HIGH ON THE HOG HARLEY-DAVIDSON IS ROARING TOWARD ITS 100TH ANNIVERSARY WITH SALES GOING FULL-THROTTLE.

Byline: Evan Pondel Staff Writer

It's difficult to rationalize buying a $20,000 motorcycle when hard times strike.

Chrome-laden choppers, cutting large swaths of asphalt with tailpipes ablaze, are a distant dream.

But with the economy recovering at a putt-putt pace and major indexes still wobbly, Harley-Davidson Inc. is thriving. The Milwaukee-based motorcycle maker has produced a profit for 16 consecutive years. And as Harley rounds the corner for its 100th anniversary in 2003, sales will most likely generate another profitable year.

``We would not characterize ourselves as recession proof, but we do consider ourselves recession resistant,'' said Jeffrey Bleustein, Harley's 63-year-old chairman and chief executive officer. ``Our brand has been through wars, depressions and terrorist attacks. But people still have this desire to express themselves and find sanity in what at times looks like a chaotic world. That's what helps us survive.''

The phenomenon appears contagious for many manufacturers of recreational and sport vehicles these days. Winnebago Industries Inc., maker of motor homes and RVs, saw earnings rise 45 percent in its second quarter ended June 1. Industrywide, reports said sales of ATVs and motorcycles are up more than 10 percent this year.

It appears that people may be cutting back on vacations to fund another source of stress relief: luxury toys. And as the average age of a Harley purchaser hovers around 45, baby boomers are cracking their nest eggs to savor the open road.

When Jack Thomson turned 43 last December, something was missing in his life. The Chatsworth resident already owned a comfortable home, equipped with swimming pool and Jacuzzi. A large boat sat idle in his driveway. And two personal watercraft were preserved in his garage.

``So I decided to pursue a dream that my wife obviously wasn't too thrilled about,'' the accountant said. ``I went down to the Harley dealer and got myself a Hog.''

A fleet of just-in-the-showroom Harley Fat Boys tempted Thomson's appetite and, a couple hours later, he was the owner of a brand new bike. ``No, it wasn't cheap and, well, I felt a little guilt. But after riding it for several weeks now, I have no regrets at all,'' he said.

Harley's ability to woo its customers isn't simply a function of boomers seeking salvation. Ed Aaron, analyst at RBC Capital Markets, said, ``it's a function of Harley's strong cultural identity. There are not many brands out there that people are willing to tattoo on their arm.''

Harley's roots date back to 1903 when William Harley, 21, and Arthur Davidson, 20, made the first production motorcycle available to the public. Built for racing, it wasn't until 1905 when the H-D motorcycle won a 15-mile race in Chicago - with a time of 19:02.

Of course, H-D motorcycles have evolved. Now, the bikes are ``hydro- formed aluminum'' machines, with ``optic headlights and frame-mounted fairings.'' But the essence of a Harley still transcends rubber and steel. Analysts say it's a combination of the right management and the mystique surrounding the motorcycle.

Instead of producing massive quantities of bikes every year, Harley keeps supplies taut. Timothy Conder, analyst with A.G. Edwards & Sons Inc., said demand exceeds production, enabling H-D to virtually have no debt. ``And we haven't seen Harley change that formula since the 1980s,'' Conder said. ``They've maintained a conservative path and as a result, the business is managed very well.''

But Harley's path hasn't always been free from potholes. In 1981, the company was dealt a series of financial setbacks. So 13 H-D senior executives, including Bleustein, decided to buy the company from AMF. Five years later, H-D found itself ``hours away from bankruptcy,'' Conder said.

The bikes weren't ditched, though.

The same year the company released its Heritage Softail, Harley-Davidson Motor Co. was listed on the American Stock Exchange. By 1987, H-D was trading on the New York Stock Exchange, thus twisting the company's throttle toward its profitable future.

Wall Street and Harley-Davidson have a unique relationship. The two contrasting entities wouldn't necessarily ride together on a touring bike. But while some motorcycle enthusiasts say riding a Hog and wearing a navy blue suit just don't fit, Arthur Estrada, 21, is of a different philosophy.

``Man, you have lawyers coming here, stock brokers, doctors, and then you have people like me,'' said Estrada, a motorcycle mechanic at Harley-Davidson/Buell of Glendale. ``I've loved Harley since I can remember. Those street bikes have never been for me. But everyone's welcome and accepted on the road.''

Each of Estrada's fingers has a tattooed letter just below the knuckle. Squeeze his digits together and the letters spell ``Hard Luck.'' Estrada said when he was in Arizona attending H-D's mechanic school, a friend of his etched the letters onto each finger.

``It didn't hurt much, but it reminds of a time when I started working on these motorcycles,'' he said. ``For me, Harley is more than just a company that gives me a paycheck. It's the way I live my life.''

Though Estrada's Harley is his only mode of transportation, brothers Joe and Mike Alvarado are in the market for weekend vehicles. The two were perusing Glendale H-D's showroom floor last week in search of the ultimate 100th Anniversary edition bike.

``MMmmmm, I like this deuce over here. Look at the chrome on that,'' said Mike, who runs a handyman business called Honeydew in Santa Barbara. ``Maybe I'll spend $20,000 or so ... maybe a little more too.''

The sticker price on a Harley ranges from $5,975 to just over $20,000. Yet Aaron said it's rare to find a Harley on target with the manufacturer's suggested retail price. ``And if you want MSRP, there could easily be a waiting list for about a year,'' he said.

If owning a Harley is too vast a financial stretch, the company is hosting its 100th Anniversary Open Road Tour at the California Speedway in Fontana Friday, Saturday and Sept. 8. Bleustein said the tour will give everyone a chance to taste Harley, even if they've never been on a motorcycle.

``And this tour is not to say that everyone should ride a motorcycle,'' he said. ``It's just time for free spirits to take some time off and see what we're all about.''

IF YOU GO

What: Harley-Davidson 100th Anniversary Open Road Tour

When: 1-11 p.m. Friday and Saturday; 1-9 p.m. Sept. 8

Where: California Speedway, Fontana. Take Interstate 10 east, exit Cherry Avenue and follow the signs.

Tickets: $35, includes live entertainment

Information: www.harley-davidson.com

CAPTION(S):

photo, 3 boxes

Photo:

(color) Joe Alvarado, left, and his brother, Mike, check out a 100th anniversary Harley-Davidson motorcycle at Harley-Davidson/Buell of Glendale.

Gus Ruelas/Staff Photographer

Box:

(1) BEHIND THE BIKE

SOURCE: Thomson Financial/First Call; Knight Ridder 

Daily News

(2) 2001 PURCHASERS

(3) IF YOU GO (see text)