In 1981, a group of company executives headed by chairman Vaughn Beals purchased Harley-Davidson for $85 million from AMF Inc. Their timing was dismal. Japanese producers began to flood the U.S. market with cheaper motorcycles, and Harley-Davidson was saddled with losses in 1981 and 1982.
But, HD petitioned the International Trade Commission, and requested a trade tariff on heavy weight motorcycles to allow it to compete with the Japanese. They got it and while It took a number of years to turn it around, HD not only survived, but started growing.
In 1986, Harley-Davidson became a publicly traded company. At that time the company issued 1.43 million shares of common stock and $50 million worth of 10-year subordinated notes.
But, is now the time for Harley-Davidson to return to a privately owned company?
Several times in the last few years, a report that private-equity firm KKR & Co. (NYSE: KKR) was kicking the tires on the big bike maker as it mulled a possible purchase caused the stock to jump, until both sides said there was nothing going on and the shares settled back down.
Four big reasons that Harley-Davidson should consider going private.
1. Falling Sales
2. Dubious Shipment Numbers
3. Declining market shares
4. Evaporating loan metrics
All four of these reasons are outlined in a blog post from Madison.com.