SOCIAL TOPICS (Archive): WORKPLACE

Published, November 1997

       Harley-Davidson, located in Milwaukee, Wisconsin, is the only major US-based motorcycle manufacturer, dominating the US market for heavyweight motorcycles since 1986.

       Earlier this fall our social research department sat down for a routine review of our socially approved companies. We got as far as Harley-Davidson when the debate started. I always find our debates both educational and fun, this one especially because my image of Harley-Davidson until now has consisted of noise, beer guts and the local biker bar in my hometown. Not the usual image conjured up when evaluating companies for socially screened portfolios.

       Twenty years ago I doubt Harley-Davidson would have even made it to our files. For many, the company was linked with social deviancy, rebellion and notoriously poor American quality. Much has changed. Quality standards have risen and Harleys are now purchased by a more diverse group. Female buyers have increased from 2% in 1987 to 9% in 1995. The average rider of a Harley-Davidson is 43, with a median income of $66,000. There is reportedly a group called the Hamsters in California consisting of CEOs who ride high-end Harleys while a trailer follows behind carrying a cache of cigars and wine. So much for rebellion.

       But what about social responsibility? Harley has a very strong record in several areas, including labor relations. How should product safety concerns fit into our evaluation of the company? Are motorcycles so inherently dangerous that Harley-Davidson should be excluded from the realm of socially responsible companies? Or do Harley’s several other strengths outweigh concerns of product safety?

       In 1981 a leveraged buyout by current management saved the company from a tumbling market share and $25 million in losses. The new owners have worked to increase cooperation between management and union workers, improve design and production and implement new methods of quality control. This process has been give and take. Workers saw their wages frozen and health benefits reduced. They also saw a bloated management layer trimmed and executives' salaries cut by 12%. Job security was enhanced as outsourced work was returned to Harley, a unique decision at a time when competitors were increasingly shifting work offshore to low labor cost areas.

       Despite these positive changes, union relations were not what they could be. In 1991 Harley’s workers rejected a proposed contract and went on strike for two weeks. Management recognized that a new labor-management model was needed and committed itself to forging a partnership with the company’s employees. Harley now has Partnership Agreements with each of its four unions, calling for greater employee involvement in information exchange, problem solving and decision making. Employees write their own goals with pay raises contingent on meeting measurable standards of improvement.

       Harley affirms the importance of each employee in a variety of ways. Each employee receives 80 hours of training per year. Workplace safety has been improved, with 20% fewer injuries over a recent three year period. Harley includes sexual orientation in its anti-discrimination policy and is one of a small number of companies to offer domestic partner benefits. Harley even helps employees find affordable housing, while also promoting central city economic development, by offering down payment grants under the Harley Walk-to-Work Homeownership program.

       Harley’s innovative labor partnerships have been widely cited as a model for others to follow. As a sign of the company’s pride in its labor relations, the union logo accompanies the Harley brand label on each of the company’s bikes. The AFL-CIO recognized this practice with its first Union Label Recognition Award.

       Over 300,000 people belong to Harley Owners Groups (HOG), the largest motorcycle club in the world. Harley uses HOG rallies to solicit customer feedback and offer maintenance seminars. The rallies serve another important purpose as well: raising funds for local and national charities. Since 1980, Harley has donated more than $23 million to the Muscular Dystrophy Association.

       Do all of the preceding positives outweigh the inherent safety risks associated with motorcycles? Although motorcycles make up only 2% of all registered vehicles in the United States, they accounted for 5% of total traffic fatalities in 1995. Per vehicle mile traveled, motorcyclists are about 16 times as likely as passenger car occupants to die in a motor vehicle traffic crash and about four times as likely to be injured. These numbers are alarming. But they come in a sea of other statistics. More than one out of five motorcycle operators in fatal crashes in 1995 were driving with an invalid license and almost half of motorcycle operators who died in single-vehicle crashes in 1995 were intoxicated.1 For its part, Harley strongly encourages its customers to take motorcycle safety courses, offering full reimbursement for the cost of certified courses to its HOG members. Is it the motorcycle or inexperience and poor judgment that should concern us? It’s admittedly a tough call.

       Besides safety, there was another concern about Harley’s product: the deafening rumble the motorcycles make. Some may call it noise pollution. Believe it or not, this isn’t an inherent product defect. At customers’ urging, Harley’s Product Development Center has intentionally worked to enhance and amplify those noises. The Harley debate clearly demonstrates that there are no easy answers in determining what constitutes a socially responsible investment. Then again, no one told me it would be easy. — Jane Chase, Social Research Analyst