We first wrote about the Trump Administration’s multi-million dollar gift to Harley Davidson back in August, but the issue is back in the news again as 10 states have now officially objected to the penalty reduction against Harley.
It seems like our own Steve Hanley also has a problem with Trump’s plan to take it easy on the aging baby boomers behind the Milwaukee motorcycle company, and it’s been eating at him for the entire 6 months since we first covered the story. As such, he’s put together a pretty solid op-ed piece against the move. We’ve published it here, below. Enjoy!
Harley Davidson Gets Off Easy
In 2016, Harley Davidson — the historic motorcycle manufacturer that has made the”‘potato-potato” sound of its iconic V Twin engine almost a religion — agreed to a settlement with the Department of Justice over allegations it sold 340,000 “super tuner” kits to its customers since 2008. The kits were supposed to increase the performance of its motorcycles — that’s good. But they also raised the emissions spewing out of those beloved shotgun exhaust pipes above the levels permitted by federal regulations — that’s bad.
Harley Davidson hotly denied doing anything wrong, claiming the “super tuner” kits were “competition only” items intended for riders operating their bikes on race tracks. There is an exception in EPA emissions regulations that permits modifications of production engines for racing, but those engines must never to be used on public streets. It’s hard to believe Harley officials could make such a bizarre claim with a straight face, but the promise of profits makes ordinary human beings do extraordinary things.
The idea that 340,000 Harley owners were putting their machines on trailers and towing them to tracks to go racing and never, ever operating them on public roads is patently absurd. In truth, based on personal experience in my rural community, the typical Harley rider today is someone older than Methuselah who enjoys riding 5 miles per hour below the posted speed limit with a few hundred close friends.
In the settlement, Harley agreed to pay a fine of $12 million. It also agreed to contribute an additional $3 million to a program to replace conventional wood burning stoves in certain communities with more environmentally friendly stoves. The DOJ says new policies instituted by Attorney General J. Beauregard Sessions make it necessary to roll back that last part of the deal, bringing gladness to the hearts of the Harley faithful but provoking outrage from officials in 10 states and the District of Columbia.
According to Reuters, Vermont attorney general T.J. Donovan has issued a statement in which he says Sessions’ new policy “does not apply to projects like the wood stove mitigation project that directly remedies the harm caused by pollutants emitted by the non-compliant Harley-Davidson motorcycles.” Vermont and 9 other states plus the District of Columbia will formally object to the change in federal court, where U.S. District Court Judge Emmet Sullivan must decide whether to approve or reject the revised agreement.
All this comes at a time when the Milwaukee-based company has suffered a steady decline in sales over the past 4 years. It announced last week that it will close its manufacturing facility in Kansas City and consolidate production in Milwaukee. The company has been trying desperately to bring new products to market for years. It offered the V-Rod a few years ago, a motorcycle that kept the iconic V Twin engine configuration but updated it with a new engine designed by Porsche that featured modern technologies like fuel injection and overhead camshafts.
Harley purists rejected the V-Rod and it became a sales dud. The knock on it was that it didn’t have the handling the Harley faithful expected, but many people suspect it just didn’t have that distinctive Harley exhaust rumble, the one that tells everyone within earshot that the rider is a thoroughly bad dude who will not tolerate being messed with. The other thing that sank the V-Rod was that it didn’t offer owners the opportunity to customize it with aftermarket exhaust pipes — a big part of the Harley mystique.
More recently, Harley showed off is LiveWire, an electric motorcycle designed to lead the company into the future. That project was put on hold when Harley said it would have to sell the machine for $50,000 in order to make money. A new electric motorcycle from Harley Davidson is supposed to be here in 18 months, but the company has been promising this for several years and the time line keeps getting pushed back while competitors like Zero, Lightning, and Energica blaze a trail to the electric motorcycle future.
Harley is the poster child for the traditional business cycle. Once an innovator, it has become a prisoner of its own success. That “potato-potato” rumble may not be enough to keep Harley from becoming another Packard — a once great company that is little more than a memory today.
Disclaimer: opinions held by Steve Hanley are very likely shared by the Editor of this site.