An outlaw turns 100

Harley-Davidson's mystique has kept its core devotees loyal and won it new fans abroad. But has the storied bikemaker done enough to lure a new generation of US riders?

Jon Pishney's not only the son of a motorcyclist, he's also the son of a Harley-Davidson dealer. But when this 20-year-old enthusiast wants his thrills, he straddles a flaming red Triumph 995i Daytona and revs the throttle.

Perched atop the sleek, ninja-style motorcycle, he screams off down a straightaway.

Mr. Pishney has no plans to mount one of the gleaming chrome, all-American machines known for its handcrafted quality and distinctive po-ta-to, po-ta-to sound.

"I just can't get excited about them," he says. "I'm into performance, and that's not what Harleys are about.... They're built for people who just want to cruise."

It's an attitude that has his father, Don - and many other Harley dealers nationwide - a little worried as the storied company they represent thunders toward its big 100th-anniversary party Aug. 31 in Milwaukee.

The average age of the Harley buyer, now 47, had been advancing about 10 months a year for nine years in a row before finally leveling off in 2002.

Today, Harley says it holds the No. 1 spot in heavyweight motorcycles in the US. It was No. 2 in total sales of new motorcycles last year after Honda, according to the Motorcycle Industry Council, an industry group. [Editor's note: In the original version of this article, attribution was not clear for the statement that Harley-Davidson holds the No. 1 spot in heavyweight motorcycles in the US.]

The firm's revenue doubled between 1998 and 2002, and, since 1991, it has notched steadily higher profits in every year but one (1993). Last year the company earned a record $580 million on $4.1 billion in sales.

Still, long term, its place may be less than secure.

"Anyone who looks at the statistics can see that this customer base is eventually going to die off," says the elder Mr. Pishney. "The concern is there's a generation coming up that isn't infatuated with Harleys, like my generation was."

Cost is one barrier. Jon Pishney paid $5,000 for his 1999 British-made Triumph. For that amount, he could have bought a 1980s Harley. "But it would be junk," he says. "You'd be working on it more than riding it."

In fact, new Harley buyers - think at least $8,000 to $9,000 for a serious bike, though the entry-level Sportster can be found for less than $7,000 - tend to be baby-boomer men earning more than $75,000 a year and looking for a toy that projects a certain something.

"They remember when Harley had this alter ego, and that's what they're looking for," says Don Pishney. "They're nicey-nice during the week, conforming to the norms of society. But on the weekend, they get a chance to get a little of that bad-boy image."

Selling one image or another has long been a big part of Harley-Davidson's game plan.

Today, some riders advance the relatively wholesome reputation that Harley - and motorcycling in general - had before World War II, when Clark Gable tooled around on the streets of Burbank, Calif., on his Harley Knucklehead V Twin, and middle-class cyclists began hitting the highway to break free of daily routines.

For the past 10 years, branches of the Harley Owners' Group (HOG), for example, have raised thousands of dollars for the Father Fred Foundation, which uses the money to help needy families. It's a program encouraged by Harley-Davidson and found in hundreds of cities across the country: Bikers pay $30 for a weekend that includes a Friday-night bike display, a Saturday dance and banquet, and a Sunday road tour.

"We've given some pretty nice checks to Father Fred," says Jim Kavalar, who rides his 1999 Road King Classic with the Northern Michigan branch in Traverse City. "It's a nice bunch of people who come from all over the country."

But it is that rogue image that has proved more indelible. Some observers trace it back to 1947, when Americans opened their Life magazines to find a chilling article about gangs of motorcycle thugs terrorizing a California town.

In reality, the anarchy in Hollister was nothing more than a few drunken revelers at a Fourth of July event - a small fraction of the 4,000 riders who attended. Still, from that point on, motorcycles would often be associated with danger and rebellion. And Harleys - the loudest, heaviest bikes on the market - became the standard-bearers.

It's an image that cuts both ways for the bikemaker.

"Yes, there are always going to be motorcycle riders who intimidate society, but it's been blown way out of proportion," says Marty Rosenblum, staff historian with the Harley-Davidson Motor Co. "We're dealing with a very small percentage of riders."

But as dealer Don Pishney points out, the firm has to straddle a balance: "They can't be too nice, because then you lose that bad-boy image, and that's what they're selling," he says.

The problem: Rebellious images of Marlon Brando in "The Wild One" or the carefree charm of "Easy Rider" mean nothing to a new generation of motorcyclists.

"The longer a brand is fashionable, the more likely it is to come under attack," says Al Ries, chairman of Ries and Ries, a marketing firm in Atlanta. "The younger generation is looking for ways to rebel against the previous generation." Mr. Ries's advice to Harley-Davidson: Create a second brand that will appeal to flashy, speed-crazy youngsters, currently drawn to Japanese bikes.

While the aging population will continue to be a boon for Harley-Davidson for the next five to 10 years, the company will have to rev up efforts to woo younger consumers, according to Bob Simonson, a financial analyst at William Blair & Co. in Chicago.

"For a long time, Harley-Davidson refused to even accept that they had that problem," says Don Brown, an independent motorcycle analyst in Irvine, Calif.

Harley contends that it began making a grab for younger riders when it completed its acquisition of Buell Motorcycles Co. in 1998. Buell produces more affordable, and arguably hipper, motorcycles.

Harley also has high hopes for its low-slung V-Rod model. Mr. Brown draws a parallel between the V-Rod and the Sportster - the motorcycle Harley introduced nearly half a century ago to stave off the British invasion led by Norton, Triumph, and BSA.

The company is also earning solid revenues by selling a wide range of Harley-branded products - from baby strollers to leather jackets. And it's revamping its foreign outreach, where sales have slumped recently.

Back home, Harley banks on the passing down of old loyalties to keep the firm rumbling. Mr. Kavalar's nonagenarian father, Al, was just 16 when he bought his first Harley in 1929. And his 40-something son, Michael, now owns a 1991 FXR Super Glide.

"My dad rode when I was a kid," says Michael. "And somewhere along the line, I decided I wanted a road bike. I bought a Honda and rode that for a year, then realized I wouldn't be happy with anything other than a Harley. People my age grew up hearing the roar of the Harleys, and there was always a mystique there."

Jeffrey Meyer contributed to this report from Boston.

When William Harley met the Davidson boys

The Harley-Davidson mystique has its roots in Milwaukee where, in 1902, William Harley and his next-door neighbors, the brothers William, Walter, and Arthur Davidson, started experimenting with internal combustion engines in a tiny wooden shed behind the Davidsons' house.

In 1903, with the words "Harley-Davidson Motor Company" crudely scrawled on the door, they produced a three-horsepower, single-cylinder engine with a looping frame.

The production of new bikes was slow, with just two in 1904 and eight the following year. In 1907, the boys moved out of the shed to a larger building and produced 150 motorcycles.

The early models were popular because they were as practical as they were novel. A motorcycle could navigate the rutted dirt roads that often stranded cars, and they could outrun and outlast horse-drawn carriages.

By 1920, Harley-Davidson was the world's largest motorcycle manufacturer, leaving more than 100 other pre-World War I manufacturers in the dust. Why?

Harley-Davidson started with a product that met the needs of its purchasers, says Herbert Wagner, author of "At the Creation: Myth, Reality, and the Origins of the Harley-Davidson Motorcycle."

It provided a large and powerful engine and a strong frame that could cope with adverse road conditions, and it was extremely reliable for its time.

"The motorcycles came from the Midwest, where distances were longer and roads were rougher," Mr. Wagner says.

The company was also conservatively managed, allowing it to withstand such challenges as mass production of the Model T in 1913, which drove many motorcycle companies out of business. Harley and its main competitor, the Indian Motorcycle Co. - founded two years earlier than Harley, in 1901 - focused their efforts on World War I needs, furnishing cycles to messengers and scouts at the muddy Western Front.

Harley got the call again during World War II, producing 90,000 bikes for the US and its allies. After the war, it was able to withstand competition from its only rival, Indian, which ended in 1953 when Indian ceased production. (It resumed limited production in 1999.)

Harley lost ground in the 1960s and '70s when Japanese manufacturers - Honda, Kawasaki, Suzuki - flooded the US market with bikes that were less expensive, lighter, and faster. In 1969, American Machine and Foundry bought Harley and invested millions in retooling the plant. By the late '70s, however, AMF had lost patience in waiting for a turnaround. It decided to sell the firm to 13 employees, including Willie G. Davidson, grandson of one of the founders, for $80 million. The new ownership cut costs and revved up sales.

With the help of the US government, it fended off the growing Japanese invasion. Tariffs on Japanese motorcycles for about five years during the early 1980s allowed the firm to hold on during a recession.

Today, the company finds itself on the other side of the protectionist fence: It alleges that China's protectionist trade polices are making it nearly impossible for foreign motorcyclemakers to penetrate the world's largest market.

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