Online Extra: Thirty Years in Hog Heaven

Harley-Davidson's outgoing CEO reflects on how the brand and motorcycling's image have evolved and the need to keep a little bit of the edge

After 30 years at Harley-Davidson -- including the last seven as Chief Executive Officer -- Jeffrey Bleustein leaves the corner office on Apr. 30. The engineer-CEO, who boasts a PhD from Columbia and taught for a time at Yale, was part of a group that turned Harley (HDI ) from an outlaw brand into one with broad appeal. Riders who belong to popular Harley Owners Groups, HOGs, now number more than 900,000 and include people from all walks of life.

Along the way, Bleustein helped take the outfit through a risky leveraged buyout from owner AMF, brought it public, and built its stock from the equivalent of 39 cents in 1987 to more than $62 a share now. Today's Harley is a global $5 billion-a-year maker of rumbling, rolling pieces of gleaming mechanical art. Bleustein, 65, recently reflected on how he and his colleagues built the modern Harley-Davidson in a talk with BusinessWeek Chicago Bureau Chief Joseph Weber. Edited excerpts from their conversation follow:

Q: You and your colleagues have been very successful in taking an old brand, which at one point was suffering, and breathing new life into it. How did you do that?


We went back to the basics and looked at developing desirable products. Then, to take the brand to a new level, we added something extra. When you buy a Harley-Davidson, you not only get a wonderful motorcycle, but you get access to a whole new lifestyle or group of lifestyles, the experiences surrounding that motorcycle -- access to HOG Clubs, rallies and events, the right to wear Harley-Davidson clothing -- all those things that go beyond the basic motorcycle.

Q: What lessons do you think there might be in Harley's experience for other brands?


First, you have to understand what your brand is, what does it mean to your customers, what do people think of when they think of your brand, what is the promise that people expect? And then you need to evolve that so it stays relevant over time, because people change and interests change.

And [there's a lesson] in everything we do, we're trustworthy, we're going to give people a first-class experience. When you buy a Harley-Davidson product, the company is going to stand behind it. It's going to be pretty, elegant, and it's going to have good value, and it's going to retain that value. And it's going to be unique, because we always try to be a little different.

Q: Did you ever think when you joined the company that you would produce something as sophisticated as the V Rod Series?


We had one [such advanced-design bike with a liquid-cooled engine] started in the late '70s, and we had to abandon it when we got into all that financial difficulty. We just couldn't continue and bring that into production. We started it once again in the late '90s, and then came out with what is now the V Rod.

When people say, "How long did it take to develop that product?" one answer is between five and six years from when we first decided we were going to do it again. But I'd say it was probably more like 25 years from when we first envisioned a product like that and the time we finally brought one into production. It really was part of an early dream.

Q: How did you build Harley into a luxury brand?


Luxury brand isn't how I would describe it. I think we certainly have premium features in our product and high-quality. [But] the reason I don't call it luxury is that our brand is very inclusive, and if you look at our customer base, it spans the whole gamut, from people who have a lot of money to people for whom this is the single biggest investment that they make. You can buy a brand-new Harley-Davidson for $6,500. You can buy one for over $20,000 as well, but our products are affordable to a very, very broad range of people.

Q: How do you make Harleys socially acceptable?


We added a charitable component to our activities and we became a corporate sponsor for the Muscular Dystrophy Assn. We found that it really resonated with our customers and people really got into it, and over the years, we've raised probably $50 million for the Muscular Dystrophy Assn.

Bikers got involved in a lot of charitable events, which helped improve the image of motorcycling. We also worked on a whole transformation of a dealer network so that it wasn't intimidating to go into a Harley-Davidson dealership. We tried to make our products more interesting for women by working on the ergonomics and making women feel that they could be a part of it, not only as passengers but also as riders, and that of course helped to change the image.

But at the same time, we've always tried to maintain a little bit of edge to the brand, the [idea that] people who ride Harleys are individuals and they're adventurous. They stand for freedom and they do their own thing. I sometimes jokingly say you always needed to keep a little bit of the bad in the brand, a little bit of the edge. That's part of the mystique of Harley-Davidson.

Edited by Patricia O'Connell

    Before it's here, it's on the Bloomberg Terminal.