Corporate View: Darrell Thomas, Harley-Davidson

Published: Nov 2017
Darrell Thomas, VP and Treasurer, Harley-Davidson

Darrell Thomas is VP and Treasurer for one of the world’s most iconic brands, Harley-Davidson. He runs a large team across a broad spectrum of treasury activities, reaching across North America, Europe and Asia. It’s a big job for a huge brand but for a biker, this is surely ‘Hog Heaven’.

Darrell Thomas

VP and Treasurer


Harley-Davidson, Inc. is the iconic American motorcycle manufacturer. The company was founded in Milwaukee, Wisconsin in 1903. Having survived fluctuating fortunes and intense global competition, today the company is one of the world’s largest motorcycle manufacturers and is widely known for its loyal following. The US$6bn business employs around 5,900 globally, with subsidiaries across Brazil, India, England and Singapore.

Harley-Davidson. The name is deeply evocative of America. The huge V-twins, the chrome, the Chopper-stylings of Easy Rider fame, the raucous flat-track Sportsters: it all adds up to the kind of brand power that few can match, though many have tried.

Being VP and Treasurer for the manufacturer and its captive financial services operation is not just a job for Darrell Thomas: it is a responsibility. There’s heritage at stake here. In his seven-year tenure to date, Thomas has helped shape the financial strategy and direction for one of the world’s largest motorcycle manufacturers, guiding the 26-strong treasury team, in four locations across the US, the UK and Singapore, towards a secure financial future.

Of course, there are day-to-day matters to which the team must attend. In addition to the primary treasury function of managing the cash resources of the company – from collections and investments, to borrowings and shareholder distributions – treasury is also charged with overall risk management. This involves a host of activities including insurance, worldwide business continuity management and financial risk management measures such as hedging currency and commodity exposures. On top of this, the team takes on relationship management with banks and ratings agencies. Retirement plan asset management is also on the agenda, as is managing the firm’s working capital and capital structure.

Broad mix, big team

It’s an extensive mix of responsibilities but Thomas takes it in his stride. “It doesn’t feel so big to me,” he proclaims. He has a big team supporting him. Non-financial risk management, including business continuity, is handled by a four-person team. The two-part funding team, covering secured and unsecured markets, has two and three personnel respectively. And so it is, throughout the spread of activities: when they are broken down into specialist components, treasury here is really just a collective of small, professional teams. In fact, says Thomas, the biggest head-count is the eight-strong accounts payable team which, in some organisations, might be found in a shared service environment; at Harley-Davidson, it is part of treasury.

Some functions, notably business continuity (BC), may not seem like a traditional treasury occupation at all. To this, Thomas responds that it does not necessarily have a natural home. “It was something I felt my risk management team and I could add some value to.” So far, it has formed a good fit. With its element of non-transferable risk – it can’t easily be insured – it has to be managed.

The team has identified key processes around the organisation. All have a BC plan in place, informing how each should continue to operate in a range of disaster scenarios, bearing in mind normal day-to-day activities or support levels may not be available for some time. The plans are regularly tested, in every location, to find and address any gaps or new requirements.

All processes have been divided into high, medium and low tiers, giving each a degree of prioritisation. High priority processes, depending on the event, would determine which organisation attracts the resources first. For example, in the event of a major IT-centre outage resulting in a company-wide impact, tiering determines which processes must come back online first.


Thomas’s journey to Harley started in banking, following an MBA in Finance and Marketing. Fifteen years at Citibank, followed by a period with Commerzbank Securities as US head of DCM. The latter role was demanding, in that the bank’s clients located outside the US that wanted to understand and have access to the US market, wanted a US native to explain it them. Time on the road (or rather in the air), visiting clients, put pressure on his family life. “I realised something had to change,” states Thomas.

In late 2003, with 19 years in banking to his name, he embarked on a new career path. The role of Treasury Director at PepsiCo beckoned. Around six months in, he says he “really started to appreciate the opportunities on the corporate side”. This was the point he determined that a treasury role made the most sense for his career. “That’s when I started to make sure I was developing the skills and competencies needed to become a treasurer for an S&P 500 type of company.”

With two years at PepsiCo under his belt, an opportunity arose for Thomas to become VP and Assistant Treasurer, a position he assumed for just over four years. Harley-Davidson emerged as a possibility for his next move, and by June 2010 he was on board. “I hadn’t set out to be a treasurer but the way the opportunities unfolded made it a viable career choice,” he comments.

Its viability works on different levels. Indeed, he says, treasury provides him with a demanding and fulfilling career, and work-life balance. “It was so refreshing for me to just have dinner with my family and attend my kids’ activities without having to worry about missing a flight.” It was, he adds, “the perfect transition” where “the stars and the moon lined up for me”.

Moving away from the crisis towards a vision

Having moved into Harley-Davidson after the crisis bit harder, Thomas feels that, to some extent, the events of 2008/09 had served to create the opportunity for him. The company had emerged from the crisis, but it had also incurred some significant costs, notably around debt. This opportunity to make good an American legend saw Thomas tackling scenarios he had not previously seen.

Harley-Davidson’s credit standing had been impaired, demanding that Thomas seek ways to shore-up the balance sheet and restore its credit quality to pre-crisis levels. Time too was spent enhancing the company’s liquidity, making sure there was no repeat performance of any destabilising issues. He also evaluated the treasury department – seen at that point as a “fixer-upper” – to make sure he had the right people to get the job done. With the pension fund also having been depleted, restructuring the asset allocation was required to put it back on track.

All this, so soon, required Thomas to “hit the ground running and be much more hands-on in setting the direction and strategy”. There were, he recalls, “a lot of things to focus on”. Having set the agenda, and a vision of creating “a world-class treasury”, Thomas likes to delegate to his team, which he feels has matured in its various roles and responsibilities. “Now it’s about letting them do their job.” This approach of empowerment works well, he feels, “as most people respond better when they have skin in the game”.

Indeed, he enables each member to respond to his vision as they see fit. He will challenge but if the benchmarks reveal ‘world class’ then he goes with it.

A ten-year plan, with headwinds

Today, on the commercial side, the whole company is focused on the ten-year strategic plan to build the next generation of Harley-Davidson riders globally. “Everything we do in treasury is designed to support that plan. When we work with other parts of the organisation we make sure we are all working together.”

As treasurer for the financial services business, for example, this entails finding the right programme to help increase ridership. Individuals who successfully complete the rider training programme, for example, may be offered a discounted borrowing rate to help them finance a new motorcycle. “We’re also looking at ways to support our international growth through broader financing programmes.” Naturally, treasury must ensure cash resources are available, in a timely fashion, to support the company’s various marketing and product development programmes.

All of this pushes Thomas and his team deep into the realms of strategic importance. He suggests this may not be as self-evident as for other functions “but we play an important role in the overall execution of the company’s strategy and our business partners recognise this”.

Financially, market volatility, especially in some of the more visible markets, has been a challenge for treasury. Currency markets, despite the recent weakening of USD, have not favoured Harley-Davidson. “We are uniquely positioned, with respect to many US organisations, in that we are hurt more than most by a strengthening US dollar.” Harley-Davidson manufactures the vast majority of the motorcycles its sells worldwide in the US so almost all bikes sold outside the US are export sold in local currency.

The negative impact of a strong dollar is immediately apparent. With approximately 95% of the firm’s competition not facing this US dollar headwind, the market seems at an imbalance as those firms sell into the US, and repatriate greater value for higher profits or as funding to compete against Harley-Davidson with lower prices. “This has been challenging for us over the last 24 months,” notes Thomas.

Harley-Davidson has an active currency hedging programme that helps. “But this tends only to buy us time,” he comments. With rolling hedges, as existing ones expire, new ones are at the mercy of currency movements, only protecting the firm against any further increase in USD. It also uses natural hedges where treasury works with the procurement team to source buying opportunities in currencies where it is exposed, using local currency to meet local expenses. Treasury also runs many ‘what if’ scenarios, often based on contingencies, testing ideas for new overseas production facilities, for example.

One potential headwind for Harley is the interest rate market. It has been a long time coming in the US. Whilst short-term rates are on the rise, long-term is yet to really move. If and when they do, the financial services company’s margins will be impacted. This business represents approximately 25% of Harley-Davidson’s operating income. Rate rises will eventually be passed along to the customer, increasing the rider’s cost and potentially negatively impacting sales. Treasury’s goal is to ensure the firm manages the funding strategy to mitigate this risk.

There is an ongoing regulatory impact on the financial services side to tackle. As a lending institution, it has to adhere to new, more stringent rules, post-Dodd-Frank. Indirect impact also comes in the form of changes imposed on its banking partners, where some products and services are no longer available on a cost-effective basis, for example as a result of rules around capital and liquidity adequacy. “The regulatory environment has added cost to our activities and reduced some of the flexibility and options for us,” comments Thomas. “We continue to partner with industry groups to share our concerns with regulators.”

Making connections

That said, he feels the banks have largely maintained a consistently good relationship with Harley-Davidson. With 15 core banking relationships around the world, the treasury team spent a lot of time assessing potential long-term partners. “We try not to have one-off relationships because we believe those are less sustainable and are frankly rather pricey,” explains Thomas. He also feels that when times are hard, the real partners stand shoulder to shoulder, prioritising their limited resources with strong clients.

Technology has a key role to play within Thomas’ treasury, notably around reducing the number of manual tasks. It’s approach to digital saw Harley-Davidson win a Treasury Today Adam Smith Award 2017, based on its innovative deployment of a truly global treasury workstation, executed under Thomas’ comprehensive five-year game-plan to deliver standardisation.

“This has improved our processes significantly, and reduced risk to our organisation,” he comments, adding that automation of low-value, manual work has enabled headcount to be halved in accounts payable and freed up resources to staff international treasury positions which did not exist prior to his arrival. Having laid the digital foundations, Thomas has his professional eye on “additional opportunities” from AI solutions as a means of “further increasing productivity of the treasury staff”.

Keeping ahead

Progress can halt the moment you take your eye off the ball and for Thomas, vision and leadership are as essential to maintaining momentum as the technical skills and hardcore number-crunching. “First, you have a vision but then you have to be able to communicate it and have people buy into it,” he advises.

“If you can’t develop that kind of relationship with your team, it will be very difficult for you to succeed.” As one with innate skills in this respect, he has long since been a go-to leader in his professional and personal life. “I think it can be learned but you have to have some natural inclination in that direction.”

For those rising up the ranks of treasury, the need is for technical strength. This, says Thomas, is what will get them recognised. “From there it is important to then start developing the softer skills that will be necessary for them to progress.”

Outside inside

Riding a Harley-Davidson is a lifestyle choice for many, Thomas included. But he also enjoys pedal-power too. Away from wheels, he is a golfing nut who enjoys playing all around the world with his social golf club. “Now I travel because I want to,” he jokes.

It’s not all entertainment though and Thomas is keen to put something back into society. He is on the board of Milwaukee’s Big Brothers, Big Sisters charity focused on helping youngsters avoid risky and detrimental behaviours and giving them positive role models.

With Thomas’ plans for a world class treasury within Harley-Davidson still coming to fruition, he has work to do. “I want to make sure we have a deliverable treasury succession plan so that we have people in the ranks that are qualified and able to step into the treasurer role,” he explains. But for now, he is very happy being the treasurer of Harley-Davidson. “From a professional point of view, I see this as the pinnacle of my career and now I am making sure that we develop the team and processes so that we are considered world-class.”

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