HARLEY-DAVIDSON IN TROUBLE - PART ONE by CLAIRE SUDDATH for BLOOMBERG

     The first thing you should do when you meet a Harley-Davidson rider is check the back of his—or her, but let’s be honest, it’s probably his—jacket. The patches tell you who you’re dealing with. First, there’s the insignia. It might be a bald eagle atop the company’s logo to let everyone know this is a Harley guy—not a Honda guy, not a BMW guy, but a red-blooded, flag-waving American patriot. If this particular Harley guy belongs to one of 1,400 company-sponsored Harley Owners Group (H.O.G.) chapters around the world, the insignia will be coupled with a second patch that specifies which H.O.G. he belongs to: the Duluth H.O.G.s, the Waco H.O.G.s., or, today, the H.O.G.s of Long Island.

Sometimes there’s a third patch, for bikers who belong to an independent club—the Blue Knights are cops, the Hells Angels hate cops—but two-patch groups tend not to associate with them. “It’s a different mindset,” says Frank Pellegrino, who on weekdays is a vice president for a plastics outsourcing company and on weekends a Long Island H.O.G.

Pellegrino, who got his first Harley for his 65th birthday last year, is about to spend this cloudless summer Sunday exploring 100 miles along the back roads of New York and Connecticut with about 25 other Harley guys. 

With him today are Joe, Marty, Dennis, Grover, Richie, Bob and his girlfriend, Dawn, and two Mikes, one with an American flag bandanna tied around his head. No one is younger than 45; many are well past 60. They’ve gathered behind a BP station at 8 a.m. in mid-July, sipping coffee and admiring one another’s bikes. At one point, Dennis talks politics with Joe and one of the Mikes.

“What’s the deal with all this fake news about a Europe plant?” Mike without a bandanna asks. “Harley was already going to build overseas, and now they’re just blaming it on the president.”

In June the European Union slapped what’s effectively a 31 percent retaliatory tariff on Harley in response to President Trump’s steel and aluminum tariffs. To avoid them, Joe says, Harley will stop making the bikes it sells to Europe in the U.S. The company already has plants in Brazil and India and is in the process of opening one in Thailand.

“Oh, is that the case?” Mike asks. He swears he read something different on the internet.

“I see where they’re coming from,” Dennis says, crossing his arms over his We Stand For The Flag T-shirt. “How are they going to sell over there with millions in tariffs placed on them?”

“I still don’t like it,” Mike says. “Harley ought to be focused on us.”

Three weeks later, and about 1,000 miles away at its headquarters in Milwaukee, Harley-Davidson Inc. announced what executives called the most ambitious overhaul in its 115-year history with a plan that, for the first time in decades, wasn’t focused on riders like Frank or Dennis or the Mikes.

In the next few years, Harley will release more than a dozen motorcycles, many of them small, lightweight, even electric. The new Harleys are intended to reverse years of declining sales and appeal to a new rider: young, urban, and not necessarily American. Harley wants international riders to be half its business in the next 10 years. “We are turning a page in the history of the company,” says Matthew Levatich, chief executive officer. “We’re opening our arms to the next generation.”

The two-patch H.O.G. clubs and three-patch biker gangs that made the brand famous have saddled the company with an uninviting reputation that Harleys are only for older white men who roam the highways on rumbling, two-wheeled beasts. Young riders, women, people of color, or anyone who lives in a city and wants a motorcycle for commuting rather than joyrides—the bikers send the message that Harley isn’t for them.

And without new customers, the company can’t grow. Nor can it fully recover from the Great Recession. It’s shipping almost a third fewer motorcycles to its dealers than at its prerecession peak in 2006. After rebounding slightly, retail sales have steadily declined again since 2014, tumbling almost 14 percent in the U.S. The average Harley rider’s age has inched up to almost 50. “It’s not just the brand, but the people associated with the brand,” says Heather Malenshek, Harley’s vice president for global marketing. “We’ve made a tonal shift to think about ourselves as being more inclusive.” 

Among motorcycle fans, Harley’s new image met with astonished enthusiasm. “We looked at pictures of the new bikes and were like, Harley did this? That’s pretty wild,” says Zack Courts, features editor of Motorcyclist magazine. Riders who generally preferred Honda or Yamaha said maybe they’d try a Harley. It should have been a marketing coup.

Then the president of the United States called on motorcyclists to boycott the company. 

Since 1903, when a Milwaukee engineer, William Harley, and his friend, Arthur Davidson, designed a motorized bicycle in Davidson’s backyard shed, the company has been continuously manufacturing motorcycles in Wisconsin. Throughout the years, Harley-Davidson has been acquired, sold, spun off, and taken public, but it’s the only American motorcycle company that’s never gone out of business. The one with the second-longest streak, Indian Motorcycle, shut down in 1953. Harley has largely thrived. It added a Pennsylvania plant in the 1970s; Missouri and Brazil came online in the 1990s; its newest addition, in Thailand, will open this fall. Last year, the company made $4.9 billion in revenue from motorcycles.

Harley has been selling bikes overseas since 1912 and today has 800 international dealerships, more than in the U.S. Still, its image and reputation remain thoroughly American. Harley-Davidson motorcycles are one of those rare products, like Coca-Cola or Mickey Mouse, that have become shorthand for 20th century America. They show up in pictures of civil rights marches, as part of President John Kennedy’s Dallas motorcade, and at the Apollo 11 astronauts’ ticker-tape parade. The company supplied military motor­cycles in both world wars. Marlon Brando, Elvis Presley, and the Terminator rode Harleys. Evel Knievel broke so many bones stunt-riding Harleys that for a while the company paid his medical bills.

“From a practical perspective, riding a Harley doesn’t make sense,” Courts says. “It’s heavy. It’s expensive. But when you talk to Harley people, they don’t talk about how the motor­cycle performs. They talk about what it represents.” As Michael Abiles, a Harley owner from Brooklyn, says, “You don’t get a tattoo of Honda.”

Trump embraced the motorcycle’s mystique. Two weeks after taking office, he invited Harley executives to the White House and held them up as an example of American manufacturing at its finest. “In this administration, our allegiance will be to the American workers and to American businesses like Harley-Davidson,” he said in February 2017. 

It was a shrewd move on the president’s part. “Most of us are just right of Attila the Hun,” jokes Pellegrino, the Long Island H.O.G. Republicans have long courted the biker vote: Ronald Reagan visited a Harley factory, and John McCain attended the Sturgis Motorcycle Rally in 2008. During the 2016 election, some of Trump’s most vocal supporters belonged to a 30,000-member group called Bikers for Trump. As the president said recently, “I guarantee you everybody that ever bought a Harley-Davidson voted for Trump.”