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Public Relations Case Study: Investor Relations and Community Relations at Harley-Davidson Motor Company

Author: Yvonne N. Bush

Abstract

Harley-Davidson Motor Company is a publicly traded company that leads the industry in

the manufacturing of American heavy-weight motorcycles, motorcycle parts, accessories and

merchandise (Harley-Davidson Motor Company). For the past 110 years, Harley-Davidson

Motor Company has strived to do more than just building and selling motorcycles, but to also

fulfill the dreams of its customers through unforgettable experiences (Harley-Davidson Motor

Company).

This research will examine Harley-Davidson Motor Company’s public relations practices

in consumer relations with an emphasis on investor relations. The investigation focuses on

public relations practices within Harley-Davidson, how those practices compare to other leading

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motorcycle manufactures, how the company can improve in consumer and investor relations

and its ethical standards.

In-depth research was carried out through the use of Harley-Davidson Motor Company,

Honda, The Wall Street Journal and The New York Time’s websites, with a focus in investor

relations, stock quotes, annual reports, quarterly earnings and press releases.

The ethics of Harley-Davidson Motor Company were assessed using the Public Relations

Society of America’s Code of Ethics, which outlines ethical guidelines for all public relations

practices and professionals.

Results of the researched showed that the Harley-Davidson Motor Company practices

investor and consumer relations in an ethical manner which is supported by a sufficient amount

of correlating evidence. Although improvements can be made between linking investor and

consumer relations together to provide maximal investor opportunities, Harley-Davidson Motor

Company provides accurate, timely financial information to its financial community, everyday

investors and specialized and mass media.

Background

Harley-Davidson Motor Companyis full of rich history that encompasses over 110 years

of commitment, loyalty and devotion from the founders, the investors and the community. The

motor company all began with a drawing in 1901. At 21-years-old, William S. Harley completed

a blueprint for an engine that was designed to fit inside a bicycle (Gardiner, M.). In 1903, Harley

was joined by Arthur Davidson and together they produced the first Harley-Davidson model.

With the assistance of Ole Evinrude, the trio was able to create a more powerful motor and in

1904, the first Harley-Davidson dealer, C.H. Lang of Chicago, opened for production (Gardiner,

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M.). Throughout the next two years, the company expanded business by developing a bigger

factory, acquiring six employees and producing its first catalog. In 1907, William A. Davidson

united with the firm and Harley-Davidson Motor Company is incorporated, with stock shared by

Harley and the three Davidson brothers, Arthur, Walter and William (Gardiner, M.). Three years

later, the city of Detroit made the first purchase of Harley-Davidson motorcycles for law

enforcement use. The famous ‘Bar and Shield’ logo was introduced in 1910 and was

trademarked one year later. By 1912, the company had over 200 dealers across the United

States (Gardiner, M.).

By 1920, Harley-Davidson Motor Company had enlarged to become the largest

motorcycle manufacturer. The company continued to add competition to the market

throughout the next ten years with releases of new models, better engines and sleeker designs.

When the stock market crashed and the Great Depression set in, Harley-Davidson would be one

of a handful of motorcycle companies to survive and continue production (Gardiner, M.).

Within the next 14 years, three of the founding members die and all civilian manufacturing is

halted due to the United States entering World War II. In between 1941-1945, the company

produced almost 90,000 motorcycles for exclusive military use (Gardiner, M.).

In 1969, Harley-Davidson shareholders sold the company to the American Machine and

Foundry Company, and throughout the next 11 years, Harley-Davidson’s production, product

quality, profit and customer loyalty decreased until Vaughn Beals and other senior

management constituents purchased the company (Gardiner, M.). Under new direction, Harley-

Davidson’s sales, quality and customers returned. Since 1981, Harley-Davidson created the

Harley Owners Group, returned to public ownership in 1986 while making its Initial Public

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Offering, opened a factory overseas, revealed its first museum, as well as celebrated its 110th

anniversary in 2012.

Investor and Consumer Relations

This research initially began with an investigation on how Harley-Davidson Motor

Company strives to retain previous investors, as well as gain new ones with the current

struggling economic status. However, like numerous areas of public relations many aspects of a

corporation support and rely on other elements to achieve success therefore this research will

also provide some brief insight in Harley-Davidson’s consumer relations.

Harley-Davidson Motor Company’s investor relations were initiated in 1907 when the

company was incorporated. The stock was shared between William S. Harley and the three

Davidson brothers, Arthur, Walter and William. In 1965, the privately held family ownership

ended with the first public stock offering. Four years later a merger with American Machine and

Foundry (AMF) occurs and in 1981, 13 members of Harley-Davidson’s senior management

purchased the company from AMF in a buyout and the implementation of higher quality

management and manufacturing techniques (Harley-Davidson Motor Company). In 1986, the

company returned to public ownership on the New York Stock Exchange, with the symbol HOG

(Gardiner, M.). Stock began trading at $11 per share at its Initial Public Offering. Since then,

Harley-Davidson has grown into a corporation with more than 1,300 dealerships in more than

60 countries worldwide (Harley-Davidson Motor Company).

Harley-Davidson connects to its current and potential investors primarily through

controlled media of its website, harley-davidson.com. Through simple navigational tools of

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banners and tabs, Harley-Davidson outlines and offers an array of information for its financial

community, everyday investors, and specialized and mass medias on its website. In the

‘Company’ tab, Harley-Davidson offers its latest news, stock quote, 2011 annual report,

sustainability strategy reports along with vital company information.

Under the ‘Investor Relations’ tab, the company provides more detailed insight into an

assortment of areas such as company overview which encompasses motorcycle shipments,

demographics, motorcycle registrations and dealer networks; stock information with dividends

and stock splits, analyst and fundamentals; U.S. Securities and Exchange Commission (SEC)

filings and reports, both annually and quarterly; financial news; events and presentations;

corporate governance; and finally shareholder information which includes a fact book, tear

sheet, online investor kit, information requests, email alerts, and investor relations contacts.

The company achieves its goal by providing its publics with accurate and timely financial

information in a manner that many individuals and companies can interpret and understand.

The company achieves this by providing an interactive form of the annual reports, the use of

charts and graphs to relay information in a more visual manner, news releases and links that

connect its investors to webcast conference calls that discuss earnings and other financial news.

Not only is all the information and records about the company made available to its

financial community, everyday investors, and media, but also to all its consumers and

community members. In regards to consumer relations, Harley-Davidson provides this

information since consumers make spending decisions on more than just the merchandise, but

also how the company stands financially. By choosing to be straightforward with customers and

consumers, it differentiates Harley-Davidson from other motorcycles manufactures and impacts

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this specific public attitudinally by creating positive outlooks among consumers about the

company’s values, ethics and reliability.

Harley-Davidson, Inc. vs. Honda Powersports

This section will examine the similarities and differences within investor relations of

Harley-Davidson Motor Company and Honda Powersports. Honda Powersports is a division of

Honda Motor Co., Ltd., one of the world’s leading automakers (Honda Worldwide | Investor

Relations). Honda Powersports manufactures street and off-road motorcycles, all terrain

vehicles, scooters and accessories. At powersports.honda.com there is no direct link to any

information regarding investor or consumer relations. For an investor or potential investor to

locate Honda Powersports financial information, they’ll need to redirect themselves to

world.honda.com, where there is an accessible investor relations tab.

Like Harley-Davidson Motor Company’s webpage, Honda also offers the financial

community and media an array of information. Honda provides various sections which investors

can explore, such as, investor relations, management policy, financial data, stock and bond

information, investor relations library, and investor relations calendar. Also similar to the

investor relations of Harley-Davidson, Honda shares its annual report, third quarter findings,

stock information, fact sheets and presentations. (Honda Worldwide|Investor Relations.)

A common asset between each company is the frequently asked questions sections,

which is a great tool in assisting current and potential investors to valuable information in a

quick manner. Both companies outline questions that many investors have had in the past or

could potentially have. With one click, it links the user to the best suited answer.

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Some differences between each investor relations program is that unlike Harley-

Davidson, Honda also trades on the Tokyo Stock Exchange, along with the New York Stock

Exchange, due to the fact that Honda is a corporation that was founded and is based in Tokyo,

Japan. Also, within Honda’s investor relations page, there is a message from the CEO, Takanobu

Ito, addressed to the shareholders. The message concentrates on a brief break down of the

company’s motorcycle, automobile and power product businesses. (Honda Worldwide|Investor

Relations.) Honda attempts to provide its investors and potential investors with insight to the

company’s financial standing at a quick glance.

Evaluation of Public Relations Practices

Harley-Davidson Motor Company is a publicly traded company. When it comes to

investor relations, some possible challenges that a large corporation can face is the tendency to

feel impersonal to targeted publics and how targeted publics interpret and handle performance

changes overtime, especially in a struggling economy. Harley-Davidson takes action to target

each public in an effective manner that makes the act of investing seem not so daunting to the

“average Joe”. Harley-Davidson provides its potential and current investors with all the

information necessary to either get started as an investor or to stay up-to-date with preexisting

ventures.

In no way does Harley-Davidson try to hide information, especially regarding investor

relations. If the company is not excelling in certain areas, it informs its publics of that

information. The company will also state what its plan is to boost those areas that are currently

in a downfall and will discuss what may be causing the undesirable result. This helps the public

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interpret these changes within the company, how situations are being handled and also how

the situations can be improved. The company provides all of its publics with precise financial

information in a timely manner. The material is presented in a variety of ways; therefore it’s

easy for publics to comprehend.

One reason why Harley-Davidson is effective in investor relations is due to its use of

tactics in the form of controlled and uncontrolled media. The website links the financial

community and investors to press releases, annual reports, quarterly financial statements,

teleconferences and webcasts and shareholder events.

Another outstanding feature of Harley-Davidson’s investor relations, especially in

regards to the website, is how easy it is to find information that is being searched for. The

website is very well organized and breaks down potential points of interest into smaller, more

digestible segments. If an investor wants to look into results and statistics on how effective

Harley-Davidson is reaching different demographics, that information is easily available. If there

is an investment beginner, the online investor kit links that beginner with all the tools to

assemble their own investor kit by selecting documents to be printed or sent to them,

personally. It also connects the beginner to RSS feed, email alerts and news releases.

Harley-Davidson investor relations are also assessed through other companies such as

The New York Times. The New York Times outlines Harley-Davidson’s investments through stock

snapshot, key fundamentals, quarterly earnings and analyst ratings (Harley-Davidson, Inc. News

- The New York Times). The stock snapshot shows the price of the stock when it last opened

and closed, the 52-week highs and lows, market capitalization and average volume. The key

fundamentals show potential investors the revenue, profit margin and return on equity.

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Similar to The New York Times, Market Watch by The Wall Street Journal summarizes

Harley-Davidson’s investor relations news, charts, financials, historical quotes, analysts’

estimates and SEC filings (Harley-Davidson Inc., HOG Stock Quote). Each stock analysis website

shares Harley-Davidson press releases, which links the financial community back to Harley’s

investor relations webpage.

Improvements to Public Relations Practices

One point of improvement that could be made within Harley-Davidson Motor Company

investor relations is to showcase to investors, the financial community and media that the

company also has a non-profit foundation that focuses on giving back. The mission of The

Harley-Davidson Foundation is “to meet the basic needs of the communities where we work,

improve the lives of our stakeholders and encourage social responsibility. We pursue

partnerships with charitable organizations that help us invest in education, health and the

environment” (The Harley-Davidson Foundation). Even though the investors are investing in

Harley-Davidson Motor Company and not The Harley-Davidson Foundation, I think it is

important to show investors that this company is not just an impersonal corporation, but it also

cares about its community, its stakeholders and it wants to improve its relationships through a

variety of partnerships. If Harley-Davidson Motor Company does not want to showcase the

foundation because it does do directly correlate with the investors and the company, it needs

to highlight the company’s profile and assets within other community relations programs.

Harley-Davidson has been associated with the armed forces since the early 1900’s. One

community relations program the Harley-Davidson has invested over $2 million in, is the

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Helping Heroes Move Onward campaign (Harley’s Heroes® & DAV). This campaign provides

counseling and assistance to veterans and their families since 2007 (Harley’s Heroes® & DAV).

Before this research was conducted, I had never heard of this campaign. When Harley-Davidson

highlights certain community relations programs, such as Helping Heroes Move Onward, it also

shows investors that Harley-Davidson connects to all different public relations communities. It

also shows that the company reaches-out to veterans, in this particular example, invites those

veterans to partake in activities that support themselves and their families, as well as create

awareness to others.

When an organization is active within its community by having continuing participation,

the maintaining of relationships and well as enhancing the environment becomes easier. The

benefits of community relations programs reflect back on the corporation and the community.

Community members can become investors, which it why it is important for Harley-Davidson to

focus on its community relations just as much as all its other public relations practices.

Harley-Davidson could also put more emphasis on its consumer relations. Consumers

have the immense potential to become investors as well. It appears that many consumers do

not know about the opportunities and the value of investing within Harley-Davidson. Yes,

Harley-Davidson does provide all the necessary tools to its publics on how to become an

investor, but just because it provides the information does not mean that people will read it

and take action. Harley-Davidson also needs to promote its corporation and its value through

consumers.

The final thing that Harley-Davidson could do to tie together its investor, community

and consumer relations is to create a Harley-Davidson Motor Company investor relations app

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for the expanding digital age. An app allows all communities to stay up-to-date on the

investment and financial news within the company. This could potentially lead to more

investors.

In the comparison with Honda Powersports, I think that Honda should just eliminate

that particular webpage. It provides no vital insight into the company, its practices or values. All

the information that is examined on the Honda Powersport page is also on the homepage of

Honda’s website. In regards to investor relations, I think Honda could also make some

improvements there as well. Honda provides all the necessary information for a potential

investor; however the investor relations section of website can seem very overwhelming, at

first glance. Improvements can be made by better organizing the information in a more

manageable fashion. At times, it was difficult to track down certain documents or records.

Compliance to the Public Relation Society of America Code of Ethics

This section will analyze Harley-Davidson Motor Company’s compliance to the Public

Relations Society of America’s (PRSA) code of ethics. PRSA is dedicated to practicing in an

ethical manner and seeks members who uphold PRSA standards and ethical conduct

(Communications Professionals: Public Relations Society of America (PRSA)).

Professional Values: Advocacy, Honesty, Expertise, Independence, Loyalty and

Fairness.

Harley-Davidson, Inc. Strives to adhere to the PRSA code of ethics and practice business

in an ethical manner. Harley-Davidson displays honesty, loyalty and fairness by allowing its

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financial information to be accessible to all publics. Harley-Davidson also shows this by offering

its code of business conduct in eight different languages.

When examined, Harley-Davidson’s code of conduct elaborates on communication,

compliance with laws, confidential information and intellectual property, conflict of interest,

environmental responsibilities, fair dealing, fair employment, fraud and misrepresentation,

government, insider trading and full disclosure, privacy and work environment. Harley-Davidson

upholds the highest standard for its company, its employees and ethical conduct.

Provisions of Conduct: Free Flow of Information, Competition, Disclosure of

Information, Safeguarding Confidences, Conflicts of Interest and Enhancing the Profession.

Along with discussing points such as conflict of interest and disclosure of information in

the code of business conduct, Harley-Davidson also provides documents about corporate

governance policy, conflicts of interest process, financial code of ethics, bylaws and other vital

documents.

Harley-Davidson has been practicing ethical standards for the past 110 years. As the

company, its assets and investments have grown, so have the expectations in conducting

ethical business. Harley-Davidson does not withhold information from its publics; therefore it

exemplifies honesty, integrity and loyalty in the utmost manner. It is a company that advocates

the motorcycle industry and not only does Harley-Davidson promote its own product it also

links users with motorcycle safety that is uniform within all motorcycle styles. Harley-Davidson

is honest to its investors, community, consumers and all other publics by providing information

in a truthful, sincere and direct way through controlled and uncontrolled media in their investor

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relations practices. The Harley-Davidson Motor Company is an example of an established

corporation that is a good investment that is financially secure, profitable, well-managed and

ethical, especially within investor relations.

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References

Gardiner, M. (n.d.).Harley-davidson Motorcycle History: History of Harley-davidson.

Motorcycle Reviews, Videos, Prices and Used Motorcycles. Retrieved November 25, 2012, from

http://www.motorcycle.com/manufacturer/history-harley-davidson-motorcycle.html

Harley-Davidson Inc., HOG Stock Quote - (NYSE) HOG, Harley-Davidson Inc. Stock Price.

(n.d.).MarketWatch - Stock Market Quotes, Business News, Financial News. Retrieved

October 22, 2012, from http://www.marketwatch.com/investing/stock/hog

Harley-Davidson, Inc. News - The New York Times.(n.d.).Times Topics - The New York Times.

Retrieved October 22, 2012, from

http://topics.nytimes.com/top/news/business/companies/harleydavidson_inc/index.h

ml

Harley-Davidson Motor Company. (n.d.).Shareholder . Retrieved November 25, 2012,

from files.shareholder.com/downloads/HDI/0x0x329002/fe33c217-5914-4dc1-ae6d-

44374a5806c9/bckgrdr.pdf

Harley’s Heroes® & DAV | American Veterans.(n.d.).Harley-Davidson USA | Harley-

Davidson USA. Retrieved November 25, 2012, from http://www.harley-

davidson.com/en_US/Content/Pages/Veterans/harleys-heroes.html

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Honda Powersports - Motorcycles, ATVs, Scooters, Watercraft.(n.d.).Honda Powersports

- Motorcycles, ATVs, Scooters, Watercraft. Retrieved November 27, 2012, from

http://powersports.honda.com/

Honda Worldwide | Investor Relations.(n.d.).Honda Worldwide : Honda Motor Co.,Ltd..

Retrieved November 25, 2012, from http://world.honda.com/investors/

Public Relations Society of America (PRSA) Member Code of Ethics | Statement of

Professional Values | Code Provisions of Conduct.(n.d.).Public Relations Resources & PR Tools

for Communications Professionals: Public Relations Society of America (PRSA). Retrieved

November 29, 2012, from http://www.prsa.org/AboutPRSA/Ethics/CodeEnglish

The Harley-Davidson Foundation | Harley-Davidson USA.(n.d.).Harley-Davidson USA |

Harley-Davidson USA. Retrieved November 28, 2012, from http://www.harley-

davidson.com/en_US/Content/Pages/Foundation/foundation.html?locale=en_US&bmLocale=e

n_US