Thursday, June 26, 2014

Harley-Davidson's EV announcement shocked the faithful. Here's why the company's announcement strategy is actually brilliant

Earlier this week, I was flown in to see and (however briefly) ride the Harley-Davidson LiveWire. It was shown to the public for the first time at Harley-Davidson of New York's trendy new TriBeCa flagship store. 

Harley-Davidson president Matt Levatich, and the company's CMO, Mark-Hans Richter were in New York for the event. Both of them, along with the other execs I spoke with, cleaved to the official story: there are no official plans to produce or market the LiveWire. 

If Harley-Davidson is to be believed, the upcoming 30-city 'Project LiveWire'—10,000 public test rides on hand-made prototypes costing well over $250,000 each—is all an elaborate market research project. The Motor Company is only conducting the tour to get a general sense of the interest in electric motorcycles.

None of the experienced motojournalists at the 'reveal' believes that. The bikes we saw—Harley built a total of 39—are far too well finished, and too resolved in their design. Andy Downes, the editor of MCN, bets there will be a production announcement within 18 months.

When really pressed, Harley execs' fallback position is, "Maybe when battery technology makes the next jump." Say, when energy densities are 50% better than they are now. But no one in the battery business expects an increase like that in the next year or two, so that's not it.

Before I saw the bike in the metal, and rode it, I thought the whole "market test" story had been concocted to avoid comparison with existing e-bikes of generally comparable specification, say the Zero S and SR, or Brammo Enertia or Empulse. But even after my ten-minutes-in-Manhattan-traffic first ride, I realized that Harley has nothing to fear from bikes like those. The LiveWire (its limited, 53-mile range notwithstanding) is fucking cool.

So, what gives? Why would Harley spend tens of millions to build a fleet of LiveWires, then deny plans to put an EV into production?

The short answer is, because Harley's existing customer base, the Live-to-Ride-Ride-to-Live-Helmet-laws-suck-Support-the-troops-Drill-baby-drill-If-you-can-read-this-the-bitch-fell-off-Show-me-the-birth-certificate-No-new-taxes-Theres-no-replacement-for-displacement, dyed-in-the-leather Harley purists hate the idea.

I buttonholed one Harley exec and made him admit that, out on the interwebs—on Harley forums—Duck Dynasty-reject Harley riders don't just not want an e-bike, they actively resent the whole idea. The exec angrily told me, "Those guys hate us [Harley management] anyway! They already say that the panhead was the last real Harley. And besides, they don't buy new motorcycles."

I've gotta' give him that; they don't. But what about the 35 year old welder, who's making good money in North Dakota thanks to the fracking boom? Or the 45 year old dentist in the Chicago suburbs, or the 55 year old grocery store manager in Albuquerque?

True story: After the launch, I rode my corroded Triumph Bonneville home from the Kansas City airport. As I trundled along, I was slowly passed by a guy riding a new-ish Harley-Davidson 'bagger'. He was in his sixties, portly, with a neatly trimmed white beard. An absolutely typical suburban grandpa, of the type you'd find at the Rotary, or Elks Lodge, or maybe in a small-town Chamber of Commerce. Except, he was wearing a shiny black leather jacket, with an elaborate, embroidered grim reaper across the back. And there was a little chrome skull on his rear fender.

My point in telling you this is, the guys who do buy new Harleys aren't buying them because they love the engineering; they're buying them because the Harley brand is wrapped up in the rebellious, badass 'authenticity' of those grizzled panhead riders. That is what allows the welder, the dentist, the store manager, and grandpa to tell themselves, if it ain't Harley, it ain't shit.

Then it hit me: the grandmaster-level-chess-player strategic genius of Harley's 'LiveWire tour' story—the genius of claiming that they have no specific plans to produce it.

I mean, the bike I saw was proof they do have plans to produce it. And if you need more evidence, Harley's openly recruiting engineers with EV experience on their web site. The Project LiveWire bikes are finished; if there are no plans to put it into production, why recruit high-dollar EV specialists? Because, LiveWire, or LiveWire 2.0 is, definitely going to be mass produced. Which makes the whole "It's just a market test" story an elaborate subterfuge. Why lie to your best customers? Bear with me another minute while I set up the strategic context...

Given: Harley-Davidson is the only motorcycle manufacturer that shows up on lists of the world's most valuable brands. The thing is, it's completely wrapped up in both small- and big-C conservative values. Take away the motorcycles, and Sturgis would be a Tea Party rally. These are people who resented having compact fluorescent light bulbs rammed down their throats.

Given: Harley's existing customers don't just not want an electric Harley; they view EVs as a tree-hugging liberal boondoggle. EVs, in their view, are actually unAmerican.

Given: As strong a brand as Harley-Davidson is, its customer base is very old. They say, Fifty is the new thirty; they say, 60's the new 40. Seventy may even be the new 50. But 85 is still 85. Harley needs a long-term strategy to attract younger customers.

Given: Harley's attempts a making smaller, lighter, sportier gas-powered motorcycles—bikes that could appeal to younger riders—have always failed. (And, by the way, Harley-Davidson's dealer network hated it the last time Harley tried to compete with those rice rockets. Harley created the Buell sport bike brand in an effort to compete with the Japanese manufacturers. Dealers felt that Buell was pushed on them by management; they never supported the brand, and it ultimately failed.) 

There are some things that, when you hear an executive say them, you know  are not true. For example, if the CEO of your company calls you all into the auditorium and says, "Let me make one thing clear: There will not be layoffs," it's time to run out and print 1,000 copies of your resume. I was reminded of that when Mark-Hans Richter, Harley's Chief Marketing Officer, emphatically said, "This is authentic. This is on-brand."
Someone at Harley-Davidson—and it had to be someone right at the top—came up with a daring plan to leapfrog right over more tech-savvy manufacturers like Honda and BMW, by going all the way to an EV. Honda doesn't have an e-bike yet, BMW doesn't (not a proper motorcycle, anyway). The only e-bikes on the market have been cobbled together by startups with no dealer networks and, frankly, not much style or marketing savvy.

By producing an EV, Harley-Davidson would attract a young, liberal, urban market that until now has been inaccessible to America's oldest and most conservative motorcycle company. Harley-Davidson executives in Milwaukee secretly contacted Mission Motors, in San Francisco, and contracted them to engineer an electric drivetrain. By tapping Mission—the most advanced motorcycle EV research & development company—Harley ensured that the LiveWire would be state-of-the-art.

But Harley still had one insurmountable problem: No one thinks EVs will be more than 10% of the market any time soon, and announcing an EV was bound to freak out its existing customer base.

That's why calling Project LiveWire a market test was a communications-strategy masterstroke.

Harley's going to take its LiveWire prototypes on a 30-city tour across the U.S. It's not even bringing the machines to Sturgis, or Daytona, or any of the places where old-school Harley riders gather. But you can be sure Portland will see the LiveWire. And because the bike is fucking cool—and it's just a twist-and-go (no clutch or gears) and very easy to ride—it's going to appeal to young hipsters, tech nerds, chicks... people who've never thought of themselves as 'the Harley type'—or even motorcycle riders. 

Mark my words: within a year or two, Matt Levatich will stand up in front of a crowd of Harley faithful and say, "We weren't even going to make the LiveWire, but the free market has spoken. Customers are demanding a LiveWire of their own."

Between the lines, Harley-Davidson will tell millions of Duck Dynasty rejects, "Hey, we're a for-profit company, and the market has spoken, bro'. That was democracy in action." 

Harley-Davidson's current customers resent EVs and the liberals who drive them (or soon, ride them.) But such petty resentments are trumped by a knee jerk belief in the sanctity of a free market. After all, there's nothin' more 'Murican than the profit motive. 

So after the LiveWire tour, Harley-Davidson will address its existing customers, and actually use their deeply held conservative values to justify the decision to put the LiveWire into production.


Tuesday, June 24, 2014

A note from the Dept. of 'Holy Shit!'

I know that you all want me to write about the Harley-Davidson LiveWire launch, but a.) I don't want to scoop, who sent me to New York, and b.) I am still digesting the aspects of the story that I plan to expand upon here on my own blog.

In the meantime, though, while we were all distracted by the idea that Harley-Davidson had gone all liberal and green on us, a story of almost equal significance almost slipped through the cracks.

What I mean is, after selling the commercial rights to AMA Pro Racing to Daytona Motorsports Group, the AMA just got back into the business of putting on a national championship.

Admittedly, the AMA has teamed up with Supermoto USA, to put on a national supermoto championship -- a class that AMA Pro Racing allowed to die on the vine five years ago. Still, I have to wonder if this isn't more evidence (along with John Ulrich's Superbike Shootout series, and rumors that Dorna's considering a North American regional championship) that DMG's monopoly over top-level motorcycle racing here in the U.S. is under threat.

Saturday, June 14, 2014

The AMA strikes another blow against helmets

It's been a busy week here. So, if you got a breathless email from the American Motorcyclists Association on Wednesday, proudly highlighting the AMA's ongoing lobbying effort to prevent the use of crash helmets, you might have thought, "Gardiner's going to go all ape shit over this." Then, after a few days passed, concluded that I am beyond caring what the AMA's lobbyists do, in Washington.

Not so.

To recap: Earlier this year, a Congressional committee drafted a new law that would, in part, have expanded the remit of the National Highway Traffic Safety Administration by allowing NHTSA to lobby state governments to encourage helmet use by motorcyclists. But, on Tuesday night, that particular house resolution was passed with a change to wording that to maintain a long-standing gag order on NHTSA; it's legally prevented from any activities that would encourage state governments to mandate the use of crash helmets. You can read a complete synopsis of the situation here.

To be clear: NHTSA--the National Highway Traffic SAFETY Administration--is barred from telling state governments that motorcyclists should wear crash helmets.

I repeat, to be extra-clear: An organization nominally created for the express purpose of improving traffic safety and promoting research and best practices in traffic safety is legally gagged, when it comes to the single most important thing motorcyclists can do, in order to improve their safety. Crash helmets? No, NHTSA can't talk about 'em.

That's a situation Wayne Allard, AMA vice president for government relations, applauds.

"We are happy that the House members accepted the language in the amendment," said Wayne Allard, AMA vice president for government relations. "Lifting the ban on NHSTA lobbying would have given Washington bureaucrats free rein to spend taxpayer money to lobby states and legislators to create laws that infringe on our rights as motorcyclists."

Elsewhere in the official AMA Press Release dated June 11, the AMA clearly describes "mandatory motorcycle helmet laws" as "unnecessary regulations" on motorcyclists.

What the fuck, eh? Let's be clear: by far the greatest single effort by the AMA as it currently exists is: Let's make sure that no states pass helmet laws; let's fight the existing helmet laws.

I'll bet the AMA's shitty lobbyists went fawning to the NRA's big swinging dick lobbyists Tuesday night and said, "You know the way you guys prevented the Center for Disease Control and the Surgeon General from characterizing epidemic gun violence as a public health issue -- something it so totally is? Well, we did that too! We prevented NHTSA from saying that open head wounds are bad for motorcyclists. So, um, is that chair free? Can we sit with you?"

Fuck off, AMA, just fuck right off.

Tuesday, June 3, 2014

What Karl Harris' death means—and doesn't mean—for the TT

After a relatively safe Practice Week, the TT paddock was rocked by fatalities on consecutive days when Bob Price died Monday, followed by Karl Harris on Tuesday.

I mean no disrespect to Price when I write that his death is, at most, a footnote to this year's TT. He was a popular guy, I hear. He was a good rider. But he was a relative unknown.

Not so Karl Harris. 

To be fair, Harris (seen here during a late-winter visit to the Isle of Man, before he first came to race) said, "I've always wanted to do the TT just never had the opportunity so it is really something to look forward to. I've got a lot of work to do looking at on-board DVDs so it's going to be a learning process but it will be fun."I'm not saying he was lured or entrapped; he came of his own free will. That's not what this post is about.
Get your special hate-mail pen out if you will, but I’m going to tell you a story about the TT anyway. This is my opinion, I guess, based on many conversations I had on the Island, with members of government, TT volunteers, Manx-based journalists, and countless stakeholders in 2002, when I was there as rider, writer, and journalist, and in subsequent years when I returned as a journalist. It's an impression that had to be compiled, instead of something I could ever have received in an organized press briefing, because the TT organizers are not to damned transparent with journos.

My take on it is that when David Jeffries offed himself at the TT in 2003, it was nearly the end of the event. I think that the Auto-Cycle Union, which had always put the races on, told the Isle of Man, “OK, we’re done. Never again.”

The event only continued when the government of the Isle of Man stepped in to act as the organizer, promising to indemnify the ACU if it would continue to act as a sanctioning body only. The IoM took on that role because—although there are plenty of Manx voters who hate the TT—it remains popular with a majority of Manx people, and it is invaluable in promoting the Manx ‘brand’, which is essential if the Island is to keep attracting international business. 

The grassroots organizers of the TT—hundreds and hundreds of volunteers—continued, for their part, because they were desperate to see it through the centenary TT, which was then just a few years hence, in 2007. Over the years, I've put this thesis to many people with knowledge of the inside workings of the TT, off the record of course, and never had anyone tell me that I was completely off the mark. [Until now, see note below from David Cretney, a guy I genuinely like.]

2004, then, marked the beginning of a new TT era. When Greenlight/Duke Video’s media rights came up for renewal, the television coverage was transferred to a different production company that produced a far superior program. New fans were drawn in—people who didn’t miss Joey Dunlop and David Jeffries. 

The course was—to the extent possible—smoothed and made somewhat safer. Hazards that were padded only by haybales in my day were protected by airfence. The race director started canceling practices and races in heavy rain. Practice mileage was cut when morning practice was eliminated. The qualification standards were tightened, to minimize speed differentials. Those steps all did, probably, make it a little less dangerous.


The organizing committee knew that if they were to attract new young fans, they needed new young riders. They began a program of actively recruiting a whole new kind of TT competitor. They looked for younger guys who had serious speed, even if they’d only raced on ‘circuits’ their entire lives. 

Promising riders were brought over to the Island for a look at the races, and if they liked what they saw, they were invited back in the off season to lap on open roads (and drive around in cars) with TT veterans like Milky Quayle. During the off season, the organizers sent out gushing press releases about the new, high-profile Newcomers that would be taking on the Mountain Course the following spring. Just between the lines was the message, "See? We're not an anachronism, or just a bunch of crazy old Irishmen. Look at this cool young guy who also dreams of the TT." They reserved a spot on the schedule for Newcomers, to go out on speed-controlled laps behind experienced riders. Most importantly, those hand-picked Newcomers were seeded in established teams, so they went out on bikes properly set up for the TT.

Paul Phillips has done a bang-up job as Motorsport Manager for the Isle of Man. As much as anyone, he deserves credit for resurrecting the TT after the dark days of 2003. When Karl Harris agreed to race on the Island, he said,  “Karl Harris is undoubtedly one of the most naturally talented riders on the British scene in the last ten years and I’m sure that with proper application he can build a great TT career for himself. He has all the attributes to make a great TT racer and I’m sure fans will look forward to seeing him on the Isle of Man this year." He wasn't wrong, exactly, but his premonition hasn't come true either. (Photo: Stolen from MCN)

If you had to pick a poster child for that new-rider program, you’d pick Karl Harris. 

In the early 2000s, he’d been a multi-time British Supersport champion. He raced successfully in British Superbike championship, too, recording 12 podium finishes before gradually souring on that series. He was a guy with close-to-world-class speed.

And, he lapped at something like 118 miles an hour in his first year at the TT. He was on everyone’s tip-sheet as a future TT winner.

But all that raw talent, and good coaching, and a good bike, didn’t save him when some problem occurred at “Joey’s”, a fast bend on the way up the mountain. 

I think that until Tuesday afternoon, there was a real sense among TT organizers that they’d worked out a system to identify, recruit, and nurture future TT stars. That may be the case, but there’s no safe way to lap the TT course at competitive speed. 

Where does that leave the TT? Well, the death of Karl Harris will not be the death of the TT any more than the death of Simon Andrews will be the death of the NW200. The TT will go on. But those deaths might give other fast young guys, currently racing on circuits, second thoughts about the merits of trying the Mountain Course on for size.

After DJ’s death in 2003, which was ghastly even by TT standards (a marshal once described it as a “broom-and-shovel job” to me) I said, the TT will continue until 2007, because there’s just too many people who want it to reach 100, but after that, it’s one high-profile disaster away from being shut down. 

I still believe that’s true. Even though the TT’s more popular and better-known now then it has been at any time since the 1960s, its existence is incident-to-incident. 

The event faces existential threats in the form of either a spectator disaster (the incident last year at the bottom of Bray Hill could easily have been far worse) or deaths of marshals or popular local racers, which could reduce local support (the two most successful local riders in recent memory, Milky Quayle and Conor Cummins, have both dodged death on the course.) Or, a major star like Guy Martin, Ian Hutchinson, or Michael Dunlop could take himself out in a manner that turns a significant percentage of current supporters into naysayers.

There has always been a sizable minority of the Manx population that is against the TT. Any incident that turns 10% of the event’s supporters against it will result in a majority of people who’d prefer to end the event.

You can love or hate this post, but one thing you have to admit is, it deals in ideas you won't find expressed in any common bike mag. To read more like this -- including stories you won't find anywhere else -- buy this book on Amazon right now.

A few days after this went up, I got this message from David Cretney, who negotiated the transition in event management, post-2003...

Dear Mark,
I hope you are keeping well. I have just been copied in to your piece about the TT. I have to say as the person who negotiated the deal for the Isle of Man to take over the running of the TT after 2003 your theory is completely incorrect. It was a long held ambition of many in the Motorcycling fraternity on the Island going back 20 or 30 years that we felt the Island had all the strengths to run the event completely without having to have the ACU en masse come to the Island.
My proposal was actually resisted my senior people in the ACU but my working relationship with the then Chairman enabled the proposal to succeed.
It was myself and the then CEO of Tourism who recognised the need to radically improve safety and the commercial aspects of the event.
After 2007 further impetus again took these issues forward.
Thanks for your longstanding interest it would be good to catch up again sometime.
Best wishes,