Harley-Davidson investor wants the firm to go back to its roots

Impala Asset Management thinks that Harley-Davidson should focus on its core customers

Harley-Davidson sportsbike VR1000 Cafe Racer

IT’S been a tough couple of months at the head of the US motorcycle industry, especially if you happen to be in the boardroom at Harley-Davidson.

With long-time employee and Harley-Davidson stalwart worker Matt Lavatich stepping down as CEO earlier this year, what then ensued was a bit of a tug of war over who should land the top job at America’s most famous motorcycle factory.

It’s a common enough occurrence, although some of the information that’s come to light since the boardroom tussle that proves to us, that Harley-Davidson was right to ignore Impala Asset Management’s advances in who they wanted to run the firm.

If you don’t know about the H-D proxy battle, you can read the full story here, but here’s the abridged version.

After Harley-Davidson’s CEO Matt Lavatich stepped down earlier this year, Impala Asset Management (who owns around a 2% share in the brand) pushed to get their favoured choice of directors into the top job.

Since then, the two parties have come to an agreement on who is going to run the company and have mutually settled on a new director.

It is though one phrase in a statement regarding the ongoing issues though which is really quite baffling. It relates to Impala’s stance on the CEO and also the direction they felt the company should be travelling in.

A statement from H-D reads:

“Impala, which owns roughly 2% of Harley’s stock, nominated two directors two weeks ago as the $2.8 billion hedge fund wanted the iconic American brand to return to its roots after focusing on electric motorcycles and concentrate on its core riders.”

So, Impala’s idea was to forget about trying to attract younger, more tech-savvy riders and focus on selling bikes to their existing, aging and shrinking pool of customers.

Impala state that Harley had for too long been in slow decline and that the board was to slow to react to the sliding share price of the iconic brand.

Do you agree with Harley-Davidson’s response to the downturn in sales, or should they ditch the electric bikes and stick to the gas-guzzling V-twins and leather chaps?

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