Sportster Iron 883: The Bike That Won't Save Harley
It seems that someone at Harley has been reading my Hubs! In RIP XLH I lamented the death of the basic Sportster after many years of providing accessible entry-level Harleying! Given Harley's current dire economic predicament, it seems that somewhere in Milwaukee the light bulb went on in somebody's head, and they figured that their current product line where you can easily drop $50K on a Screaming Eagle, might not be the absolute best product strategy in a severe recession.
It is highly unfortunate that their new US$7,995 motorcycle is the Sportster Iron 883, a bike that does nothing but harken back to the all-black uglharleys of the past. It's all blacked out, it has the most hideous fork gaiters this side of a pogo stick, cheap looking cast wheels, a wimpy looking front disk brake, flat standard handlebars, and has all of the Harley appeal of a 1966 Bobcat... if you were to let a hyperactive child loose on it with a couple of cans of flat black spray paint.
If Harley thinks that this little monstrosity is going to be their saving grace, they are dead wrong... and may be dead soon, for that matter. It seems that things are not exactly looking up at the venerable firm.
Harley Davidson's 2008 total fiscal revenue dropped by 2%, while the actual profits declined by 25%. Per-share profits for 2008 totaled $2.79, however the precipitous drops seen earlier in 2008 accelerated significantly in the fourth quarter as the economy stalled out and people found other priorities like food and mortgage payments instead of dropping $30 K on a Hawg. Harley Davidson's revenues dropped 7% year over year and very significantly, the company's earnings declined 56% to $0.34 per share.
These actions could end up costing Harley's shareholders over $125 million in restructuring charges before it's all done. Combine this number with Harley Davidson management's forecast of a 350-basis-point decline in gross margins, a $2.2 billion debt, and it all adds up to what could be Harley's worst year since the pre-AMF days. At its current cash-burning rate, Harley could be flat broke before the end of this year. Bailouts anyone?
To combat this virtual collapse, Harley management plans double-digit percentage reductions in shipments this year which will mean that there will be far less motorcycles on the dealership floors. Furthermore, Harley Davidson plans to consolidate several of its plants and warehouses as part of its plan to reduce capital spending by approximately 20%. The worst news of all for Harleyphiles everywhere is that 1,100 employees are going to be tossed into the same pile of unemployed as 7,000 Home Depot, 8,000 Sprint, 20,000 Caterpillar, and hundreds of thousands of other workers that are getting their pink slips this month.
All of these corporate financial plans mean nothing if riders can't afford to buy your bikes and / or your bikes are really fundamentally butt ugly embarrassements that no self respecting rider would be caught dead on.
If Harley had taken the Honda Fury approach instead of this blacked out gargoyle, we might be looking at an entry level Sporty that riders would actually be interested in, instead of passing over in droves.
Willie G., listen to your old friend Hal. (And yes... you should have taken the leap, bitten the bullet, and hired me way back then at Daytona... by now you'd be producing really great bikes...) Take the 883 Sporty. Sleeve it down to 600 cc. Lighten it up a bit. Gently rake the front end. Chrome it and candy color it and follow the lead of the Honda Fury in styling. Now price it at $5,995. And get ready to crank up the assembly lines as this model could very likely be the single biggest selling motorcycle of the decade!
And toss this black Iron mutation into the nearest dumpster!
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