Aug. 10, 2009 – Harley-Davidson downsizes production, workforce

In wake of sizeable sales declines, Harley-Davidson is making further cuts both in its workforce and in its 2009 production.
The manufacturer will eliminate 1,000 positions, both in its hourly production and salaried work forces, after earlier this year reducing its personnel by more than 1,500.
Harley-Davidson also announced a second 2009 production cutback of possibly 61,000 motorcycles. Together with earlier cutbacks, Harley’s 2009 build could be 25-30 percent less than a year ago.
“Managing supply in line with (retail) demand is one of the more important things we can do,” Harley-Davidson CEO Keith Wandell said in the company’s quarterly earnings report.
Harley has had to take a closer look at production after its U.S. sales fell more than 35 percent in its second quarter. For its first half, Harley is down 23.6 percent for its worldwide retail sales and 26 percent in the United States.
As a result of the slowdown, Harley is shutting down production at some of its plants. Sportster and V-Rod powertrain production and Sportster final assembly manufacturing is being shut down for 14 weeks this year, including the entire fourth quarter. That doesn’t figure to have a tremendous impact
on Sportster availability as the company said that model made up a higher percentage of its overall build mix earlier this year as the company anticipated more demand on lower-priced units. That demand, however, did not materialize.
Harley also said it is stopping production at its other operations for five weeks over the remainder of the year. The company also is accelerating the consolidation of its two Milwaukee-area powertrain plants, which is expected to be completed by mid-2010.
The announced layoffs will include 700 hourly production positions and approximately 300 nonproduction employees. The latter group will include 100 from Harley-Davidson Financial Services. Earlier this year, the company laid off 1,400-1,500 production positions and 300 nonproduction, salaried positions. PSB

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