Harley Davidson's CEO to Retire: Car Czar Next?

Press Release:

Harley-Davidson, Inc. (NYSE:HOG) announced today [Monday] that President and Chief Executive Officer James L. Ziemer has informed the Board of Directors that he intends to retire in 2009, capping a 40-year career with the Company. The Board of Directors has formed a search committee to review both internal and external candidates. Ziemer will remain in his current role until a new CEO is in place.

“Jim Ziemer has dedicated his entire professional career to Harley-Davidson and has been a great advocate for the Company,” commented Board Chairman Jeffrey L. Bleustein. “All of us who have worked with Jim throughout the years have benefited from his leadership, his selfless commitment to the Company and his contributions to making the brand one of the most admired and successful brands in the world. As an avid and lifelong motorcyclist, Jim also exemplifies the great legacy and spirit of Harley-Davidson.”

Ziemer is a native Milwaukeean who grew up in the neighborhood next to Harley-Davidson’s original Milwaukee factory location on the city’s west side. He started with the Company in 1969 as a freight elevator operator while attending the University of Wisconsin-Milwaukee. Upon earning his undergraduate degree in accounting at UWM, he joined the accounting department where he spent the majority of his career. He was named the Company’s Chief Financial Officer in 1990. In 2005, he was named President and Chief Executive Officer of Harley-Davidson, Inc. Ziemer also serves on the Board of Directors of Textron, Inc.

“Working at Harley-Davidson has been an honor and privilege and has fulfilled a life-long dream for me,” said Ziemer. “I am extremely proud of what our outstanding team of employees and dealers has accomplished together. There is always new and exciting work to be done on Harley-Davidson’s epic journey, and I have great confidence that the powerful combination of our employees, customers and dealers around the world and their passion will continue to fuel the strength of the brand. I am delighted to be able to spend more time with my family and am enthusiastic about the Company’s tremendous opportunities and its prospects for success in the years to come.”

Why maybe the "Car Czar"? Unlike the U.S. auto makers like Ford (F) and GM (GM), Harley Davidson has had a very successful labor union relationship. That is not to say it has been all roses, union relationships never are, but it is to say that both sides have profited handsomely from the arrangement, unlike the auto manufacturers.

That fact alone makes Ziemer the perfect person for the post. He will have little patience for management that turns out inferior products (and way too many lines of them) and the same intolerance for labor unions that want to enrich membership at the expense of shareholders and the company's viability.

Because of his success at Harley Davidson, either side would be hard pressed to object to his appointment unlike GE's (GE) former CEO Jack Welch, whose name has been tossed in the ring but would face strong union objections because of his stance on them. Personally I think Welch would be great but realities just will not allow it.

Disclosure: Long HOG, GE

Comments

[DetroitBiker:]

"That fact alone makes Ziemer the perfect person for the post. He will have little patience for management that turns out inferior products (and way too many lines of them)" What! Does he remember the Harleys in the 70's and 80's they were crap. they have come a long way but are still not up to quality standards of the jap bikes. for the money we are paying for harleys we should be getting better bikes. and with parts made here in the U.S every time i get parts for my 06 harley, the parts are made in a foreign country. Im sick of it.

2008 Dec 17 08:41 AM

[harleydlr:]

I think you are both on drugs. Ziemer could barely find his way to work. That's why he is going. Car Czar my ass. As to quality, compare the value of your 06 Harley to an 06 Jap bike and see which one is worth more(percentage wise). Show me any item that is mostly made in the USA and see where some of the parts are made. Over 95 percent of your 06 Harley is made here. If you don't like it sell it and by some Jap crap.

2008 Dec 17 10:19 AM

[User 321300:]

Inferior products? You're a dolt. Ford Motor Company builds the highest quality, safedt vehicles in the world (JD Power and IIHS). Check your facts before opening your big mouth.


On Dec 17 08:41 AM DetroitBiker wrote:

> "That fact alone makes Ziemer the perfect person for the post. He
> will have little patience for management that turns out inferior
> products (and way too many lines of them)" What! Does he remember
> the Harleys in the 70's and 80's they were crap. they have come a
> long way but are still not up to quality standards of the jap bikes.
> for the money we are paying for harleys we should be getting better
> bikes. and with parts made here in the U.S every time i get parts
> for my 06 harley, the parts are made in a foreign country. Im sick
> of it.

2008 Dec 17 10:24 AM

[Chris B:]

<loud sigh>

Somehow I knew this commentary would decend into the kind of Ford-truck-man versus Chevy-truck-man fanboy vs hater banality seen in GM vs Ford investment articles. And all this over a company that gets most of its revenue from Harley-logo fashion clothing and the subprime financing of recreational vehicles. I wonder if those fanboys/haters are able to step back from their corporate marketing-department produced identities long enough to make objective decisions regarding their life savings rather than just being defensive about their brand identification.

That said, I suspect Ziemer got out before things got stressful because HOG is about to be hit with a wave of bad loans. People are going to be paying the mortgage and electric bills long after the $30k motorcycle loan has defaulted, and bikes are notoriously difficult to repo and resale. I also doubt that hard economic times and high unemployment are going to do much for the sales of $200 logo riding boots or chaps.

How Ziemer would suggest restructuring an auto industry that became too dependent on profiting from subprime loans while selling vehicles at a loss is beyond me. Judging from Harley prices, his solution to the union problem is to just pay them whatever they want.

It's probably best to put him out to pasture, where he can take credit for the good ole days as the company suffers.

2008 Dec 17 12:11 PM

[FUJIMO:]

I find the comments; Ziemer the perfect person for the post of car czar very far sighted. Not that he doesn't understand business but one that understands the car market is a little far fetched.

Lee Iacocca would be a far better choice with name recognition. Lee worked his way through the ranks of Ford and saved Chrysler with success and has a degree in engineering to his credit.





On Dec 17 08:41 AM DetroitBiker wrote:

> "That fact alone makes Ziemer the perfect person for the post. He
> will have little patience for management that turns out inferior
> products (and way too many lines of them)" What! Does he remember
> the Harleys in the 70's and 80's they were crap. they have come a
> long way but are still not up to quality standards of the jap bikes.
> for the money we are paying for harleys we should be getting better
> bikes. and with parts made here in the U.S every time i get parts
> for my 06 harley, the parts are made in a foreign country. Im sick
> of it.

2008 Dec 17 04:07 PM

[Car Guy:]

I'd be interested in hearing the investment thesis for your long position in HOG (and perhaps for GE as well). Disclosure: Short HOG. No position in GE.

2008 Dec 19 09:05 AM

[Car Guy:]

I'd be interested in hearing the investment thesis for your long position in HOG (and perhaps for GE as well). Disclosure: short HOG. No position in GE.

Quick short thesis: Earnings estimates are too high -- most estimates out there imply top line decline of 5-10%. Conversely, the auto industry has seen declines of 25-35% the past few months. HOG sales are likely to fare worse as they are more discretionary in nature. HOG dealer in Santa Cruz, CA that recently shuttered reported sales declines of 70% -- that sounds more realistic to me.

Exposure to subprime loans and payback from aggressive lending practices is the other shoe to drop.

Potential funding issues at HDFS is yet another ticking time bomb.

Good luck!

2008 Dec 19 09:12 AM

[User 443213:]

When your 05 engine needs to be rebuilt after only 24000 miles, something is wrong. What would you do if you spent 18000 on a truck and its engine fell apart after 24000 miles? Too many focused on quantity and not enough focus on quality. My next bike will not be a Harley. What ever happened to American pride?

Jul 08 01:33 PM

[FUJIMO:]

Look at American industry and their American pride .
They have along with the union officials have made a mockery out of the American worker and their dollor.

How about a 1700 cc narrow degree single pin crank [ that Harley sound] liquid cooled engine.
6-speed transmission. 108 lb-ft of torque at 1750 rpm,
dual adjustable air shocks and a 45mm four-way adjustable fork. 130/90 front and 170/70 rear tires mounted to 9-spoke 16-inch cast wheels.
Steel fenders. large floorboards front and rear, massive luggage compartments, lockable glove boxes, passenger backrest and grab bars.
front fairing mounted to the frame with a trio of headlamps
analog dials with LCD displays .
electronic cruise control ,
iPod and MP3 compatible audio system,
fuel-injected, fly-by-wire Electronic Throttle Valve.
Advanced Coactive Braking linked braking system with ABS
This would be a great touring Harley.
Kawasaki just came out with this bike. mso $17.899.00

Wake up Harley. old school old thinking

Jul 08 02:56 PM