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Harley Davidson - Board Member Resigns
Harley-Davidson board member resigns, cites 'severe underperformance', hits remote work
A Harley-Davidson Inc. director has resigned from the board, citing among other things, poor leadership and “cultural depletion” at the 122-year-old company.
In a letter dated last Saturday, Jared Dourdeville said he had “grave concerns” about the state of Harley-Davidson and its long-term outlook.
Four days before he quit the board, Dourdeville, who is with the New York investment firm H Partners, had called for the immediate resignation of Harley-Davidson Chairman and CEO Jochen Zeitz along with longtime directors Sara Levinson and Tom Linebarger.
Dourdeville said he submitted his resignation when no meaningful progress was made, although this week Zeitz announced his retirement as CEO of the Milwaukee-based motorcycle manufacturer.
In his resignation letter, heavily redacted but posted by Harley-Davidson in a Securities and Exchange Commission filing, Dourdeville complained of “severe underperformance” of the company that’s struggled under Zeitz’s leadership.
“While I am concerned about this severe underperformance, what I am most concerned about are the foundational building blocks that underpin any company’s long-term trajectory: culture, transparency and accountability, and the willingness of the Board and management to put the Company first. These concerns have increased exponentially in recent quarters,” Dourdeville wrote.
The Harley-Davidson community of employees, dealers, customers and fans has been “decimated at the corporate level, and the extent of this cultural depletion has become more glaring in recent months,” according to Dourdeville.
“I was aware of the fact that most white-collar Harley-Davidson employees were working remotely most of the time. And while I always questioned the merits of a virtual company, Jochen Zeitz’s previous success at running (sporting goods manufacturer) PUMA from a Boston satellite office – coupled with the early-days constraints of a COVID environment – reassured me somewhat. What I wasn’t aware of until recently, however, was just the extent of this white-collar-work-from-home policy,” Dourdeville wrote, with the rest of his explanation redacted.
His resignation letter goes on to complain about the lack of success of Zeitz’s Hardwire strategy to turn around the company’s sinking motorcycle sales and a lack of entry-level products to attract new customers.
“New riders are the lifeblood of our Company, and without a product to attract these customers, I am concerned about our long-term outlook,” he wrote.
Dourdeville also cited a “revolving door of senior leadership,” further depleting Harley’s company culture. Over the past five years, he noted, there have been numerous departures from management’s hand-picked senior leadership team, including the chief financial officer, chief commercial officer, chief electric vehicle officer, creative director, and senior vice president of apparel and licensing.
“In addition, the turnover and role-changing at the operations and manufacturing-leadership has been especially chaotic and convoluted,” he wrote.
In response to Dourdeville’s resignation letter, Harley-Davidson in an SEC filing noted that at a board meeting in February he had voted in favor of all current company directors standing for reelection, without discussion or objection.
“Mr. Dourdeville was not a dissenting voice in the boardroom as to matters he raised in his letter,” Harley-Davidson said.
“The Company is in the final year of the Hardwire, its five-year strategic plan (2021-2025). During his tenure as a Director, Mr. Dourdeville did not voice concerns in the boardroom over the Hardwire strategic plan” and confirmed that elements of the plan were “central to his investment thesis,” Harley-Davidson said in the filing.