The boardroom eruption over the future of Harley-Davidson

The next CEO, who would be Harley's third in less than 6 years, could stick with Zeitz's strategy or pave a new road

- John Keilman

Boardroom drama usually happens behind closed doors. But at Harley-Davidson, a fight to define the future of the iconic American motorcycle brand has spilled into public view.

On a Wednesday in March, Harley's directors assembled in a conference room at the Loews Chicago O'Hare Hotel to interview three candidates for the company's next chief executive. They had begun searching for a new CEO this year after the current leader, Jochen Zeitz, 62, privately told them he was ready to retire.

Eight directors—the entire board except for Zeitz, who also serves as chairman—later held a vote. None of the candidates won on the board and went public with complaints about what he called "cultural depletion" and the loss of senior leaders. After back-and-forth sniping through securities filings, H Partners this past week launched a campaign it dubbed "Free the Eagle" to force out the directors.

Harley, a star-spangled beacon of U.S. manufacturing, faces slowing sales of bikes that can cost more than $40,000, an aging customer base and no clear way forward.

The next CEO, who would be the company's third in less than six years, could stick with Zeitz's strategy—or pave an entirely new road for one of the world's most recognizable brands. Critically, whoever takes over will need to improve relationships with 1,200 worldwide dealers and win back loyal riders.

Harley aficionado Steven David, a 69-year-old Dallas auto executive, rides a 2003 Fat Boy and has resisted his local dealership's suggestions to upgrade, saying newer models lack the chrome and noise that are hallmarks of the brand. "I think they've just been missing the mark for quite a while," said David, who wants to see a back-to-basics approach.

This account of the clash within Harley-Davidson is based on interviews with current and former company leaders, investors, customers and dealers, as well as public filings.