The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Jonathan Guilford

NEW YORK, May 1 (Reuters Breakingviews) - After 122 years of traversing economic crashes, world wars and pandemics, Harley-Davidson HOG.N is running low on gas. Sales of its iconic motorcycles declined 57% from 2006 through 2024. The company’s investors are now as rebellious as its counterculture customers used to be. It’s time for boss Jochen Zeitz to peel out of public markets.

With typical riders in their late 40s, much older than previous generations, the rejuvenation struggle is real. Higher interest rates make it pricey to buy choppers on credit. President Donald Trump’s trade war also has turned the archetypal American brand, representing freedom cruising the country’s open roads, into a target for retaliation. Harley on Thursday joined a growing group of companies yanking financial guidance because of tariff turbulence.

Zeitz shook up the mix of models, sought to boost revenue from accessories and rolled out electric Hogs, as Harleys are famously known. His efforts failed to overcome the obstacles. In the first quarter, revenue fell 23% from a year earlier. The company is worth almost 60% less than its post-pandemic peak, inviting a fresh round of restlessness from shareholder H Partners.

Following a dispute over who should replace Zeitz when he exits later this year, the hedge fund resigned the board seat it secured three years ago and urged fellow owners to withhold votes from three directors in May. It’s too late to nominate a rival slate, but the campaign clears the way for a general expression of disapproval.

H Partners is also helpfully amplifying Harley’s long to-do list. Its relationship with dealers has soured and the LiveWire LVWR.N electric subsidiary is struggling. Spun off in 2022 through a blank-check merger, its share price is down 84%. Harley owns an 89% stake.

One bright spot: Harley is forecast to throw off more than $500 million in free cash flow this year, according to Visible Alpha data. Wall Street also expects the division financing loans for customers to generate more than $200 million of operating income for years. Zeitz is considering capitalizing on that strength by selling part or all of the business.

Most of Harley’s nearly $7 billion in debt is tied up in these financial services. If separating the unit, with its borrowing, is practicable for a mooted $1 billion, as reported by Bloomberg, it would leave a net-cash enterprise worth roughly $1.5 billion after including the sale proceeds. Throw in a standard 30% premium, and a wealthy enthusiast could drive off with the ride preferred by Brad Pitt and Bruce Springsteen. If nothing else, Harley-Davidson would be a dazzling trophy asset.

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CONTEXT NEWS

Harley-Davidson on May 1 suspended its annual financial forecasts over tariff concerns while reporting that first-quarter operating income fell 39%, to $160 million, from a year earlier on a 23% decline in revenue.

H Partners, a 9.1% stakeholder in Harley, unveiled a campaign on April 16 urging shareholders to withhold their votes from three company board members at the annual meeting on May 14.

(Editing by Jeffrey Goldfarb and Pranav Kiran)

((For previous columns by the author, Reuters customers can click on GUILFORD/ Jonathan.Guilford@thomsonreuters.com))