The battle for who holds the reins at Harley-Davidson continues, with H Partners Management—the investment group that had representation on the company’s board until their representative resigned out of frustration over not being able to choose a new CEO—now securing another backer for their initiative.
In fact, Purple Chip Capital, which has approximately a 1% stake in Harley-Davidson, is joining forces with H Partners Management in their challenge against retiring CEO Jochen Zeitz, along with board members Thomas Linebarger and Sara Levinson. They are essentially accusing them of corporate missteps, particularly criticizing the brand’s “misguided” Hardwire strategy, which they claim diverges from the brand’s core principles and undermines its culture.
Their objective is to publicize their concerns in hopes of influencing other investors and stakeholders. They are demanding the immediate removal of those three executives and the termination of Harley-Davidson’s LiveWire electric motorcycle division. They also advocate for a return to Harley-Davidson’s traditional image, characterized by chrome and leather, when their investment returns were significantly greater.
Unfortunately, that reality has ebbed away, having been left behind in the ’90s.
On a side note, before diving deeper into their claims, it’s worth mentioning that Purple Chip Capital’s statement not only neglected to include the dash in Harley-Davidson every single time, but it also misspelled Harley-Davidson on one occasion. While it’s a minor detail, it seriously irked me by the time I finished reading their statements and only strengthened my belief that they seem disconnected and uninformed about the brand, compelling me to counter their arguments.
Photo by: Harley-Davidson
As stated by Purple Chip Capital, “As long-term shareholders and customers of Harley-Davidson, we have watched with dismay as the Company strayed significantly from the foundational principles that created its lasting legacy as an American icon. Owning a Harley-Davidson is about more than just the bike; it is about being part of a unique culture and community recognized nationwide.”
The firm further emphasizes the importance of dealerships as the company’s lifeblood, lamenting the neglect of the brand’s culture, asserting that the shift to online sales (which Harley does not yet engage in) has virtually harmed the company, and bemoaning the board’s preference for “egregiously off-brand product lines” which stray from the high-quality options that made every Harley truly unique.
And sure, 800 pages of accessories might not seem enough in terms of options. However, this is where they start pushing for the discontinuation of the LiveWire.
“In terms of product offerings,” they assert, “the company must recognize that its electric LiveWire product line is fundamentally flawed and should be ceased. Harley-Davidson enthusiasts do not desire electric engines; they crave raw American muscle. The focus should instead shift to appealing to a new generation of Harley riders, revitalizing the lineup, and reintroducing the iconic Sportster 883 as a beginner motorcycle.”
To start with, electric motorcycles do have a place. I’m actually working on a piece discussing what I think Harley should pursue in that realm. Nonetheless, I agree that the LiveWire’s product strategy has been…misguided. But to discontinue it? Absolutely not. There’s a route ahead for this, and it’s crucial for Harley-Davidson’s survival for the next 125 years. Research and development are vital for any company’s long-term success, and the LiveWire division could be key to that.
Secondly, the idea of “raw American power” is a naive viewpoint given Harley’s current financial troubles. A significant portion of Harley’s new clientele is aging out of the biking scene, as most individuals under 50 can’t shell out $30,000 to $50,000 for a hog. And those who can afford it usually already possess one. Moreover, younger audiences are largely indifferent to the notion of “raw American power.” What they seek is affordability, which Harley only provides through its pre-owned models. Even these models can be pricey.
Regarding the suggestion to revive the Sportster 883, it’s absurd to think anyone could see it as an entry-level motorbike by today’s standards. Take a closer look at what’s thriving in the entry-level segment. The focus is on small-displacement, budget-friendly bikes that are easy for newcomers to handle without the fear of accidents. These motorcycles are also easier to maintain and lighter on insurance costs. Successful models include Triumph’s 400s, Royal Enfield’s complete range, and various 300 to 500cc offerings from Japanese manufacturers.
None of this aligns with the 883. And that’s where things start to spiral further.
Photo by: Royal Enfield
“It’s time to rekindle the pride that Harley-Davidson riders have always felt for their bikes and the brand, and to bring back the premium-quality parts and accessories crafted from chrome, steel, and leather,” they conclude. I highlight that as it captures such a simplistic understanding of what Harley-Davidson truly embodies, as if you asked a child, “What is a Harley?”
Because let’s face it, the market has evolved beyond that era of motorcycling. We are not living in an Easy Rider narrative any longer. The landscape is not predominantly tailored for a Boomer audience. Harley-Davidson’s economic and sales struggles stem not from a divergence from its roots, but rather a reluctance to evolve significantly. Baggers remain a fundamental aspect of the lineup. Softails and Hardtails are still popular. Cruisers continue to be integral to its offerings. Nevertheless, the older white male demographic is still Harley’s primary audience. In essence, very little has shifted since “the golden years.”
Purple Chip Capital concludes, asserting, “We believe that removing those three directors, who seem out of touch with what Harley-Davidson is built upon, would be a significant first step in steering the company back to its former glory for the benefit of its riders, dealers, and shareholders.”
Ironically, they use the term “clearly disconnected,” when in reality, both Purple Chip Capital and H Partners Management appear to be the ones out of touch. Their inability to recognize this indicates they should not be taken seriously.