Ironically, the decision to kill the Nova project helped create the circumstances that led Vaughn Beals’ employee buyout, and ultimately saved Harley-Davidson from a slow death under AMF control.
In the late 1970s, Harley spent millions on the Nova project; designing and prototyping v-twin, v-four, and v-six motorcycles ranging from 800-1,500cc displacement. The Nova motors would be liquid-cooled, with overhead cams. The intent was to take on increasingly sophisticated and powerful bikes coming from Japan.
So, what killed the Nova? It wasn’t a technical problem; it was corporate bureaucracy.
At the time, Harley-Davidson was owned by American Machine and Foundry. AMF had two divisions, one focused on industrial equipment and the other focused on leisure products.
A change in AMF management led to a new strategy. They decided to use the leisure division as a cash cow (or should I say, ‘cash hog’?) while pumping capital investment into the industrial division. Harley had already spent about $15 million on the Nova project, with 30 working prototype motors and a dozen complete bikes, but there was no way AMF would allow the company to make the capital investment required for new tooling and assembly lines.