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Economic Indicators Paper
Harley-Davidson is an excellent example of an American company that turned itself around from the brink of bankruptcy back to profitability. With a hostile takeover, the American Machine and Foundry Company (AMF) acquired Harley-Davidson and on the verge of bankruptcy, AMF sold the company to a small group of investors who then made significant changes.

These investors reduced the number of motorcycles produced each year, improved the quality of the motorcycles, and began customizing bikes to the individual customers wants. Instead of trying to match the Japanese cycles, management deliberately exploited the “retro” appeal of the machines (Wikipedia, 2004). Management invested heavily in their factories, modernizing them and streamlining production lines. They also invested in the appearance and feel of their retail stores (USA, 2003). Todays stores are wide aisled and clean, giving space to the Harley-Davidson clothing line. The company now makes more money selling licensed merchandise featuring the Harley-Davidson logo than selling motorcycles (USA, 2003). Harley-Davidsons customers range from the bearded, beer-belly stereotypes to “yuppies.” Their largest market is the middle to upper class, middle-aged man. For these men, owning a Harley has become a status symbol. Harley-Davidson is part of the American dream.

The revitalization and success of Harley-Davidson is due largely in part from managements vision and their ability to recognize economic factors and act accordingly. In looking at the Harley-Davidson Company today, it is hard to imagine that only a short time ago they were on the brink of bankruptcy. Harley-Davidsons future rested solely on the shoulders of the management team. Their ability to work with the economic factors and apply them to the company is the reason they still exist today and are again, a leader in the industry.

The new management team made significant changes. Their values-tell the truth, be fair, keep your promises, respect the individual, encourage intellectual curiosity-(Harley, 2002) guide and serve as their business framework. When management began revitalizing the company, there were economic indicators they watched, and continue to monitor. Some of the indicators important to Harley-Davidson are as follows:

Market value of goods and services produced within a year known as Gross Domestic Product (GDP) is used to measure market transactions. It values activity at market price and could be used to compare market/economy performance. Real GDP is the existing price adjusted for inflation. With Harley-Davidson, comparing 2003 and 2004. In this regard, the demand for Harley-Davidson motorcycles grew at a rate of 7% to 9% per year. In 2004, the Company shipped 317,289 motorcycle units, a 9% more than in 2003. The company expects shipment to grow to 7 percent in 2005 with an annual shipment of units to target at 339,000. Overall, results of operations in 2004 compared to 2003 in 2004 totaled $5.02 billion $390.9 million or 8.5 percent increase over 2003.

Below is a table illustrating the growth rate of shipment, which built up the companys revenue comparing 2003 to 2004.
Unemployment when individuals seek jobs to earn a living. Unemployment is determined at how much labor is available for an increase in production, which then determines how fast the economy would grow. At Harley-Davidson, the company strives hard to better its employees, as they are the most important resource and is the only sustainable long-term competitive advantage of the company. Therefore, at Harley-Davidson, there is a focus on workplace diversity, which ensures the visibility and optimization of talent across the organization. As always, with business, the more diverse talents and the creation of opportunity, the more products and services will be produced for the company in its long-term growth. This is seen on the number of goods that were produced comparing 2003 to 2004 and what is expected to be produced in 2005.This is largely dependent on the work force labor that is available to the company.

Inflation is the continual rise in the prices of goods, which is above the price index. Supply and demand of goods and services determines the inflation rate. At Harley-Davidson, the inflation rate on products and services, mostly depend on how well the market goes. The company operates in two principal business segments, which are motorcycles and related products, as well as financial services (Harley-Davidson, 2004). The Company sells its products internationally and in most markets, those sales are made in the foreign countrys local currency. In this case, the Companys earnings can be affected by fluctuations in the value of the U.S. dollar relative to foreign currency. Based on foreign transaction, this could influence fluctuation in prices of products.

Historic trend in the last 10 years at Harley-Davidson
Shipment of motorcycle 1994 – 2004 shows an increase in production leading to an increase in goods being shipped domestically and internationally.
Total revenue from 1994 – 2004 shows a continuous rise in revenue. This shows growth in the Company.
(c)With continuous operation, it shows an increase in the net total income.
(a) (b)
(c)
In the overview there were three financial indicators named which shows great strength and economic growth for Harley-Davidson. Historically, Harley-Davidson has been continuously growing since the middle part of the nineteen eighties. In the process of reviewing the personal income for Harley-Davidson for the past five year (2000-2004)

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