St. Louis, MO
Posted - 01/30/2011 : 3:13 PM
Can H D be trusted to train new riders, given their mission and vision statements?
H-D's vision statement is: Harley Davidson, Inc is an action oriented, international company, a leader in its commitment to continuously improve our mutually beneficial relationship with stakeholders (customers, suppliers, employees, shareholders, governments and society). Harley Davidson believes the key to success is to balance stakeholders interests through the empowerment of all employees to focus on value added activities.
Hardly the specific, measurable statement having a direct bearing on the actual activities the company intends to pursue. There is no goal there at all; instead its a series of New Age Business School buzz words concealing more than they reveal.
Iow, its all about image and illusion again: action oriented, leader in its commitment, continuously improve, mutually beneficial, stakeholder, key to success, balance, empowerment, value added. This empty, ambiguous jargon can mean whatever the Company wants them to mean at the time it wants them to mean something in particular. One can hear echoes of Clintons infamous It depends on what the meaning of is is.
And, just as a side pointwho does H D see as their customers stakeholdersthe dealers or the consumers who buy the products? Both? Or do they see the dealers as their employees of a sort? This, too, is not clear. But, if customers mean consumers, then H D is saying their needs will be balanced with all othersand, by necessity, that would include the quality of rider training. What may be best for the student would be balanced against whats best for the dealer and so forth.
Otoh, state programs have, as their sole purpose, the safe, effective training of students and dont have to worry about this stakeholder nonsense. This, then, makes them better qualified to serve the public interest, which is in safe competent motorcyclists.
The conflict of interests between different interested parties is just one of the reason the stakeholder concept has been roundly criticized by many in the business ethics field as well as other observers. These critics say that no matter how lovely the appearance of social responsibility, businesses will always come down on the side of making as much money as they can as that is their raison detre.
For example, balancing stakeholders interests says nothing about how that balance is achieved. The illusion thats created is that each stakeholder is of equal weight but thats simply cannot true. Three skinny little kids on one side and one big fat kid on the other may balance a teeter totterbut the effect is quite different if one little kid gets off as opposed to the big, fat kid. And Procrustes bed was a form of balancing toobut at considerable cost.
So how, in practice, does HDI balance in mutually beneficial ways these relationships?
Weve seen how HDI treated the dealerspressuring and/or forcing them to take on huge debt to build big box dealerships, take on too much inventory and so forth.
And the pull strategy and Wal Mart tactics towards suppliers also shows a ruthlessness that seems to be at odd with this vision statement.
As far as employees gounion contracts will be negotiated in 07 and 08 and HDI has already laid the groundwork in the 06 10 K form for fiddling with the pension plan. Given the trend in American business, HDI employeeswho have been led for over 20 years to see themselves as owners themselves should expect HDI to stab them in their retirement backs#61628;for the sake the business.
The warehousing and winter financing may have mutually benefited some dealers and the Motor Companys unit sales, but did it, in the long run, benefit stockholders? Many of themand the SEC is thinking perhaps not.
Then, of course, theres the underhanded tactics theyve used with SMROs, state motorcycle programs in selling HDRE to the states. Thats beside the underhanded government relations tactics they have used with the infamous tariff of the early 80s, the EPA regulations in CA, lobbying for RE and so forth.
But all of these thingsand the set up for tampering with the pension planwere done at a time when HDI had record sales, revenue, and an great EPS. Iow, if the Motor Company behaves this way when times are good, whatever will they do when sales slump?
Iow, in all these ways, HDI execs have shown they have an odd sense of balanceunless it means giving each group equally the shaft.
Otoh, H D is being true to what it said it was: Illusions R Usintangible, imaginary, fantasies of balance and mutual benefit that can mean whatever the dreamer wants to believe it means. But words that have no hard and fast meaning when it comes to how the Company will actually do business. Underneath is the same old nightmare American corporations have taken to the nth degree for yearsonly the profits matterand, given the class action suits and SEC inquiry, the profits that matter the most is how much the execs make.
Otoh, HDI is truly a leaderbut where are the execs leading all their stakeholders? Could it be down the path traveled by such other darlings of the Business School and/or stock-market - Enron, Worldcom, and Tyco? Thats one question, but not the one that is most pertinent to the on going discussion on this blog. This is:
If HDI is allowed to set up RE on a wide scale basis so that the dealerships are training a great number of students, when sagging sales push comes to stock price shove, they will kick RE to the curb without a second thought if it doesnt do what they are gambling it will.
Thats simply good business to cut waste and tighten spending to keep profits upand their past and present sense of balancing stakeholder interest shows that is exactly what they will do.
Anyone who thinks otherwise, given what HDI has revealed in word and action, is confusing day dreams with reality. To be what they arean American corporationthey must do whats best for their bottom line. If (I say when) rider education is abandoned as a marketing strategy, the end will come suddenly without warning. Stakeholders and balance be damned, its the bottom line that counts. Dealers have the same goalto make moneyand if RE doesnt, if it costs them moneythey will be quicker to jump off the rider education teeter totter than the Motor Company.
And, if/when that happens, rider education will suffer in the same way the skinny kid suddenly hits the ground when the big fat kid gets off the teeter totter: suddenly, state programs would have to be beefed up again, financing would have to be found again, ranges and classrooms, and all that has been done over the decades redone.