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July 16, 2009
Citing lower retail motorcycle sales and expected 2009 shipments, Harley-Davidson Inc. said Thursday that it will cut about 1,000 jobs this year — including about 400 in Kansas City — in addition to the 1,400 to 1,500 jobs it said earlier it would cut in 2009 and 2010.
Harley spokeswoman Pat Sweeney said the company expects to cut the Kansas City jobs by the end of September, leaving about 400 employees in Kansas City, the vast majority of whom are hourly workers.
The Milwaukee-based heavyweight motorcycle manufacturer (NYSE: HOG) said it will shut down final assembly operations for its Sportster and V-Rod models and V-Rod power train production in Kansas City, as well as Sportster power train production in Wauwatosa, for about 14 weeks in 2009, including the entire fourth quarter.
The company said the latest round of cuts will include about 700 jobs in its hourly production work force and about 300 salaried positions, including at Harley-Davidson Financial Services. The company had said April 16 that it would cut 300 to 400 production jobs in addition to the 1,100 jobs the company had said in January it would cut in 2009 and 2010, including 80 hourly and five nonproduction jobs in the Kansas City area. Harley-Davidson had about 1,000 employees in the Kansas City area in mid-April.
The company said in the Thursday release that its worldwide retail sales of new motorcycles fell 30.1 percent from the same quarter last year. U.S. sales decreased 35.1 percent, and international sales fell 18.2 percent.
Industrywide, retail sales of heavyweight motorcycles fell 48.1 percent from last year, the company said.
Harley-Davidson lowered its projection for 2009 motorcycle shipments to a range of 212,000 and 228,000 units, or 25 percent to 30 percent fewer than the 303,479 it shipped in 2008. The company’s prior shipments forecast for 2009 was 264,000 to 273,000 units.
The company also reported Thursday that second-quarter earnings fell 91 percent from last year and that revenue decreased 26.6 percent.
Earnings for the quarter that ended June 28 were $19.8 million, or 8 cents a share, compared with $222.8 million, or 95 cents a share, last year.
The company said in the release that a one-time reclassification of finance receivables from “held for sale” to “held for investment” and the related $72.7 million noncash provision to establish a related initial credit loss allowance contributed to the lower earnings. The company also took a noncash, one-time impairment charge of $28.4 million in the quarter to write off the good will recorded for its 1995 purchase of Harley-Davidson Financial Services.
Revenue for the quarter was $1.15 billion, down from $1.57 billion last year.
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