Bicycle boom has opposite result from motorcyclist boom

Posted November 24, 2010 by wmoon
Categories: Motorcycle crashes, Motorcycle fatalities, Motorcycle helmet use, Motorcycle injuries, Motorcycle licensing, Motorcycle Rights, Motorcycle Safety, Motorcycle Training, Uncategorized

There’s a fascinating article in the Wall Street Journal, Cycling’s New Rules of the Road, by Tom Perrotta that offers some interesting possible parallels and counterpoints to motorcycling in the USA:

According to the article, after years of “tepid growth” bicycling in New York has doubled to more than 200,000 riders a day. In a similar way, motorcycling suddenly surged in the late 1990s.

The article implies that bike lanes are at least partly responsible for the increase in bicycling.  Since 2007 NYC has built a further 200 miles of  bike lanes for a total of 482 miles with another 1,300 miles to be built by 2030. Bike lanes are promoted by a wide variety of means as the answer to bike safety like this one, NY 9th Ave Separated Bike Lane Experiment:

New York is not alone—the number of bicyclists has been rising for years in other large urban areas like Portland, San Francisco, Minneapolis and Chicago.  This, too, is like motorcycling where urban areas have seen the greatest increases in motorcyclists. And like NYC, these cities have been putting in miles and miles of bike lanes.

There’s another unexpected parallel to the recently passed boom in motorcycling. Just like in the motorcycling boom, far more women and “elderly” people are climbing on bicycles to travel around one of the most congested cities in America.

The increase in women and elderly riders is “a sign,” said John Pucher, a professor of urban planning and public policy at Rutgers University, “that cycling is seen as safe.” And they feel safe because of the bike lanes.

A report,  Four Types of Cyclists, by Roger Geller, Bicycle Coordinator, Portland , OR Office of Transportation directly associates the increase in bicyclists with a decrease of fear because of the increase in bike lanes, “This enthused and confident demographic of cyclists are the primary reason why bicycle commuting doubled between 1990 and 2000 (U.S. Census) and why measured bicycle trips on Portland’s four main bicycle-friendly bridges across the Willamette River saw more than a 300% increase in daily bicycle trips between the early 1990’s and 2006.”

Four types of bicyclists—and motorcyclists? Geller identifies four types of Cyclists, “Survey after survey and poll after poll has found again and again that the number one reason people do not ride bicycles is because they are afraid to be in the roadway on a bicycle. They are generally not afraid of other cyclists, or pedestrians, or of injuring themselves in a bicycle-only crash. When they say they are “afraid” it is a fear of people driving automobiles. This has been documented and reported in transportation literature from studies, surveys and conversations across the US, Canada, and Europe.”

And it is fear, according to Geller, that has the most to do with whether people ride, how often they ride and where they ride. He breaks them down into four types—and I suggest that this is a possible model for motorcyclists:

The first, and smallest, group are the “Strong and Fearless” that he describes as, “These are the people who will ride in Portland regardless of roadway conditions. They are ‘bicyclists;’ riding is a strong part of their identity and they are generally undeterred by roadway conditions…”

The “Enthused and Confident” are those who are comfortable riding around cars because of bike lanes and “bike boulevards”. Both Geller and the general perception in the bicycling community suggest that riders are newer to the activity and less experienced, do not ride as often or as long—and are believed, by the Strong and Fearless group, to ride slower and get into more dangerous situations due to their inexperience or recreational nature of their ride.

The largest group is the “Interested but Concerned” who “would ride if they felt safer on the roadways—if cars were slower and less frequent, and if there were more quiet streets with few cars and paths without any cars at all.”

The last group is the “No Way No How” who are “currently not interested in bicycling at all, for reasons of topography, inability, or simply a complete and utter lack of interest.”

Based on Motorcycle Industry Council research, it’s probably that while the proportions may differ it is extremely likely that there are the same four groups in regards to motorcycling but with slightly different descriptions but sharing the same concern about safety.

Safety matters when it comes to bicycling Study after study has found that bicycling is particularly sensitive to perceptions of risk—perceived improvements in bicycle safety is followed by a corresponding rise in participation.

Bicycling, though not as objectively dangerous as motorcycling, is still far more dangerous than any other form of road transportation. Head injuries are a leading cause of fatalities and any crash is more likely to result in injury than a similar one in a passenger vehicle or truck. Fatal head or chest trauma or internal injury can occur, as with motorcycling, at 13 mph and above—just as in motorcycling. And, as in motorcycling, the cyclist gets injured in fixed object crashes (like hitting a light pole—or even curb), in multi-vehicle crashes or even a collision with a pedestrian.

In terms of control, bicycles and motorcycles are not too different. Both share the same vulnerabilities to weather, pavement and handling. Both do not lend themselves to seat belts, air bags or crush zones.

Traveling peed, then, is the main difference between bicyclists and motorcyclists in terms of safety. But bicyclists can—on the flat—reach consistent traveling speeds of up to 30 mph and, in shorter bursts, higher speeds—and, of course, on a slope. And it’s a fallacy that most motorcyclist fatalities happen at high speeds.

Given that, there’s a marked difference in what’s considered “safe” for bicyclists and “safe” for motorcyclists:

There are no mandatory training courses for adults, and, of course, no bicycling license, insurance or registration required. The bicycling community unofficially teaches road strategies including controlling your space—“take the lane”; taking full responsibility for their own behavior and safety; assuming they aren’t seen; predicting and decide on avoidance actions, etc.

Not one state requires adults to use a helmet and helmet use varies widely state to state.

There is protective gear—pads for elbows, knees, wrists; shorts; chest and neck protectors; and jackets—but use is mostly associated with racing or mountain biking and most are rarely seen on city streets where bicyclists dress in ordinary clothes.

Iow, the only thing that has really changed is the amount of bike lanes in NYC and other large urban areas. There’s a very low threshold for “safety” then for bicycling. Bike lanes, because they are promoted and perceived as safer, are enough to move people from  “Interested but Concerned” to the “Enthused and Confident” group.

This, then, is a difference between the motorcycle and bicycle boom—no one thinks motorcycling is safe.[i]

Still, one wonders if helmets, riding gear and training courses fulfill the same role as bike lanes for bicyclists and, as with bicycling, gave a great many “Interested but Concerned” a reason to move over to the “Enthused and Confident” group.

New York bicyclists might be right that bicycling is safer—and the risk is lower: despite this enormous increase in riding on incredibly congested streets, “the yearly number of cycling fatalities and injuries has remained flat or declined, and the percentage of riders who are injured while riding has fallen dramatically.” This is very unlike motorcycling as we well know.

Unintended consequences

Despite the video above, the reality is that the safety of bike lanes has been oversold—or rather, something that should’ve been protected space has been co-opted by other road users. Check out My Commuted Commute:

for another take on bike lanes. Other videos show the same thing—vehicles blocking the lanes, using the lanes, turning in front of bicyclists, pedestrians jaywalking in front of bikes—iow, the same behavior they do on the regular lanes. And, perhaps most troubling, cyclists being “doored”—vehicle doors being opened in front of cyclists resulting in injury or death.

Bicyclists, then share many of the same problems that motorcyclists do and I have long encouraged motorcycle rights activists to combine forces with both bicyclists and pedestrian rights groups for more effective action. That advice has been ignored, though.

Other research has found that motorists drive closer to cyclists if they are in a bike lane than if they aren’t. Iow, if bike lanes were truly respected as intended, bicycling would be safer but because they aren’t, they may be more dangerous even if cyclists are streetwise and wary.

Additionally, cyclists speak of the danger of the inexperienced or casual rider who is not street smart or rides too slowly causing other riders difficulty. In this way, also, bicyclists are similar to motorcyclists—it’s not them it’s the new guy that’s causing the problems. Yet, like motorcycling, there’s no proof of that.

Interestingly, some of the bicyclists in the video identify the problem as risk perception—it’s thinking that the bike lane is supposed to be safe, is safe, that makes it so dangerous.

The video ends with several bicyclists—including the narrator and filmmaker—saying that bike lanes dangers has them now co-opting the bus lane because they perceive the risks are lower there.

Bad behavior increases risks But, according to the WSJ article, when it comes to bicyclists the bad behavior is not one-sided. Scott Stringer, the President of the Manhattan Borough, sent out some staffers to observe and what they “recorded over three days, astounded him: 1,700 total infractions by drivers, bikers and pedestrians, many of them egregious.”

While bicyclists emphasize (as do motorcyclists) offenses against them, there’s a great deal of bad bicycle behavior that includes running red lights and stop signs, accepting too narrow gaps between moving or stationary vehicles,  following too close, too fast for conditions, etc.

Bike lanes don’t discourage much of that behavior—and may exacerbate some of it. To what degree bicyclists take on additional risk because they feel justified by the bad behavior of pedestrians or motorists or because they feel they have the street smarts/experience to handle it.

Danger increases as risk perception drops As discussed above, bicycling in NYC has been as safe or safer despite the surge in participation until this year.  “There were 19 cyclist fatalities in the city through October 31, seven more than in all of 2009. In the same period, 3,505 bikers were injured in crashes with motor vehicles, more than last year’s total and up 20% compared to the first 10 months of last year. If the current rate of injuries continues, the percentage of daily riders who sustain injuries in 2010 will rise slightly.”

Iow, the fears of the “Interested but Concerned” are founded in reality—despite the bike lanes, bicycling isn’t all that safe. And this, too, is like motorcyclists—motorists and pedestrians invade bicyclists’ space, do not yield the right-of-way, look but do not see, and so forth.[ii]

Lower death rate for bicyclists: The great difference between the booms The rise in fatalities, though, may be a blip, an anomaly in NYC this year. Comparing pedalcyclist fatalities for other bicycle-friendly states shows that although bicycling has boomed in those states the fatality rates have dropped over the years—though with occasional minor fluctuations year after year even as the numbers of riders doubled.

This is the exact opposite experience of motorcyclists where the death toll far outpaced the increase in riders.

And, amazingly, it was accomplished without formal training—let alone mandatory training, without an overarching, over-controlling corporation made up of the major manufacturers, without helmet laws or use of protective equipment. Iow, without anything that we’ve been told ad nauseum that we have to do as motorcyclists to be safe.

But what we do to be safe hasn’t been effective while what bicyclists don’t do has been. And what’s up with that?

[i] According to a study Perceived Risk And Modal Choice: Risk Compensation In Transportation Systems,  high income people perceive the risks of a given form of transportation as lower. The author, Robert B. Noland, speculates this may be because they purchase (and use) more safety devices.  However, as noted, observed helmet use is rather low and protective gear, in cities, is almost non-existent. Males also perceive the risks of a given mode of transportation as lower than females do. Surprisingly, risk perception drops as age rises.

Iow, older, well-off men perceive less risks in a form of transportation than the younger and  poorer and females do. Needless to say, older, well-off men are the majority of those who took up motorcycling in the last boom.  Iow, the very group that perceives the least risk are the ones who were drawn to the most risky form of road transportation.

[ii] Like motorcyclists, the average age for bicyclist fatalities has risen and, in 2008, was 41 while in 1998 it was 32. In 2008 the average age for injuries was 31 while in 1998 it was 24. Yet, unlike motorcycling, NHTSA does not blame the rise on the born-again bicyclist. But those who were 41 in 2008 were 31 in 1998—iow, bicycling seems to be affected by that large Boomer cohort. Unlike motorcyclists, NHTSA makes it clear when it comes to alcohol-involvement and fatalities, it’s either the rider or the pedalcyclist—even though it’s the same situation for motorcyclists. However, there’s less alcohol-involved fatalities in bicycling than motorcycling.

3,10, 70 and 62: All you need to predict Harley’s (and BMW and Polaris) ten-year future

Posted November 12, 2010 by wmoon
Categories: Harley-Davidson, Motorcycle Industry, Uncategorized

As we’ve been discussing in the comments the average age of certain motorcycle manufacturers, clubs and associations and rights groups. According to industry sources it’s about 47 give or take a couple years.  Jim, one of my readers, pointed out, “Mid 40′s is close to the sweet spot for luxury manufacturers in general and what is BMW and HD if not luxury brands?”

This is true…In fact, the peak earning years have been from 35-54. But that is the problem:

Harley-Davidson says its median age was 47 in 2008.[i] That lends the impression that half of all Harley owners are older and half are younger than 47.

As Jim points out, Harley, BMW and Polaris have made billions off of those in the sweet spot for more than a decade. So if 47 really is the median age for Harley owners (and somewhere in the ballpark for BMW and Victory (made by Polaris) owners and motorcycling was something like RVs or luxury cars all would be very well. But it’s not–especially because of 3, 10, 70 and 62:

3: For most of the past 100 years, motorcycling has been about 2% of all road vehicles.  But then, beginning in the early 1990s,  76-78 million Boomers came into the sweet spot years–their 40s. This generation was better off financially than any generation before them and it appeared as though a greater than average number of people decided to ride motorcycles–particularly  customs/cruisers and tourers–Harley and Polaris’ stock-in-trade.

As these Boomers moved through the 1990s, motorcycle sales grew every year by at least 10% over the previous year and, at the end 3% of all registered vehicles on the road were motorcycles.

In 2006, motorcycle sales peaked–and the last of the Boomers turned 42–and turned 46 this year–just about Harley’s median age, but also moving towards the end of the sweet spot years.

So let’s go back to Harley’s “median.” The median means half the ages are older and half younger and can appear that there’s equal numbers of people with each age on both sides of the median. But that’s not the way it works–more owners share some ages than others.

Since we know–by H-D’s own account–that it’s had a very difficult time attracting younger riders, it’s very unlikely (as in snowball’s chance) that half of all Harley owners are younger than 47. There’s good reason to suspect less than one-third of Harley owners are under 47:

According to a January, 2008 Reuters article by Emily Kaiser “Economy faces bigger bust without Boomers” pointed out, two-thirds of all Boomers were already 50 and older. The heavy concentration of Boomer Harley owners and the Motor Company’s inability to attract a strong young market suggests that a significant portion of Harley riders may already be closer to age spots than the sweet spot and a great many of them moving out of the sweet spot even without the recession.  In fact, chances are they’re even older than analysts have suspected.

Even if there had not been a recession–nor lingering Recession Fear–sales will fall off quickly as the Hog passes out of the python–in fact, ten years from now perhaps two-thirds of current Harley owners will be over 60 and well out of the sweet spot.

That elevated 3% is merely a bubble and the overall market for motorcycles will shrink as the smaller Gen X and Millenials grow into their generations’ sweet spots. Iow, the motorcycle market will not recover in the next ten years because there’s simply not a big enough general society base to support it–unlike the Boomers.

And, specifically, it won’t recover for the luxury brands unless, of course, Harley, BMW and Polaris find a way to attract large numbers of 35 and under riders. Yet Harley–for one–has spent nothing on R&D and has cut marketing to almost nothing. Selling Buell and MV Augusta also showed a horrendous lack of vision or understanding of the modern motorcycle market.

And that brings us to the next number–

10: Industry research has found the average rider buys a new motorcycle about every ten years.  This is the pattern the recession most affected. Though the effect on motorcycle purchases is unknown,  study done in 2009 found that 59 percent of new car buyers planned to keep their cars more than four years. That number was up from 45 percent just one year previous–a 14% change. Since motorcycles are a discretionary purchase, it’s likely the percentage is much higher.

The question is–how long will the Boomer Harley owners delay to buy? Because they are growing older, after all. In 2010 the first Boomers turned 64, and that brings us to the next and most important number:

70: The age at which most motorcyclists retire or severely limit their riding. And this is what makes motorcycling a special case compared to, say, an automobile. For example, the average (not median) age for a Mercedes-Benz is 63.6 years-old and about 45% of RV owners are over 55. Iow, unlike many other high-ticket items, motorcycling has a shorter shelf life.

62: Industry research has found  riders buy their last new bike around age 62. This fits then both with the perhaps unconscious belief they will quit riding at about 70 years old and with the 10-year rule. Two things about this:

The purchase window is smaller than many might suspect since it has a relatively young 62 year term limit.  If two-thirds of Harley’s market is over 50 and they buy their last bike before they’re 63, there isn’t much time left to sell a lot of bikes.

That is if they even get to that last bike purchase. If they have delayed or will delay buying the second-to-last bike because of the recession or Recession Fear too long, they may not buy another new bike when they retire–if they retire after the hit to their investments and home prices. Iow, sales may slump even farther because of the recession and its aftermath.

This suggests that over the next 10 years, Harley may not only lose up to tw0-thirds of its base, it may continue to lose last bike sales if riders 55-57 continue to delay purchasing that 10 year motorcycle now. Short of reinvention and new market appeal, it’s almost certain that sales of customs/cruisers and tourers will continue to plummet regardless of the overall American economy.

Nor does hope rest on the perhaps one-third of Harley owners who are under 47. According to an 11/09/2010  article on AOL’s DailyFinance “Baby Boomers Are No Longer Luxury Retailing’s Future“, “Even as generation X hits the peak earning ages of 35 to 54, the cohort is too small to support the [luxury] market on its own.” According to Unity Marketing president Pam Danzinger. “Gen X-ers are merely a hiccup. . .we have to wait for the millennials,” says Danziger. Those 25- to 34-year-olds have the appetite for luxury, but not the cash — at least not yet.”

As we see in the chart, Gen X is significantly smaller than the Boomers–and the Millenials, which are also smaller than the Boomers.

But not only do Gen X and Millenials prefer sport bikes, they don’t value status symbols or conspicuous consumption as their Harley/Polaris/BMW elders, according to Danzinger.

“Danziger calls the new luxury shopper a “tempered pragmatist,” who gets power from being a smart consumer and focuses on superior quality and performance. That means retailers will have to adjust their value message to give consumers a reason to pay the prices they ask, she says, adding: “We have to stop selling the sizzle and go back to selling the steak.”

Marketing to Gen X and Millenials will require a great deal more than revamping HOG rallies and livening up club meetings. The young already have an extensive, intimate and immediate social network through social media, the internet and informal bike nights, track days and so forth. The new motorcycling is heavily supported through images in both advertising/marketing and entertainment even in peripheral ways.  For example, FedEx co-markets with Ducati in a current commercial and the cable television show, Covert Affairs, features an animation of a rider on a sport-type motorcyclist even though no character rode any bike in the first season.

But it will require more than marketing–it’s just as much style that’s required. BMW has been trying to adapt its line to appeal to Gen X and the Millenials for several years. Only time will tell if they can take the frugality chic lessons the recession offers and continue to rebrand itself. However Polaris and Harley have shown no inkling that they are even aware that motorcycling is moving on without them.

With only about ten years left, there isn’t much time for Harley and Polaris to find a way to reinvent their brands into something that has more steak than sizzle.

P. S. Just to mention the little fry–custom builders better figure out how to make marvels out of sport bikes if they want to survive as well.

The recession has only hastened the sea change in motorcycling; it did not create it. The under 40 rider has a different sensibility and sense of style, different priorities. They are tempered pragmatists that don’t buy into the drink-n-ride sociability, don’t see helmets and gear as social commentary.

Without reinvention, Harley-Davidson is a dying brand

Posted November 3, 2010 by wmoon
Categories: Harley-Davidson, Uncategorized

In the early 1980s Harley was in a very similar position as they are today: The economy was in a recession, motorcycle sales had plummeted and Harley was in dire straits. In 1981 thirteen senior executives bought out Harley-Davidson’s owner AMF and, like today, engaged in massive restructuring. But that wasn’t enough to turn sales around.

That’s because restructuring addresses the business of running the corporation but can’t create consumer demand: money saved is not money earned. As in the 1980s, so in 2010—sales did not pick up and, in fact, plummeted.

Back in the 1980s, Harley got the federal government to institute a punishing tariff on foreign motorcycles. But that alone wasn’t enough to up sales either. Tariffs  can shift existing demand to the favored corporations, but only if the protected industry is not too inferior to the penalized foreign ones. And, at the time of the takeover, Harleys were perceived to be inferior by a great many motorcyclists because of its terrible reputation for mechanical problems.

So much so that the brand was the butt of jokes such as “Why are so many Harleys still on the road? Because the tow trucks haven’t arrived yet.” That reputation affected consumer demand beyond the effect of the recession.

Over the next several years, Harley embarked on a series of dramatic technological advancements—the 1340cc V²® Evolution engine and a superior powertrain as well as rubber-mounting among other innovations. They also fixed perennial problems like oil leaks—and sales increased so much so that Harley petitioned the feds to allow  the tariff to lapse two years early. But without that tech fix, the tariff would’ve had little effect.

Iow, consumers didn’t care how the company was run; they cared about how the motorcycle ran. And that’s what separates yesterday from tomorrow when it comes to H-D’s current troubles: the bike is reliable (enough) nor are there any cutting-edge technological advancements that the core is demanding. Iow, there’s no ready way this time to improve the product to increase demand.

Style also works against Harley’s resurgence now: In the mid-1980s, Harley also introduced a new model, the Softail, which was very much like earlier Harley models, and then the Heritage Softail. which recalled the famous Indian motorcycles—particularly the Chief.

That typifies Harley design since then: In the 1990s, the Motor Company took a cautious step toward modernizing design by producing the V-Rod.

When that failed to attract many riders, they slightly change it to the Street Rod, which also failed to make a significant impact. Harley swiftly returned to their endless variations on past glories. Witness how Harley’s website describes two of the three latest models:

the 2009 two-wheeler “the history-inspired Cross Bones, a bobbed factory custom,” and the 2010 XL Forty-Eight that recalls “the raw, custom Sportsters of earlier days.”

Iow, Harley’s design is, in a good friend’s words, “putting their boots on backwards to stumble forward into the past.”

And that’s just what Harley’s base wants—more of the same with just enough little changes that one year can be distinguished from another—by the faithful and few others.  Baby Boomers identified with Harley’s iconic American corporate mythology, and the rugged individualist  achieving the American Dream mythology the motorcycle symbolized.

Fear of alienating the base has prevented the Motor Company from reinventing the brand to appeal to a changing society.  For example, many dealers refused to carry Buell motorcycles because even though Harley owned Buell, it was not a Harley. Harley fanatics have a strong, inflexible image of what the brand is—and isn’t. And it isn’t a bike that looks un-American since the “sport” look is associated with the bikes made in Japan or Europe.

In this way, the famous Harley brand image is both the best and worst thing that happened to Harley. It was responsible for the phenomenal success of the corporation but keeps it frozen in a time that’s increasingly irrelevant to not only younger generations but older men and women (and minorities).

Consider it this way: Not everyone likes a cola. What if Coca-cola only could produce variations of Coke? By diversifying with Sprite, Barqs, Canada Dry, Crush, Dasani, Minute Maid, Nestea and Gold Peak iced teas and four  hundred other varieties of beverage (including Barcardi mixers), there’s something for everyone. And Coke fanatics don’t mind, nor do stores that carry Coke. This provides multiple revenue streams, protection against market swings (like the growing aversion fad for carbonated soft drinks) and more.

But for some strange reason, Harley is not Coca-cola: In the 1960s when Honda Super Cub were selling like crazy, H-D’s foray into selling scooters failed. That same year it founded Aermacchi Harley-Davidson to produce small single cylinder motorcycles in Europe. Fail. The three-wheel Servi-Car. Fail. H-D snowmobiles. Fail. Making engines for lawnmowers. Fail. The move into RVs with Holiday Rambler Corporation. Fail. Buell. Fail. MV Augusta. Fail.

For almost 50 years every single attempt to diversify[i] has been unsuccessful no matter who ran the corporation. Since Harley’s major competitors, Honda, Suzuki, Kawasaki, Yamaha, Polaris and BMW, all have successfully diversified—and drawn their bases to their other products—this is a singular mystery. But it’s one analysts should consider: What happens if Harley loses its base?

Or rather, when Harley loses its base. The average Harley rider is now closer to 50 than 40—and 40 is considered old by younger people. This has a double whammy for the Motor Company:

The visuals are negative—the more older riders seen on the roads on Harleys, the more Harley is seen as the Geezer Ride. That will not appeal to younger riders nor to those new motorcyclists over 40 who want to ride to feel younger—not older.

But it has another effect: Several years ago, BMW—who shares the well-off, white collar worker demographic with Harley—found out that riders buy their last new motorcycle in their early 60’s.[ii] Iow, a great many of the Harley Faithful have bought their last bike or are about to—and worse still, every year more of them are passing that “last bike” milestone. Since the last Boomers turned forty in the late 1990s, it’s a trend that will accelerate as the bulk of the Boomers hit 60-years old in a couple years. Iow, even if H-D miraculously attracts a great number of young people in the next few years shipments may only stay even with 2007 results and not grow. And that’s something analysts should consider: very soon, it will take a phenomenal number of new customers to produce modest growth.

But to attract young people the Motor Company has to overcome the Geezer Factor and make its hallmark yesteryear styling relevant to a society that values speed, flexibility, daring and ability to adapt quickly—none of which are associated with their products. Buell–despite it having the “old-fashioned” Harley engine–did appeal to younger riders and those who wanted to be thought of as younger. But Harley treated Buell as if it was a sideline like the pathetic Topper scooter or lamentable snowmobile rather than the path to a vibrantly growing future.

Iow, the kind of turnaround the Motor Company experienced in the 1980s is highly unlikely in the second decade of the new millennium.  Unless Harley finds a way to brilliantly reinvent their line, Harley-Davidson literally may be a dying brand.

[i] Except into making motorcycle loans and selling them to Wall Street investors.

[ii] BMW promptly began designing motorcycles that would (and have) appealed to younger riders. Harley, has failed not only with a younger design in their main product line but with the more youthful Buell style.

Harley’s 3Q results disguise the bigger problem

Posted October 24, 2010 by wmoon
Categories: Harley-Davidson, Uncategorized

Harley-Davidson posted its third quarter report on the 19th and USA shipments were down 9.4% over the same quarter last year.

Harley didn’t mention that shipments year-to-date are down over 11% from year-to-date last year—which was, of course, the worst year of the Great Recession.

But Harley has fallen much farther than that in ways that have nothing to do with the recession. When YTD 2010 is compared with YTD 2006 shipments are down over 35%:

However, Wall Street was very impressed that Harley roughly tripled its profits over the previous quarter. How can that be when sales sagged like the turkey necks on its aging demographic? Primarily it was thanks to its Financial Services division. The Motor Company attributed the increase in 26% profitability to lower cost of funds and fewer loans going into default.

As this article rom stated, “Motorcycle demand is slumping, and that slump has yet to show signs of abating,” Brent Miller, an analyst with Gradient Analytics in Scottsdale, Arizona, said in an interview. “That’s a bit concerning. How long can a company continue to count on its financial services arm to fill in that gap of dragging demand?”

As I’ve said before—at some point a motorcycle manufacturer has to start selling motorcycles if its going to stay in business—or stay as a publicly traded company. 4Q 2010 is not going to be when it happens—the 4Q is traditionally the lowest quarter for shipments because demand drops severely and especially in snowbelt states. Harley is planning on 20% of its year-long sales to occur in the 4Q or an additional 40,000 some motorcycles at the minimum. That’s far lower than 4Q sales prior to 2009, however it is likely to be thousands more than they will ship this year.

And this is where Harley’s aging demographics and recession-fear (because it has technically ended) directly impact H-D growth for several years:

Harley has bragged for years that they were in the dream-selling business and that truism came back to bite them hard—and perhaps in the jugular—because of who exactly was buying that dream.

According to Harley, 88% of their customers are male, nearly 2/3rds of its customers are between 36-54, have a median income of over $84,000 and 3/4ths of them have at least one year of college. And most of them are married. And, as Harley alludes to in its annual reports, Harley’s base is overwhelmingly white. That—along with age—might affect Harley’s future profitability in ways no one anticipated:

The Harley and its lifestyle was not just a statement about who the rider saw himself as (or wanted others to see him as) but it was also the prestige brand—the high price (and previously the difficulty obtaining a Harley) also said something about his solid finances (or how he wanted others to see him.

In this way a Harley was the visible, tangible indicator the owner belonged to a specific kind of elite—those for whom the American Dream had become American Reality: they had the wife/family; house; comfortable lifestyle; and a future (or actual) retirement that would comfortably provide for themselves and their families. The Harley, then, was the embodiment of the American Dream: the rugged individual  who conquered the New Frontier and rightfully enjoyed the fruits of his (white collar)  labors.

As HDFS’s 30% subprime loans revealed and crushing default rate in 2008-2009 that was often more dream than reality.

However, Harley’s base was not the group that primarily suffered job loss or salary/hour adjustment. According to Pew Research, younger people and minorities have suffered the majority of job loss or salary/job adjustment Though white men certainly lost jobs, Harley’s core weren’t primarily hit by unemployment.

But, as many of my readers know, it’s not who is laid off that matters as much as the uncertainty that remains in the workplace afterwards. Those who still have jobs struggle with both gratitude they escaped the axe and worry they’re next.

However, the Pew Research Center found, “Middle-aged adults have gotten the worst of the downturn in house values, household finances and retirement accounts. Men have lost many more jobs than women.”

Iow, Harley’s core market has been hit hardest in the areas that make the buying decision difference—even if they still have a job.

And even though the market is now over the 11,000 mark and even though 401ks and mutual funds are generally recovering, the housing and job market haven’t—and neither has the kind of people that fit into Harley’s core:

According to the Pew Research wealthier, white, middle-aged and older Republicans and Independents with higher incomes think their personal financial situation will get worse—and that their financial health won’t recover for three to six years. And, of among all respondents, 39% believe the damage caused by the recession on the U.S. economy is permanent.

High negativity and low trust could keep customers who could afford Harley’s high prices away from the showroom long after the economy and housing improves and unemployment drops. And that would be bad news for Harley—and, as we’ll see, in more than one way.

Otoh, younger, less-affluent minorities with Democratic leanings are optimistic about their personal finances improving, believe things are getting better and the majority of respondents believe America will recover from the recession. And that optimistic profile matches the consumer who chooses sport and adventure motorcycles—or, to put it another way, the kind of motorcycles Harley-Davidson doesn’t manufacture.

They are ready, as Kawasaki says, to “Let the Good Times Roll” again. The kind of motorcycles these young optimists prefer are generally less expensive than Harleys. Iow, even with lower-paying jobs and an economy that’s not recovering fast enough for the pessimist Harley core these younger positive thinkers can afford to buy now. As a result, it’s very likely that Harley’s competitors will benefit low price and high customer optimism while Harley will continue to suffer for more than a year.

Beyond that, there’s two other possible effects that makes it even less likely Harley will recover and more likely it will become a niche manufacturer for ten or more years. That’s the next entry.

Is Harley cruising for a bruising?

Posted September 27, 2010 by wmoon
Categories: Harley-Davidson, Uncategorized

In 2009, Harley-Davidson embarked on an aggressive restructuring plan to avoid bankruptcy and retain investors: It shed Buell and MV Augusta; shut down factories; sold off machinery; reneged on promises to develop land and add jobs in a quid pro quo deal involving the museum; cut 2,000 jobs; forced the workers to pay more of their health insurance costs; and turned union jobs into fairly low-paid temp jobs.

The Motor Company’s threat to pull manufacturing from Wisconsin resulted in 25 million in tax credits even as the company throws hundreds onto the unemployment rolls—benefits that come out of taxpayer dollars.

Even though the Motor Company admitted enormous restructuring costs, it presented the 2Q results in an extremely favorable light—look, despite everything, the company rebounded from enormous losses and made a little profit.  And it’s leaner—and meaner—coming out of it.

Some analysts, though, question whether it’s a sound health and if the company will rebound in the future. Some are even recommending short selling the stock:

Seth Jackson, in a Motley Fool article, “Show Me the Money, Harley-Davidson” published after the second quarter results came out found the cash flow was disturbing: “When I say “questionable cash flow sources,” I mean line items such as changes in taxes payable, tax benefits from stock options, and asset sales, among others. That’s not to say that companies booking these as sources of cash flow are weak, or are engaging in any sort of wrongdoing, or that everything that comes up questionable in my graph is automatically bad news. But whenever a company is getting more than, say, 10% of its cash from operations from these dubious sources, I feel obliged to crack open the filings and dig even deeper, to make sure I’m in touch with its true cash profitability.”

Questionable cash sources, he points out, comprises 28% of the cash flow from operations for Harley-Davidson. “Harley has one of the messier cash flow statements out there, full of swings from “retained securitization interests” and other wonders of modern finance.”

In comparison, H-D’s nearest competitors FCF range from 13% (Polaris) to a negative 8% for BMW group. Iow, H-D’s FCF is over twice as much, which isn’t necessarily bad but it’s not necessarily good.

Then there’s the kind of savings that come from restructuring. The Motor Company says it “saved” $135 million to $155 million from the restructuring activities it’s undertaken beginning in 2009. Harley wants us to believe savings could go up to $240 million to $260 million a year.

Jeffery B. Middleswart, President and Director of Research at Behind The Numbers, says restructuring charges tell him a company made a mistake, especially when they come up often.

“They are telling you they screwed something up,” he said.

While huge savings in one year look impressive on a balance sheet, they generally aren’t duplicated again. There’s only so many times they can  borrow $600 million from investors, disassemble plants or throw hundreds into unemployment to look good for Wall Street mavens.

More to the point, Harley’s 2Q profit didn’t come from selling motorcycles—it came from selling off assets, laying off workers and borrowed money—specifically, it came from cleaning up some of the mess in the Financial Services subsidiary. The business of HDFS is primarily motorcycle loans. Making loans is not making motorcycles.

Ultimately, though, a motorcycle manufacturer has to sell bikes if it’s to stay in business. And they aren’t selling many—and the less motorcycles it makes, the less loans.

And such drastic measures surely convey that Harley-Davidson doesn’t believe it will be needing those factories or workers for a long time. And that speaks volumes about the kind of company H-D believes it will be in the future—one that won’t be selling a lot of motorcycles soon.

It’s also going to have $5 billion in net debt after the loans and restructuring costs.

It will take a lot of savings from restructuring and a hell of a lot of bikes sold to pay that back.

Another spot of concern is the increase in short selling of Harley stock. As another Motley Fool article, “Don’t Short These Stocks” by Jordan DiPietro pointed out that “droves” of investors are shorting Harley stock.

Short Selling is the act of borrowing stock to sell with the expectation of price dropping and the intent of buying the stock back to replace at a cheaper price.”

Short interest as a percentage of float, which is a great yardstick for how heavily shorted a stock actually is, typically remains below 5% — anything above that usually indicates a red flag.”

Harley’s short interest percentage of float was 10.7%–or twice what’s considered typical.

Iow, many investors believe Harley isn’t on the road to recovery for many of the reasons we’ve discussed—an aging demographic that’s uncertain about the security of their investments and pensions or are unemployed, massive net debt, questionable cash flow and a profit that came from financing bikes rather than making them.

Beyond all we’ve already talked about, there’s an odd little coincidence that suggests they might be right:

According to an article on the website Seeking Alpha, “Harley-Davidson: Looking for a Good Short? Shed Some Fat”,

The financial services company, BMO Capital Markets, ( found that S& P’s Case-Shiller index of house prices correlated with Harley’s stock prices than any other measure such as “the unemployment rate, interest rates, gross domestic product and consumer sentiment scores…to explain the stock’s movements.”

Both existing and new home sales plummeted in July—but home prices were increasing slightly. Still, “While the numbers are upbeat, other more recent data on home sales and mortgages point to fewer gains ahead,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s.”

Existing home sales rose slightly in August, but were still down not only from June but from August 2009. New home sales were static from July. Case-Shiller results will be announced this coming week.

Harley stock price rose slightly after the unions caved in Wisconsin—this strengthens the correlation with Case-Shiller house prices though one has nothing to do with the other.

However, home sales—either new or existing—speaks of a widespread economic health. And if people can afford to buy a house, they might afford an over-priced motorcycle. It could be that  home sales are bellwether of motorcycle sales, it’s very likely that Harley shipments were soft in the third quarter. We’ll find out on October 19 when the Motor Company releases its third quarter results.

How healthy is Harley-Davidson as the end of the 3rd quarter approaches?

Posted September 20, 2010 by wmoon
Categories: Harley-Davidson, Motorcycle Industry

Many stock market analysts believe motorcycles are a sign of consumer confidence. If that belief is true, then the economy is slightly improving:

Harley’s second quarter shipments were slightly up from first quarter 2010, and, as Harley announced in its 2Q earning report, at the end of the 2Q income was 71.2 million compared to 19.8 million at the same point last year. It seems things are looking up in the Beer and Bike city and thus for the nation.

And, despite all this, more analysts say hold—even sell—than buy. So why aren’t they all woo, woo, go Harley? Let’s look deeper at Harley’s self-proclaimed road to renewing health:

Shipments up but not over 2009

Harley counts a shipment as a sale—that means the motorcycle is sold to the dealer. It doesn’t mean it’s sold to the consumer. It also cut shipments back severely over 2009 and lowered inventory.

Harley’s Stock Price and Shipments at the end of the 2 quarter for each year:

In its second quarter report, Harley announced shipments were down 8.4% from the same quarter in 2009. Of course, that was in the throes of the Great Recession and an abysmal year for the Motor Company. If shipments are still down from that, it’s not

H-D would have to meet their goal of selling 53,000-58,000 motorcycles in the 3Q in order to hit their goal of shipping 201,000–212,000 motorcycles by the end of 2010. That’s still 5%–10% down from 2009, which was significantly lower than 2008.

The growth in shipments over 1Q is good—but distracts from the real picture: shipments are worse than at the height of the Great Recession.

Dealer sales are down A report commissioned by analysts show that 66% of the dealers surveyed at the end of the second quarter said their sales fell by 20% in the 2Q.

If product is choking showroom floors and dealers are choking on the interest payments from that unsold stock, third quarter orders are likely to be lower especially since there’s nothing particularly new or exciting in the 2011 models to driver consumers to buy. This makes it harder for Harley to make their shipment goal.

According to Matt Andrejczak in a July 30, 2010 MarketWatch article, “How short-selling sleuths spot accounting gimmicks on financial reports”,“Typically, inventories should rise at about the same pace as sales. If a company’s inventories are growing faster than sales or expected sales growth, it’s a clue that products aren’t moving. In that case, gross margins could get squeezed.”

Harley is aware of that—and set what TPTB thought were modest shipment goals. Dealers, clearly, thought they could sell what they bought but were wrong and inventories have grown, in many cases faster than sales.

Needless to say, paring shipments further is likely to end in more layoffs, which doesn’t help the nation’s recovery (or the workers, obviously).

But high unemployment is a major reason why dealer sales are down—H-D’s core demographic has been hit hard by both job loss and uncertainty that their savings and investments are secure. And Harleys are high-end discretionary products.

Until Harley’s base is securely employed, sales will continue to lag. But the slower the recovery goes, the slower sales and the slower Harley recovers. Hello, vicious circle. And this is true of a great many companies and entities in the USA that are busy cutting benefits and wages: they feed into the very process that undermines their future profitability.

Dealers have unhappy choices to deal with their inventory: They can—and would—cut orders for new product, which exacerbates the problems H-D already faces. They can cut prices, which also cuts into gross margin profits. It could also damage the brand—it’s no longer a prestige product if it’s on the sale rack.

Market saturation Harley’s problems are exacerbated by market saturation (both here and in Canada). More and more analysts are realizing the Motor Company’s inability to attract women, minorities and younger men and caution that it will affect the corporation’s recovery. Nor is Harley making significant inroads in other countries.

These domestic and international failures are the result of the same branding that made the company such a success. It’s an image that’s dated, narrow and even a joke among the very people the company needs to attract. Moreso, the essential elements of motorcycling—individuality, daring, independence—have been successfully incorporated by Harley’s competitors in their sport, tourer, adventure models in ways that appeal to the very groups Harley has been unable to attract.

Bottom line: when times were good, the leadership failed to find a creative way to translate the brand for a new generation and new concerns. It dwelt in the past even as it aggressively pursued questionable business practices (such as the subprime loan fiasco). Unless a marketing miracle occurs, Harley’s market share will continue to shrink.

This suggests that, unless something dramatically positive happens in the economy in the next few weeks, both sales to consumers and shipments to dealers will be down in the 3Q. And that would mean that Harley may not make its already depressed and modest shipment goal this year. And that does not bode well for the Motor Company.

Both sluggish sales and market saturation affects the other two main streams of revenues: Motorclothes/accessories and Harley-Davidson Financial Services. How it affects the first, the Motorclothes division, is obvious—the second deserves a bit of explanation.

Harley-Davidson Financial Services At the height of the recession almost 30% of Harley’s Financial Services loans were subprime and the Financial Services subsidiary lost about 60 million. This is where the 600 million dollar loan from Buffet and Davis Selected Advisers, L.P. went. A change in the subprime loan policy, the restructuring and infusion of cash has made the subsidiary profitable in the 2Q. For now. And, of course, since Harley loans the dealers money to buy its motorcycles Harley makes money from the interest on shipments dealers paid for but can’t sell.

The bottom line is: Demand for loans is contingent on demand for bikes and it’s going to be years before Harley gets back to even 2007 shipments.  HDFS’ recovery looks good on paper but under the surface lurks the hefty 15% interest on that 600 million loan that and the debt itself that is due in just three years.

Ultimately though, a motorcycle manufacturer has to sell motorcycles to be successful or even to stay in business. It’s still behind

As “Harley-Davidson: Easy Riding on Less Bad Results” published on July 20, 2010, stated,  “At Ockham, we would not recommend buying Harley’s stock following today’s earnings report because “less bad” just is not good enough.”

In the next entry we’ll look at some troubling signs some analysts have found when they looked behind the numbers of the 2Q report. And what they worried about in July is likely to be even more true as the end of the 3Q approaches.

Harley-Davidson plays hardball in Wisconsin: capitulate or we leave

Posted September 13, 2010 by wmoon
Categories: Harley-Davidson, Motorcycle Industry, Uncategorized

No matter what marque a motorcyclist rides if they hear “Milwaukee, Wisconsin”, “Harley-Davidson” is the first thing comes to mind (or right behind beer). But now, barely two years after opening its self-referential museum in Milwaukee, Harley is threatening to move its manufacturing out of state.

It’s already shut the plant in Wauwatosa—and, of course, the Buell operations in East Troy closed down earlier this year. But Harley’s not doing well (more on that in the next entry) and desperate times call for desperate measures.

According to company spokesperson, Bob Klein, the Motor Company would rather stay there but is looking at other locations. Kansas City—who hoped to benefit from the troubles in York a few years ago—hopes to benefit from the Dairy state turning sour for Harley.

It all depends on the unions, according to Harley. All the workers have to do is agree to freeze their pay, cut hundreds of jobs, turn hundreds more into non-union jobs—many of which would be temporary jobs with no benefits. The three unions have encouraged their workers to accept the bad deal to keep the Motor Company in the state.

While Harley’s threat may sound drastic, a little history is in order to see this threat in its proper perspective:

In 2005, Harley-Davidson paid 1.5% of pre-tax profits in Wisconsin income tax resulting in almost $23 million in state taxes. In a series of political maneuvers and tacit threats to leave and promises to stay, employ and grow, H-D (and other big corporations) won tax rate breaks that had the Motor Company paying a mere $1 million in 2008 or less than 0.1% of profits.

In 2006, when Harley was riding high on the HOG, the Motor Company threatened to move manufacturing out of state unless the Wisconsin unions agreed to drastic cuts in wages and benefits. And, after some empty saber rattling, the union capitulated.

In 2007, union workers in Pennsylvania went on strike for two weeks before basically capitulating to Harley’s contract that lowered wages and benefits.

During these same years when its revenue soared and state taxes plummeted and unions rolled over, Harley also received not just federal credit for research and development but a Wisconsin state Transportation Economic Assistance grant of over a quarter of a million dollars to the Harley plant in Tomahawk, WI. According to a case study by the Federal Highway Administration

“The goal of the TEA Program is to attract and retain non-speculative business firms and create or retain jobs in the State.”

Iow, Harley took a quarter of a million of taxpayer dollars to create or retain jobs in Tomahawk in 2009 and plans to not only cut them in 2010 but move out of state.

In 2009, the Motor Company cut 370 union jobs and about 300 administrative jobs with most occurring at the facility in Springettsbury Twp in York County, PA.

Early in 2009, Harley announced it was laying off 12% of its workforce amounting to 1,100 jobs. Later in 2009, Harley threatened to build a new plant in Shelbyville, Ky and close the plant in York—and in November, 2009 the union in Pennsylvania agreed to cut jobs and benefits to keep the plant open—and the state of Pennsylvania gave the Motor Company around $15 million to stay in the state.  Though Shelbyville lost that time, it is coyly silent on whether it’s in the running for the Wisconsin operations this time.

Back at corporate headquarters—still in 2009, Harley Corporate complained bitterly that they had to pay 22.5 million in bookkeeping charges to determine how much the company would owe in the future because Wisconsin closed a corporate tax loophole. Iow, they complained about paying less than they used to for an entire year. For more on this, read here:

Oh, it seemed justified in 2009—Harley suffered in the Great Recession with plummeting motorcycle sales and egregious problems with credit defaults and the inability to securitize those consumer loans. Altogether the Motor Company lost $55 million.

But it’s an ill wind that blows no good and Harley used the recession to do some massive house-cleaning:  Buying the MV Augusta—who had gone through several owners all unable to make the company profitable was one of the most colossally stupid corporate decisions it had made in decades. The recession gave a easy reason to sell it.

Somehow it attracted the interest and investment of the legendary Warren Buffet—and, of course, it used the Great Recession to strongarm Pennsylvania with the very same threat it is now using in Wisconsin. Hey, if it worked once, why not do it again.

By the time the lay-offs are done, the full-time permanent workforce York, PA will have been cut by more than half from 1,950 to 700-800 employees. Not to mention the huge cuts in the labor force elsewhere—and upcoming in Wisconsin if the workers accept the over-the-barrel deal the Motor Company offers.

But every cloud has a silver lining—Pennsylvania hopes that if Harley shuts its factories in Wisconsin and moves the work to Kansas City that some of the work done now in KC will move to York—making that $15 million investment and the sacrifices of the York unions worthwhile.

Of course that’s what Wisconsin thought when it gave Harley the TEA grant and those unions took a haircut years ago. Now Harley wants the workers to shave their heads. And, if the union workers bend over again tomorrow to keep Harley there—well…just how long do you think it will be before Harley is threatening again.

Which is a word to the wise in KC—when their union negotiations come up, how much do you want to bet that Harley threatens to move out of Missouri to Wisconsin and/or Pennsylvania or Kentucky or somewhere else unless those unions, too, accept Harley’s terms?

Of course, Harley—though shipments are down almost 26% over 2008—had made a profit at the end of the second quarter (more on this tomorrow) even though shipments are only marginally up over the same quarter a year ago.

Iow, workers’ sacrifices will pave the way to Harley not just surviving the recession but doing so profitably. (Of course, we don’t know what the 3 and 4 quarter results will be).

And before you give me any “unions are the curse of America” argument or the recession argument consider this: According to a op-ed piece, “Are Harley cuts a case of need or greed?” by Jack Norman published in the Milwaukee Journal-Sentinel yesterday, draconic cost-cutting is limited to the worker:

In 2009 when the USA was in the worst recession since the Great Depression and motorcycle sales had plummeted, the CEO salary (split between Zeimer and Wendell in 2009) was $1,105,169 with another $8,864,919 in extras.

External board members (not already on Harley’s payroll) collected $80,000 fee in 2009, plus $50,000 worth of stock. And things aren’t so bad at Harley that board members gave up their $1,500 annual allowance for clothes and accessories.

This at the same time as thousands (at the least) of their core demographic struggled to make their make their monthly payments or had to sell their bikes or had them repossessed. And more than 3,000 workers will have lost their jobs in the past two years.

But, hey, that’s the Great American Way, right? Except Harley has taken tens of millions from taxpayers—much of it based on promises to create or retain jobs.

In fact, Harley’s hand is always out either begging for bucks from taxpayers or strong-arming the American worker….it’s such a great example of the American free market, isn’t it?

The American worker who has been Harley’s base and yet, because of corporate shenanigans like Harley’s or Wall Streets have lost their jobs or forced to accept equally bad deals to keep a job while the CEOS suffer not at all. Really, does it deserve its fans that bleed black and orange?

Side by side–the early RSS and early BRC

Posted August 4, 2010 by wmoon
Categories: Uncategorized

This is actually a response to a comment on the last entry. Read it for yourself—here’s the summation from the range cards for each curriculum:

The following is taken directly from the range cards for both courses.

Exercise 1:

RSS: Getting Familiar with the Motorcycle 5 mins (though it normally took longer as I’ve been told).

Skills: 1) Mounting motorcycle, 2) correct seating position, 3) leaning bike left and right and to full lock both ways. 3) Identify controls, 4) roll on and off throttle, 5) squeeze and release front brake and 6) clutch (separately). 7) Turn on and off other controls (and choke in different positions).

BRC: Motorcycle Familiarization  30 mins

Skills: 1) Mounting motorcycle, 2) correct seating position, 3) leaning bike left and right and to full lock both ways. 3) Identify controls, 4) roll on and off throttle, 5) squeeze and release front brake and 6) clutch (separately). 7) Turn on and off other controls (and choke in different positions).

8) Practice finding neutral with engine off. Roll bike (to prove in neutral). 9) Practice using clutch. 10) Shift to second, 11) shift back to first. 12) Start/stop engine. 13) Practice throttle roll on/off. Stop engine.
Exercise 2:

RSS: Moving the motorcycle 15 mins

Walking, straddle walking, buddy push.

BRC: Riding Demo, Simulated Practice 25 mins

Group Rocking, Power Walking, Riding

Done in 1st Gear with Friction Zone, shift to neutral, shift to 1st. Using brakes in 3rd part.

(It should be noted that one of the near fatal crashes happened in this exercise in the BRC, also the rider left the range and hit the elderly pedestrian with the result she had a broken hip and, in Delaware, a woman rode across three—yes, three—ranges, hit an SUV and an instructor’s Harley and ended up with multiple breaks in both legs. These are the only ones we know about and not necessarily the only ones that happened.

(RSS 20 mins elapsed)

(BRC 55 mins elapsed)

Exercise 3:

RSS: Starting and Stopping the Engine 5 mins

Starting the engine in neutral and running it for 30 seconds.

BRC: Starting and Stopping Drill 25 mins

Skills: Power walk; crossing traffic coming the other way; brake to a stop at cones then in part 2 ride from 1st cone and stop at the last one.

This is the exercise believed to be running when the latest student crashed and died in the BRC.

(RSS 25 mins elapsed)

(BRC 1.20 hrs elapsed)

Exercise 4:

RSS: Riding in a straight line 35 mins

Skills: Group Rocking, Power Walking, Riding

Done in 1st Gear with Friction Zone, shift to neutral, shift to 1st. Using brakes in 3rd part.

BRC: Shifting  & Stopping 30 mins

Skills: 1) Riding in a straight line; 2) shifting to 2nd;  3) downshifting to 1st;4)  braking to a stop; 5) turns; 6) using outside-inside-outside in turns.

(RSS 60 mins elapsed)

(BRC 1.50 hrs elapsed)

At this point, RSS students are 60 mins in and doing what the BRC students did at 30 mins.

At almost 2 hrs, BRC students are up-shifting and downshifting, slowing to turn, using lines through a corner, dealing with multiple lines of traffic and on-coming/turning traffic  and braking to a stop.

Exercise 5:

RSS: Riding the Perimeter and Large Circles 20 mins

Skills: “Gradually increasing speed up to 12-15 mph”  “in a straight line; slow using brakes” for corner. Move to large circle A and then to large circle B.

BRC: Adjusting Speed & Turning 30 mins

Skills: Ride perimeter and then weave between the cones. “Speed up as possible in the straightaway and slow for corners.”

(RSS 1.10 hrs in)

(BRC 2.20 hrs elapsed)

Exercise 6:

RSS: Weaving 10 mins

Skills: In 1st gear ride perimeter and then begin to weave between cones.

BRC: Controls Skills Practice 20 mins

Skills: Pause-n-Go; left and right perimeter turn; weave; traffic check; weave.

(RSS 1.20 hrs elapsed)

(BRC 2.40 mins elapsed)

Exercise 7:

RSS: Turning on Different Curves 20 mins

Skills: Perimeter riding; weaving, large oval;

BRC: Cornering 30 mins

Skills: Large oval in second gear

(RSS 1.40 mins elapsed)

(BRC 3.10 hrs elapsed)

At just over hour and a half in, RSS students have been practicing with the friction zone, slowing in 1st without stalling and cornering in 1st gear. RSS students do not shift to 2nd until Exercise 10—2.35 hrs into the course. Before they’ve done so, they’ve learned basic cornering, slowing, clutch control, braking all at the lower speeds demanded by 1st gear.

While BRC students have been shifting to 2nd from 1.20 mins in.  In Exercise 8—3.10 hrs in—BRC students will shift to 3rd gear.

BRC students have learned far more skills earlier in the course, shifted to 2nd and had to downshift and brake to a stop all at the same time in the same exercise.

If BRC students are traveling below 12 mph and in 2nd gear that would be difficult to believe—and a question of whether it’s a good idea.

RSS students have had a chance to hone clutch control and braking without having to worry about upshifting or downshifting. They learned cornering without having to worry about shifting or turning immediately up the middle of the range with traffic coming towards them (and turning up the middle).

Another death in Motorcycle Safety Foundation Training

Posted July 18, 2010 by wmoon
Categories: Motorcycle fatalities, Motorcycle Industry, Motorcycle Safety, Motorcycle Safety Foundation, Motorcycle Training, State Motorcycle Safety Programs

There’s been another death as the result of an MSF-curriculum rider training class. There may have been more—but this is the latest one I have heard about from an alert reader and loyal friend:

Fifty-five year-old James Lawrence Smith was taking a MSF-curriculum rider training course at Florence-Darlington Technical College in Florence, SC on Saturday, July 10, 2010 when he thrown from his bike after he lost control. According to his family, he died from his injuries. The same news story can be found here and here and here.

The articles do not say which course Smith was taking at the time of his crash.

Rider training is offered by the state motorcycle training program in South Carolina on community and technical college campuses.  The Florence-Darlington Technical College website says the continuing ed program offers beginning, intermediate and expert classes, however the available courses button only links to intermediate classes.

That is all the information I have at this time.

This is the 12th death that we know about in training in the past eight years. From 1973-2001 and almost 1.5 million riders trained, there had only been one death due to rider error. From 2002 until now, there have been at least 12 and several other near-fatal injuries.

Who doesn’t tell the Motorcycle Helmet Story–the manufacturers

Posted April 27, 2010 by wmoon
Categories: Motorcycle crashes, Motorcycle fatalities, Motorcycle helmet use, Motorcycle Industry, Motorcycle injuries, Motorcycle Rights, Motorcycle Safety, Uncategorized

There’s two groups that don’t tell the Helmet Story, and I don’t mean the rabid anti-helmet folks.

No, one group is the helmet manufacturers themselves. And my next guess is that many of you are strenuously objecting right now—so let’s take a look at the most popular helmets in the USA (in no particular order).

First of all, all helmets sold in the USA have to meet, at minimum, DOT standards—and that information is available on the sites. But, we’ll take a look at standards in another entry.

Arai “You could go through a bunch of cheaper helmets in the lifespan of just a single 5-year-warranty Arai – and wind up spending more in the long run. Worse, you’d miss out on Arai’s legendary comfort, fit, features, and feeling of confidence along the way. A helmet is something you’re going to spend too much time and too many miles in to not ensure that every bit of it is a pleasure. So compromise somewhere else.”[i]

Iow Arai takes the same approach L’Oreal hair color took with women: yes it’s more expensive, but you’re “worth it.” But nothing in the manufacturer’s site says safety is what the rider is buying.

Shoei doesn’t say it’s reduces injuries or prevents death either: In the section “Inside A Shoei Helmet” there’s a subsection, “SHOEI ACTIVE SAFETY”: “As opposed to “passive safety” that is ensured by compliance with Snell and DOT safety standards, “active safety” defines the further improvements made by SHOEI to ensure that maximum comfort is achieved, allowing the rider to devote all of his or her focus to riding. Advanced helmet features such as our anatomically-shaped comfort liner for optimum helmet fitment, lowest possible weight to reduce stress on the neck muscles, and effective ventilation system for temperature regulation and reduction in wind noises all serve to further improve the safety of the rider. Further development and continued improvement in the areas of safety and comfort technology are SHOEI’s primary goals.”

Shoei implies that safety is synonymous with comfort and that’s “active” safety. Safety is defined as the rider paying more attention, having a cooler head (which is only hot because they’re wearing a helmet) and is quieter (though the helmet itself is causing much of the noise which Shoei then dampens). All that is a limited truth because comfort can just as easily led to inattention. But that’s not why we buy helmets.[ii]

HJC doesn’t claim its helmets do anything either:  “With the addition of the helmet models mentioned above, it is clear that HJC continues to be a brand that is friendly to motorcyclists around the world providing safe, comfortable, stylish and affordable helmets.”

In the section “Helmet Usage” HJC comes the closet to claiming that its helmet will reduce injury or death:  “To reduce the risk of serious injury or death…” “and to help prevent damage to your helmet” …“always use your helmet correctly.” However, this doesn’t say the helmet reduces the risk. Rather, its what the rider does that will reduce the risk.

But that’s a half-truth. A rider can vastly reduce the risk of a crash by what he or she does (and that includes using the helmet correctly) but once the crash occurs, the rider can’t reduce the risk of injury or death—that’s exactly what a helmet is supposed to do. But that’s not what HJC claims.

Nolan Helmets has a truly ridiculous claim: “…since the early 1970’s, Nolan began using sophisticated materials to bring optimum performance to motorcycle riders at a competitive price.” Iow, it’s not skill or judgment that makes a rider perform as best  (but not necessarily safely) as they can. Iow, helmets are like tires or a trellis frame or a few hundred extra cc’s. Safety—or even comfort—aren’t appeals that Nolan uses in its advertising.

KBC comes the closest to referencing safety in terms of helmets with its slogan: “Ride Long. Ride Hard. Ride Safe.” It’s also the only manufacturer that states a direct though somewhat ambiguous warning on its website: “PLEASE NOTE: A.  No helmet can protect the user against all foreseeable impacts.”

Scorpion has a section on safety but it doesn’t say its helmets will protect you. Instead it references MSF training (without saying that will keep you safe), has a link to the MSF’s .pdf on helmets and directs readers to the Snell Foundation.

Safety seems to be the last thing on Icon’s mind—as does grammar and coherent thought. Rather, Icon courts and encourages both risk and violence: For example, it describes its new “Airframe Sacrifice” helmet as: “The needs of the many outweigh the needs of the few. Some will thrive whilst others wither. The Airframe Sacrifice is the former. A warrior’s helm. A leader destined for glory amongst the disposable ranks. Legions of weaker willed troops will break upon it’s chromed brow. There will be no legends passed down to glorify their sacrifice. Only this single heroic helmet and magnificent crest will remain.”

The Airframe Predator is described as: “When this bird shows up, trust us, it’s no party. This foul predator eats your dog’s food, craps over the driveway and one day will probably carry off the cat. We’ve seen it a thousand times.” And the Airframe Death or Glory as: “Some live their life in moderation – a careful balancing act devoid of excess. And that’s fine, the world needs those people. Then there are those who are destined to leave their mark on history’s pages. Those courageous (or stupid) souls who know no such balance. For those few it’s all or nothing. A pure digital lifestyle – Zero or One, Black or White, Death or Glory.”

Icon, though, does have a section called “Survivors” where Icon purchasers relate their various crashes and attribute their well-being to Icon.

Only one manufacturer claims that its helmet saved a life—while Bell also advertises its helmets in terms of ventilation, weight and price it’s the only manufacturer that directly claims that once a helmet saved someone’s life: “In 1955 a guy named Cal Niday plowed into the retaining wall during the Indianapolis 500 and the first Bell comeback was officially underway. The impact fractured his skull, but one of our helmets saved his life.”

But from that point on it uses euphemisms to imply it saves lives without directly claiming they do: “Cal returned to racing a few months later. We’ve been engineering spectacular comebacks ever since….Bell was there when the world’s best riders went down. And with innovations like energy-absorbing liners, the first full-face motorcycle helmet, and more design patents than any helmet company in history, we’ve always been there to help them get back up again. Over the years we earned enough trust to make our name synonymous with motorcycle helmets.”

Iow, if one didn’t know the Helmet Story one would never ever guess from what those who make them that the primary purpose of helmets is to reduce injuries and prevent deaths. But then we do know the Helmet Story thanks to NHTSA and the Motorcycle Safety Foundation, which is one of two organizational sister corporations to the Motorcycle Industry Council—to which all the helmet manufacturers belong.

The easy answer is that helmet manufacturers don’t say a helmet can save your life because of fear of liability suits—if they say it, and someone is hurt or dies, then they’ll get sued.

So let’s look at life jacket/vest manufacturers as a comparison. Certainly their products also are supposed to save lives and if they failed, they, too could be sued.

Like helmet manufacturers every one states their products meet standards—but, unlike helmet manufacturers they don’t stop there:

The Personal Flotation Device Manufacturers Association is a trade group like MIC and states on its homepage, “Most drowning victims had access to a Personal Flotation Device, but did not wear it. A wearable PFD can save your life – if you wear it!”

Float-Tech “Safety in the water is something we should all take seriously. One of the easiest things we can do is wear our life preserver, a habit that would have a significant impact on annual drowning.”

Jim BuoyModel #SO-1 – Features Jim Buoy’s remarkable new LIFE-SAVING design that enables an unconscious person to roll over, face-up, with their mouth more than 4 3/4″ above the water in LESS THAN 5 SECONDS!”

Or this from manufacturer Extrasports, “Wherever safety is needed most, rescue experts turn to Extrasport® Swiftwater® rescue PFDs. The right equipment can mean the difference between success and failure, life and death. Our accomplished Swiftwater® rescue line is often called to unexpected places and dangerous water conditions.”

Or Mustang Survival Company that states, “For more than 40 years, Mustang Survival has been committed to providing lifesaving solutions for people exposed to the most hazardous environments. Through constant innovation and application of new technologies we have established ourselves as a leading supplier of survival solutions to the most demanding military, professional, and recreational users.”

The difference between helmet manufacturers and personal flotation device manufacturers could not be more pronounced. And the latter aren’t afraid to mention the elephant in the room—that their products are meant to be used in terrible times. They aren’t afraid to say that their products can mean the difference between living and dying. In fact, they flaunt it.

Nor do they try to justify the purchase by waxing on about comfort or how side effects will make the boater safer. They know why their consumers buy their products and that’s what they sell: we save lives for a living.

The helmet manufacturers sell comfort, ventilation, comparative weight, graphics and swappable faceshields. Notice the difference?

Or how about the opposite side of the spectrum—not preventing death but preventing unwanted life? Durex condoms advertises “Durex condoms …they’re not just about protection against sexually transmitted infections and unplanned pregnancies.  They’re designed to excite and enhance.”

Or Trojan: “TROJAN® Ultra Thin Spermicidal Lubricant Condoms…

  • Thinnest TROJAN® Latex Condom-Designed for ultra sensation
  • The Strength of a Regular TROJAN® Latex Condom
  • Made from Premium Quality Latex-To help reduce the risk
  • Nonoxynol-9 Spermicide Is On This Condom for extra protection against pregnancy ONLY – NOT for extra protection against AIDS and other STDs
  • Special Reservoir End – For extra safety
  • Each Condom is Electronically Tested – To ensure reliability

CAUTION: Spermicidal lubricants are for extra protection against pregnancy. Spermicidal lubricants are not for rectal use or more-than-once-a-day vaginal use.”

Or, on the feminine side of sexual protection, here’s what Meyer Labs says about Today’s Sponge: “Today Sponge provides effective birth control without “pill” side effects. It is a proven contraceptive with over 150 million sponges sold…”

So if it’s liability that’s the concern, there’s a far greater chance that pregnancy or disease would result trip for trip, so to speak, than a rider has of sustaining a head injury or dying from one. Yet there’s absolutely no doubt about what condom manufacturers are selling—and it’s not reduction but prevention. Comfort and pleasure are added values and not the main benefit when it comes to birth control.

To put this into perspective, then, if helmet manufacturers advertised condoms, it would be all about comfort and pleasure they give without the slightest hint that they’re supposed to prevent pregnancy or disease. Iow, rather like Arai and Shoei advertise helmets.  Personally, I doubt comfort or pleasure are why people buy condoms.

Yet we’ve certainly heard of situations where condoms break or were defective and pregnancy or disease resulted yet that doesn’t stop these manufacturers from stating what their products are meant to do.

Iow, while fear of consumer liability lawsuits is a reasonable explanation for the startling omission of any reference to what helmets are supposed to do, it’s not a very good answer.

Or maybe it’s just a different type lawsuit they fear. Stay tuned…

[i] Arai really does spend a great deal of time justifying its cost: “In the end, what are your comfort and confidence are worth to you? Can you really put a “price” on them? An Arai helmet isn’t inexpensive. It isn’t made to be.” “And when you wear one, it isn’t made to feel good for just an hour or two. It’s made to feel good all day, every day – and to keep feeling good for years, long after cheap helmets have become loose and shabby (and probably had to be replaced more than once).” Notice that the only benefits Arai claims have to do with comfort and not safety:” “You can’t always see the reasons why an Arai feels better, but they’re there: lower weight from aerospace fiberglass-based construction; a lower center of gravity for better balance and less strain; softer single-piece multiple-density liners (whose technology still hasn’t been able to be copied in almost 20 years). Ventilation systems that work in the real world, not just in drawings. A helmet with no “minor” parts. And the result is major: you just feel good. You want to keep riding.”

“That’s why we build our helmets the way we do. Because it’s not about what you pay, it’s about what you get.” “Few of us can afford to own the very best of most things. But with an Arai helmet, you truly can own the very best of something.”

[ii] However, Shoei disagrees with the true experts in helmet’s effectiveness like the late Harry Hurt: “Very thick, soft padding provided good wearing comfort, but it did not hold well at high speeds, leading to helmet buffeting and instability.” Hurt, the foremost advocate of helmets and truly effective standards, was very clear:  very thick soft padding absorbs more kinetic energy and is thus safer for the reason we wear helmets: reducing injuries and preventing deaths.