4TehNguyen

iTrader: (1)

wiki leaks needs to do more of this on the Fed

Big Andy

As it says in the article it looks like they sold a lot of motorcycles on credit to people who subsequently defaulted:

baadhabit

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

jaseman

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.

Och

iTrader: (3)

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?

jaseman

Yes, at one point, a few years ago, HD's held their value extremely well. Part of this was the fact the HD couldn't build bikes fast enough to meet demand. Many people were willing to pay new prices for used bikes, simply to not have to wait 6-8 months for one right off the assembly line. Those days are over. Dealers now have plenty of inventory on the showroom floor, and are struggling to get rid of much of it.

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.

mmarshall

In the lending department, though, we're (probably) still playing catch-up to the Chinese.

mmarshall

An HD (or any other bike, for that matter), is not necessarily a luxury-item. Some people don't own cars, and use their bikes (when the weather is good enough) as Daily-Drivers.


If the original loan was from a bank, a HD dealer, even on a default, may not necessarily be able to take back possession. The bike is then the bank's property, not the dealership's.

Big Willy

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 ?

Big Willy

I have a very close source that was an engineer for HD. He said all production will be moving to Mexico in the very near future...

mmarshall

Yes, that's just what we need with 10% (or more) unemployment.....MORE American manufacturing jobs lost.

jaseman

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.

Big Willy

The market is flooded with used bikes. It's crazy what people think they can get for these bikes. If you look hard enough you'll find some pretty good deals, but there are a few smart people that know when and where to buy so the deals go quickly.
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.

jaseman

I have a very, very hard time believing this from a compony such as HD. While 50% of all the parts on any HD are made overseas, I can almost guarantee that final assembly will still be here in the U.S.

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).

mmarshall

Part of this, of course, is the fact that a large percentage of HD riders are military vets, with a deep sense of patriotism.