Pedal to the Metal

This is a partial transcript from "Your World with Neil Cavuto", January 21, 2004, that was edited for clarity.

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NEIL CAVUTO, HOST: Higher sales for Harley-Davidson, the motorcycle manufacturer, is riding forward after its 100th anniversary celebration last year, beating Street estimates by two cents.

Joining us now from Milwaukee is Jeffrey Bleustein, the Harley- Davidson chairman and CEO.

Jeffrey, good to have you. Thank you for coming.

JEFFREY BLEUSTEIN, HARLEY-DAVIDSON CEO (HDI): Good to be here.

CAVUTO: Let me ask you, Jeff, a little on the earnings themselves, you have set apart a pretty ambitious schedule for how many motorcycles you’re going to be able to churn out in the next couple of years, with the idea by 2007, 400,000 of them. That would be a better than eight percent annual clip, when the auto industry would die for those kind of numbers. Do you stand by that?

BLEUSTEIN: Yes, we are feeling confident in those numbers, and you need to be confident to be talking out there and setting goals four or five years out in the future. But what we are projecting is a continuation of a very long-term trend, underlying growth rate for Harley-Davidson sales. We have actually been growing faster than that for many, many years due to some special circumstances, such as our 100th anniversary and the stock market bubble, and the wealth effect that got a lot of new people into buying big toys. And we feel very confident in that underlying rate.

CAVUTO: Do you follow the success of the auto industry? In other words, as it goes, so you go?

BLEUSTEIN: No. I think we are very different from the automobile industry. I mean, we both have engines, they have twice as many wheels, but we have much more appeal, I think, to people interested in enjoying their life. You don’t have to have a motorcycle. People buy them because they want them.

CAVUTO: You know, one thing interesting that you have done is you have resisted the temptation on a lot of part of managers to ship a lot of your production facilities abroad. In fact, you’re going to boost them in Wisconsin. You know it would be a lot cheaper for to you do so elsewhere. Why are you still in the USA?.

BLEUSTEIN: Well, we believe that the USA can be competitive around the world. I think you have to have good products, you have to have a great ethic in your workforce, you have to do the right things for your customers. And I think if we focus on those things we can compete around the world.

CAVUTO: Do you plan to stick by that? Because I’m sure there are bean counters who approach you, Jeff, at the company, and say, you know, if we just move a little bit south of the border, it would be pay-dirt time.

BLEUSTEIN: Well, I think we certainly have heard that. And there are a lot of people who are doing that and chasing cheap labor around the world. But that is not our game.

We make a high-quality product. The value that our customers perceive in it is much more than just the sum total of the labor hours and the metal that goes into it. They have a whole experience surrounding that motorcycle.

So, yes, we need to charge a little bit more for that product than we would if we were making it someplace else around the world. On the other hand, our customers seem to appreciate the added value that they get, and the quality and the work ethic and the passion that our employees have put into that product is appreciated by our customers.

CAVUTO: Jeff Bleustein, thank you very much in Milwaukee, the Harley-Davidson chairman.

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