John Olin has been the CFO of Harley Davidson, Inc. since 2009. Prior to this, he has held financial roles at Kraft Foods, Oscar Mayer Foods and Miller Brewing Company. Mr Olin has more than 25 years of financial leadership experience.
Below is our interview with mr. Olin |
* All answers have been paraphrased. Full transcript and recording located at the bottom of the page.
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What category of consumers do you focus your business towards?
Our core customer is the white male between the ages of 35 and 65. Outside of that, we have what we call our outreach customers. Those are young adults(18-34) who are of all races and ethnicities. And then of course we have our women riders. Both in the US and the Europe, women drivers are a large growing customer.
Do you do any work for the military?
Military, police and fire are huge customers. We’re by far the largest seller of police vehicles around the world. I don’t know exactly what percentage of our customers they are, but it’s a good percentage.
How many people do you currently have employed at Harley both internationally and nationally, and then at your Milwaukee branches?
We employ about 6400 people. Of that, I would guess in Wisconsin there’s probably 3000. We have a plant in Menomonee Falls that’s probably a little bit shy of 1000 people. And then we have our headquarters of course. So of the 3000 employees in Wisconsin, 2500 of them are here in Milwaukee.
What do you feel is your economic impact on the city of Milwaukee?
Probably from a salary standpoint $300 to $350 million. We then have about $150 million of capital here. Add on expense money such as marketing etc. and were at about $600 million.
Do you know by chance the number, percentage-wise, of motorcycles that you sell to people around this area? Do you see that people around this area buy motorcycles more so than in other parts of the country?
Yeah, Wisconsin is one of the highest states of our sales. I’d say less than 1% of our sales will come out of the city of Milwaukee. But I’d probably say 3% of our worldwide sales are coming from Wisconsin, so it’s not insignificant.
Do you think people here in Milwaukee, Wisconsin like to buy your motorcycles because Harley is a local company and you guys do so much for the local economy and community?
Yeah, that’s why we’d have a bit of a higher market share. I think there is a lot of pride that it is a local company.
Could give us an estimate of your company’s annual revenue growth during the past 5 years?
5.6%
Can you speak to how the recession of late has affected Harley’s growth?
The recession was very tough for Harley. Prior to it we had recorded 22 straight years of growth. However, we were able to bounce back rather successfully. The recession allowed us to look into what we were doing and make some changes for the better. So while the recession did hurt us, it allowed us to change our strategies and become even better.
Where do you see Harley’s growth, now that we’re kind of moving out of this recession, do you see it growing significantly?
Yeah I think there’s a lot of growth opportunity. We expect international to grow faster than domestic and we expect outreach in the US to grow faster than our core customer. In the last 7 years since the downturn we have been very focused on growing those two types of customers and we have been very successful with the results.
How has technology boom of the last 15-20 years affected Harley? Has it substantially made your production practices much more efficient or has it hurt you guys because other companies can produce more streamlined sport bikes than you have at Harley?
From an efficiency standpoint, the technology that we use to run our facilities has been very good in trying to hold down costs and so on and so forth. In the last 5 years we’ve been very good in terms of revamping the product development. We just came out with a new line of motorcycle that took the Touring Gold Standard up numerous notches, and there’s several things on the motorcycle that’s never been done in motorcycling before. Since the downturn we’ve gained about 12 points of market share, so competition has not caught up in anyway, they’ve fallen further behind and they stopped investment and we continued to invest. With sport bikes, they gotta keep developing new engines for displacement which is really expensive to do. We’ve probably had around 10 engines in a hundred some years, so we’re not into displacements since we have the brand that people want.
Our core customer is the white male between the ages of 35 and 65. Outside of that, we have what we call our outreach customers. Those are young adults(18-34) who are of all races and ethnicities. And then of course we have our women riders. Both in the US and the Europe, women drivers are a large growing customer.
Do you do any work for the military?
Military, police and fire are huge customers. We’re by far the largest seller of police vehicles around the world. I don’t know exactly what percentage of our customers they are, but it’s a good percentage.
How many people do you currently have employed at Harley both internationally and nationally, and then at your Milwaukee branches?
We employ about 6400 people. Of that, I would guess in Wisconsin there’s probably 3000. We have a plant in Menomonee Falls that’s probably a little bit shy of 1000 people. And then we have our headquarters of course. So of the 3000 employees in Wisconsin, 2500 of them are here in Milwaukee.
What do you feel is your economic impact on the city of Milwaukee?
Probably from a salary standpoint $300 to $350 million. We then have about $150 million of capital here. Add on expense money such as marketing etc. and were at about $600 million.
Do you know by chance the number, percentage-wise, of motorcycles that you sell to people around this area? Do you see that people around this area buy motorcycles more so than in other parts of the country?
Yeah, Wisconsin is one of the highest states of our sales. I’d say less than 1% of our sales will come out of the city of Milwaukee. But I’d probably say 3% of our worldwide sales are coming from Wisconsin, so it’s not insignificant.
Do you think people here in Milwaukee, Wisconsin like to buy your motorcycles because Harley is a local company and you guys do so much for the local economy and community?
Yeah, that’s why we’d have a bit of a higher market share. I think there is a lot of pride that it is a local company.
Could give us an estimate of your company’s annual revenue growth during the past 5 years?
5.6%
Can you speak to how the recession of late has affected Harley’s growth?
The recession was very tough for Harley. Prior to it we had recorded 22 straight years of growth. However, we were able to bounce back rather successfully. The recession allowed us to look into what we were doing and make some changes for the better. So while the recession did hurt us, it allowed us to change our strategies and become even better.
Where do you see Harley’s growth, now that we’re kind of moving out of this recession, do you see it growing significantly?
Yeah I think there’s a lot of growth opportunity. We expect international to grow faster than domestic and we expect outreach in the US to grow faster than our core customer. In the last 7 years since the downturn we have been very focused on growing those two types of customers and we have been very successful with the results.
How has technology boom of the last 15-20 years affected Harley? Has it substantially made your production practices much more efficient or has it hurt you guys because other companies can produce more streamlined sport bikes than you have at Harley?
From an efficiency standpoint, the technology that we use to run our facilities has been very good in trying to hold down costs and so on and so forth. In the last 5 years we’ve been very good in terms of revamping the product development. We just came out with a new line of motorcycle that took the Touring Gold Standard up numerous notches, and there’s several things on the motorcycle that’s never been done in motorcycling before. Since the downturn we’ve gained about 12 points of market share, so competition has not caught up in anyway, they’ve fallen further behind and they stopped investment and we continued to invest. With sport bikes, they gotta keep developing new engines for displacement which is really expensive to do. We’ve probably had around 10 engines in a hundred some years, so we’re not into displacements since we have the brand that people want.
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Biography Source: "John A. Olin: Executive Profile & Biography." Bloomberg.com. Bloomberg. Web. 10 Feb. 2015.
Image Source: "Business Journal Names CFO of the Year Winners - Milwaukee - Milwaukee Business Journal." Milwaukee Business Journal. Web. 10 Feb. 2015.
Logo Source: "1280x800 Harley Davidson Logo Desktop PC and Mac Wallpaper."1280x800 Harley Davidson Logo Desktop PC and Mac Wallpaper. Web. 11 Mar. 2015.