Harley Having to Answer for Yet Another Recall

For every automotive manufacturer, recalls will happen. Each one is an opportunity for effective, ineffective, or disastrous public relations. Most people will remember the GM consumer PR disaster in which the company held off on recalling parts that some later reported they knew could be defective. Those defects caused deaths and proved to be a major PR scandal for the company.

Then there was the Takata airbag PR nightmare, in which it was shown that the life-saving devices may be defective on many different models across a variety of different manufacturers. The scandal rocked the company, causing serious, permanent ramifications.

In each instance, how the company responded to the PR challenge influenced the outcome of that recall issue. And that brings us to Harley Davidson. The premier motorcycle manufacturer in the United States, Harley is one of a very few elite brands that has managed to connect its company directly to the spirit of “Americana.”

That loyalty is being tested in recent weeks, as the company has been forced to issue two recalls that affect hundreds of thousands of bikes.

Just this past week, Harley Davidson issued a recall for 178,000 motorcycles due to a faulty clutch issue, which, the company announced, could cause the bikes to stay in gear, leading to potential traffic crashes. This particular recall came just one week after a very similar recall in which Harley announced it would need to check or repair more than 238,000 motorcycles worldwide, due to a clutch issue.

Taken together, the company anticipates a net loss of up to $35 million in the current fiscal quarter, which is bad news for management and investors. Worse news, though, is the PR impact of what is now the fourth clutch-related recall in the past five years. Harley riders are a tough, discerning group, but no one wants to have their bike in the shop once a year for four or five years running, especially for the same problem.

What may be worse, though, is the nature of the problem. For Harley riders, a faulty clutch could, potentially, create a fatal accident, so, when they know that’s the potential, they’re not going to be riding. So, for as long as the recall takes to manage, hundreds of thousands of “proud” Harley owners are going to be “aggravated and inconvenienced” Harley owners… whose bikes are sitting in the garage collecting dust. And, let’s not forget, this is the fourth time in five years.

In response to the issue, Harley Davidson CFO John Olin held a conference call with market analysts that was reported on by national media. During the call, he said: “We, along with our dealers, are committed to addressing this issue. The safety of our riders is our highest priority…”

In answer to that message, legions of Harley riders offered this: “Then fix it already!”

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