◼ BUSINESS Bloomberg Businessweek July 27, 20209PHOTO
ILLUSTRATION
BY
731;
IMAGES:
GETTY
IMAGES
(14);
HARLEY
DAVIDSON
(1).
DATA:
UBS
He’sauthoredtwobooks,a how-toonsustainable
capitalismanda spiritualtomeonmanagementval-
uesheco-wrotewitha Benedictinemonk.In 2017 he
turnedhisvastcollectionofAfricanartintoa nine-
storymuseumonthewaterfrontinCapeTown.Zeitz
speakssevenlanguages,playsclassicalguitar,and
setupa foundationtosupportethicaleco-tourism
likethatpracticedbyhisluxuryresortinKenya.
Hecanalsoseethespiritualsideofmotorcycling,
asin 2013 whenheattendeda masswherehundreds
ofHarleyenthusiaststooktheirbikestotheVatican
tobeblessedbyPopeFrancis.“You’vehadthesta-
tusquoreplacedbya visionofthiscultured,worldly,
globalperson,”saysTonyGonzalez,a Denver-based
industryconsultantwhoworkswithHarleydealers.
“Ifyoulookatmostbusinessesrightnow,there’sa
lotthatarefocusedgloballyandtryingtoconnect
witha newcustomer.”
Zeitzearnedhisfortuneandmanagerialstripes
whenatage 30 hebecameCEOofanalmostbank-
ruptPumaSEandrepositionedthesneakercom-
panyasa hipfashionbrand.Thatlaunchedthe
formerColgate-PalmoliveCo.executiveintoCEO
stardom,landinghimontheboardofHarleyin2007.
Hepushedtheboardtoembracebusiness-friendly
environmentalismbychampioningthecompany’s
firstall-electricmotorcycle,LiveWire,andprograms
suchasmeasuringsupplychainimpact.
Hetookthetopjobafterthesuddenresignation
ofhispredecessor,MattLevatich,andimmediately
hadtoconfrontthecoronaviruspandemic,which
shutHarley’sfactoriesanddepressedsalesalready
sufferingfroma five-yearslumpintheU.S.
Zeitz quickly pulled pages from the cost-
conscious playbook he used at Puma, where one of
his first moves was to walk into a sneaker factory in
the company’s hometown in southern Germany and
tell workers he was sending their jobs to cheaper
plants in Asia. He’s dismissed roughly 14% of Harley’s
workforce, including the chief operating officer,
finance chief, and a swath of midlevel managers.
While details of Zeitz’s turnaround plan beyond cost
cuts have yet to be unveiled, he’s hinted at focusing
on a more premium, high-margin product line—akin
to what occurred with the Puma makeover.
So far, Wall Street is encouraged. Harley’s stock
has jumped 50% since Zeitz first addressed investors
on an earnings call in April, and a slew of analysts
have either upgraded or started covering the shares,
citing his record and the potential for a turnaround.
Even activist investor Impala Asset Management,
which tried to oust the previous CEO, appears will-
ing to let Zeitz try his hand, after it negotiated the
right to nominate a new board member.
The German marketing whiz still has his workcutoutforhim.Harley’scorebabyboomerriders
are aging out of the market. Millennials and
Generation Z would rather buy an ATV or an off-
road bike than a heavyweight Hells Angels cruiser. At
the same time, Indian, another historic U.S. motor-
cycle brand, now owned by Polaris Inc., has been
eating into Harley’s dominance of the heavyweight
market, while Japanese and European manufactur-
ers beat it to the punch on lightweight bikes.
Investors and dealers are hopeful that Zeitz’s
marketing cred will enable him to succeed where
his predecessors have fallen short. Keith Wandell,
who took over at Harley in 2009, was an auto exec-
utive who upgraded manufacturing technology and
forced unions to agree to job cuts. Levatich, an engi-
neer, tried everything from expanding into emerging
markets to offering less expensive lightweight motor-
cycles and e-bikes for children. Neither was able to
combat the generational shift away from heavy-
weight motorcycles—about 78% of Harley’s ship-
ments worldwide—that poses an existential threat
to the company’s core U.S. market.
One skill that may set Zeitz apart is that he knows
how to make things seem cool. At Puma, he took a
brandfocusedpurelyonathleticperformanceand
repositionedit withinthe“sportlifestyle”niche,
recruitingMadonnatowearthesneakersduring
her 2002 concerttourandfeaturingskateboarders
initsads.Bythetimehesteppeddownalmosttwo
decadeslater,Puma’sstockhadrisen27-fold.
ButHarleyhasbeentryingtoreachyounger
ridersforyears.It starteda ridingacademytwo
decadesagotohelpbringwomen,twentysome-
things,Blacks,andLatinostothebrand.Andtoday
itsfemalebrandambassadorsfillupInstagram
withadventure-pornpostsofcampingandriding
ontheopenroad.Still,UBSestimatedin 2017 that
themedianageofHarleyridersintheU.S.was52.
Ratherthanginningupfreshinterestamong
twentysomethings,Harleyis nowhintingit’snar-
rowingitsaimtowardaffluentprofessionalswhocan
afforditspriceybikes.“Wearesharpeningourfocus
onproductsandcustomerswhoareridingHarley-
Davidsonmotorcyclesorwhoalreadyhaveinterest,”
thecompanysaidina statement.
Zeitzseeselectrificationasonesolutiontothe
brand’sdemographicchallenge.Ata 2014summitin
theSwissAlpsonsustainablebusiness,hecrowed
abouta LiveWireprototypehewaspromoting.“The
traditionalhogowneris notnecessarilytheelectric
enthusiast,”hesaid.“Butif youhearthisbikeand
lookatthebike,it’stotallyHarley.”
LiveWire received raves from critics and
enthusiasts, but its $29,799 price—roughly double a
similar gas-powered Harley—has made it a tough10%0-1 0
2011 2019▼ U.S. motorcycle unit
sales,year-over-year
growth
Harley-Davidson
Heavyweight
category
All