H-D Q2 Sales Down with Jobs Cuts Planned

July 16, 2009
Bart Madson
By Bart Madson
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Bashing away at the MotoUSA keyboard for nine years now, Madson lends his scribbling and editorial input on everything from bike reviews to industry analysis and motorcycle racing reports.

The 2009 second quarter numbers are in for Harley-Davidson and the results, like the rest of the motorcycle market right now, aren’t pretty. The Motor Company’s Q2 retail sales dropped worldwide 30.1% compared to 2008. The US-only sales figures are even more grim, with a 35.1% decline.

Introducing the 2009 Harley-Davidson XR1200.
Harley-Davidson is far from alone as a motorcycle manufacturer feeling the economic sting in 2009.

The net income plunge is more dramatic, falling from $222.8 million in 2008 to $19.8 million in 2009. This is due, in part, to an operating loss of $62.1 million by the firm’s HDFS (Harley-Davidson Financial Services) arm, which posted $27.1 million in income for the same quarter in 2008. Another hit in H-D’s total 2009 financial numbers comes from a claimed $22.5 million one-time tax charge from its acquisition of MV Agusta.

The drop in demand forces H-D to lower planned 2009 production shipments from estimates of 264,000-273,000 to 212,00-228,000 units. The approximate 50,000-unit reduction necessitates another round of layoffs – Harley announcing job losses of “approximately 700 positions in the hourly production workforce” as well as “about 300 non-production, primarily salaried positions.”

The production drop will also require shutdowns of the Kansas City V-Rod and Wauwatosa, Wisconsin Sportster operations for “approximately 14 weeks in 2009, including the entire fourth quarter.” The Motor Company also continues to analyze whether restructuring can save its York, Pennsylvania, plant or if York’s operations will be relocated entirely.

H-D President and CEO Keith Wandell, maintains the brand is solid, while also acknowledging the industry-wide downturn is presenting significant challenges, saying of the Q2 numbers:

“While the underlying fundamentals of the Harley-Davidson brand remain strong and our dealers’ retail motorcycle sales declined less than our competitors, it is obviously a very tough environment for us right now, given the continued weak consumer spending in the overall economy for discretionary purchases.”

Stay tuned to Motorcycle USA for Harley-Davidson news and 2010 reviews of the company’s CVO and regular 2010 model lines.

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