Harley to Be Taken Over?
This could be very bad for Milwaukee and Wisconsin if it’s true.
A rumor that Harley-Davidson Inc. is the target of a takeover bid - by a firm famous for buying and sometimes dismantling companies - drove the motorcycle maker’s shares to a three-month high Tuesday.
The stock closed at $28.35, up 7% in trading that was nearly six times higher than the normal volume.
Investors responded to speculation that Harley was a takeover target by Kohlberg Kravis Roberts & Co., a private equity firm whose $25 billion purchase of RJR Nabisco in 1989 inspired a book and the movie “Barbarians at the Gate.”
New York-based KKR would not comment on the Harley rumor that began with stock traders in Frankfurt, Germany.
Milwaukee-based Harley also declined to comment, but the rumor fueled a frenzy of media and analyst speculation.
Hey, if this is what the free market dictates, who are we to be sentimental for local concerns. Market, baby!
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 0053 hrs
Especially if it’s taken over by a company out of state who would have to double up its corporate taxes until such time as it moved Harley out of state.
Posted by Brian J. on March 17, 2010 at 0617 hrs
Harley is prime for a buyout. They have a horrible union - closing down York and trimming as many union people as possible would cut their costs significantly. Their stock is supressed due to low demand during the recession, but their name recognition is still high.
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 0645 hrs
George would apparently love to have the government running the markets. I suppose he wouldn’t mind waiting 15 years for a car, and bread lines.
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 0659 hrs
People have been claiming a horrible business environment in this state for years. Well here’s the consequence. Let it happen. Government meddling is why these things are happening so let the failure of government be complete. You can’t fix it by passing new laws, it’s too late for that. Sit back and enjoy the ride. If it gets too bad all of us has the ability to pick up and leave. Then we’ll leave this state to the pro-government extremists who will ruin whatever is left trying to “make it work.”
Government = Failure.
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 0725 hrs
How much extra tax money did Harley have to pay courtesy of Jim Doyle and the Dems newly instituted Combined Reporting tax they put in place last year?
I can see Gordon Gecko on Wall Street right now….“We’ll move this HQ off to Texas and save enough to push the stock price up $8 a share right there alone”
Again, Scott Walker needs to get on this message today.
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 0741 hrs
I don’t mind tractors…er.. Harleys, they are actually pretty nice now-especially the V-Rods (which of course don’t sell very well). The problem is their base is aging and there is very little new blood looking to buy a rolling dinosaur. The cruiser fad is coming to an end and younger (under 55) riders don’t see Harleys as dream machines.
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 0753 hrs
How much extra tax money did Harley have to pay courtesy of Jim Doyle and the Dems newly instituted Combined Reporting tax they put in place last year?
I can see Gordon Gecko on Wall Street right now….“We’ll move this HQ off to Texas and save enough to push the stock price up $8 a share right there alone”
You mean Texas, that state to the south whose crazy governor, Rick Perry, signed combined reporting into law four years ago after it was passed by its Republican-controlled Legislature? That Texas?
Just checking.
Posted by Recess Supervisor on March 17, 2010 at 0904 hrs
American Machine and Foundry ran Harley into the ground when they bought it. It took government intervention to give it a chance to recover. I doubt that anyone at KKR knows how to run the company and cost cutting, as AMF proved, is mystique cutting, too. It’s an interesting rumor, but I doubt that KKR would bother.
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 0908 hrs
It took government intervention to give it a chance to recover.
So government interfered and prevented a failing business from failing just so it can fail in the future and cause more harm? Had Harley been allowed to fail the first time, perhaps there’d be something better in it’s place. Or perhaps as someone else pointed out motorcycles aren’t selling like they once were. Therefore Harley is doomed anyway. No wait, let’s prop it up with more bailouts and tax breaks and whatever other government favors we can come up with. Then the government people can claim they “saved” some jobs.
Corporate welfare. It’s bad unless it benefits something I like, then it’s good.
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 0920 hrs
Family intuition saved the company, not government. It would be a good move if the family does not intend to stay in the business.
The company and brand are not dinosaurs.
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 0945 hrs
I’ve made no claims about wanting the gov’t to run markets. I just don’t understand how people can rally “free markets” over and over, and then cry when the market brings a result that they’re upset about. C’est la vie, MFs!
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 1055 hrs
I’ve made no claims about wanting the gov’t to run markets. I just don’t understand how people can rally “free markets” over and over, and then cry when the market brings a result that they’re upset about. C’est la vie, MFs!
I agree. From time to time a company will fail. If every time a company that might fail is “saved” we’d still have the Pony Express and subsidize it heavily.
Harley going away isn’t the worst thing in the world nor is it something that should be stopped by government force.
Many Republicans show their true colors though when faced with this reality. They’ll vote for bailouts and assistance for something because it benefits them but then cry about overspending and deficits. I wonder which high profile Republican in this state is doing exactly that?
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 1123 hrs
-
I’m as free market as the next guy, but this is not free market. This is not capitalism.
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 1243 hrs
Ahem… the “government intervention” that occurred after the group of executives led by Vaughn Beals and Rich Teerlink bought H-D from AMF was a temporary increase in tariff on bikes made in Japan. Not a monetary bailout. Arguments can be made as to whether or not this was good policy, but it gave the new H-D a little breathing room to reorganize and it also created an environment for other mfr’s like Honda to open up manufacturing facilities in the US. Oh, and they requested the “relief” to be removed before it expired on its own.
You want to trace the roots of the current H-D downfall? While somewhat founded in the recession, it is primarily from the decisions of former leader Jeff Bleustein. Bleustein grew workforce too fast, got more lax on the quality that they had to work so hard to get back, and most importantly - increased production so much and so fast that H-D lost a lot of the mystique - and a lot of the marketing value. Now its just another big expensive motorcycle. But he completely cashed in as he walked out of the building….
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 1250 hrs
They’ll vote for bailouts and assistance for something because it benefits them but then cry about overspending and deficits
Word.
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 1250 hrs
Family intuition saved the company
Cato’s article entitled Taking America for a Ride: The Politics of Motorcycle Tariffs:
To provide relief, the ITC recommended the following five-year tariff plan for heavyweight motorcycles: Raise the current tariff of 4.4 percent to 49.4 percent and keep it there for a year; lower the rate to 39.4 percent in the second year, to 24.4 percent in the third year, to 19.4 percent in the fourth year, and to 14.4 percent in the fifth year. After the fifth year the tariff is to return to 4.4 percent.
That was one of Ronald Reagan’s gifts to the free market. The huge tariff gave Beals an unexpected windfall.
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 1256 hrs
Free lunch -
If the family didn’t buy the company back from AFC, it would have ceased to exist. The family knew what it needed to do, time to do it and an even playing field.
The playing field was a big issue with the Japanese back in the ‘80’s for many companies and reasons. The breaks we gave them to rebuild after WWII needed to be changed.
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 1813 hrs
ofr - the family didn’t buy it from AMF. It was a Leveraged Buyout by AMF execs, there just happened to be one family member in that group. And he went to Styling, he didn’t run the operations.
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 1821 hrs
If it happens, the first thing they will do is move the corporate HQ out this State. I think without a buy out the coporate HQ will move out of the State within 3 years or sooner.
This State is a tax hell and getting worse.Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 2038 hrs
I just don’t understand how people can rally “free markets” over and over, and then cry when the market brings a result that they’re upset about.
<trollfeedingalert>No one is crying. The statement was that it could be bad for Wisconsin, that’s it. There’s no hypocrisy here, but being the smart free thinker that you are, you realize that.</trollfeedingalert>
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 2101 hrs
Companies are easy to run in good times and very hard to run in bad times.
Trane Air Conditioning in LaCrosse and been through so many takeovers it is a wonder they have time to make any product. First Black and Decker then American Standard then they were taken over again this year.
We saw Serta go into bankruptcy after being raped by Wall Street.
I don’t know how to fix the problem but what continues to happen to these businesses is that they are pillaged right in the middle of a crisis just to pull money out of them and not for an ongoing business concern. If a business is failing because of bad management and is taken over to improve the performance then I agree it is great but to take advantage of a short term vunderability and kill the company is quite another.
Which one is this?
Posted by .(JavaScript must be enabled to view this email address) on March 17, 2010 at 2129 hrs
neomom - I confess that sometimes I write to fast or rely on memory to much but if you check the history of the company you will find that the Davidson family did indeed lead the purchase of the company back (with a major investor) as stated in this quote from history.
“Restructuring and revival
In 1981, AMF sold the company to a group of thirteen investors led by Vaughn Beals and Willie G. Davidson for $80 million.[44] Inventory was strictly controlled using the just-in-time system.”Posted by .(JavaScript must be enabled to view this email address) on March 18, 2010 at 0608 hrs
Willie G and the family were minority investors.
Posted by .(JavaScript must be enabled to view this email address) on March 18, 2010 at 0807 hrs
I worked there for 10 years in the mid-80’s to mid-90’s… There were exactly 3 Davidson’s there. Willie G - VP of Styling, his kids Bill and Karen were non-execs in Marketing. Vaughn Beals and Rich Teerlink made that LBO work and brought the company back.
Posted by .(JavaScript must be enabled to view this email address) on March 18, 2010 at 1427 hrs
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