The Company

It all started in 1901 when William S. Harley, age 21, completes a blueprint drawing of an engine designed to fit into a bicycle. Then in 1903 William S. Harley and Arthur Davidson make available to the public the first production Harley-Davidson motorcycle. In 1907 William A. Davidson, brother to Arthur and Walter Davidson, quits his job as tool foreman for the Milwaukee Road railroad and joins the Motor Company and Harley Davidson is incorporated on September 17th. The stock is split four ways between the four founders, and staff size has more than doubled from the previous years to eighteen employees. Factory size is doubled as well. Dealer recruitment begins, targeting a lot of regions in America. Harley Davidsons had a quick growth and was not blocked until the great depression when their production had a 80 percent decline. In spite of this during the First and Second Word Wars, Harley Davidson not only recovered completely due to the huge militaries demand for HD motorcycles but they gained a huge competition advantage on the market. In the early years of Harley Davidson existence, the only competition was a company named Indian Motorcycle but it went out of business in 1953, fact that gave HD a great advantage. This being said we can see that they nearly had no completion, but things were about to change when the Japanese company Honda entered the market in 1960 in both car and motorcycle market segments. All through the 60 Honda products gain more and more popularity due to low priced products and suddenly the 100% pure American Harley is in big trouble. More over Harley Davidson had a production model, which caused many performance/handling issues, fact that caused low customer satisfaction and also instability in sales of HD. In 1969, American Machine and Foundry bought the company and hired lower skilled workers to increased production from 15,475 units in 1969 to 70,000 units in 1973. Even so price/quality was unsatisfying for American customers that rather chose Honda. The real turnaround for HD starts in 1975 when Vaughn Beals becomes CEO of HD. Beals understood the need for a big change and developed a 10-year product strategy along with

his managers and engineers. In 1981, AMF sold the company to a group of thirteen investors led by Vaughn Beals and Willie G. Davidson for $80 million. Inventory was strictly controlled using the just-in-time system. In the early eighties, Harley-Davidson claimed that Japanese manufacturers were importing motorcycles into the US in such volume as to harm or threaten to harm domestic producers. After an investigation by the US International Trade Commission, President Reagan imposed in 1983 a 45% tariff on imported bikes and bikes over 700 cc engine capacity. Harley Davidson subsequently rejected offers of assistance from Japanese motorcycle makers.[45] Rather than trying to match the Japanese, the new management deliberately exploited the "retro" appeal of the machines, building motorcycles that deliberately adopted the look and feel of their earlier machines and the subsequent customizations of owners of that era. Many components such as brakes, forks, shocks, carburetors, electrics and wheels were outsourced from foreign manufacturers and quality increased, technical improvements were made, and buyers slowly returned.