Harley-Davidson's Leadership Crisis: Can the Iconic Brand Survive Its Governance Struggles?

Harley-Davidson (HOG) has long been a symbol of American rebellion, freedom, and rugged individualism. But today, the storied motorcycle manufacturer finds itself in the throes of a governance battle that threatens its legacy. The company’s 2025 CEO transition plan, announced in April 2024, has spiraled into a high-stakes proxy fight led by activist investor H Partners Management, which holds a 9.1% stake. The conflict centers on whether CEO Jochen Zeitz’s leadership—and the board’s broader strategy—can salvage a brand hemorrhaging market share, dealer loyalty, and investor confidence.

Shareholder Rebellion and the Case Against Zeitz

H Partners’ campaign against Zeitz and two veteran board members—Thomas Linebarger (presiding director) and Sara Levinson (29-year director)—is rooted in frustration over Harley’s deteriorating performance. Since Zeitz became CEO in 2020, the stock has plummeted 42.7%, while 2024 revenue dropped 14.9% to $4.12 billion. The firm’s proxy statement accuses Zeitz of “absentee leadership,” citing his minimal presence at Harley’s Milwaukee headquarters and his reported travels to New Mexico, the UK, and Kenya. H Partners also criticizes the board’s “entrenched” structure, arguing that Linebarger and Levinson have stifled accountability and strategic agility.

The activist group’s demands are stark: withhold votes for Zeitz, Linebarger, and Levinson at the May 2025 shareholder meeting, and replace Zeitz with an external CEO. To rally support, H Partners launched FreeTheEagle.com, framing the fight as a defense of Harley’s soul against “corporate complacency.”

The Flawed Strategy: Hardwire’s Double-Edged Sword

Zeitz’s signature Hardwire strategy, launched in 2021, aimed to boost profitability by focusing on high-margin touring bikes, trikes, and premium customization. While this approach initially stabilized margins, it has alienated critical segments. Dealers, particularly smaller ones, decry declining profitability and reduced inventory flexibility. A December 2024 letter from the National Powersports Dealer Association (NPDA) declared “no confidence” in Harley’s leadership, citing dwindling dealer margins and a product lineup increasingly out of step with younger riders.

The strategy’s geographic pivot also faces backlash. Shifting 2025 model production to Thailand—a cost-cutting move—has sparked accusations of abandoning Harley’s “born in America” identity. Meanwhile, EU retaliatory tariffs threaten to hike European motorcycle costs by 54%, further squeezing margins.

Governance Failures and Cultural Toxicity

H Partners’ critique extends beyond financial performance to governance and culture. Jared Doureville, H Partners’ principal and former Harley board member, resigned in early 2025, alleging that Linebarger and Zeitz dominated decision-making while sidelining other directors. Doureville claimed the board lacked oversight of critical issues like the botched spinoff of Livewire, Harley’s electric vehicle (EV) division, which continues to bleed money.

Internal culture is another flashpoint. Employees reportedly describe a “toxic” environment under Zeitz, with stifled innovation and a leadership team disconnected from frontline operations. This perception is underscored by Zeitz’s sparse on-site presence, which shareholders argue undermines his ability to steer the company through crises.

The Crossroads: Strategic Reversal or More of the Same?

Harley’s board defends the Hardwire strategy, calling it a “successful execution” of its five-year plan. Yet, the data tells a different story:
- Dealer profitability: Down 30% since 2020 amid reduced inventory flexibility.
- Market share: Lost ground to rivals like Indian Motorcycle and Yamaha in key segments.
- Brand relevance: Younger riders increasingly view Harley as “unaffordable” and “outdated.”

Analysts suggest Harley needs to revisit the “More Roads to Harley-Davidson” strategy (2016), which aimed to diversify the brand with smaller-displacement bikes and urban-focused models. The Hardwire plan’s narrow focus has, ironically, replicated the same mistakes: alienating core audiences and failing to attract new demographics.

Investment Implications: A High-Risk Pivot

Investors face a binary outcome:
1. Status Quo: If Zeitz and the board retain power, Harley risks further erosion of dealer networks, brand equity, and financial health. The stock could drift lower as competitors capitalize on its missteps.
2. Regime Change: A new CEO with external experience (likely from automotive or consumer goods) might revive the brand by balancing profitability and accessibility. However, abrupt course corrections could spook investors in the short term.

The May 2025 shareholder vote is pivotal. If H Partners wins, Harley’s board will face pressure to:
- Re-evaluate the Hardwire strategy’s focus on premium models.
- Address dealer profitability through flexible inventory policies.
- Shore up Livewire’s EV division before it drains more capital.

Conclusion: A Brand at the Precipice

Harley-Davidson’s governance battle is not just about leadership—it’s a referendum on whether the company can adapt to a shifting market without losing its soul. With a 42.7% stock decline since 2024 and revenue stagnation, the status quo is unsustainable. While replacing Zeitz introduces risk, the board’s resistance to change has already cost shareholders dearly.

Investors should monitor two critical metrics:
1. Proxy vote outcome: A H Partners victory would signal a mandate for strategic overhaul.
2. Dealer relations: Improving profitability and inventory flexibility could stabilize demand.

For now, Harley’s iconic eagle logo remains a symbol of defiance—but unless leadership changes, its wings may struggle to carry the brand forward.

The road ahead is fraught with potholes. Only time—and shareholder votes—will tell if Harley can rev its engine one more time.