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COVID-19 KILLS OFF HARLEY DISPUTE

Harley-Davidson’s board of directors and disgruntled activist shareholder Impala Asset Management have kicked their ongoing battle about brand strategy into the long grass, following the temporary closure of all Harley manufacturing plants in the US and the collapse of global retail bike sales — in both cases due to the coronavirus pandemic.

According to news agency Reuters, the two sides have set aside their differences and agreed to the appointment of an as-yet unknown independent director, chosen by mutual agreement. This mystery individual will join Harley’s board after its forthcoming annual general meeting but before a cut-off date of 31 July. In a regulatory filing to the US Securities and Exchange Commission, Harley said this settlement was reached “in the spirit of cooperation during trying times, viewing it as a necessity to move forward”. color:#666666″>

Impala, a £2.3bn hedge fund which holds a substantial 2% stake in Harley-Davidson, had been pressurising the company for some time over failure of its “More Roads” strategy to turn around declining sales and the consequential plunge in share price. The investor’s perspective was that diversifying into other styles of motorcycle and smaller-capacity machines, along with offshoring production to India and the Far East, were grievous errors and Harley should instead focus solely on core values, epitomised by its signature heavyweight cruisers wearing “Made in America” tags.  color:#666666″>

The abrupt departure of Harley chief executive and “More Roads” author Matt Levatich in February was widely attributed to Impala’s influence. But a recent attempt by the hedge fund to nominate a pair of trusted placemen as Harley directors was rejected by the board. color:#666666″>

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