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Harley brought this on themselves via Screamin' Eagle Credit. They sold a metric butt load of sub-prime loans in order to keep their factory going. Now things get tight and the people who couldn't afford a $17,500 motorcycle to begin with stop paying and HD wonders why the balloon burst. I read that over 60% of HDs loans are junk, shame on them. Did you notice that the executive in charge of consumer financing quit?
They won't go out of business but they will be much, much smaller and may be a target of a take over. Maybe Honda will buy them and stop making those God awful Shadows? One can only hope.
maybe its only where i live but forking out $30,000 on a new harley all chromed up that see 2000km a year leads me to think that most either have the money to blow or are fad followers that take out bike loans to get them. Now here in vancouver canada the economy is slowing down but we still have jobs, credit and money. But in the states where this credit problem started, I can see how HD's target market has definitely dried up.
plus the product is inferior compared to others.
everyone thought honda/toyota was a joke in the 70's and 80's. now people laugh at the big three.
The lack of credit is BS. For small businesses and consumers with good credit there is plenty of money at very, very good rates. I can go down to my local Credit Union and get a 72 month auto loan for 4.69%, we just refinanced both houses, one at 5.00%, the other we paid the points and got 4.60%. I was quoted a very good rate on a business loan from a local bank last week too. Point being the large banks got greedy and broke traditional lending rules. Now they are getting smoke. The credit unions and small/local banks stuck to their rules and they are fine.
The lack of credit is BS.
Alliances are pretty common because to cost to develop new technology is so high. In Semiconductors it is very common to see competitors team up; Intel, Freescale, Samsung, Applied Materials, etc. all teamed up to make the jump from 200mm to 300mm wafers. The cost of a 300mm fab is about $5 billion.
Bruce you are correct the only time Harley need government cash was in the '80's after the AMF disaster. That chunk of change brought us the then new Evolution Motor and at the time the magazines raved about it.
I hope Harley makes it but the junk loans may bite them.
Wellllll...
Maybe, maybe not. Simply lowering prices would ultimately kill them. The Harley business model is a money eating machine, and it goes all the way from the corporate level to the dealership level. Just look at all the million dollar dealerships located right beside major interstates and highways. It's not cheap to operate at that level.
Bruce