Wisconsin's Weekend Morning News
WWMN Interview: Rich Kirchen on the Impact of the Harley Homecoming 7-28-24
Well, we've got Rich Kirch in here from the Milwaukee Business Journal, and Rich, it's just been an amazing weekend, and you had the opportunity on Friday night to see some of those big acts. Yes. Well, Jelly Roll was the headliner, and, you know... I like him, by the way. Yeah, I gotta say, I never heard of him before they announced him as the headliner. But yeah. And it's a different musical mix than last year for Harley, where they had a couple of older rock-and-roll bands, Green Day and Foo Fighters, this time going with Jelly Roll one night. Country, rap, hip-hop, whatever he does, and then Red Hot Chili Peppers going back to sort of that '90s rock playbook. Now, why has Harley switched to an annual celebration instead of doing it every other... Every five years. Every five years. Yeah. Well, as far as I understand it, and Yoken Zites, the company CEO, reiterated that this past week that sounds like it was his decision. I'm sure it had to be approved by the marketing department and all that, but he thought that why I just hold a celebration every five years, there are big motorcycle rallies in other places that Harley participates in, Daytona and Sturgis. He wants to build up the homecoming to be the same kind of thing every year in Milwaukee and bring in riders from all around the world. How does that affect Harley's business? Well, I mean, it's mostly about brand building, and it's about building on that connection that the company has with its riders. You know, if they're willing to ride here from hundreds or thousands of miles away and spend some time, you know, visiting the museum, hanging out with each other, going to the dealerships, it's sort of the ultimate way of connecting with your customers. All right, but business-wise, how is Harley doing? Because I know you had a couple of stories this week. Well, it was the tale of two Harleys. First of all, on Thursday, they reported sales and earnings that were higher than the stock analysts expected, and their stock actually went up a bit initially, and you know, shipments were up, things were looking pretty good. That's for the quarter that ended June 30th that they just reported. However, in the meantime, I followed up on some statements that their chief financial officer made during the call with the stock analyst, where he talked about slowing down production of motorcycles. So I thought, gee, what's that about? And reached out to the company, they didn't have any further comment, but I also got a hold of the steelworkers union, which represents the majority of the workers at the plant in Menominee Falls. And he informed me that actually the company had implemented what they're calling temporary layoffs, and they are slowing down production. About one week a month is the plan started through the end of the year for those employees who work at the plant. In Menominee Falls, there's a plant in Tomahawk, and there's a plant in Pennsylvania, so they're slowing down production, and the workers are not there full time. What does that mean? That means the company is trying to reduce the inventory at their dealerships. They're saying 30%. They think there's a mismatch between the number of bikes they've been making and the number that the dealers have been selling. Is it an economic slowdown? Is it the interest rates? Not sure. All right. Well, maybe the economy isn't everything that we hope for right now, because one of those places that opened with great fanfare at the Corners in Brookfield closed very quietly here. Tell us about what happened. Wallburgers. At one point, they had two locations in the Milwaukee area, one in the Third Ward that closed last year, and then the one at the Corners in Brookfield. The owners of the shopping center tell us that they made a decision that they wanted to go with a different mix of businesses in their shopping center. Hard to say what that means. I only went to the wall burgers out there once, shortly after it opened, and at that point it was a big deal, and it was packed. So I did a quick little look around for news on them. It seems like it's not unusual for them to close locations or have locations closed. But as far as I know, it's still a viable business and a going concern. But it's interesting you said you went there once and you didn't go back, because everybody I've talked to had that same experience. They'd go once to see what it was all about. Right. You have to have that repeat business. That's the thing. The novelty wears off. One place that does get a lot of repeat business is Coles, and they're changing things up a little bit. They are. They've been trying different things, of course, to get their sales back up to where they were some years back, changing their merchandise mix, changing what they're emphasizing, changing what you see when you walk in the door. And the latest thing is dresses, and I can't help you too much there. But maybe they're hoping to get more women and young women to notice that they have dresses in their inventory, and there's sort of a different mix of brands. Well, even if you're not shopping for dresses, I'll tell you, as a woman, you generally will stop to see what's there. And I think most coal shoppers are women. Yes, absolutely. Yeah, I remember when I was covering that company, when you talked to the executives about their consumers, they always said, "She." So they know. Yeah, they know. I've been there. All right. Let's talk about something kind of exciting, and that's a major development that's happening right near the Marcus Performing Arts Center. Right. And with sort of an unassuming name, at least as far as the developer, it's called Neutral, which is a-- What does that mean? In Madison, they're already building one residential tower next to the PAC on a spot that used to be a flower warehouse, and it's right on the Milwaukee River. So that's going to be about 30 stories. Again, construction is underway. I walked by there going to and from the Republican Convention a week or so ago. For many years, there's been discussion about the parking structure that's attached to the PAC. You go over the bridge to go from the parking structure into the PAC. And in terms of developing that into something more than a parking structure, it's a prime spot right on Water Street. And so the city of Milwaukee ran a request for proposals process and received three proposals. We know one was from Gachman development of Milwaukee, and they were not pleased about the process. The city started out by awarding the proposal that was submitted by Neutral, and they want to put a high-rise there. It might be the tallest building downtown, or certainly one of the tallest, and it'd be a combination of office, retail, residential. And the rendering that I saw that was released shows a couple of buildings on the structure. So I'm not sure of all the details, but I believe they have one year to prove that they can do this and make it happen. It may not be a done deal, but that's the plan at this point. Let me ask you this, do we still have a lot of empty office space in Milwaukee? Yes, absolutely. That's sort of the surprise about this or any new office, or any new high-rise that's going up is if it includes office, you got to wonder where the tenants are coming from because there are so many buildings. The main one right now is the 100 East Building that the Johnny Vasallo, Johnny V, and his comrades are converting to apartments. And there have been a number of buildings like that. The old M&I bank headquarters is vacant and could have a mix of apartments and offices. So yes, you do wonder where the tenants would come from, partly because of all of the remote work that's going on. Well, maybe they'll come from Racine because there's a real war going on between Racine County and Mount Pleasant, and it's not so pleasant on that. Well, we are calling it the Racine Water Wars because it's mimicking issues that were happening in Milwaukee in the 90s and the 2000s between Milwaukee County and Waukesha County, which led to the big pipeline that was built from Waukesha to Lake Michigan, but the situation in Mount Pleasant is that there's a residential subdivision where the infrastructure has gone in. They're ready to start building homes. A developer named SR Mills of Kenosha is involved with that project, and his company or an LLC that's related to his company filed a lawsuit against the City of Racine and Mayor Mason in Racine saying that they had an arrangement to get water piped to that from the Racine Water Works to the subdivision, and now the city is essentially blocking that deal. So there was a court hearing this past Wednesday, and a judge did rule in the favor of the developer and directed the Racine Common Council, a committee of the council, to consider this agreement. They were sitting on it. They weren't doing anything with it, and then the full Common Council also has to consider it. He did not order them to extend the pipeline, but he just said, "You got to look at this thing." Lots of news this week. Rich Kerchen from the Milwaukee Business Journal, it's always great to have you here. Great to be here, Libby.