gang films produced from the 1950s through the 1970s, following the 1947 Hollister, CA biker riot on July 4th. "Harley-Davidson" for a long time was synonymous with the Hells Angels motorcycle gang and other Outlaw motorcycle gangs.
In 1969, American Machinery and Foundry (AMF) bought the company, streamlined production, and slashed the workforce. This tactic resulted in a labor strike and a lower quality of bikes. The bikes were expensive and inferior in performance, handling, and quality to Japanese motorcycles. Sales declined, quality plummeted, and the company almost went bankrupt. The venerable name of "Harley-Davidson" was mocked as "Hardly Ableson", "Hardly Driveable," "Hogly Ferguson" and the nickname "Hog" became pejorative.
Leadership regained.
1998 Harley-Davidson FXSTC.
In 1981, AMF sold the company to a group of thirteen investors led by Vaughn Beals and Willie G. Davidson for $80 million.[23] Inventory was strictly controlled using the Just In Time system.
In the early eighties, Harley Davidson claimed the Japanese manufacturers were dumping motorcycles on the US market. After Harley Davidson rejected aid from Japanese manufactures, the US International Trade Commission imposed in 1983 a 45% tariff on imported bikes and bikes over 700cc engine capacities specifically to protect Harley Davidson motorcycle company.
Rather than trying to match the Japanese, the new management deliberately exploited the "retro" appeal of the machines, building a motorcycle that deliberately adopted the look and feel of their earlier machines and the subsequent customizations of motorcycle owners of that era. Many components such as brakes, forks, shocks, carburetors, electrics and wheels were outsourced from foreign manufacturers and quality increased, technical improvements were made, and buyers slowly returned. To remain profitable Harley continues to increase the amount of overseas made parts it uses, while being careful not to harm its valuable "American Made" image.
The "Sturgis" model, boasting a dual belt-drive, was introduced. By 1990, with the introduction of the "Fat Boy", Harley-Davidson motorcycle once again became the sales leader in the heavyweight (over 750 cc) market. At the time of the Fat Boy model introduction a story rapidly spread that its silver paint job and other features were inspired by the World War II American B-29 bomber; and that the Fat Boy name was a combination of the names of the atom bombs (Fat Man and Little Boy) that were dropped on Nagasaki and Hiroshima respectively. However, the Urban Legend Reference Pages lists this story as an urban legend.
Ford F-150 crew cab
Harley Davidson edition.
1994 saw the replacement of the FXR motorcycle frame with the Dyna motorcycle frame, though it was revived briefly in 1999 and 2000 for special limited editions.
In 1999, Ford Motor Company added a Harley-Davidson motorcycle edition to the Ford F-Series F-150 line, complete with the Harley-Davidson motorcycle logo. This truck was an extended-cab for model year 1999. In 2000, Ford changed the truck to a crew cab and in 2002 added a super-charged engine (5.4L) which continued until 2003. In 2004, the Ford/Harley was changed to a Super-Duty, which continues through 2006. Ford again produced a Harley-Davidson Edition F-150 for their 2006 model-year, as well.
Building started on $75 million 130,000 square-foot (12,000 m²) Harley-Davidson motorcycle Museum in the Menomonee River Valley on June 1, 2006. It is expected to open in 2008 and will house the company's vast collection of historic motorcycles and corporate archives, along with a restaurant, café and meeting space.
Claims of stock price manipulation.
During its period of peak demand, during the late 1990s and early 2000s, Harley-Davidson motorcycle company embarked on a program of expanding the number of dealerships throughout the country. At the same time, its current motorcycle dealers typically had waiting lists that extended up to a year for some of the most popular Harley-Davidson motorcycle models. Harley-Davidson motorcycle company, like the auto manufacturers, records a sale not when a consumer buys their product, but rather when it is delivered to a dealer. Therefore, it is possible for the motorcycle manufacturer to inflate motorcycle sales numbers by requiring dealers to accept more inventory than desired in a practice called channel stuffing. When demand softened following the unique 2003 model year, this news lead to a dramatic decline in the stock price. In April 2004 alone, the price of HOG shares dropped from over $60 to under $40. Immediately prior to this decline, retiring CEO Jeffrey Bleustein profited $42 million on the exercise of employee stock options. Harley-Davidson motorcycle company was named as a defendant in numerous class action suits filed by investors who claimed they were intentionally defrauded by Harley-Davidson's management and directors. By January 2007, the price of Harley-Davidson motorcycle shares reached $70.
2007 workers' strike.
On February 2, 2007, upon the expiration of their union contract, about 2,700 employees at Harley-Davidson Inc.'s largest manufacturing plant in York, PA went on strike after failing to agree on wages and health benefits. During the pendency of the strike, the company refused to pay for any portion of the striking employees' health care.
The day before the strike, after the union voted against the proposed contract and to authorize the strike, the company shut down all production at the plant. The York facility employs more than 3,200 workers, both union and non-union.
Harley-Davidson announced on February 16, 2007, that it had reached a labor agreement with union workers at its largest manufacturing plant, a breakthrough in the two-week-old strike. The strike disrupted Harley-Davidson’s national motorcycle production and had ripple effects as far away as Wisconsin, where 440 employees were laid off, and many Harley suppliers also laid off workers because of the strike.
Agreement in India.
In a landmark agreement reached during discussions between the U.S. Trade Representative, Susan Schwab, and the Minister for Commerce and Industry of India, Kamal Nath, on April 12, 2007 at New Delhi, Harley-Davidson motorcycle Company will be allowed access to the Indian motorcycle market in exchange for the export of Indian mangoes. India had not specified emission standards for any motorcycle over 500cc displacement, effectively prohibiting the import of any Harley Davidson motorcycle, along with most motorcycle models of other manufacturers, such as Yamaha Motor Co. Ltd. and Suzuki Motor Corporation. However, Harley Davidson motorcycle is shelving plans to export their motorcycle to India for now; import duties of 60%, along with taxes of 30%, would effectively double the cost of the motorcycle for the Indian consumer.
The beginning.
The company considers 1903 to be its year of founding, though the Harley-Davidson enterprise could be considered to have started in 1901 when William S. Harley, age 21, drew up plans for a small engine that displaced 7.07 cubic inches (116 cc) and had four-inch flywheels. The engine was designed for use in a regular pedal-bicycle frame.
Over the next two years Harley and his boyhood friend Arthur Davidson labored on their motor-bicycle using the northside machine shop at the home of their friend, Henry Melk. It was finished in 1903 with the help of Arthur's brother, Walter Davidson. Upon completion the boys found their power-cycle unable to conquer Milwaukee's modest hills without pedal assistance. Will Harley and the Davidsons quickly wrote off their first motor-bicycle as a valuable learning experiment.  |