Overview of Harley Davidson
Harley Davidson was founded back in 1903 in Milwaukee, Wisconsin, which is a very famous American motorcycle manufacturer. It operates in the automotive industry, and is famous for giving chopper motorcycle style (Scott, 2008). The company has had a history of having survived the Great Depression, and has also seen a number of subsidiary and ownership arrangements, along with poor economic health and product quality phases and continued intense global competition. The company is amongst the largest motorcycle manufacturers in the world and as a result of its iconic brand, has created a loyal fan following, which has resulted in events being organized across the world and clubs being formed, in addition to the brand focused museum (Gingerelli, 2014).
The company sells its products across the world, and the key manufacturing units of the company are at Bawal in India, York in Pennsylvania, Manaus in Brazil, Milwaukee in Wisconsin, and Kansas City in Missouri. Presently, the headquarters of the company is at Milwaukee in Wisconsin. The company also has a manufacturing unit in New Castalloy in Adelaide, apart from having regional office at Sydney (Harley Davidson, 2017a). As of 31st December, 2016, the company had around 5,400 employees in manufacturing segment. In this, nearly 2,300 were the unionized employees from the US manufacturing facilities alone. The employees in financial services were around 600 (Harley Davidson, 2016). The company has 2 people, in Victoria, and 28 people, in Sydney as its employees. The company has a factory backed riders group known as Harley Owners Group and this group has 23,000 members. Harley Davidson Australia has the responsibility of importation and distribution of the motorcycles of company, general merchandise, and parts and accessories to around forty eight dealers across New Zealand and Australia (Tony Owens, 2017).
The overall performance of the company saw a decrease of 1.6% for the motorcycle shipments and the revenue of the company stood at $6.0 billion. The company also faced a decrease in the gross margin for the motorcycle segment by 1.7 points, making the gross margins at 35.1%. The net income of the company stood at $692.2 million which was a decline by 8% in comparison to 2015. Even though the results of 2016 were not as the company had expected it continued to deliver strong value to the shareholders as the diluted earnings per share saw a rise to $3.83 which was a rise of 3.8%. The company raised its dividend by 13% which resulted in the 36.6% as the dividend payout ratio. The company has become a brand due to the passion from its freedom seeking customers. The company is celebrating its 115 years of journey for the present year and has chalked out a number of plans for the next ten years. In this goals are the goals of having a zero impact on the environment, owing to the raising concerns of satiability across the globe (Harley Davidson, 2017b).
The companies who have presence or operations in Australia are required to follow the regulatory framework which is applicable in the different jurisdictions of the nation, and this is in forms of different acts and regulations. There are regulatory bodies that have the responsibility of applying and governing these frameworks. Having its operations in Australia, Harley Davidson is required to follow all these frameworks.
Manufacturing Units and Employees
The first legislation which is applicable on Harley-Davidson is the Corporations Act, 2001, which is an act of commonwealth, meaning that this act is applicable uniformly across all states and territories in the nation (Plessis, Hargovan & Bagaric, 2010). The applicability of this act requires the directors and the other officers of the company to carry the work of the company in such a manner which shows diligence and care, where the position and information of the company is not misused, and the work of the company has to be carried in good faith and best interest (Latimer, 2012). This act also provides the manner in which the name of the company has to be kept or amended, the requires of memorandum and constitution, the meetings of directors, the accounting requirements in terms of presenting a true and fair position of the company, and various other aspects of a company. For instance, the applicability of this act on Harley Davidson requires the company to make the disclosures based on section 299A (1) of the Corporations Act (Cassidy, 2006).
As the company has a manufacturing unit in Adelaide, there is a key need of following the legislations of Workplace health and safety, which are not only given for the commonwealth, but also separately for every state and territory; though, these are more or less aligned to the commonwealth act. Safe Work Australia takes the leadership in the development of national policies for improving upon the work health and safety of the workers across the nation, apart from making the arrangements for the workers’ compensation (Archer et al 2014). Under this act, it is the duty of the employers to provide such conditions to the workers which are safe for the employees and where the machinery and other equipments are handled in a proper manner, for which the employees are properly trained. This act also imposes duty on the employees to be careful in working and to not undertake tasks in a manner which pose threat to the safety of others (Stoll, McGill & Ritchie, 2013). Being a manufacturing company, which deals with heavy machinery, the adherence to the provisions of this act becomes all the more important.
In the previous segment, it was mentioned that the company is focused towards having a zero impact on the environment. This means that the company has to follow the environment related legislations applicable in Australia, which means the adherence to the Environment Protection and Biodiversity Conservation Act, 1999, as well as, the Environment Protection Act, 1970 (Business, 2017). It does not matter that the company has headquarters in US, having its operations in Australia would mean that Harley Davidson Australia would have to follow the environmental legislations.
A general treaty which applies on the company is the United Nations Charter where the rights and duties are provided for the nations and provides certain activities as being the key duty and responsibility of the nations. Based on the conventions, treaties, declarations and legislations, these rights are often limited/ restricted. An example of such limitations can be found in the environment related activities and its associated frameworks across the globe (Garner, 2017). Being a company having global brand loyalty, there is a need for Harley Davidson to follow all such obligations.
Financial Performance of the Company
The company employees a high number of employees, which makes the Stockholm Declaration, apply for the operations of Harley Davidson as a global company. The Stockholm Declaration is better referred to as the United Nations Conference on the Human Environment, Stockholm 1972. This declaration also works in the direction of interactions of people which they have with the environment. There are 27 principles under this declaration ranging from human rights being asserted in a proper manner, the wildlife and natural resources being safeguarded, the adherence to environment related polices, helping the developing countries, keeping the levels of pollution under limits, and bringing forth improvements in environment by the mode of development, amongst the other things (Dodds, Strauss & Strong, 2012).
There is also a need to follow the Universal Declaration of Human Rights to ensure that the employees and the different people associated with the company have the proper rights, and that their human rights are properly secured (Morsink, 2010). Human rights are very crucial aspect considered by the United Nations and thus, the focus on these rights is propagated. Apart from this, Harley Davidson also has to comply with the International Covenant on Civil and Political Rights, along with the International Covenant on Economic, Social and Cultural Rights (Schutter, 2010).
The company had reached a settlement of $15 million with the US federal government in order to settle the charges regarding the company selling devices which were meant to cheat regulations of engine emissions. As per the Justice Department and the Environmental Protection Agency, the company had sold around 340,000 aftermarket devices under a certain brand for over eight years which allowed the vehicles to emit high pollutants than the prescribed limits. This major fiasco not only caused a negative impact over the company in financial terms, but also on the goodwill of the company (Cama, 2016; EPA, 2017).
Due to this scandal and the raised awareness on the environmental concerns, there is a need for Harley Davidson, not only for Australia, but for all its plants across the globe, to follow the environment related conventions and treaties. As the company has operations in Australia, the company also has to follow the Kyoto Protocol as Australia is a signatory to this treaty. The Kyoto Protocol is to be followed, apart from United Nations Framework Convention on Climate Change as both of these are linked. The goal under these frameworks is to bring down the greenhouse has emission in order to limit the damage which they cause to the environment. The United Nations Framework Convention on Climate Change had been created back in 1992 with the goal of stabilizing greenhouse gases, which majorly impact the climate in a degrading manner (Leal-Arcas, 2013). This treaty also specifies the emission limits for each nation, and promotes the reduction of such emissions (Harrison, 2013).
These are not the only treaties which have to be followed for making the operations of the company friendlier and also such that no harm is caused to the environment. There are a number of other treaties which becomes applicable on companies like Harley Davidson, as these are global companies. Some of such treaties focused on saving and respecting the needs of the environment include the World Summit on Sustainable Development, 2002, Conference on Environment and Development, 1992, and Environment and Development, 1983 (Garner, 2017).
Regulatory Frameworks in Australia
As stated earlier, United Nations Framework Convention on Climate Change is aligned with Kyoto Protocol where the focus is on bringing down the green house gas emissions. This concentration is due to the clear signs of damage being caused across the globe from such gases, and the same is visible in terms of global warming (Körber, Schwirzenbeck & Barth, 2008). Thus, there is a need to adhere to the provisions and conditions presented through the Kyoto Protocol to remove not only the CO2 but also the CO2e from the environment, which starts from reducing the presence of these in the environment. With this, the anthropogenic interferences can be prevented from the environment (Massai, 2011).
This has led to Harley Davidson putting its focus on growing the business in such a manner where the environmental impact is not grown. In this regard, the company has adopted a broader sense of responsibility towards the environment. There is a focus on bringing down the environmental impact of the company for its operations and products in order to obtain a new level of innovation for benefiting the customers of the company, both the present ones and the futures ones, in a similar manner. In this regard, the company also makes sure that the employees of the company also align with the commitments of the company (Harley Davidson, 2017b).
A very famous concept of the present time is corporate governance which puts the focus on three aspects, the society, the environment and the company itself. In this regard, the companies are required to work in a manner where they earn profits but also work towards the society and environment, in terms of giving them back what they give the company. In this regard, there is a need to follow the principles as have been set out by the Organization for Economic Co-operation and Development, also referred to as G20/OECD Principles of Corporate Governance. Through these principles, it is ensured that the investment becomes a powerful indicator of growth for the entities (OECD, 2015).
References
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Business. (2017). Environmental legislation. Retrieved from: https://www.business.gov.au/info/run/environmental-management/environmental-legislation
Cama, T. (2016). Harley-Davidson reaches $15M settlement over pollution charges. Retrieved from: https://thehill.com/policy/energy-environment/291838-feds-accuse-harley-davidson-of-pollution-violations
Cassidy, J. (2006). Concise Corporations Law (5th ed.). NSW: The Federation Press.
Dodds, F., Strauss, M., & Strong, M.F. (2012). Only One Earth: The Long Road via Rio to Sustainable Development. Oxon: Routledge.
EPA. (2017). Harley-Davidson Clean Air Act Settlement. Retrieved from: https://www.epa.gov/enforcement/harley-davidson-clean-air-act-settlement
Garner, E.L. (2017). International Treaties Governing Mineral Exploration. Retrieved from: https://www.eolss.net/Sample-Chapters/C09/E6-65-05-04.pdf
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Harley Davidson. (2016). Harley-Davidson, Inc. Retrieved from: https://investor.harley-davidson.com/static-files/dd89f029-38a6-4e73-91f4-59d952206a3b
Harley Davidson. (2017a). Our Locations. Retrieved from: https://www.harley-davidson.com/au/en/careers/locations.html
Harley Davidson. (2017b). 2016 Letter To Shareholders. Retrieved from: https://investor.harley-davidson.com/news-and-events/letter-to-shareholders
Harrison, J. (2013). The European Union and South Korea: The Legal Framework for Strengthening Trade, Economic and Political Relations. Edinburgh: Edinburgh University Press.
Körber, C., Schwirzenbeck, M. & Barth, K. (2008). The Kyoto Protocol. Norderstedt: GRIN Verlag.
Latimer, P. (2012). Australian Business Law 2012 (31st ed.). Sydney, NSW: CCH Australia Limited.
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OECD. (2015). G20/OECD Principles of Corporate Governance. Retrieved from: https://www.oecd.org/daf/ca/Corporate-Governance-Principles-ENG.pdf
Plessis, J.J.D., Hargovan, A., & Bagaric, M. (2010). Principles of Contemporary Corporate Governance (2nd ed.). Cambridge: Cambridge University Press.
Schutter, O.D. (2010). International Human Rights Law: Cases, Materials, Commentary. Cambridge: Cambridge University Press.
Scott, M. (2008). Harley-Davidson Motor Company. Westport, CT: Greenwood Press.
Stoll, M., McGill, C., & Ritchie, J. (2013). Work Health and Safety. Sydney, NSW: McGraw-Hill Education Australia.
Tony Owens. (2017). Harley Davidson, Australia. Retrieved from: https://tonyowen.com.au/files/hdaustralian-construction-and-engineering-review.pdf
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