Motorcyle and Biker Ride Reports and General Info

I have been reading about the rumors that Honda Motor Corporation is going to be buying Harley Davidson for the past week. I have been reading the expected responses from die hard loyal Harley Davidson motorcycle riders that it will never happen, it is just a rumor, etc.

Then my friend from Blawg Review sent me a link to an article in Biker News Online which contains links to articles on subject from the Associated Press, Forbes, and Reuters. I concur with Biker News Online that publications such as these do not just throw rumors out unless there is some validity to the story.

The big question is; can Honda buy Harley Davidson? Yes they can.

What most people do not realize about publicly owned companies such as Harley Davidson is that they are owned by stockholders and not just by one or two people.

I am not going to write a dissertation on what a Public Corporation is as opposed to a privately held company. However, I will tell you that once a Corporation goes public, which means shares of their stock are purchased and sold on the public stock exchange, anything is possible. Most publicly held corporations have what is called a majority stockholder who owns the largest percentage of shares in a corporation.

Corporate takeovers can be friendly or they can be hostile.

Harley Davidson was taken over years ago by AMF Corporation. Later, the management and employees of Harley Davidson managed to arrange to buy a majority share of Harley Davidson stock from AMF, which made it an independent Public company again, with the majority of shares being owned by the company.

From what I have read, such a takeover of Harley Davidson by Honda would result in a Honda that controls 60 percent of the motorcycle market. This issue brings forth another issue; even if Honda decided to purchase Harley Davidson through a friendly or hostile takeover, would Federal Anti-Trust Regulators allow such a deal to happen? Could be, you never know.

My personal take on a potential Honda takeover of Harley Davidson is that I hope it does not happen. Harley Davidson is an American Icon and a national treasure that I think should be preserved as an American Company. Harley Davidson is uniquely American just like apple pie and the 4th of July.

Furthermore, the vast amount of corporate mergers that have taken place in the past 3 decades, have very much taken away true competition in every market from consumer electronics to automobiles.

I do not know if Harley Davidson has the will, means or muscle to keep a takeover from happening. They are supposed to do what is in the stockholders interest. That is how Public Corporations operate. In the end it will be decided by the shareholders of Harley Davidson themselves. Will their greed allow Honda to take over Harley Davidson? In the free market, a lust for profit drives everything.

I hope Harley Davidson remains an American Company.

Everyone is welcome to comment on this story.

By Norman Gregory Fernandez, Esq., © 2007