Hodaka Motorcycles Steps Up

The Hodaka Motorcycles Story Part Three
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This excerpt is from Hodaka Motorcycles by VMX magazine editor Ken Smith. You can find reviews, videos, and more at the book’s page. Click to learn more!  

Hodaka Motorcycles Steps Up

While PABATCO grew quickly with the success of its new models, there were a couple of significant events just a couple of years later. That growth, by the way, can be demonstrated by the blossoming of employee numbers. In 1966 there were about five or six employees, then by the late ‘60s around 15 and by 1972 the staff number was close to 30. Still, for a company that designed and sold 10s of thousands of motorcycles, that was an incredibly lean organization. But the first event that might have had a devastating impact was the sale of Farm Chemicals, PABATCO's parent company, to Shell Farm Chemicals in 1966.

The owners of Farm Chemicals were still Ed Miley, Gerry Whitney and Claran Hesp. Competition in the farm chemicals market was incredibly fierce during this time and Shell Farm Chemicals were making a point of buying up all their distributors to get a stranglehold on the market. The primary opposition to the sale came from Henry Koepke, but, of course, at the end of the day he was merely an employee, not an owner of the company, and his objections were noted but ignored. After the sale, Gerry Whitney took his profit and left, Claran Hesp stayed for a while then left, and Ed Miley stayed and took direct control of PABATCO. In essence, though the new owners of PABATCO were quite content to leave the company alone; they didn't really set out to take over a motorcycle company after all. It was the farm chemicals segment they were pursuing. PABATCO made money and never made any demands, so Shell let them get on with their job. It was just business as usual.

The second tumultuous event was the untimely death of General Manager Henry Koepke, as a result of an accident on a BMW 250 motorcycle on Labor Day in 1967. Chuck Swanson took over the general manager's role and had a different style to Koepke’s; perhaps not quite as incisive, but he was well liked by all and had a good feel for the market. Either way, what was perhaps missed most was the benefit of having both Koepke and Swanson together, as they did seem to complement each other quite well. Swanson stayed in the top position until he locked the door behind him when he was last to leave the building when PABATCO ceased operations in August 1978. Miley continued to exercise overall financial control of PABATCO and was the ultimate decision maker, but he was now answerable to Shell.

Miley continued with the same approach he had always exercised at PABATCO, and with Swanson as general manager they both took the company forward. Swanson believed strongly in many of the same ideals as Miley, such as the one that the company should be one big family. He wanted people to like working at PABATCO and didn't want a high turnover of staff. Everyone respected Miley and liked him, although he didn't know a lot about bikes. His forte was definitely the business side of things, as he was very good at doing deals and getting components cheaper. Much of this negotiating skill dated back to when he was dealing with farmers, who are typically a tough crowd.

As the 1960s came to a close, PABATCO released the first Hodaka model, the 100/MX or Super Rat, that started to stray from their own one-model, one-color, one-style philosophy.

Prior to that, the Ace 90 and Ace 100 models had indeed maintained the company mantra of, “Let's build a simple trail bike that is red with a chrome tank and improve on it, over and over.” The reasoning behind that approach is in many respects an admirable and rational way to build your business, while watching your pennies. You don't need to build a brand-new model every year with a new engine, new frame and new everything else. There's merit in improving the breed and just perfecting what you have already, particularly if you start with a good base product, as was the case with the Ace 90.

New, improved parts could be retro-fitted to earlier models, keeping them fresh and up to date. PABATCO promoted this approach, of course; they considered it a positive marketing strategy. For example, this text is taken from one of their own sales booklets, The Hodaka Story, after discussing some background on why they were building this rugged trail machine: “Eventually a basic philosophy emerged. One from which PABATCO has never wavered. First, keep the machine simple. And then start making it simpler. The fewer number of components, the fewer things to break down. Service will be easier, and parts easier and less costly to replace.

"Secondly, stick with the idea of what the machine must do. If a change will make it do the job more efficiently, change it. Otherwise leave it as is. Never fall prey to the idea something must be changed just to be different.

Third, build this motorcycle in a size that will perform hot enough to satisfy the desires of most enthusiasts, yet be light and nimble enough to be enjoyed by the weekend pleasure rider."

Last, keep the price within the reach of anyone that feels they might enjoy motorcycling. Motorcycling is essentially a sport. For fun. No one should have to seriously strain their budget to enjoy it."

That text was included in a PABATCO booklet that came out in 1969, before the release of the Super Rat, but following the release of the Ace 90 and Ace 100. The Super Rat didn't really become widely available until the start of 1970, so if you look at sales figures from 1964 until the end of 1970, you will see PABATCO sold 24,160 motorcycles, basically Ace 90 and Ace 100 models, which kept on selling in years to come with the Ace 100B, the Ace 100B+ and then the later 100cc models that didn't feature red and chrome, but which were nonetheless still related to the Ace 90/100 models. So the philosophy worked, initially at least, as that's a damn lot of motorcycle sales for just one model.

The Ace 90 received 87 modifications during the three years after its release, "each a refinement of the same basic design" as PABATCO stated. The Ace 100, itself an improved model over the Ace 90, of course, received 24 modifications after its release. Evolution, not revolution.

Another employee central to the development of the Hodaka brand and image was Marvin Foster, who, like Swanson, was there almost from the outset. As the ex-advertising and promotions Manager, Foster took us through some of his recollections as we compiled this book, and how much of what he did in his role at PABATCO shaped their philosophy. His memories also demonstrate the very humble beginnings of the PABATCO company. "My first awareness of PABATCO was an advert in Cycle World showing the mocked-up Ace 90,” Foster said. “Joe Parkhurst, the publisher, had put it together for Henry Koepke to promote the coming of the new bike. It showed the bike sitting on a large bed sheet for a backdrop with a wooden tank to represent the familiar Toaster Tank that was still in production.

"I thought the Ace 90 looked like a pretty keen trail bike, especially because I had been riding a Yamaguchi SPB50. I lived in Yakima, Washington, about 100 miles away and was operating a small photo-studio in association with my friend John Freeborn, who was running an art service and sort of ad agency. I lived at the studio. We decided to contact PABATCO about doing their ads and I called and made an appointment with Gerry Whitney to drive down to Athena and get acquainted [This was probably in about 1964].

"When we visited PABATCO, it was just a couple of rooms at the Farm Chemicals building on the north side of Athena. I met Gerry, Ed Miley, Henry and Chuck and got the tour of the place and talked about doing ads for them. We started off with one-quarter and one-third-page ads for Villiers engines and parts, Cotton motorcycles, and Amal carbs. As an aside, I also subsequently bought a Villiers-powered DMW Highland Trials bike that Henry had sampled from the factory in Wolverhampton, thinking maybe to sell them in the US. I was part of a group putting on observed trials in the area and had subsequently met Henry and Chuck and Jim Gentry at events held in Yakima and Walla Walla.

"My friendship grew with Henry, Chuck and Jim through working with them on ads and at motorcycle events, often where I was photographing Cotton and Villiers riders for promotion. Don Pomeroy on his Cotton and Harry Taylor, both guys I knew from my motorcycling in Yakima, were giving extraordinary performances at local events."

Foster was soon riding into Hodaka history, using both his riding skills and his advertising agency background, particularly the photography aspect. "In the summer of '65, Henry had been approached by Frank Wheeler of Lancaster, California, to do a ride for Hodaka on an Ace 90, down the Baja peninsula, and Henry agreed to underwrite it to some degree if Frank would take me along to photograph it,” Foster said. “So in December of that year, after some physical prep on my part to get in shape for a 1,000-mile ride in rough country on a 90cc bike, I drove off to Lancaster where Frank had his part-time motorcycle shop. He was a full-time fireman and on his off days he was a Hodaka dealer. Frank had set-up two Ace 90s for the ride. It certainly was an adventure and took us about 30 days to ride from Lancaster to the tip of the peninsula and back. Subsequently we made ads and wrote stories about the adventure [including a Cycle World cover article].

That little jaunt really gave Hodaka some credibility and was widely advertised. Of course, Frank Wheeler was also behind one of Hodaka's other milestones, riding a Hodaka Wombat 125 around Australia. In any event, Foster’s trip to Baja and his involvement with the brand had a big influence upon his return. "I had left my photo business to make the trip and after I returned was so stoked on working in the mainstream of Hodaka that I suggested to Henry that he hire me full-time and he did,” Foster said. “My first activities were to take over customer service as a function of the sales department, directed by John Trommald. I devised a system to answer correspondence from interested motorcyclists and provide them with literature and referral to their closest Hodaka dealers."

Foster had quite a few ideas up his sleeve as it happened. "Literature at the time consisted of what the Hodaka factory had agreed to provide for the Ace 90, but the initial ones were very odd and not appealing to American riders [one-sided slick sheets done in purple and black ink],” he said. “We re-did those to be more informative and appealing to U.S. riders and the factory printed them and included a package in each crate. My advertising philosophy was, ”The more you tell, the more you sell,” and so I created story ads that talked about Hodaka features and accomplishments. Each full-page black-and-white advert had a coupon so the reader could send in a quarter and get a copy of the Hodaka Story. This was a small pamphlet that fitted in a number ten envelope that extolled the virtues of PABATCO and our philosophy of ‘riding should be fun,’ and how us back-country folks knew more than anybody about designing and building trail bikes, and having the features that made them superior. The quarter almost made the campaign self-sustaining and got valuable information into the hands of enthusiastic prospects.

"As the company grew and more sales were possible, adverts got to be full color and featured just one model at a time. Our competitors were having to jam several models into the same ad size. Our ads consistently outperformed our competitors for readership and memorability in Starch tests." Starch tests measure reader recall of advertisements in newspapers and magazines.

PABATCO made ongoing efforts to establish and maintain strong connections with their dealers and customers. As well as the examples above of customer outreach, PABATCO went out of their way to provide material to dealers, such as the comprehensive Dealer Guide. Foster explained. "The Dealer Guide came about as a basic company philosophy that we all subscribed to,” he said. “I recall that Henry was very strong on this and cited historical examples of companies that grew a dedicated foundation of supporters by making them feel like they were a part of the big picture. Hodaka dealers, owners and enthusiasts knew almost everything about Hodakas, compared to our competitors’ involvement. The Dealer Guide supplied that info for the dealer, and our ads, literature and Hodaka Story pamphlets did the same for consumers."

There was also The Resonator newsletter and Gravel Rash calendar, and those publications, along with the extensive customer communication philosophy, were remembered by PABATCO employee Leon Wilbanks, "We communicated with the customer by direct mailing of The Resonator, how-to articles, Gravel Rash calendar, etc.,” he said. “This was before the computer age, remember, we had to use an Addressograph machine with steel plates for each address, all of the envelopes were stuffed by hand, addressed on the machine, sorted by zip code and packed off to the Athena post office. We mailed so much stuff that it caused the Athena post office to be upgraded in the hierarchy of post offices. Mrs. Winn and her crew did yeomen's work getting this done and keeping the database up to date. Indeed, I recall Imogene Winn clearly, she and a crew of her local girlfriends were the mail department. Marvin hired Imogene to do it and it grew from there. I helped her with the machines and keeping things going. They would work in an upstairs cubby that wasn't very pleasant, they would sing hymns and work away, truly great folks."

As an example how this approach of becoming involved with customers was way ahead of its time, in the November 2013 issue of Motorcyclist magazine in a test of the 2014 Harley-Davidson touring bikes, they say crowdsourcing is some new cutting-edge business practice, and that H-D was one of the first major companies to embrace this strategy of connecting with consumers. Apparently, this whiz-bang new practice is all about involving the customer in the company, making them feel a part of what's going on, even contributing ideas for future models. If that's cutting-edge, then what would you call PABATCO's business practices more than 40 years ago? Indeed, several of the ex-PABATCO staff still recall some praise from Willie G. himself in the late '60s at a trade show, where he said he thought PABATCO was doing it right with their approach to the market. (Willie G. Davidson is the son of former Harley-Davidson President William H. Davidson and the grandson of Harley-Davidson co-founder William A. Davidson.)

Another aspect of PABATCO's philosophy in relation to the one model, one color approach was that a Hodaka, any Hodaka, could be several bikes in one. During the Ace 90/100 days their advertisements often promoted their accessories which could turn an Ace 100 into anything you wanted, as one of their adverts from 1969 mentioned: "The Hodaka 100 five-speed. America's most versatile trail bike. Winner of the 1966, '67, '68 National Trail Bike Championships. From trailing to roadracing, the success of the Hodaka is legendary. How can a motorcycle produced in only one size (100cc) and model (trail) be so many things to so many people?" The advert went on also to say, "Cyclists are individuals. With the Hodaka, you can custom design to suit any taste or requirement. The sky's the limit." Other adverts of the period promoted similar constructs, such as the line that the Hodaka was the country's most accessorized motorcycle and sometimes the ability to use the bike for a multitude of purposes was termed its Hodakability. Other times, that term was used just to embrace the overall effectiveness of Hodaka models. There were, in fact, specific pamphlets issued by PABATCO on how to modify your Hodaka for trials, scrambles and roadracing.

The trouble was, no other manufacturer, especially none of the Japanese big four, was playing the same game of just producing one model; they had a different model for every possible occasion. To its credit, PABATCO realized it did have to diversify to stay in the game, and as early as 1971 they had a prototype 175 that was quite ahead of the game, as their original Ace 90 had been back in 1964. The 1970 Super Rat 100 showed PABATCO was listening to the market and was the first divergence from their one model, one color regime. Well, it did keep the colors (red/chrome), but it was a different model. After all, the Super Rat was in essence an Ace 100 that had been stripped down and improved for racing, just like owners had been doing for a few years.

PABATCO really found themselves with a sales success with the release of the Wombat 125 in 1972; it was a winner in every sense. Still an evolution of sorts from the Ace 90 parentage, but far more contemporary and it just plain worked well as a trail bike. From there you could guess the stripped-down Combat Wombat was coming, and after that the even sharper Super Combat, but the struggle for the Hodaka brand to remain competitive really started to hit home in about 1973.

Well before this time, PABATCO had always been aware of their main obstacle in getting what they wanted, when they wanted it, from Hodaka. In simplest terms, PABATCO was a customer of Hodaka. Sure, they were their biggest customer, as they took almost 100 percent of Hodaka's output (Hodaka still made some other products not destined for PABATCO, such as transmission parts for Meguro speedway bikes), but they had no control over the Hodaka company. Everything was done by negotiation. Maurice Lee, an engineer from Hodaka hired by PABATCO, conducted a lot of the actual negotiation, as he was hired as an interpreter as well as an engineer.

While the arrangement worked splendidly for the first few years, when sales were brisk and Hodaka was just glad to be back in business after the collapse of Yamaguchi, the situation became more difficult as the years progressed. There were also a few curve balls in the link between Hodaka and PABATCO. One such idiosyncrasy was that Fuji Motor Corp. provided the capital for Hodaka to continue its supply of engines and start its supply of whole motorcycles to PABATCO after Yamaguchi went bankrupt. Indeed, some of the nameplates on the steering head of some Hodaka models around 1970 state “Made by Fuji Motors”. Also around 1970, Fuji wanted to get back into the act of supplying engines (Fuji had been a supplier of engines to Yamaguchi, just like Hodaka had supplied engines to Yamaguchi), so they borrowed the Hodaka design and re-tooled to supply 80cc and 100cc engines for other manufacturers to use. Conceptually, these engines are replicas of the Hodaka design, but there are no interchangeable parts. Fuji, of course, had some influence with PABATCO, being the financier of Hodaka, so PABATCO even became the USA agent for those same Fuji engines. Fuji continued to provide capital to Hodaka until the end, in 1978. Perhaps the most salient point, though, is that Fuji would have liked PABATCO to use them to build motorcycles after the collapse of Yamaguchi, rather than PABATCO choosing to run with Hodaka.

Just for interest's sake, Mitsui Trading had initially been the capital provider for Hodaka, but wanted to end that association after the collapse of Yamaguchi, and Fuji entered the fold.
So out of all that you have a financial backer of Hodaka who doesn't necessarily like PABATCO, the usual language barriers between Japanese and USA camps, a very small-time distributor (PABATCO) who had limited access to funding, a company philosophy that dated back to the days of the Model T Ford, and model releases from major manufacturers that were seemingly happening every second day. Luckily, PABATCO liked a challenge.

In a rare moment of support, PABATCO's parent, Shell Oil, did at one point in 1972 attempt to purchase 50 percent of Hodaka, realizing this was the only way PABATCO could exert any real influence over the management direction of the company that actually made their motorcycles. Hodaka refused the offer.

This excerpt is from Hodaka Motorcycles by VMX magazine editor Ken Smith. You can find reviews, videos, and more at the book’s page. Click to learn more!
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