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Hog Wild
Kellogg School/BusinessWeek leadership forum gets revved up with Harley-Davidson CEO

By Raksha Varma

Jeff Bleustein, Harley-Davidson CEO  
© Evanston Photographic Studios
Jeff Bleustein, Harley-Davidson CEO
View the video of Harley-Davidson CEO Jeffery Bluestein's address to the Kellogg community

Harley-Davidson Inc. Chairman and CEO Jeffrey L. Bleustein recently brought his leadership insights to the Kellogg School, when he addressed the importance of attracting younger consumers and running a market-based company during a special event cosponsored by Kellogg and BusinessWeek.

"Harley-Davidson stands for ‘Americana,’” said Bleustein at the "CEO Leadership Forum with America’s Best B-Schools.” James E. Ellis, chief of correspondents for BusinessWeek, directed questions to Bleustein before more than 100 attendees, including many Kellogg School MBA students, at the Tribune Auditorium in the James L. Allen Center on the Evanston campus.

Bleustein fielded questions about why the Harley-Davidson brand is vital to sustaining profitability.

"Our company’s brand is a promise to the consumer,” he said. "We fulfill the dreams of our customers. We aim to exceed their expectations.”

The Harley-Davidson brand is targeted to 35- to 54-year-old men, who comprise some 60 percent of the company’s consumer market, Bleustein noted.

Although Harley-Davidson is the leading American manufacturer of motorcycles, Bleustein, who joined the company in 1975, said it took "a lifetime” to build the brand’s reputation. "After I participated in the buyout, I had my work cut out for me,” he said. "It was risky at the time.”

Despite the challenges posed by an 80-to-1 equity ratio and the 17.5 percent interest rate that existed when the coup was consummated, Bleustein and others managed to raise $80 million to purchase Harley-Davidson in 1981 from its parent company, AMF.

"Bleustein has clearly demonstrated that his career is not just about taking risks,” said Karen Raviv, a first-year Kellogg MBA student, who attended the forum. "It’s about taking smart ones.”

Taking a smart risk was clear in Bleustein’s choice to include union input in Harley-Davidson’s decision-making processes. He spoke about the importance of "working together” with the unions to produce mutually beneficial strategies.

"If we include the unions in our decision, I know we can boost productivity and generate more job security,” he said.

With the help of about 1,300 dealers, Harley-Davidson produced more than 260,000 bikes in 2002. The Electra Glide, Sportster and Fat Boy are three of the company’s 28 models.

Bleustein also spoke about the importance of producing marketing strategies targeted to younger customers. "Companies should concentrate on strategies that appeal to Generation X and Y,” he said. Harley-Davidson uses focus groups to test the potential of future products. Programs such as "Rider’s Edge” are offered by the company to educate some 11,000 new riders yearly.

"Our company has adopted a long-term focus,” Bleustein said. "Programs must have a clear connection to the product line and future profitability.”
Bleustein ended the forum with highlights from Harley-Davidson’s 100th anniversary, calling the milestone a "celebration of freedom.”

©2002 Kellogg School of Management, Northwestern University