Motorcycle icon Harley-Davidson to reduce production, slash workforce

23 January 2009

Iconic American motorcycle company Harley-Davidson Inc. is also feeling the effects of the recession. Today, it announced that it would cut around 1,100 jobs in 2009 and 2010 as it cuts production volumes and restructures. The job cuts amount to 12 per cent of its total workforce, according to its most recent annual report.

As part of the move, Harley will consolidate its two Milwaukee engine and transmission production facilities to its Menomonee Falls location. It will also close its Franklin distribution center, consolidate parts and accessories and conduct general merchandise distribution through a third party. The company will also discontinue its domestic transportation fleet and plans a 10 per cent to 13 per cent reduction in shipments for 2009.

"We have a strong core business anchored by a uniquely powerful brand, but we are certainly not immune to the current economic conditions," said Jim Ziemer, CEO, Harley-Davidson Inc. "We have a clear strategy to not only deal with the economic conditions, but also strengthen our long-term operations and financial results. We are executing that strategy with confidence and conviction."

"We reduced our production levels prudently in 2008, helping our dealers achieve lower inventory levels," said Ziemer, "and we're going to show similar discipline in 2009." The 1,100 jobs to be cut over 2009 and 2010 include about 800 hourly production positions. The job cuts will happen over a period extending into 2010. The group said it expects to take one-time charges of $110 to $140 million and generate annual savings of $60 million to $70 million.

The company is reinforcing its support of the Harley-Davidson brand, accelerating its ongoing marketing efforts to reach out to emerging rider groups, including younger and diverse riders. In addition, the company will continue to focus on product innovations targeted at specific growth opportunities with its strong core customer base and new riders.

In the US, the company said its Sportster motorcycle trade-up program is being well received by dealers and consumers and is generating new floor traffic during the winter months.