Vaughn Beals, Harley-Davidson’s Turnaround Chief, Dies at 90

(Bloomberg) -- Vaughn Beals Jr., the executive credited with resurrecting the Harley-Davidson motorcycle from the brink of bankruptcy in the 1980s to a symbol of made-in-America pride, has died. He was 90.

He died Aug. 19, according to a death notice posted on the website of Haven of Rest Funeral Home in Gig Harbor, Washington. No additional details were provided.

As a vice president of AMF Inc., Beals in 1981 led the leveraged buyout of its Harley-Davidson Motor Co. unit by 13 of its executives for a sale price that Fortune magazine put at $81.5 million. It was a bleak time for the Hog, which was the only remaining American-made motorcycle still competing against Japanese brands Honda, Yamaha, Suzuki and Kawasaki.

Beals became chief executive officer of the newly private and independent Harley-Davidson. He cut the workforce by 40 percent, trimmed salaries and moved company headquarters back to Milwaukee from AMF’s home in White Plains, New York. To strengthen ties with customers, Beals and his team created the Harley Owners Group, which claims about 1 million members in almost 1,400 chapters around the world.

‘Wiped Out’

“‘We were being wiped out by the Japanese because they were better managers,’” Beals said, according to a 1989 Fortune magazine article. “‘It wasn’t robotics, or culture, or morning calisthenics and company songs -- it was professional managers who understood their business and paid attention to detail.’”

At the company’s behest, President Ronald Reagan’s administration imposed five years of limited tariffs on Japanese motorcycles in 1983 that helped the company as it retooled its operations.

Three decades later, in a reversal of fortune, Harley-Davidson announced plans to shift some production out of the U.S. to avoid European Union tariffs imposed in response to President Donald Trump’s protectionist trade policies.

Going Public

The revitalized company went public again in 1986 on the American Stock Exchange, as Harley-Davidson Inc. It moved to the New York Stock Exchange a year later.

“A bunch of American workers have shown that they can get their act together,” Beals said in 1987, according to Time magazine.

That year, the company asked the government to drop, ahead of schedule, the tariffs against Japanese manufacturers, a step that Reagan celebrated by visiting a Harley-Davidson plant in York, Pennsylvania.

“American workers can take on the best in the world, anywhere, anytime, anyplace,” Reagan told employees. “No one is better than you are.”

Beals served as CEO until 1989 and stepped down as chairman in 1996. The Motorcycle Hall of Fame in Pickerington, Ohio, inducted him in 2008.

“During some of the most challenging times in the long legacy of Harley-Davidson, Vaughn Beals brought vision and powerful leadership to this great company,” Harley-Davidson CEO Matt Levatich said Thursday in a statement. “Most significantly, he ensured that this ‘Eagle Soars Alone.’ We’ve carried his leadership lift under our wings ever since and we always will.”

Engineering Background

Vaughn LeRoy Beals Jr. was born on Jan. 2, 1928, in Cambridge, Massachusetts, according to Marquis Who’s Who. He was the only child of Canadian-born Vaughn Beals and the former Pearl Wilmarth.

Beals graduated from the Massachusetts Institute of Technology with a bachelor’s and master’s degree in aeronautical engineering in 1948 and 1954, respectively.

He spent the next 10 years directing research and technology at North American Aviation Inc. in Columbus, Ohio. In 1965 he became vice president of research and engineering at Cummins Engine Co. in Columbus, Indiana, and was promoted to vice president in charge of the domestic engine division. The company is now Cummins Inc.

He joined AMF’s Motorcycle Products Group in 1975. Six years earlier, when it was still American Machine and Foundry Co., AMF had added Harley-Davidson to its roster of recreation-related companies, which included Roadmaster bicycles, Head skiing and tennis equipment and Hatteras Yachts.

‘Production Mentality’

As deputy group executive, then as vice president and group executive, Beals watched as Harley-Davidson lost ground to Japanese competitors and lost respect from American consumers.

“Our quality got out of whack in the early ’70s because AMF expanded way too rapidly and couldn’t assimilate the growth,” he recalled, according to a 1988 article in the Morning Call newspaper of Allentown, Pennsylvania. “It went from a craftsman mentality to a production mentality.”

AMF put Harley-Davidson up for sale in 1981, prompting speculation that Honda was a prospective buyer. “Those rumors just scared the dickens out of our dealers, who had spent their lives competing against the Japanese,” Beals recalled, according to Forbes magazine.

Instead, the management group led by Beals -- which also included Willie G. Davidson, Harley-Davidson’s chief designer and a grandson of company co-founder William A. Davidson -- emerged as the buyers, backed by lenders led by Citicorp.

Reducing Defects

Beals and his team turned to Japanese management techniques such as just-in-time inventory control to improve costs and quality. The Journal of Commerce reported in 1987 that the company had slashed its defect rate to 1 percent from 50 percent.

Richard F. Teerlink, a former chief financial officer and chief operating officer at Harley-Davidson, succeeded Beals as CEO in 1989 and as chairman in 1996. The company now operates a Vaughn L. Beals Tour Center at its assembly plant in York, Pennsylvania.

With his wife, the former Eleanore Woods, Beals had two daughters, Susan and Laurie. The couple in 2011 donated $500,000 to research into multiple sclerosis, a disease affecting their daughter Laurie and two members of their extended family, according to the National Multiple Sclerosis Society.

--With assistance from John Lippert.

To contact the reporter on this story: Laurence Arnold in Washington at larnold4@bloomberg.net

To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Steven Gittelson

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