President and CEO Matthew Levatich Steps Down; Board of Directors Appoints Board Member Jochen Zeitz as Acting President and CEO
MILWAUKEE (February 28, 2020) – Harley-Davidson, Inc. (“Harley-Davidson”) (NYSE:HOG) today announced that Matthew Levatich has stepped down as President and CEO and as a member of the Board of Directors. The Board of Directors has appointed current Board member Jochen Zeitz as Acting President and CEO. A committee of the Board will be formed, and the Company will utilize an external search firm to undertake a search for a new CEO, and a further announcement will be made at a later date. Levatich will assist with the transition through the end of March.
As part of this leadership change, Jochen Zeitz has also been named Chairman of the Board and will remain Chairman once a new CEO is appointed. Current Chairman of the Board, Michael Cave, is now Presiding Director.
Zeitz said, “The Board and Matt mutually agreed that now is the time for new leadership at Harley-Davidson. Matt was instrumental in defining the More Roads to Harley-Davidson accelerated plan for growth, and we will look to new leadership to recharge our business. On behalf of the Board, I would like to thank Matt for his 26 years of service to Harley-Davidson. He has worked tirelessly to navigate the Company through a period of significant industry change while ensuring the preservation of one of the most iconic brands in the world.”
“The Harley-Davidson Board and leadership team will continue to work closely together as we search for a new CEO. We have confidence that our combined leadership experience and deep understanding of Harley-Davidson will ensure an effective transition. As a passionate Board Member of Harley-Davidson, I look forward to continuing to work with my colleagues and other Harley-Davidson stakeholders to advance and deliver the Company’s strategy and execution during this important time,” Zeitz continued.
Levatich said, “I am very fortunate to have spent many years with a company as revered as Harley-Davidson. The grit and determination of the employees and dealers and their passion for bringing our brand of freedom to people around the world has always been inspiring. I am proud of what we have achieved during my time as CEO, in one of the most challenging periods in our history, and I am confident that the progress we have made on the More Roads plan will position Harley-Davidson for long-term success.”
Jochen Zeitz has been a member of the Harley-Davidson Board of Directors since 2007 and established the Company’s Brand and Sustainability Committee. He served as Chairman and CEO of the sporting goods company PUMA from 1993 to 2011. He was also PUMA’s CFO from 1993 to 2005. Zeitz served as a director of luxury goods company Kering (formerly PPR) from 2012 to 2016. He was a member of Kering’s Executive Committee and CEO of its Sport & Lifestyle division from 2010 to 2012. Zeitz is also a Board Member of the Cranemere Group Limited and is on the Board of The B Team which he co-founded with Sir Richard Branson.
Harley-Davidson, Inc. is the parent company of Harley-Davidson Motor Company and Harley-Davidson Financial Services. Since 1903, Harley-Davidson has fulfilled dreams of personal freedom with an expanding range of leading-edge, distinctive and customizable motorcycles in addition to riding experiences and exceptional motorcycle accessories, riding gear and apparel. Harley-Davidson Financial Services provides financing, insurance and other programs to help get Harley-Davidson riders on the road. Learn more about how Harley-Davidson is Building the Next Generation of Riders at www.harley-davidson.com.
The company intends that certain matters discussed in this release are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as the company “believes,” “anticipates,” “expects,” “plans,” “may,” “will,” “estimates,” “is on-track” or words of similar meaning. Similarly, statements that describe or refer to future expectations, future plans, strategies, objectives, outlooks, targets, guidance, commitments, or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially, unfavorably or favorably, from those anticipated as of the date of this release. Certain of such risks and uncertainties are described below. Shareholders, potential investors, and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this release are only made as of the date of this release, and the company disclaims any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
The company’s ability to meet the targets and expectations noted above depends upon, among other factors, the company’s ability to: (i) execute its business plans and strategies, including the elements of the More Roads to Harley-Davidson accelerated plan for growth that the company disclosed on July 30, 2018 and updated September 24, 2019, and strengthen its existing business while enabling growth; (ii) manage and predict the impact that new or adjusted tariffs may have on the company’s ability to sell products internationally, and the cost of raw materials and components; (iii) execute its strategy of growing ridership, globally; (iv) successfully carry out its global manufacturing and assembly operations; (v) accurately analyze, predict and react to changing market conditions and successfully adjust to shifting global consumer needs and interests; (vi) develop and maintain a productive relationship with Zhejiang Qianjiang Motorcycle Co., Ltd. and launch related products in a timely manner; (vii) develop and introduce products, services and experiences on a timely basis that the market accepts, that enable the company to generate desired sales levels and that provide the desired financial returns; (viii) perform in a manner that enables the company to benefit from market opportunities while competing against existing and new competitors; (ix) realize expectations concerning market demand for electric models, which will depend in part on the building of necessary infrastructure; (x) prevent, detect, and remediate any issues with its motorcycles or any issues associated with the manufacturing processes to avoid delays in new model launches, recall campaigns, regulatory agency investigations, increased warranty costs or litigation and adverse effects on its reputation and brand strength, and carry out any product programs or recalls within expected costs and timing; (xi) manage supply chain issues, including quality issues and any unexpected interruptions or price increases caused by raw material shortages or natural disasters; (xii) manage the impact that prices for and supply of used motorcycles may have on its business, including on retail sales of new motorcycles; (xiii) reduce other costs to offset costs of the More Roads to Harley-Davidson plan and redirect capital without adversely affecting its existing business; (xiv) balance production volumes for its new motorcycles with consumer demand; (xv) manage risks that arise through expanding international manufacturing, operations and sales; (xvi) manage through changes in general economic and business conditions, including changing capital, credit and retail markets, and the changing political environment; (xvii) successfully determine, implement on a timely basis, and maintain a manner in which to sell motorcycles in the European Union, China, and ASEAN countries that does not subject its motorcycles to incremental tariffs; (xviii) accurately estimate and adjust to fluctuations in foreign currency exchange rates, interest rates and commodity prices; (xix) continue to develop the capabilities of its distributors and dealers, effectively implement changes relating to its dealers and distribution methods and manage the risks that its independent dealers may have difficulty obtaining capital and managing through changing economic conditions and consumer demand; (xx) retain and attract talented employees; (xxi) prevent a cybersecurity breach involving consumer, employee, dealer, supplier, or company data and respond to evolving regulatory requirements regarding data security; (xxii) manage the credit quality, the loan servicing and collection activities, and the recovery rates of HDFS’ loan portfolio; (xxiii) adjust to tax reform, healthcare inflation and reform and pension reform, and successfully estimate the impact of any such reform on the company’s business; (xxiv) manage through the effects inconsistent and unpredictable weather patterns may have on retail sales of motorcycles; (xxv) implement and manage enterprise-wide information technology systems, including systems at its manufacturing facilities; (xxvi) manage changes and prepare for requirements in legislative and regulatory environments for its products, services and operations; (xxvii) manage its exposure to product liability claims and commercial or contractual disputes; (xxviii) successfully access the capital and/or credit markets on terms (including interest rates) that are acceptable to the company and within its expectations; (xxix) manage its Thailand corporate and manufacturing operation in a manner that allows the company to avail itself of preferential free trade agreements and duty rates, and sufficiently lower prices of its motorcycles in certain markets; (xxx) continue to manage the relationships and agreements that the company has with its labor unions to help drive long-term competitiveness; (xxxi) accurately predict the margins of its Motorcycles and Related Products segment in light of, among other things, tariffs, the cost associated with the More Roads to Harley-Davidson plan, the company’s Manufacturing Optimization Plan, and the company’s complex global supply chain; and (xxxii) successfully launch a smaller displacement motorcycle in India.
The company’s operations and/or demand for its products could be adversely impacted by work stoppages, strikes, natural causes, widespread infectious disease, terrorism, or other factors. Other factors are described in risk factors that the company has disclosed in documents previously filed with the Securities and Exchange Commission. Many of these risk factors are impacted by the current changing capital, credit and retail markets and the company’s ability to manage through inconsistent economic conditions.
The company’s ability to sell its motorcycles and related products and services and to meet its financial expectations also depends on the ability of the company’s independent dealers to sell its motorcycles and related products and services to retail customers. The company depends on the capability and financial capacity of its independent dealers to develop and implement effective retail sales plans to create demand for the motorcycles and related products and services they purchase from the company. In addition, the company’s independent dealers and distributors may experience difficulties in operating their businesses and selling Harley-Davidson motorcycles and related products and services as a result of weather, economic conditions or other factors. In recent years, HDFS has experienced historically low levels of retail credit losses, but there is no assurance that this will continue. The company believes that HDFS’ retail credit losses may increase over time due to changing consumer credit behavior and HDFS’ efforts to increase prudently structured loan approvals to sub-prime borrowers, as well as actions that the company has taken and could take that impact motorcycle values. Refer to “Risk Factors” under Item 1A of the company’s Annual Report on Form 10-K for the year ended December 31, 2019 for a discussion of additional risk factors and a more complete discussion of some of the cautionary statements noted above.