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Harley-Davidson plans additional job cuts after profits fall

Discussion in 'General Motorcycling Discussion' started by vic, Apr 18, 2009.

  1. HARLEY-Davidson said it may cut an additional 400 jobs as its profit took a 37 per cent hit due to a sluggish motorcycle market.

    The results were stronger-than-expected and reiterated the company's full-year shipment forecast, saying it was "mildly encouraged" by sales trends in the United States, its biggest market by far.

    The results and outlook sent the motorcycle maker's shares surging as much as 8 per cent in premarket trading.

    Harley-Davidson, which has already laid off 20 per cent of its workforce and closed several plants, warned its cost-cutting efforts would continue and that 300 to 400 more jobs would be eliminated over the next two years. It said costs from the continuing revamp could reach $US150 million ($208 million) over the next two years.

    Harley reported first-quarter net income of $US117.3 million, or 50 cents a share, down from $US187.6 million, or 79 cents a share, a year earlier.

    Analysts, on average, had expected the company to report a profit of 52 cents a share.

    But the latest results included $US34.9 million in restructuring charges and a $US22.5 million charge related to a change in Wisconsin tax law that the company complained had been "enacted mid-quarter without public hearings and which applied retroactively to January 1."

    Citi analyst Gregory Badishkanian estimated the unexpected tax charge alone cost the company 10 cents a share in earnings.

    Retail sales of Harley-Davidson motorcyles in the United States, which accounts for 65 per cent of the company's revenue, fell 9.7 per cent in the quarter. That represented an improvement over previous quarters. In the fourth quarter of 2008, the company reported that US retail sales tumbled 19.6 per cent and in the third quarter of 2008, US retail sales fell 15.5 per cent.

    Mr Badishkanian called the sales data "better than expected" and predicted Harley's shares, which have more than doubled in value over the past six weeks, would "react positively."

    Harley-Davidson also affirmed its plans to ship between 264,000 and 273,000 Harley-Davidson motorcycles to dealers worldwide in 2009. It said it plans to ship 55,000 to 59,000 during the current quarter, down from 74,760 in the first quarter.
  2. The effects on this market are only the beginning. Most money is made on the aftermarket trick bits for Harley’s that pimp them out. Most of this market will bottom out with discretionary spending out the window.
  3. They certainly have a lot of branded merchandise on offer, it would interesting to know what makes them more money, the bikes or the merchandise?

    The baby boomers are big fans of HD's but is there a new generation following in their footsteps to continue buying HD bikes? I am seeing more and more Jap cruisers getting around, perhaps it's time for HD to bite the bullet and build overseas in order to be more price competitive? I do like their bikes but the price tags are offensive. I'd rather get a custom chopper.
  4. Bad engineering.

    I think the price of a HD is fine (One born every minute). But what I find offensive is the lack of engineering on them.

    As for Choppers; I'd rather get Herpes than a chopper (more convenient and comfortable). And you can get Herpes for free as well, let alone pay $30K for a paperweight designed and built by a speed addict who failed the ergonomics unit of a third rate industrial machinery design course!

    A Honda postie bike would cost $20K if it was made by HD! And losers would buy them to. :LOL:
  5. Oft quoted myth.
    From the 2008 Annual Report -

    "Wordwide sales by product line", Graph, Page 40

    Motorcycles - 76.5 %
    Parts/Accessories - 15.3%
    Merch - 5.6%
    Buell Motorcycles - 2.2%
    Other - 0.4%

    So logically, would it make sense to chop the Buell arm?
  6. You have to see how well Buell sales are before you lop off the buell range.
    Being an offshoot Buell can source their engines elsewhere.
  7. But how about culling them in the interests of all that is good and aesthetically pleasing?... :twisted:

    Also, I didn't realise the only thing hardley sold was their engines. I assumed they were under the whole harley umbrella - if 2.2% of their total income is keeping a brand alive just for kicks, then if you were downsizing, why wouldn't you lop them. But if it's just the engines... :-k
  8. HD won't go overseas. They've tried it before, in the 80's IIRC. This is the period where they got the moniker 'hardley ableson'. The company's recent resurgence only came about a few years after they brought manufacturing/assemlbly back to the US.

    *EDIT* All speeling errors are the sole fault of this wonderful Rum Port and not necessarily the fault of the author.
  9. Re: Bad engineering.

    You judgmental knob.
  10. With Joel on this. After a lot of humming and harring and a lot of research, when time comes for me later in the year to get a new (or more probably late model) bike, it will almost certainly be a Sportster: what else can I find that has the soul, the low-revving thumping, bullet-proof and 50 year heritage of that bike, for the same price as plastic...however the latter won't be rebuilt at 150,000km - no it'd be thrown away. Harley has had issues in the past, but to bring them up is about as clever as taunting Triumph riders about their Lucas electrics. What first put me on to a Sportster was when I went to look at a Bonneville, after a VN900 made me think about spending some real bucks, and as I walked past the Harley shop I say it was cheaper than the VN and Bonnie...for a whole lot more bike. Speaking for the Sportster, it's well worth the money, the best investment one could make in purely practical terms...
  11. You would have to see which part is most profitable margin wise and dollar wise, which was where i was aiming my comment at. They might sell a lot of HD bikes but it's mainly in the US market so i wonder how profitable the bike sales are for them in over there? They might make more dollars profit from the sale of merchandise LOL.

    The demographics of HD buyers:
    1987 the ave age was 34.7yrs ..... 1996 the ave age was 43.6....2008 the ave age was 49. That's a major worry, their target market will be dying soon.
  12. Harley still make some of the best cruisers in the world but they are a premium product in a market that's all about discretionary spending.

    That's obviously hurting them and will go on hurting them until the economy recovers. But they aren't in the world of hurt that the US auto makers are in (despite their similar drops in sales) because they have been better managed.

    Harley will survive and come out the other end a leaner, more competitive company (which is probably a good thing).

    I'd be more concerned about the small manufacturers that add variety to our motorcycling experience vanishing...
  13. Harley had been the darling of Wall Street since their reorganization from the AMF days. They knew what they were doing.

    In other words, I can't see how they could've escaped the current economic situation. The rest of the industry is suffering as well. The only question is, could they have lessened the impact of the downturn? (Maybe so, but only at the cost of their core brand, IMO)
  14. Re: Bad engineering.

    Man, it was just a bit of satire. I actually like choppers, as an expression of motorcycle art / sculpture and self expression. But as practical machines you have to admit, they are not practical.
  15. Motorcycles stopped being practical for most of us, the day we decided we needed more than that trusty CB250 that had served us so well! :LOL:

    I wish so very much that I could stick with the SR185. God life was easy with that thing!
  16. Perhaps not the six-digit trailer queens that seem to have hijacked the term. However, not so very many years ago, I could have pointed you at a significant number of (mostly amateur built) chops that took their owners to work every day and to a show or rally every weekend, often several hundred miles away.

    Perhaps they were not optimal bikes for the purpose, but it would be hard to argue that such functional machines were not practical.
  17. I see a lot of 10 year old sports bikes for sale with 20,000km on them! And then I see the guys on the Choppers Australia forum organising this ride: "The bikes being ridden on the 5000km trip will be a mixture of 30+ year old seventies style rigid choppers and bobbers and more modern engined rigid and sprung choppers. Rider age varies from late sixties to mid twenties."
  18. The impression i get from 'older aged' riders is that they do a LOT of touring. It would make sense these style of bikes being ridden a lot more considering the average age for a Harley owner is nearly 50.

    Young guys on sports bikes seem to only blat the usual haunts on the weekends.
  19. Got a feeling that HD wont go out of business providing the pub tarts of the NT keep buying the HD branded g-bangers and bras.


    ....ooooo i feel nasty saying that :angel:
  20. Harley will downsize, and slimline their operations. They'll be fine.

    Speaking of the aftermarket trinkets market hitting the floor, dunno. Wonder how S&S is doing?