Hardley's Troubles Continue

[IdahoMtnSpyder]

Yeah, but how do you charge to 2017 expenses that will fall within the 2018 tax year to 2017? I've heard of deferring revenue and expenses to future years, but not charging 'future' expenses to the current year...would love to see a better explanation of the current charge to earnings for something that hasn't happened yet.

Accrued expenses, after all, aren't 'future' expenses but rather expenses incurred in the current period that have not yet been paid for.

Reuters says "NET INCOME AND EPS IN QUARTER ADVERSELY IMPACTED BY A $53.1 MILLION INCOME TAX CHARGE RELATED TO ENACTMENT OF 2017 TAX CUTS AND JOBS ACT"

So, again I ask - why would H-D incur a charge to earnings of $53 million because of a tax CUT? Usually tax cuts result in a reduction of expenses, not an increase.

I think you missed what I was trying to say. Say, if in 2017 and earlier HD had a bunch of chargeable expenditures that they were spreading out over several years and now had the option of bringing them forward into 2017. Those expenditures are going to reduce income regardless of what year they're charged in. If they have the option of charging them against 2017 income or against 2018 income, charging them in 2017 will reduce the higher taxed income. To do this they had to have charges that were on the books and had the option of charging them now in 2017 or later in 2018. They aren't charges that come up new in 2018. They're old charges that have not been deducted from income yet, i.e., the deferred expenses you mention above.

Tax cuts don't impact expenses since income tax is not an expense. It's more like an after the fact loss of income, turned over to the taxing authority. Income taxes affect your gain/loss of assets, not your profit & loss statement.

Don't put too much faith in literally interpreting what Reuters wrote. I think they mean "income tax related charges", i.e., charges that affect H-D earnings and hence their tax liability.

 

[JerryB]

Hi Bob,

Re: spending money in an EXTRA crazy way?

Well, one way was when I retired. I retired 30 Sep 99, it was the last day that I could get the $25k bonus for going out the door.

Pretty crazy, eh?

Jerry Baumchen

 

[Bob Denman]

You retired on my Birthday: that's worth an extra $25,000! :clap:

 

[RinconRyder]

The remark about the controls being clustered and not knowing how they worked was interesting - do they really think that's a legitimate concern when doing an "unbiased" comparison?

I really hate to agree with HD's assessment of the Spyder but that 'controls' comment I do agree with and is my 2nd or 3rd complaint on my '16 RTL. Too easy to hit the wrong button and buttons are not on logical side.

I hate driving through other rider puddles when I accidentally hit the horn instead of the starter! :dontknow:

 

[Bob Denman]

I really hate to agree with HD's assessment of the Spyder but that 'controls' comment I do agree with and is my 2nd or 3rd complaint on my '16 RTL. Too easy to hit the wrong button and buttons are not on logical side.

I hate driving through other rider puddles when I accidentally hit the horn instead of the starter! :dontknow:

But familiarity with the bike will reduce that tendency by a whole bunch! nojoke

 

[RinconRyder]

But familiarity with the bike will reduce that tendency by a whole bunch! nojoke

No disagreement but with many products, correctly designed, you don't need extended "familiarity" to operate. And this issue is not only Spyder related. I have a top of the line Hyundai Genesis which has an OEM navigation system. But instead of the logical country, city, street, number specification to set a destination it begins with a street name. I have no idea why it was engineered this way but it results in a listing of an almost unlimited number of streets all over the USA or Canada which you then have to sort through to find the correct one. Those engineers were idiots and a big reason why most people opt for aftermarket nav systems.

The only two bikes that have an abundance of handlebar mounted controls ala the Spyder are my last two Wings. It took about 2 minutes to get used to their control layout and I never hit the wrong button following my initial ride. I cannot say the same thing about the Spyder. My wife has also complained that she has to look at the controls (especially the left one) in order to find the correct button. This is not only a poor design but a safety issue. It is even worse with riding gloves.

 

[Bob Denman]

There's an easy solution: sell your bikes, and get new ones that don't require as much thought.
You shouldn't have to work so hard for your fun! :thumbup:

 

[UtahPete]

No disagreement but with many products, correctly designed, you don't need extended "familiarity" to operate. And this issue is not only Spyder related. I have a top of the line Hyundai Genesis which has an OEM navigation system. But instead of the logical country, city, street, number specification to set a destination it begins with a street name. I have no idea why it was engineered this way but it results in a listing of an almost unlimited number of streets all over the USA or Canada which you then have to sort through to find the correct one. Those engineers were idiots and a big reason why most people opt for aftermarket nav systems.

The only two bikes that have an abundance of handlebar mounted controls ala the Spyder are my last two Wings. It took about 2 minutes to get used to their control layout and I never hit the wrong button following my initial ride. I cannot say the same thing about the Spyder. My wife has also complained that she has to look at the controls (especially the left one) in order to find the correct button. This is not only a poor design but a safety issue. It is even worse with riding gloves.

I've never owned a sophisticated bike with all the handlebar mounted controls the Spyder has. So, I always thought the problem was with me in hitting the wrong button 1/2 the time for headlights, horn, turn and the like (I don't even try to use mode controls while riding). Good to know I'm not the only one.

 

[UtahPete]

I think you missed what I was trying to say. Say, if in 2017 and earlier HD had a bunch of chargeable expenditures that they were spreading out over several years and now had the option of bringing them forward into 2017. Those expenditures are going to reduce income regardless of what year they're charged in. If they have the option of charging them against 2017 income or against 2018 income, charging them in 2017 will reduce the higher taxed income. To do this they had to have charges that were on the books and had the option of charging them now in 2017 or later in 2018. They aren't charges that come up new in 2018. They're old charges that have not been deducted from income yet, i.e., the deferred expenses you mention above.

Tax cuts don't impact expenses since income tax is not an expense. It's more like an after the fact loss of income, turned over to the taxing authority. Income taxes affect your gain/loss of assets, not your profit & loss statement.

Don't put too much faith in literally interpreting what Reuters wrote. I think they mean "income tax related charges", i.e., charges that affect H-D earnings and hence their tax liability.

I agree. I think what that $53 million charge to earning really was is to recognize the loss from discontinued operations (i.e. shutting down the plant), in which case those deferred and future costs are capitalized and charged to earnings in the current year. I don't think it had anything to do with the change in tax law at all. Bad reporting all the way around. That's why I said the story made no sense as written.

 

[ARtraveler]

There's an easy solution: sell your bikes, and get new ones that don't require as much thought.
You shouldn't have to work so hard for your fun! :thumbup:

That is the way the 2015 Vulcan is. Speedo, turn signals, starter, high beam, horn, kill switch and 4 idiot lights. I can do that one. :yes:

 

[Rogue Hawk]

Who is 'they'?

You know...they...

 

[Easy Rider]

I don't think it had anything to do with the change in tax law at all..

So you think that they are lying about the reasons behind the "write down" ??

 

[Bob Denman]

I think that they're looking for an excuse for their losses due to dropping sales...

 

[UtahPete]

So you think that they are lying about the reasons behind the "write down" ??

No, I think the reporting is inaccurate. I don't think there is anything nefarious about it, though.

 

[UtahPete]

You know...they...

OH! Them!

 

[vrodrjs]

Yeah that's the ticket... Tax reform caused the whole thing

How about a dealer network that, for the most part, refused to embrace an entire product line because it wasn't "a real Harley."
How about a MoCo whose biggest change in the last 10 years is a motor that doesn't shake the life out of you at idle AND has 4 valves per cylinder.
How about dropping 2 whole lines of bikes (VRSC and DYNA) for the 2018 model year so you have 2 plants only using half the floor space.
How about a bunch of C level guys that hooked their wagon to 1950's tech and are going to ride it straight off a cliff.
They have been cutting people at the KC plant for the last 5 years or so.

Yep that friggin' tax reform did them in. The CEO is an A** Hat!

 

[RinconRyder]

How about a dealer network that, for the most part, refused to embrace an entire product line because it wasn't "a real Harley."
How about a MoCo whose biggest change in the last 10 years is a motor that doesn't shake the life out of you at idle AND has 4 valves per cylinder.
How about dropping 2 whole lines of bikes (VRSC and DYNA) for the 2018 model year so you have 2 plants only using half the floor space.
How about a bunch of C level guys that hooked their wagon to 1950's tech and are going to ride it straight off a cliff.
They have been cutting people at the KC plant for the last 5 years or so.

Yep that friggin' tax reform did them in. The CEO is an A** Hat!

The article did NOT say that the tax reform was totally, or even majorly, responsible. It was listed as only one of several causes.

That said, had those of us motorcycle inclined persons actually owned a Hardley dealership along the way I suspect none of us would have behaved any differently. HD sold virtually every bike it built for decades and built what its customers said they wanted. HD tried to modernize several times (the Vrod for instance) but the customers didn't want it. What message did that send to the suits? To the dealers?

The first clue arrived in the 70's when the Japanese big bore bikes put a huge dent in Hardley and threatened to close them down entirely. Perhaps the suits thought the gubmint would again put up import limits or tariffs to protect the MoCo once again. Or maybe HD could compete on price if AMF could build them cheaply enough.

The suits had to know that this euphoria would not last forever and that someday the leather and tattooed customers would die off and be replaced by people who had no interest in Hogs or even motorcycles in general. But we all know what happens to the messenger.

If there is a lesson here it is that every executive suit in the land should adopt Intel's one-time CEO Andy Grove's "only the paranoid survive" maxim. Never be content with the status quo. Always keep your eyes open and on a swivel. Someone is always gaining on you.

 

[vrodrjs]

I guess my point was that this has been coming for a long time and I find hard to believe that anything in the last 6 weeks had anything at all to do with it. But of course I could just be pissed that they quit making the VROD and never put the Revo in a touring bike. I would bet you a whole lot of money that if they had done that AND educated the diehard HD crowd, they wouldn't be closing the KC plant. I'm just glad I don't have any HD stock. If they don't change their ways, in 10 years they will be nothing more than a t-shirt company.

 

[ofdave]

why is bashing Harley so important to so many?
I dislike a few bikes but see no reason to bash them and get no perverse pleasure out of doing so.
Just wondering.

 

[RinconRyder]

why is bashing Harley so important to so many?
I dislike a few bikes but see no reason to bash them and get no perverse pleasure out of doing so.
Just wondering.

I will offer my perception.

For years and years HD has been the haughty American made big bike and they made no bones about the fact that if you didn't ride Hardley you didn't join the "club". They priced their products in a premium tier even though their products were often times ancient technology or just unreliable as hell. Straight pipes piss off most everybody and made motorcycling difficult for those not riding Hardleys as they were lumped in with the outlaws.

If you are going to talk the talk you better be walking the walk. HD wasn't doing it much of the time and earned a well deserved rep as a poseur bike (or bar bike, take your pick).

If you wanted better performance and much better reliability coupled with lower pricing you bought Japanese. People who had an upper crust and could afford overpriced technology bought German. It was not unusual for a Hardley buyer to pay through the nose for the basic bike then have to spend thousands more to "stage" it for performance that came right out of the box for foreign bikes.

The marketing change from motorcycle shop to t-shirt boutique didn't help the image either.