Harley Davidson’s secret $2.3 billion taxpayer bailout
#17
That drop in sales isn’t enough to explain why Harley needed $2.3 billion from the federal government, instead, it seems as if the company’s exposure to bad debt by Harley-Davidson Financial Services is really what led to the company’s apparent near-death.
#18
Lexus Champion
iTrader: (2)
these handouts to big business make me sick. they shouldve given each family a few grand each. i read somewhere that if they broke down the billions handed out, to each tax payer family it worked to about $20K each family. i can certainly stimulate the economy more if i had an extra 20 grand
#19
Politics aside, I find it very hard to believe HD needed a bail-out.
While motorcycles are their primary source of revenue, merchandising is a very large source of income for Harley Davidson. They slap the logo on everything imaginable, from t-shirts and hats, to dog bowls and Ford trucks. Walk into any WalMart, PepBoys, Sheetz, or any other major retailer, and you are guaranteed to find HD branded merchandise. Someone pays a licensing fee, and some percent of every sweatshirt, lighter, flashlight, or air-freshener goes right back to HD. And there is more than enough product out there to make up for every RUB who defaulted on his bike loan in the last five years or so.
While motorcycles are their primary source of revenue, merchandising is a very large source of income for Harley Davidson. They slap the logo on everything imaginable, from t-shirts and hats, to dog bowls and Ford trucks. Walk into any WalMart, PepBoys, Sheetz, or any other major retailer, and you are guaranteed to find HD branded merchandise. Someone pays a licensing fee, and some percent of every sweatshirt, lighter, flashlight, or air-freshener goes right back to HD. And there is more than enough product out there to make up for every RUB who defaulted on his bike loan in the last five years or so.
#20
Lexus Champion
iTrader: (3)
It's understandable when people default on mortgage payments that they cant afford. Its understandable even when people default on their Corolla when they are really broke. But when people default on luxury items such as HD bikes, thats truly pathetic.
Instead of bailing out HD with taxpayers money, the government should've gone after possessions of the a-holes who defaulted on their payments, auction them and reimburse HD.
Besides, from what I hear HD bikes hold their value extremely well. Why can't HD repossess the bikes from those who defaulted and resell them?
#21
And this is silly that people are allowed to default on pretty much anything.
It's understandable when people default on mortgage payments that they cant afford. Its understandable even when people default on their Corolla when they are really broke. But when people default on luxury items such as HD bikes, thats truly pathetic.
Instead of bailing out HD with taxpayers money, the government should've gone after possessions of the a-holes who defaulted on their payments, auction them and reimburse HD.
Besides, from what I hear HD bikes hold their value extremely well. Why can't HD repossess the bikes from those who defaulted and resell them?
It's understandable when people default on mortgage payments that they cant afford. Its understandable even when people default on their Corolla when they are really broke. But when people default on luxury items such as HD bikes, thats truly pathetic.
Instead of bailing out HD with taxpayers money, the government should've gone after possessions of the a-holes who defaulted on their payments, auction them and reimburse HD.
Besides, from what I hear HD bikes hold their value extremely well. Why can't HD repossess the bikes from those who defaulted and resell them?
The problem now is, people with used HD's are still expecting close to MSRP for their used bikes, so they sit for sale at an inflated 'perceived' value until the owner can no longer afford to pay off the loan. And while the bikes still command high prices, they are no longer the 'yuppie' status symbol they were a decade ago, so actual demand is not what it used to be.
I'm not sure HD (or the financing institution they use) is in the position to repo all the bikes that have been defaulted on. They are in the business of selling new bikes, and trying to unload reposesed inventory my cost them much more than it's worth in the end. It would make much more sence (to me, at least) if they sold the paper to a third party, who could then go after default owners. But bikes are not like cars. People don't need them. You can send repo'ed cars off to used lots by the truckload, and make a profit (or at least break even). Bikes, especially higher priced ones, are a little harder to unload in quantity. Plus, I'm not sure the percentage of default loans is as high as people may think on HD's.
#22
Lexus Fanatic
#23
Lexus Fanatic
Besides, from what I hear HD bikes hold their value extremely well. Why can't HD repossess the bikes from those who defaulted and resell them?
#24
Lexus Test Driver
Politics aside, I find it very hard to believe HD needed a bail-out.
While motorcycles are their primary source of revenue, merchandising is a very large source of income for Harley Davidson. They slap the logo on everything imaginable, from t-shirts and hats, to dog bowls and Ford trucks. Walk into any WalMart, PepBoys, Sheetz, or any other major retailer, and you are guaranteed to find HD branded merchandise. Someone pays a licensing fee, and some percent of every sweatshirt, lighter, flashlight, or air-freshener goes right back to HD. And there is more than enough product out there to make up for every RUB who defaulted on his bike loan in the last five years or so.
While motorcycles are their primary source of revenue, merchandising is a very large source of income for Harley Davidson. They slap the logo on everything imaginable, from t-shirts and hats, to dog bowls and Ford trucks. Walk into any WalMart, PepBoys, Sheetz, or any other major retailer, and you are guaranteed to find HD branded merchandise. Someone pays a licensing fee, and some percent of every sweatshirt, lighter, flashlight, or air-freshener goes right back to HD. And there is more than enough product out there to make up for every RUB who defaulted on his bike loan in the last five years or so.
As for HD merchandise, they do well , but not enough to support the company. Who do you know buying a $50 HD t-shirt any more ?
#26
Lexus Fanatic
Yes, that's just what we need with 10% (or more) unemployment.....MORE American manufacturing jobs lost.
Last edited by mmarshall; 12-06-10 at 02:19 PM.
#27
HD has been in trouble for a few years now. Much like the housing industry, finance was easy a few months back so anyone who wanted a bike could get one...HD then lifted the cost of the machine...what you get in the end is a motorcyle or "House" that is not worth the balance of the loan.
As for HD merchandise, they do well , but not enough to support the company. Who do you know buying a $50 HD t-shirt any more ?
#28
Lexus Test Driver
I totally agree. I just didn't explain it quite as eloquently. This is why you see so many on the used market, sitting unsold for so long. Too many owners are trying to get the "balance", instead of taking a dive, and getting what the bike is worth.
Not many. But you do see people buying up every $10 trinket with the logo on it. Be it T-shirts, wall clocks, flashlights, or what have you. No, logo branding itself can't support the compony. I'm just surprised it doesn't help prop them more up in lean times.
Not many. But you do see people buying up every $10 trinket with the logo on it. Be it T-shirts, wall clocks, flashlights, or what have you. No, logo branding itself can't support the compony. I'm just surprised it doesn't help prop them more up in lean times.
If you look at the demographic on the average Harley owner, I would say they fit square in the middle of the average person on that financial bubble.
#29
While I've heard talk of the York, PA plant being shut down, Harley knows it's customer base still wants "made in the USA". It's ingrained too deep in the HD culture. Sub-assemblies being put together in Mexico, then shipped to Milwakee to be mated with other sub-assemblies? Sure, I might buy that. But I guarantee final assembly will be left here in the States somewhere. Without a US production line of some sort, HD will lose all credibility with it's die-hard fans, and Willie G knows this (or should).
#30
Lexus Fanatic
While I've heard talk of the York, PA plant being shut down, Harley knows it's customer base still wants "made in the USA". It's ingrained too deep in the HD culture.
Without a US production line of some sort, HD will lose all credibility with it's die-hard fans, and Willie G knows this (or should).
Without a US production line of some sort, HD will lose all credibility with it's die-hard fans, and Willie G knows this (or should).