Harley-Davidson to shut down plant

Feb 01, 2018, 00:39
Harley-Davidson to shut down plant

And the pain won't end this year: The company projected global sales will drop as much as 4.9 percent more in 2018 after a 6.7 percent decline last year. This announcement came after the fourth-quarter earning report of Harley-Davidson, which witnessed the downfall in Harley's sales.

It earned $47.2 million, or 27 cents per share, a year earlier.

During Tuesday's earnings call, the company also announced the development of an electric motorcycle called Project LiveWire.

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Harley-Davidson retail motorcycle sales in the United States were down 11.1 percent, and the overall industry was down 6.5 percent compared to the year-ago quarter.

In the US, motorcycle sales tumbled 8.5%; in Latin America, sales were down 2.6%; in Europe, the Middle East, and Africa, motorcycle sales fell 2.0%; and in Asia Pacific, sales plunged 7.7%. There were 32,000 new Harley-Davidson buyers in the USA previous year.

Harley has taken steps to counter what's been a prolonged downturn, including tightening motorcycle inventories.

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"The EV motorcycle market is in its infancy today, but we believe premium Harley-Davidson electric motorcycles will help drive excitement and participation in the sport globally", said Levatich.

As it adjusts to lower demand, Harley said it will consolidate work at its motorcycle assembly plant in Kansas City, Missouri, into the one in York, Pennsylvania, eliminating about 800 jobs at the Kansas City plant but adding 450 at the York facility.

This optimization initiative will lead to a reduction in operating income of $170 to $200 million through 2019 after which the company expects to see an ongoing cash savings of $65 to $75 million. And CEO Matt Levatich told the Wall Street Journal, way back in 2015, that the e-bike would release no later than 2020 - not to mention confirming it again in this interview with The Street last February. Meag Munich Ergo Kapitalanlagegesellschaft MBH bought a new position in shares of Harley-Davidson during the 4th quarter valued at about $424,000. The stock fell almost 13 percent in 2017. "However in recent years, and going forward, we expect a much slower growth pattern for the USA motorcycle industry", said analyst Robin Diedrich with Edward Jones Co. Aging baby boomers who once fueled rising sales are another factor. Having ridden the prototype bike, called Project Livewire, Hoyer said he expects Harley-Davidson will deliver a quality product.

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"Harley is seeing significant pricing pressure, hurting profitability and sales", she said.

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