Harly Davidson

Harley Davidson Inc.

Management 322

CompanyÑžs Overview

In 1903 William Harley and Arthur Davidson made the first Harley-Davidson motorcycle available to the public. It was built in a small wooden shed with the words “Harley-Davidson Motor Company” written on the door. The next year, in 1904, C.H. Lang opened the first Harley-Davidson dealership in Chicago, selling one of the first 3 HarleyÑžs ever made. In 1906 the company opened a new factory, in Milwaukee, Wisconsin. The next year, in 1907 the company doubled its factory space. Also in 1907 the Harley Davidson Motor Company was incorporated, with the stock being divided among the 4 owners, including William and Walter Davidson (ArthurÑžs brothers). By 1920 Harley Davidson is recognized as the largest motorcycle manufacturer in the world, supported by over 2,000 dealers in 67 countries. In 1953, one of Harley DavidsonÑžs competitors, Hendee Manufacturing, which produced an Indian motorcycle line, goes out of business. For the next 46 years Harley Davidson is the only American manufacturer of heavyweight motorcycles.

In 1912 Harley Davidson built a six store building on Juneau Avenue in downtown Milwaukee. This building would become the main offices and factory for Harley Davidson. In 1947, to supplement existing manufacturing facilities Harley Davidson purchased the old A.O. Propeller plant, which the company successively converted from wartime manufacturing into a large machine shop. In 1962, in response to a growing trend of including fiberglass in motorcycle production Harley Davidson purchases a 60% equity share in the Tomahawk Boat manufacturing company. Harley uses the companyÑžs existing equipment to manufacture its own fiberglass parts, beginning in 1963 with the official opening of the Tomahawk division of the company.

In 1973 Harley Davidson upgraded its production facilities with the opening of a new 400,000 square foot plant in York, Pennsylvania. The companyÑžs manufacturing operations are now located in York, Tomahawk, and Milwaukee, where the new Capitol Drive factory begins to manufacture engines the same year. Harley DavidsonÑžs expansion into York continued in 1992, with the opening a new $31 million paint facility to complement the manufacturing facilities already located in the town.

Today Harley DavidsonÑžs manufacturing base includes those existing plants plus several new plants opened in the late 1990Ñžs including a distribution center in Franklin, Wisconsin, a development center in Milwaukee, and a manufacturing plant in Kansas City. The manufacturing ability of Harley Davidson was also further enhanced in 1982 by the implementation of the MAN (Materials As Needed) program. Similar to todayÑžs “Just In Time” inventory management methods the MAN program ensured that parts and raw materials are only built and purchased as they are required. This method helped Harley Davidson drastically reduce its manufacturing costs and improve quality.

In 1909 Harley Davidson developed and marketed the first V-twin powered motorcycle, which would become a staple of the Harley Davidson product until today. The first VTwin was developed in 1909 and boasted a whopping seven horsepower. Since the first V-Twin, Harley Davidson has improved upon the design many times, but the V-Twin engine is still the standard in the companyÑžs motorcycles. In 1910 Harley introduced its first two-speed rear transmission, but this was quickly replaced by the introduction of the three-speed transmission in 1915. Other important improvements for Harley Davidson motorcycles include the introduction of hydraulic front and rear suspensions in the 1940Ñžs and 1950Ñžs, the electric starter in 1964, and Kevlar drive train belts in 1980.

Harley Davidson Motorcycles were used extensively by the United States Military during both World Wars. During 1917 the military purchased one third of all Harley Davidsons manufactured that year. To support the militaryÑžs use of the motorcycles, Harley opens the Quartermasters School in 1917 to teach military mechanics how to maintain the motorcycles. The Quartermasters School later became the Service School. During the second World War Harley Davidson almost completely suspended civilian production of motorcycles in order to focus on military production. By the time the war ended in 1945 nearly 90,000 motorcycles had been produced for military use.

Over the years Harley Davidson motorcycles have become an American icon, with numerous Harley rallies all around the country. The most famous of these rallies is the Black Hills rally in Sturgis, South Dakota. The Sturgis rally started in 1938 by the Jack Pine Gypsies Motorcycle Club. Sturgis is now a legendary annual event, drawing thousands of Harley riders to a small town in western South Dakota each summer. In 1980, in honor of the historic Sturgis motorcycle rally, Harley-Davidson releases the FXB Sturgis model, employing belt drive, black chrome appointments and 80 cubic inch engine.

In 1969 Harley Davidson merged with the American Machine and Foundry company (AMF), a well known leisure products manufacturer. From that point until 1981 Harley Davidson was effectively a subsidiary of AMF. In 1981 thirteen Harley Davidson executives organized and bought Harley Davidson from AMF, making it an independent company again. In 1986 the companyÑžs management took Harley public. In 1987 Harley Davidson was listed on the New York Stock Exchange.

In 1993 Harley Davidson purchased a minority interest in Buell Motorcycle Company, which had been created to build sport motorcycles using Harley DavidsonÑžs manufactured engines. In 1998 Harley Davidson purchased another 49% of Buell, giving Harley management control of the company. Management retained Erik Buell, the founder of the company as the chairman for the new Harley Davidson subsidiary. Buell remains a major division of Harley Davidson today.

Harley Davidson remains a dominant force in the heavyweight motorcycle industry, maintaining a 50% share in the market for heavyweight motorcycles. Harley Davidson is the only major motorcycle manufacturer to focus entirely on motorcycles. The other major players in the industry, Honda, Yamaha, and Suzuki, each have other major product lines including cars, watercraft, and musical equipment. In 2005 Harley Davidson recorded its 19th consecutive year of record revenues and record earnings and seems poised