Thursday, July 23, 2015

The Harley Recall: Bad News and Good News

The latest bad news from Detroit is that Harley-Davidson is recalling 185,000 motorcycles made in 2014 and 2015. The problem is that the saddlebag can come loose and fall off of the bike. It is unclear how many times Harley has issued such a recall, but my guess is that there have not been many. It would not surprise me if Harley had a better manufacturing record than Cadillac. So this may be yet another case of skilled labor just not being what it used to be, at least where quality control is concerned.

On the other hand, Harley detected the problem through analysis of warranty claims. This is definitely good news. Because, apparently, there have been no reports of crashes or injuries due to this defect. In other words, unlike some of the automobile companies (and not just the American ones), the folks at Harley believe in closing the barn door before the horse has been stolen (and then filing their own insurance claim on the stolen horse). Harley seems to be a company that still believes that the customer is more important than the shareholder.

The fact is that the company had a rough past, particularly when Japanese bikes were on the rise. However, they managed to rise above that mess. One reason is that many of their customers are "true believers." Apparently, they want to make sure that they believe in their customers as strongly as their customers believe in them. How many Chief Executive Officers of publicly-traded corporations can make that claim with a straight face? (Harley does not always keep a straight face, by the way. Their ticker code on the New York Stock Exchange is HOG!)

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