Harley Davision Analysis

Harley-Davidson: Preparing for the Next Century

Question: Which hostile takeover defense strategy that Harley Davidson used when the Harley’s profitability down after the AMF acquisition? And how did the company transform its production after buying back Harley from AMF?

During 1960s – early 1980s, Harley had suffered in its quality which reduced its standard and reputation, because Harley-Dividson was acquired by AMF (a heavy-industrial congolomate looking to diversify into leisure products) and Rodney Gott, AMF’s CEO, allowed Harley to exapand production by overlooked quality issues added less-skilled workers to production lines resulting to declinging of market share and reputation od Harley.

That resulting to the Harley’s profitability down and AMF began looking for a buyer. Vaughn Beals used “Greenmail” defense strategy which he tried to convince the Harley-Davidson managers to repurchase the company’s shares of stock with $81 million buyback price.

After buying back, company transform its production by benchmarking Honda. The senior managers visited Ohio plant in the United stated. Then Beals and his management team realized that they needed to modify the entire manufacturing system by using Japanese production methods which were (1) employee involvement (2) Just-In-Time inventory practices (3) Statistical Operator Control (SOC). As the result the inventory turnover increased from 2 to 17 a year, Productivity went up by 50%, Work in progress inventory reduced by 75%, international revenues went up by 1.7 times, operating profits increased by $59 million, market share increased by 97%, and Harley Davidson listed on New Tork Stock Exchange (NYSE).

Question: Identify the ethical behavior of Harley Davidson’s mana gers, how does it affect the company?

During the transformation under Teerlink’s leadership, Harley Davidson began to transform itself to a formal organization by emphasizing organizational and individual learning through “ Leadership...