FOR THE FIRST TIME IN HALF A CENTURY, HARLEY- DAVIDSON'S FACING SERIOUS COMPETITION

by Spencer Foxworth

On paper, the prospect sounds as daunting as any business prospect anywhere could possibly sound: to compete with Harley-Davidson Motorcycles, that gleaming, exhaust-belching hunk of American machismo. And not only to compete with Harley, but to do it on Harley's terms, focusing on their target demographic with a heavyweight-cruiser style bike that's as tough and image-laden as the Fatboy. In essence, to flip the entire face of American motorcycling -- a $1.2 billion worldwide industry -- on its ear.

Not a simple task. Harley-Davidson is as much a part of American Tough as black leather and clenched teeth. A few companies have tried cracking their monopoly (cult, some would say) in the past, but every attempt -- from the Japanese industry's in the '70s to a series of doomed revivals of the classic Indian motorcycle -- has failed. You just don't mess.

Hubris or no, Excelsior-Henderson, a Minnesota-based motorcycle company, is about to. While they've got no intention of usurping Harley's iron grip on motorcycling's considerable mythos, securing a small percentage of that grip couldn't hurt ... and they've spent the past five years figuring out exactly how to do that.

They've got the name, resurrecting it from a 67-year slumber. They've got the mythology, being the reincarnation of one of the U.S.A.'s first -- and best known, along with Harley and Indian -- motorcycle manufacturers. Now, with 12 prototype "Super X" motorcycles, a brand-new, $50 million factory, 53 hand-picked motorcycle dealers and what appears to be a solid pantheon of enthusiasts backing their efforts, Excelsior-Henderson is poised to (re)enter the market.

It looks as if Harley's golden goose might get a healthy whack on the head. From here on in, motorcycling's about to be indelibly changed.

Brad Banister, Excelsior-Henderson's media relations representative, laughs a little when I describe Excelsior-Henderson's position in such a manner; he's quick to suggest an alternate viewpoint. "Yeah, there'll be some rivalry," he says, "but more than anything I think what you'll see is Harley and Excelsior-Henderson working together. They're brothers."

(A short aside to anyone who's been a brother: You know how viciously brothers can fight.)

"There's a trend, a phenomenon, called 'duality' in the market place," Banister says, "where two businesses, through competition, grow an industry, grow a market, more than just one could alone. These two are going to help each other. They're going to build up the American heavyweight cruiser."

We're talking in the immense foyer of Excelsior-Henderson's newly-raised factory in Belle Plaine, 30-or-so miles southwest of Minneapolis. The foyer itself is designed to be gently reminiscent of an early 20th-century urban street scene -- the floor is brownstone brick, certain windows have been embellished to resemble store fronts (complete with mannequins modeling Excelsior-Henderson T-shirts, leather jackets, chaps and gloves) and several streetlamps border the hallway. Behind us, opposite the front doors, lies Excelsior-Henderson's assembly room. Occasionally, a worker steps out from behind the smoked-glass doors and I get a glimpse of bare, NASA-sterile walls and catwalks. It resembles the secret base of a James Bond villian; the space, while largely empty, is still off-limits to journalists and potential corporate raiders. Excelsior-Henderson's got their secrets, and our conversation is punctuated by wary, sidelong glances from various employees.

While the specifics of Excelsior-Henderson's future remain under wraps, their past most definitely isn't. Indeed, that's one of the earliest lessons Excelsior-Henderson learned from Harley-Davidson -- embrace the past -- and they're cashing in on this as a major selling point for their bikes.

What's behind those doors is intriguing, sure; but what's just in front of them is at least as fascinating. Three early Excelsior-Henderson motorcycles -- 1911 to 1931 -- are parked beside the new 1998 Super X prototype, and the contrasts are both stark and subtle. Comparing the slick, Rubenesque '98 with the spartan 1911 model, the contrast couldn't be sharper. The grey antique resembles a bicycle more than a motorcycle: The tires are thin and many-spoked, the foot rests are made of wood and the front suspension is a glorified spring. This is the bike that carried a man across the world -- Excelsior-Henderson is quick to point out that their product was the first ever to circumnavigate the globe -- but it's hard to imagine spending even a weekend cruise on this contraption without rupturing something.

Banister motions me over to the '31 Excelsior-Henderson, where their evolutionary links become clearer. Like the '98 prototype, the '31 Super X's most obvious distinctions are the twin coiled springs running vertically down through the front fender. It wasn't the most subtle design choice in the world, but it's effective. And it adds a certain amount of silvery, primitive grace to the bike's squat frame -- the repeating circles of the coiled springs have the cumulative effect of softening the motorcycle's lines, rounding them out, smoothing it. In fact, for an old geezer, the '31 looks -- and feels -- pretty comfortable: The frame's backbone curves underneath a teardrop-shaped gas tank, and the handlebars swing far back, allowing an upright seated position. Anyone who's ever seen a Harley cruiser would instantly recognize the '31 Super X as its ancestor (and what a huge leap from the old '11 model!).

Sixty-seven years have passed since then, though, and the '98 Super X prototype doesn't ignore much of that elapsed time. It's a much bigger bike than the '31, and it manages to look retro without looking too retro. Except for the twin oil-dampened suspension springs running through the front fender, the '98 Super X looks uncannily like the Fatboy's upstart cousin. Which, in a way, it is.

"Excelsior-Henderson likes to think that a lot of the features [on the modern heavyweight cruiser] defined the cruiser, the classic American motorcycle," Banister says. "Older Harleys, Japanese manufacturers copied [this style]. It's not a Harley style. It's just that Harley's the only American company right now that's offering it.

"In the old days, Harley had big, square gastanks. As time wore on and that company was around longer, they looked at this bike and said, 'Hey, there's some things here that we like.' The frame backbone curves out and goes down ... they used to go back square and drop back. That's something that was new on this bike, and it lives to this day."

Aesthetically speaking, just about every aspect of Excelsior-Henderson -- the prototype Super X, the architectural choices of the Belle Plaine factory, even their promotional materials -- emotes nostalgia.

Even the name has a history attached to it. Ninety years ago, Excelsior Motorcycles, along with Harley-Davidson and Indian, were considered the "Big Three" of American motorcycles. In the pre-Depression era, everybody and their uncle manufactured motorcyles, but the Big Three were the largest, most well-known and, arguably, the highest quality of American motorcycle companies.

Excelsior motorcycles were standard police-issue, chosen for their durability and speed; the first man to break to 100 mph speed barrier on two wheels did so on an Excelsior. In 1911, Schwinn Manufacturing (who owned Excelsior) bought Henderson Motorcycles, and the name became Excelsior-Henderson. That lasted until 1931, when Schwinn was faced with the choice of ceasing the manufacture of Excelsior-Henderson motorcycles, or going bankrupt. They chose the former, and it wasn't until 1993 that the name was resurrected by Dan and Dave Hanlon, CEOs of the new Excelsior-Henderson.

Surmounted obstacle #1:
They got their name and a legend attached to it.

After all, Excelsior-Henderson's in the business of selling bikes, which has very little to do with practicality and nearly everything to do with passion, frivolity and nostalgia. Like any good marketeers, Excelsior-Henderson is counting on these emotions to carry them through their first year on the market and beyond.

"Harley's done a wonderful job of getting people attached to their product," says Butch Donahue, who serves on Excelsior-Henderson's Board of Advisors. "They have lots of people tattooing the Harley-Davidson logo on their bodies. They're the only company in the world that does that. ...

"So what the Hanlon boys did is revive the name. That's been their effort, and in doing so, to create their own following, their own customer base. That customer base could consist of all kinds -- a guy that'd ride a Honda Gold Wing and wants something American-made, a guy that drives a Harley but wants something else made in America, or somebody that has Hondas and Harleys and wants another motorcycle of limited production that has some uniqueness to it."

According to everybody from Excelsior-Henderson's market analysts to the average Harley fanatic, nostalgia is something that, no matter now high-tech or performance-oriented your bike is, can't be manufactured. Motorcyclists -- specifically, those motorcyclists fitting under the heavyweight-cruiser demographic -- are a notoriously picky bunch when it comes to what's acceptable and what isn't. After Indian's bankruptcy in '53, Harley-Davidson literally owned the American motorcycle market. Essentially, they've been the only U.S. motorcycle company to compete (well, dominate) in the heavy-cruiser market for 45 years. That's why Sturgis, the yearly motorcyclist's mecca in South Dakota, is traditionally recognized as a Harley gig. Other bikes are becoming more and more welcome as the years progress, but tradition's tradition: You're never truly accepted unless you're straddling a Harley.

Surmounted obstacle #2:
Sturgis ate them up.

"We had the bike set up so you could get your picture taken with it," Banister says. "... Guys were sitting on the [Super X] with their Harley shirts on, smiling for the camera. Everybody that rides wants to see this company make it."

Part of their success, indicated by Sturgis, has been their relatively conservative business plan. "These guys are not after Harley-Davidson," Donahue says. "They're after their own customer base on a smaller scale. ... It's not Harley, it's not Honda, but [they're] a viable business. If you can get a business like this, get 4 to 6 percent of the market, you'd have a success, because your business and profit structure is focused on a smaller business. The problems that some places have is they come through, try to get too big too fast, do too many things at once.

"Dan and Dave Hanlon have a business plan -- I read it through thoroughly years ago -- and they have not deviated from it one iota."

Already, enthusiasts are putting hard cash down on Excelsior-Henderson. Tony Donahue, Butch's son and vice president of Delano Sports Center (not incidentally, one of the first dealers hand-picked by Excelsior-Henderson), has most of his first year's stock already sold. He's not surprised. "There are a lot of people out there that are looking for an alternative to Harley-Davidson now because of the demand thing -- not being able to get a [Harley] for two years. ...We already have 70 deposits."

But not everybody's so enthusiastic, and not every Harley lover is automatically interested in Excelsior-Henderson's efforts. Critics of the company are quick to suggest that only motorcycle restorers, historians and fanatics will recognize Excelsior-Henderson's name; it's been 67 years since the last Super X graced a showroom floor, after all.

"Harley has a history that carries people to them a little more than Excelsior-Henderson," says Dave Borri, salesperson at Twin Cities Harley-Davidson. "My dad might've ridden a Harley or an Indian, but he probably wouldn't have ridden an Excelsior-Henderson. They quit making them in the early '30s. Indian went until '53, and Harley's still being made. People think 'American-made motorcycle,' they think Harley-Davidson, not Excelsior-Henderson. That's what I mean by history."

Design choices and legendary name notwithstanding, the company's still facing a tough battle into American bikers' collective unconscious. According to Borri, Excelsior-Henderson can talk about history all they want, "but those people that rode Excelsior-Hendersons are pretty much dead, and they're not buying bikes."

True enough; but if Excelsior-Henderson can succeed in resurrecting their namesake's legend, securing some part of their history in the minds of their target demographic, they've won half their battle already. "Harley lives or dies by the old," Borri says. "They really don't change much. They learned not to change too much until it's accepted, and then change it, but don't ever get rid of the old until the new stuff's been accepted."

Excelsior-Henderson's chosen to walk a narrow line between the new and the old -- that's a key point other manufacturers, attempting to swipe a chunk of Harley's market, have failed to recognize. Foreign bikes, in particular, have had a tough time. Market pressures have spoken: A Honda heavyweight cruiser, for example, depreciates in value much more quickly than a Harley cruiser, which tends to increase in resale value.

So far, Excelsior-Henderson's entry-level path has been a slow and steady uphill climb -- not easy by any means, but constantly progressive. Market analysis can predict only so much; when spring of 1999 rolls around and the new Super X hits the streets, time will be the surest indicator whether or not Excelsior-Henderson will have two wheels to balance on.