German-born Jochen Zeitz has been named as the new CEO and president of iconic American motorcycle company Harley-Davidson.
Jochen was appointed interim CEO after former boss Matt Levatich was sacked in February.
“During this extraordinary time of crisis my first priority is the well-being of our H-D community as I execute our COVID-19 response plan efforts to stabilise the business, resume operations, and recover,” he says in a press statement.
“I am also leading a necessary and comprehensive overhaul of the company structure, operating model, and strategy as we adjust to the new post COVID-19 realities.”
During the recent quarterly results, Jochen also spelt out his five-year plan, which he called “Rewire”.
It includes concentrating on “profitable iconic heritage bikes” while committing to branching out to adventure touring, the new Streetfighter range and electric motorcycles.
The 57-year-old has a long corporate history including 18 years as boss of German sporting goods company Puma.
Apart from Harley, he has served on several boards including luxury goods company Kering, holding company Cranemere and the Kenya Wildlife Service.
Jochen also founded the Zeitz Foundation to support sustainable solutions that balance conservation, community, culture and commerce.
Jochen spells out Rewire strategy
But we are more interested in his plans fr Harley which he recently spelt out in his five-year Rewire strategy to “expand beyond traditional products and markets”.
However, he will continue with the More Roads strategy introduced by Matt to train more new riders and introduce 100 new models in 10 years.
They include the electric LiveWire and other electric products, plus the Pan America Adventure model and the Streetfighter and Custom range all with water-cooled Revolution Max engines.
However, Jochen says they have “over-indexed on new riders and new market growth and lost focus on critical profit sources”.
“We made progress with our product line and to some degree our customer base, but profit is lagging and our expectations are unreasonable, especially given the economic environment that we are likely to encounter, as the COVID-19 ripple effect would likely be with us for some time,” he says.
He is calling for the More Roads strategy to be “reassessed”.
His Rewire strategy is his “playbook for the next few months, leading to a new five-year strategic plan which we’ll share when visibility to the future returns”.
To implement the plan he has launched an internal management restructure and established a CEO Roundtable of “select dealers and former Harley-Davidson leaders”.
The Rewire part 1
The first part of the new strategy is to “enhance our core strength and better balance expansion into new spaces”.
We expect that means more traditional cruisers and tourers with some easing of new products in new areas such as adventure touring.
Hardcore Harley fans should be happy, although many will just want Harley to bring back the V-Rod and Dyna.
He doesn’t make any commitment to a return of those models but says “we’ll expand our profitable iconic heritage bikes to excite our existing customers”.
“We also remain committed to adventure touring, Streetfighter and advancing our efforts in electric,” he says.
The Rewire part 2
The second part of the strategy is to concentrate on “markets, products and customers that offer the most profit and potential”.
While that includes domestic sales, Harley will “narrow our focus, time and energy in the most critical countries and market segment that can move the needle for us today”.
We don’t expect that to mean any winding back of the throttle in traditional markets such as Australia, New Zealand and Europe.
However, the difficult market of China may be one that suffers as they “simplify the market coverage model and take costs out of the process”.
The Rewire part 3
The third part of the strategy is to change timing for the launch of new models.
Harley has traditionally launched its new range in August at the global dealer meeting with maybe one or two mid-year model releases in February/March.
That always seemed strange given August is near the end of the northern hemisphere riding season.
Jochen says they will “reset” new product launches “for the first time in our recent history to align with the start of the riding season”.