…First at Last?

I wasn’t able to make the Harley-Davidson Project LiveWire event in New York… but Mark Gardiner did.  As a former amateur motorcycle racer and veteran of the marketing/advertizing industry, Mark now writes for motorcycle-usa.com, and has some interesting claims:

1. The LiveWire (or at least, a Gen 2 bike) is actually going to production.  The LiveWire tour, billed as a rider feedback program, is actually a ruse.
2. Harley is building the bike to show up Honda and BMW… upstaging Zero and Brammo would be a bonus, too.
3. The ruse is The Motor Company’s plan to defuse the graybeard riders, who would be outraged at a “straight” announcement.
4. This all means H-D management is more on-the-ball, and forward looking and future-oriented, than non-Harley fans expect.

Now it’s time to play “what’s the evidence, and how much of it do I buy?”

1.  Mark personally claims the many demo units he saw were just too refined to be concept bikes or prototypes, as officially claimed.  I’ll have to take his word on that, though I’ve never met him in my life.  He also claims “None of the experienced motojournalists at the ‘reveal’ believes that.”  I doubt he tracked down every last reporter at the event, and took down all their statements.  But then again, this is marketing/advertizing- real Don Draper territory.  Mark is in the business of sizing up other people’s stances, even people he’s never met, using his gut if nothing else.

Ultimately, those of us who didn’t make it there will have to take the word of those who did.  Unfortunately, those that did are aiming at a moving target.  Let’s assume Gardiner is dead-on, and Harley is actually setting the table for LiveWire production.  They could still pull the whole tablecloth from everything, even at the last minute.  Such is the tech business- deciding to shelve a development takes a single bigwig.  They only need to claim it’s half-baked, and needs more megahertz or bluetooth or cloud or whatever.

That leads us to a middle ground here.  Harley could be planning on producing the LiveWire, sure, but on an indefinite schedule.  Mark states that Harley’s “fallback position is, “Maybe when battery technology makes the next jump.””  He personally doubts that this is an honest statement on the part of H-D management… but it doesn’t have to be.  The ‘maybe’ is exactly why it feels like a fallback position, when Harley hasn’t officially given any (truthful?) Plan A.  Just like it’s hard to kill a dead man, it’s hard to accuse a man of libel when he never put a statement on the record in the first place.  Gardiner goes further to state that “Andy Downes, the editor of MCN, bets there will be a production announcement within 18 months.”  Now, there’s a testable claim, and we can come back and hold Downes to it in late 2015.  Harley-Davidson’s nonexistent claims?  Not so much.

2.  Mark speculates that H-D’s boardroom plans “to leapfrog right over more tech-savvy manufacturers like Honda and BMW.”  There would be precedent for this: in the mid- and late-Nineties, word spread that Toyota (let alone the US Big Three) were working on hybrid cars.  Honda, not wanting to be upstaged, rushed their Insight into production.  In the Japanese market, Honda has a reputation for being the tech innovator, and could not afford to be scooped.  Certainly not by Toyota, which was starting to develop a reputation for being safe and boring- a maker of geezermobiles.  Similarly, Harley management is just old enough to remember the dark years- thirty years ago, when their very survival was at stake, and propped up by having the Reagan administration put a tax on heavyweight imports.

Harley management seems determined not to make that mistake twice.  KTM, BMW, and Yamaha are hedging their e-vestments, only developing lightweights (~250cc equivalents); BMW will only commit to an e-scooter, which can’t legally be called a motorcycle.  Honda, meanwhile, won’t acknowledge their efforts at all, and is supporting Mugen as a development house.  Stateside, the existing lineups from Zero and Brammo don’t even compare to the market categories of modern Harleys.  (Though Harley has, in decades past, offered lightweights at times.)  Apparently, Harley would like to keep it that way, though like Honda they are tapping Mission Motors as a dev group.  (Mission’s own sportbikes do not compete in Harley’s space.)  By being first in the entire sales category, Harley can stake out a territory they never have: tech vanguard.  Watch us, BMW!  Keep trying, Honda!

Of course, this needs the “tech vanguard” crown to actually mean something, besides spite.  It does, to a limited extent.  Once Harley has solidified the “heavyweight cruiser” crown (it did), they need to keep working, to even maintain share, let alone see growth.  Harley-Davidson, as I’ve mentioned, is aware of a demographic trap.  Motorcycles (at least, in the US) are mainly bought by males, 35 to 60 or so.  The Baby Boom supplied these in spades, and Harley rode that wave to record profits.  But every wave has a downside: Baby Boomers must then wash out of the 60 end, and Harley needs an Act II to keep their pipeline.  Gardiner and I are in perfect agreement on this one.  As I’ve mentioned, the 2001 V-Rod is one part of the effort, and also had more Euro appeal.  Expanding into Asia, Latin America, etc. was next, and the smaller, cheaper Street line in 2014 was part of that.  They’re also more appealing to first-time riders.

Now what?  Like Toyota, Harley is not planning a future on a pipeline only two to four years long.  The Prius R&D effort is now paying off, over a decade later, and Harley wants products for the 2020-2030 motorcyclist, not the 1980 one.  (The fact that Gardiner and Downes are claiming 2016 or so does not negate this.)  In 2014, the new motorcyclists haven’t just forgotten vinyl LPs, they may not even play any CDs.  Many of these buyers are not interested in the bikes of “Duck Dynasty rejects,” as Gardiner puts it.  Meanwhile, the V-Rod is now over a decade on, and may itself need an Act II.  Of course, we on the outside don’t know if the Motor Company also has a “Super V-Rod” in the works.  But if they are, they definitely aren’t going all in on it, nor do they have to.  The existence of a LiveWire does not literally block a Street or a Super V-Rod, though see below.

3.  About that “Duck Dynasty” bit: Gardiner, like anyone in the North American market, knows darn well what that market looks like.  The fact that the market may look like something else later does not mean that today does not exist.  Today is yesterday’s later, and apparently H-D management knew this.

Announcing the LiveWire as a concept bike only, with no sales commitment, is to Gardiner, “grandmaster-level-chess-player strategic genius.”  The graybeards cannot literally attack the Motor Company’s sales statement, since once again they never put a statement on the record.  I will go one step further than Gardiner:  Attacking a phantom then makes you look like a grumpy old coot to someone who not only plays MP3s, but is evaluating the new streaming startups.  Harley-Davidson is ostensibly trying new ideas, some of which may fail, because to tech-savvy youngsters, everyone in tech is trying new ideas, some of which may fail.  The failure would be in not having new ideas plural.  If nothing else, Harley is offering a variant Zero, Brammo, and the e-sportbike gang aren’t; any of these four may fail, without hurting the broad concept of new tech and trying to be a vanguard.

Gardiner then goes on to speculate that the LiveWire Tour will be a switcheroo.  Harley will claim ‘we wanted to see if buyers would like an electric, and hey, it seems they do, so we’re going to build it.’  This would shut up many graybeards, by pitching the capitalist, market-knows-all angle.  Obviously, this is hugely speculative on Gardiner’s part, heading into tinfoil land.  Again, Harley could abort at any time; they would at minimum have to pay interest, and likely some contract penalties to disappointed suppliers, but these are pap in the tech world.  And again, Harley could simply take the middle option and slide their unannounced date from, say, 2016 to 2018 or whatever.  Lots of companies- including many EV ones- have already pulled this one.

Gardiner’s mistake here is to ‘attribute to malice that which can be adequately explained by stupidity.’  He is forming in his mind a boardroom conspiracy of cackling executives, when they may simply be hedgy and timid.  Timidity is a flaw, not a crime, and the Motor Company has multiple projects in the pipeline as I’ve described.

4.  Which brings me to an interesting point, or possibly a weak “conspiracy.”  The expensive, liquid-cooled Harley V-Rod begat the smaller-displacement, liquid-cooled Street.  These form a pincer maneuver, broadening the company lineup from its bread-and-butter Interstate mile-eaters.  Take this broadened lineup, appealing to three or four continents instead of one.  Combine it with the Baby Boom on this continent.  Combine that with the later Baby Booms in developing nations on the other, new continents.  Harley is currently in a good position now, with many existing and untapped customers for the moment.  Harley thus has available money… R&D money.  Why wouldn’t they explore new space, and new potential?  (When they’re also improving their mile-eaters too, with Project Rushmore?)  Duck Dynasty attacks, that’s why.

Both Gardiner and I can see Harley reaching the same endpoint (e-bike production and sales), though he sees a conspiracy along the path.  I won’t make such a bold claim, just like Harley won’t.  Gardiner also feels that the LiveWire must be headed for production,  because they’ve spent “tens of millions” on it.  I say, Harley had tens of millions already.  It’s not money to burn, of course, but it’s not them betting their house, either.

Ultimately, Harley-Davidson executives may be timid, but they sure aren’t stupid.  They are in a position of strength now, but so were IBM, Microsoft, Dell, Acer, BlackBerry, Sony, and in the vehicle space GM and Chrysler.  Harley’s position could still come tumbling down through simple neglect, and management won’t allow that to happen.  Fortunately for us e-enthusiasts, this exploration of new potential means another dev group in the oil-free space.  At this stage of the game, this helps everyone.  As Zero and Tesla have stated, EVs are competing against anti-EV inertia and conceptual attacks more than we’re competing against each other.  Man cannot live on potato alone- at least, not any lifestyle from $6,799 base to over $20,000.