The Bar-and-Shield is reporting more profits for 2010, but how it got there is perfectly illustrated by the lean lineup of new-for-2011 models. When sales are flat—or shrinking—the only way to bump profits is to increase margins by cutting costs or raising prices. To that end, the MoCo introduced a new low-cost model, some big-bucks high-end bikes and is still aggressively trimming fat in all of its operations.
First, the bikes. For 2011, the Motor Company announced three new mass-market models — one of which we already told you about – and a new CVO to tempt those of us not too badly damaged by the Great Recession.
Aside from the XR1200X, there is a second new Sportster model, the Super Low. Unlike its snarling, attitude-laden (and wicked uncomfortable!) 883 Iron brother, the Super Low is cute, friendly, and seemingly designed with an eye towards practicality to lure new customers into H-D dealers. The 883cc-equipped model has a 4.5-gallon tank, radial tires (on new five-spoke wheels), a low handlebar and a seat that somehow manages to be slightly lower than the already-low 26.9-inch saddle of the 883 Iron. It’s also 12 pounds lighter than the Iron at 536 pounds dry, and handling should be further improved by an extra .9 inches of trail built into the improved front end. A lot of stuff for a $7999 (in black; add more for the color or two-tone paint) cruiser from any manufacturer.
At $22,499, the other new model is less budget-oriented. The new Road Glide Ultra is Harley’s street-savvy tourer—basically the Electra Glide touring rig with a stylish dual-headlamp frame-mounted fairing—with the Twin Cam 103 cubic-inch powerplant found on last year’s Electra Glide Ultra Limited. That six-speed motor is good for 102 ft.-lbs. of torque, more than enough to haul around the 888 pounds of claimed wet weight. The new Ultra is also loaded up with all the luxury-touring features you need. Aside from the PowerPak (which is the 103 engine, ABS brakes and the keyless Smart Security system), the bike gets a giant Tour Pak top case and hard saddlebags, a lower fairing, a redesigned one-piece seat, cruise control and an 80-watt Harmon/Kardon audio system complete with CB, CD player and two headsets.
For the truly high-end Harley enthusiast, there’s a CVO (Custom Vehicle Operations, Harley’s hand-built line of limited-edition models) version of the Road Glide Ultra. In addition to having the 115 ft.-lbs. 110-cubic-inch CVO motor, the CVO Ultra gets even more touring goodies, like a Zumo nav system, bag-mounted big-bass speakers (in case your neighbors are able to sleep though your aftermarket straight-pipe symphony), heated seats and remote-entry trunk and saddlebags. It even comes with an 8-gigabyte iPod. The price? $35,999, and I’m sure H-D would like to point out that the cost of building the CVO on your own via its Tokyo phone book-sized parts and accessories catalog would greatly exceed that figure. Remember: you can sleep in your truck, but you can’t ride your house to Sturgis.
Not a lot of new models, but that’s to be expected in the current market. But there was a glimmer of hope in the Motor Company’s second-quarter statement. Though sales are down 5.5 percent worldwide, profits are up sharply, thanks to what CEO Keith Wandell called “restructuring and continuous improvement activities.” That means job cuts, cuts in production, consolidation of manufacturing and other activities, and of course the crushing of the Buell sportbike division (as well as selling MV Agusta, which H-D is still trying to sell).
But apparently those savings aren’t enough. There is a new labor contract in negotiation with the goal of closing “cost gaps” in Harley’s Milwaukee-area factories, and if a deal isn’t struck by September, the company will move production away from Milwaukee (but stay in the U.S.). Let’s hope something gets worked out and Milwaukee can continue to be an industrial city.