Harley-Davidson is an American success story, rife with both failure and triumph. The company is a marketing machine with a 116-year history of carefully cultivating an image, one that’s earned scores of fans and detractors alike. Opening May 18, a new exhibit at the AACA Museum Inc. in Hershey, Pennsylvania, will examine Harley-Davidson: History, Mythology and Perceptions of America’s Motorcycle.
Harley-Davidson was founded in 1903 in Milwaukee, Wisconsin, by William Harley and Arthur Davidson, childhood friends who initially teamed up to develop a “power cycle” motorized bicycle based upon Harley’s compact engine designs. Milwaukee was home to numerous motorcycle and small engine manufacturers, and in creating the first Harley-Davidson prototype, the duo borrowed ideas from Merkel (later, the “Flying Merkel” motorcycle brand) and outboard engine manufacturer Ole Evinrude.
Success did not occur overnight. Three years after its founding, Harley-Davidson was selling a modest 50 motorcycles per year, but by the end of the decade — the result of near-constant product improvement and a growing network of dealerships — this number had grown to more than 1,100 sales annually. By 1914, the majority of its motorcycles were powered by V-twin engines, a design that would eventually become symbolic of the brand.
1928 Harley-Davidson “Peashooter.” Photo by John Sterling Ruth, courtesy AACA Museum Inc.
By the time the United States entered World War I, Harley-Davidson was already supplying motorcycles to the military. To fulfill wartime contracts, the Milwaukee company delivered 20,000 motorcycles to the U.S. and it allies, and two years later, as the 1920s dawned, Harley-Davidson was the largest motorcycle manufacturer in the world, with dealers in 67 countries and annual sales of more than 28,000 units.
But the end of the decade brought the Great Depression, and with it, a reversal of Harley-Davidson’s fortunes. In 1929, the brand sold 21,000 bikes, but four years later, in 1933, the Milwaukee factory produced just over 3,700 examples. To stay afloat, the company diversified, offering industrial engines and a novel new three-wheeled machine called the Servi-Car. Easier to ride than a motorcycle, with more cargo capacity, the Servi-Car was less expensive to purchase and operate than an automobile, and soon became popular with police departments and delivery-based retail businesses from coast to coast. Ultimately, the financial effects of the Great Depression would devastate the American motorcycle industry, with Harley-Davidson and rival Indian emerging intact, but weakened.
World War II saw Harley-Davidson prosper with wartime contracts. More than 90,000 motorcycles were produced for the United States and its allies, and many GIs enjoyed their first two-wheeled adventure aboard a Harley-Davidson WLA. In the postwar years, the manufacturer received the DKW RW 125 design as a war reparation, and produced a small-displacement motorcycle based upon this to broaden its appeal.
1945 Harley-Davidson VL, in California Highway Patrol livery. Remaining images courtesy AACA Museum Inc.
Rival Indian folded in 1953, giving Harley-Davidson temporary dominance in the American motorcycle market. The same year, Marlon Brando portrayed a rebellious outlaw biker in the film, The Wild One, and seemingly overnight motorcyclists were typecast as hard-drinking, hell-raising outcasts bent on undermining the very moral fiber of America. It took Japanese brand Honda to turn this perception around with its “You meet the nicest people on a Honda” ad campaign of the 1960s.
Harley-Davidson went in the opposite direction, positioning itself as the brand of choice for the blue-collar set, as well as those who lived outside of convention (and in some cases, outside the law). As the chopper craze took hold, Harley-Davidson began incorporating style elements in its production motorcycles, but another major change was on the horizon. In 1969, Harley-Davidson was purchased by American Machine and Foundry (AMF), a company better known for producing leisure products than large-displacement motorcycles.
AMF implemented changes in the assembly process and a reduction in the workforce, prompting Harley-Davidson employees to strike. Quality suffered, and motorcycles built during the AMF years soon earned the manufacturer a black eye, forcing many potential buyers to look overseas for their next motorcycle. On February 26, 1981, the AMF era came to an end when Harley-Davidson was sold to a group of 13 investors, all senior executives from within the company.
1969 Harley-Davidson XLCH Sportster.
Sales of its motorcycles remained depressed, and in 1983 Harley-Davidson petitioned the International Trade Commission to impose a tariff on all Japanese motorcycles above 700-cc in displacement. The ITC agreed, imposing a five-year tax, beginning in 1984, on large-displacement motorcycles from Japan. To its credit, Harley-Davidson turned its business around, and in 1987 — the same year the company was listed on the New York Stock Exchange — asked the ITC to remove the tariff on Japanese bikes two years ahead of its expiration.
Another period of explosive growth came in the 1990s and early 2000s, but it was not without pain. In an effort to modernize its dealer network, Harley-Davidson began dictating rules on store design to its dealers, requiring many to remodel or lose the franchise. As popular as its motorcycles were (with many dealers selling new bikes from waiting lists), gear with the Harley-Davidson logo was even more in-demand, so the company required dealers to devote a set amount of floor space to merchandise sales.
In 2008, Harley-Davidson acquired Italian motorcycle brand MV Agusta for a reported $109 million, but just one year later sold the company to Italian industrial magnate Claudio Castiglioni for €3 (not a typo), plus a $26-million infusion of cash into MV Agusta’s accounts. It shuttered the innovative Buell brand in 2009 as well, claiming it needed to focus attention on its core brand. Ultimately, Harley-Davidson survived this economic downturn as well, emerging battered but not defeated.
1978 Harley-Davidson MX250, built by Aermacchi.
Today, Harley-Davidson is trying to attract a new generation of riders, hosting training clinics to introduce new motorcyclists to the sport (and the brand) while debuting a line of smaller-displacement “Street” motorcycles, along with an electric offering, the Livewire. Whether its latest strategy will prove successful remains to be seen, but this much is clear: Harley-Davidson has proven itself a survivor time and time again.
Harley-Davidson: History, Mythology and Perceptions of America’s Motorcycle will cover seven key themes in the company’s history and evolution, including:
- Harley as an American innovation
- Harley versus Indian
- The “American Motorcycle” — why Harley?
- The situation in doubt: Decline and the AMF years
- Rebirth: The 1981 buy-back, a painful housecleaning, and the success years
- “I don’t give a damn about my bad reputation”: Harley, Outlaws, American society, and other motorcyclists
- The future is in gear
A total of 34 motorcycles will be displayed, ranging from a 1912 Harley-Davidson single to a 1984 XR1000. Slated to run through October 20, 2019, more details on the exhibit (and other upcoming events at the museum) can be found at AACAMuseum.org.