Harley to cut 1,100 jobs as 4Q profit falls

 
 http://news.yahoo.com/s/ap/20090123/ap_on_bi_ge/earns_harley_davidson

 or

 http://tinyurl.com/bm8dr7

  -

  Davïd
 Greenville, NC

 Here's the L.A. Times version of the same story:
Source:
http://www.latimes.com/business/nationworld/wire/sns-ap-earns-harley-davidson,0,7169291.story

Harley-Davidson to cut 1,100 jobs over 2 years, shutter
facilities as 4th-qtr earnings plunge
By DAN STRUMPF, AP Auto Writer
6:01 AM PST, January 23, 2009

NEW YORK (AP) — Harley-Davidson Inc. said Friday it will cut
1,100 jobs over two years, close some facilities and
consolidate others as it grapples with a slowdown in
motorcycle sales.

The Milwaukee-based company also reported its fourth-quarter
profit fell nearly 60 percent, and said it is slashing
motorcycle shipments in 2009 to cope with reduced demand.

The iconic motorcycle maker said it will consolidate two
engine and transmission plants in Milwaukee into its
facility in Menomonee Falls, Wis. It will shrink its paint
and frame operations in its York, Pa., plant and close its
distribution facility in Franklin, Wis., whose duties will
be handled by a third party.

Harley also said it will end its domestic transportation
fleet operation.

The company said the cuts include 800 hourly production
positions and 300 non-production, mostly salaried positions.
It said 70 percent of the job cuts will occur this year and
the rest in 2010.

The cuts will result in one-time charges of $110 million to
$140 million over 2009 and 2010, Harley said. Once they are
finished, the cuts will save between $60 million and $70
million per year.

Harley has been stung by the rapid downturn in motorcycle
demand. The economic recession has prompted many consumers
to put off purchases of its high-end bikes, while the credit
crunch has kept some would-be customers from obtaining
financing.

Meanwhile, the company remains in the midst of a shake-up
among top management. Chief Executive Jim Ziemer said last
month he would retire in 2009, and the company remains in
the process of finding a successor. Sy Naqvi, the head of
Harley's troubled financial-services arm, resigned earlier
this month. Chief Financial Officer Tom Bergmann has taken
on Naqvi's old duties until a replacement is found.

Harley said worldwide retail sales fell 13.1 percent in the
fourth quarter, with sales in the U.S. — its biggest market
— falling nearly 20 percent. International sales crept
higher, though, and the overall heavyweight motorcycle sales
fell 25.5 percent in the same period, Harley said.

For the full year, worldwide retail sales fell 7.1 percent.

Harley said it is slashing new motorcycle shipments in 2009
to between 264,000 and 273,000 to cope with the down market.
That would be a drop of 10 percent to 13 percent from a year
earlier.

In 2008, Harley said it shipped 303,479 new motorcycles,
down 8 percent from 330,619 new motorcycles in 2007.

Harley said its fourth-quarter profit fell 58 percent to
$77.8 million, or 34 cents per share, for the quarter ended
Dec. 31, compared with $186.1 million, or 78 cents per
share, in the same quarter last year.

Revenue fell 6.8 percent to $1.29 billion from $1.39 billion
in the year-ago quarter.

The results fell short of Wall Street estimates. Analysts
surveyed by Thomson Reuters expected 57 cents per share on
sales of $1.29 billion, on average.

Harley said its financial-services division swung to an
operating loss of $24.9 million in fourth quarter, hurt by
write-downs totaling $63.5 million. The company said it is
evaluating "a range of options" to provide funding for the
ailing Harley-Davidson Financial Services. Many analysts
have suggested the lending unit may have to be sold because
it has been unable to unload its debt in the financial markets.

For the full year, Harley said its earnings fell 30 percent
to $654.7 million, or $2.79 per share, from $933.8 million,
or $3.74 per share, in the same quarter last year. Sales
fell 2.3 percent to $5.59 billion from $5.73 billion in 2007.

Analysts expected $3.02 per share on sales of $5.61 billion
in revenue for the year. Harley said it would not provide
earnings guidance for 2009, but analysts call for $2.15 per
share.

Shares of Harley plunged $2.20, or 17.7 percent, to $10.20
in premarket trading on Friday. The stock is down 69 percent
in the last 52 weeks.
(end of article)
---

The boom wasn't going to last forever.

Wonder what's going to happen all those oversized botiques
that HD pressured their dealer network to build over the
last ten years?

Off-the-wall idea: instead of cutting jobs and production
facilities, why not cut PRICES?

A round for all!
- John

 

http://www.latimes.com/business/nationworld/wire/sns-ap-earns-harley-davidson,0,7169291.story

Cut prices! Heaven forbid! I might have to buy a new bike if they did that.

  last ten years?

They can't do that until they stop paying the union workers $50 an
hour to screw in parts.

Think about it....A Softtail custom is what, $18K?    Even the Big
Three, with their high salaries and benny costs, can produce a car
cheaper than Harley can make a bike.

To be fair:  Harley produces in lower volume.  But, the average Joe
can damn near build a Softtail from scrath for what it costs to buy a
new one.  Economies of scale theorizes that you can't build one
yourself cheaper...yet you damn near can.  WHat does that say about
the price they pay for labor?

MrScottly#54

 
 last ten years?

They can't do that until they stop paying the union workers $50 an
hour to screw in parts.

Think about it....A Softtail custom is what, $18K?    Even the Big
Three, with their high salaries and benny costs, can produce a car
cheaper than Harley can make a bike.

To be fair:  Harley produces in lower volume.  But, the average Joe
can damn near build a Softtail from scrath for what it costs to buy a
new one.  Economies of scale theorizes that you can't build one
yourself cheaper...yet you damn near can.  WHat does that say about
the price they pay for labor?

MrScottly#54

and that is why i am building a softail right now.  i have a buddy that
rides nothing but rice.  he absolutely can't understand why anyone would pay
more for a motorcycle than he can buy a car for that has four doors, air
conditioning and an automatic transmission.

while i can't explain it to him, two out of our three baggers have been
built in the shed and we have one more getting ressurected.  except for the
frame, you can get factory take-off parts for next to nothing. first thing
most people do is start taking off the moco parts and swapping them for
chinese import bling.  that makes putting one together from scratch actually
cheaper than buying from the moco if you are careful.
michael