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The Honolulu Advertiser
Posted on: Wednesday, August 14, 2002

Harley-Davidson turns 100

By Michael Tsai
Advertiser Staff Writer

The Harley-Davidson 100th Anniversary Heritage Softail Classic, out this year, and other classic designs have helped insulate the company from economic downturns.

Eugene Tanner • The Honolulu Advertiser

A ride through Harley history

1901: Bill Harley and Art Davidson experiment with the first Harley-Davidson motorcycle prototype.

1903: Harley-Davidson established as a company; three motorcycles are sold for $200 each.

1907: First V-twin engine motorcycle hits the market.

1948: First panhead engine debuts.

1953: Indian goes out of business, leaving Harley-Davidson as the only American motorcycle company.

1969: Company is bought by American Machine and Foundry.

1981: Company returns to private ownership.

1983: Harley Owners Group (HOG) formed.

2002: V-Rod is introduced.

We should all be this sexy at 100.

Harley-Davidson, the iconic motorcycle company that for generations has helped to define contemporary American culture and counterculture, is rolling into its centennial year with engines — and sales — at full throttle.

The party began last month with the kickoff of the Open Road Tour, a year-long traveling festival celebrating Harley-Davidson history and lore.

Next August, thousands of riders are expected to participate in The Ride Home, a quartet of concurrent bike rides starting at different points on the Mainland that will converge in the company's hometown of Milwaukee.

Hawai'i riders who can't make the trip will be able to get in on the fun with a four-stage "poker run" on the Big Island, Kaua'i, Maui and O'ahu. The last stage will double as a kickoff for the annual Toys for Tots Christmas charity drive. Dates and locations will be announced later.

The centennial celebration comes at a high point for the storied company. Bolstered by a consumer subculture of its own nurturing, the company has proven immune to recent economic fluctuations. Joe Nicolai, president of Wholesale Motors and Hawai'i's lone Harley-Davidson distributor, says demand for the motorcycles has exceeded supply for at least 15 years.

"Harleys are collectibles, and collectibles aren't as negatively impacted as some other items are in a deep recession," he said. "So you can enjoy the experience of riding one, and at the same time you know that you won't lose money with it."

Demand increased even more with last year's introduction of the V-Rod, an anodized aluminum performance custom cruiser developed in cooperation with Porsche, and an aggressive advertising campaign leading up to the anniversary.

In January, Forbes magazine named Harley-Davidson its Company of the Year, turning president and CEO Jeffrey Bleustein into the magazine's baddest-looking cover model since Martha Stewart.

Last month, Harley reported record revenue — $1 billion — for the second quarter of this year, an increase of more than 16 percent over the same period last year.

But what makes Harleys the object of such desire?

"They're big and loud and sexy as hell," says Noel Norgaard, 44, a Harley rider for nearly 20 years. "What's not to love?"

Nobody rides for free

When a person buys a Harley-Davidson, they're after more than just a motorcycle, Nicolai said — they're buying into a community and a lifestyle that is uniquely American.

"What other logo would people be willing to tattoo on their body?" Nicolai asked. "How do you explain something like that? I mean, that's loyalty."

Harley owners pay a price to belong to that club, of course — and they do so with enthusiasm. In Hawai'i, Harley-Davidson motorcycles average about $10,000 for a Sportster, popular with beginning riders, and $20,000 for a Fat Boy, the most in-demand bike.

Still, as Nicolai noted, Harley-Davidson bikes hold their value remarkably well. A 10-year-old Fat Boy in excellent condition can fetch $18,000.

"It's the demand that keeps the value high," Nicolai said.

Riding a rocky road

Harley-Davidson's recent successes belie a rocky history.

Bill Harley and Art Davidson first came up with the idea of the Harley-Davidson Motor Co. in 1901, but it wasn't until 1903, when Davidson's brother Walter joined in, that the company officially was launched. That same year, Henry Ford began automobile production, and the Wright Brothers achieved the first airplane flight at Kittyhawk, N.C.

The first Harley-Davidson motorcycles combined standard bicycle frames with low-powered engines. Successive efforts yielded better carburetion and more power.

When Walter Davidson, an avid racer, won the Catskill-New York Endurance Run in 1908, he helped to establish Harley-Davidson as a legitimate competitor to then-leading American motorcycle manufacturers Excelsior and Indian. By the end of World War I, the company had overtaken both rivals. By the early 1950s, Harley-Davidson was the only American company still making motorcycles.

Harley-Davidson motorcycles were used extensively during both world wars, and many returning soldiers sought out the bikes at home, including the original members of the Hell's Angels clubs.

By the 1960s, the company lost ground to companies from Japan, Britain and West Germany. To ward off a hostile takeover, Harley-Davidson merged with American Machine and Foundry Co. in 1969.

"That's when things went from bad to worse," Nicolai said.

Nicolai started selling Harley-Davidsons in 1964. He became a distributor three years later.

"It was not a profitable franchise for the first 20 years," he said. "For a while, our Kawasaki business actually supported our Harley-Davidson business."

The turnaround started when principals from Harley-Davidson joined Nicolai and other managers in buying back the company in 1981.

Over the next decade, the company successfully reasserted itself in the market by marrying its new V2 Evolution engine with a line of new, but retro-styled, bikes.

Born to seem wild

The earliest Harley-Davidsons consisted of a low-powered engine attached to a standard bicycle frame.

Harley Davidson Motor Co.

In the '60s and '70s, Harley's image loomed large in American pop culture. Movies such as "Easy Rider," "On Any Sunday," "Little Fauss and Big Halsey" and "Electra Glide in Blue" articulated a vision of a free-wheeling American counterculture, with the motorcycle as star.

For many riders,Harley-Davidson cycles came to represent the wish for, if not the actual attainment of, a lifestyle of freedom and self-determination.

"There are a lot of dyed-in-the-wool riders we consider our core consumers," said Kaina Huddy, general sales manager for South Seas Harley-Davidson in Honolulu. "There are also people who just want to come off as the bad biker guy on weekends. They'll skip shaving on Thursday, show up for the ride on Sunday with some stubble, and on Monday go back to the grind clean shaven. They love the fantasy."

The new riders

A growing number of women are getting in on the Harley mystique. Over the past five years, women have become the fastest-growing segment of the customer base, Nicolai said.

"Forty years ago, women made up maybe one-tenth of 1 percent," he said. "These days they're in the double figures. The increase has been dramatic."

Michele Bachman, a retail manager turned artist, began riding when Harley-Davidsons were still considered male territory.

"Some of the motorcycle clubs wouldn't let independent women ride with them, so I'd just ride together with other women," she said. "It's much better now. People are used to seeing women ride, and they're more accepting."

Still, Bachman said, she gets her share of double-takes on the road.

"Women will always pull up and say, 'You go girl,' or, 'Nice bike,' when I'm riding," she said.

Shelly Hernandes, a part-time office clerk and full-time mother of three, said buying her first Harley three years ago was a revelation.

"My husband has been riding for years, and I used to love just being a passenger," she said. "One day, he just turned around and said, 'Hey, get your own bike.' "

Hernandes learned how to ride at a motorcycle safety course. The day she got her license, she bought a used Sportster from a family friend.

"There something so empowering, so forceful about being on a motorcycle," Hernandes said. "I think every woman should have one.

"Forget about riding on the back," she said. "You have to grab those handlebars yourself."