Harley plans to lay off 225 salaried positions - USA Today [PDF]

Oct 18, 2016 - Harley has 1,024 salaried employees at its Juneau Avenue headquarters and 3,246 salaried employees worldw

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Harley plans to lay off 225 salaried positions Rick Barrett, Milwaukee Journal Sentinel

Published 7:58 a.m. ET Oct. 18, 2016 | Updated 5:43 p.m. ET Oct. 19, 2016

Harley has 1,024 salaried employees at its Juneau Avenue headquarters and 3,246 salaried employees worldwide. Harley-Davidson Inc. on Tuesday said it expects to lay off about 225 salaried employees between now and the end of the year as the company cuts costs amid a sluggish U.S. motorcycle market. Harley said it will incur between $20 million and $25 million in employee separation and reorganization costs as it throttles back production and reduces the number of workers.

(Photo: RIck Wood / Milwaukee Journal Sentinel)

Roughly 225 salaried employees and 70 contractors will be affected by the layoffs throughout the company, said Harley-Davidson spokeswoman Maripat Blankenheim. Harley has 1,024 salaried employees at its Juneau Avenue headquarters and 3,246 salaried employees

worldwide. The company is not disclosing specific locations for the job cuts or the affected positions. In October 2015, Harley said it was cutting about 250 salaried jobs but was increasing marketing and product development efforts following disappointing quarterly sales and earnings. Tuesday, the company also reported a sluggish third fiscal quarter. RELATED: Harley wins "coolest" product contest (/story/money/business/2016/10/18/harley-wins-coolest-product-contest/92370820/) Harley said it had a profit of $114.1 million in the three-month period ended Sept. 25, down 18.7% from $140.3 million in the same period a year earlier. On a per share basis, the company earned 64 cents, down 7.2% from 69 cents a year ago. Harley reported $1.27 billion in revenue in the recent quarter, down 3.8% from a year earlier. The company said its worldwide retail motorcycle sales were down 4.5%, primarily on weakness in the U.S. where sales fell 7.1% from a year earlier. In August, Harley said approximately 200 production employees could face layoff this fall as the company adjusted to slowed sales. The 200 included a mix of seasonal and regular full-time employees. Union sources said many of the layoffs would take place at the company’s assembly plant in York, Pa., but a handful of positions could be lost at the Menomonee Falls engine plant that employs about 1,000 people.

U.S. motorcycle sales have been soft in recent months, partly due to economic weakness in oil and gas producing states. Also, Harley has faced intense pressure from competitors, including Japanese motorcycle manufacturers and Minnesota-based Indian Motorcycle Co. “We continue to effectively navigate a fiercely competitive environment and an ongoing weak U.S. industry,” Matt Levatich, Harley’s president and chief executive officer, said in a Tuesday conference call with analysts. Partly offsetting the downturn, Harley says its recently introduced 2017 model-year bikes have been well received in the marketplace. “In September, we saw touring (motorcycle) sales in the U.S. increase by double digits, along with increased demand for test rides. Given initial results, we’re confident the entire line-up will drive our retail sales for the remainder of 2016 and will position us well heading into the spring riding season,” Levatich said. There’s been an “extremely positive” response to the company’s new Milwaukee Eight engine (/story/money/business/2016/08/23/harley-davidsonlaunches-new-engine/89196948/), he added. That engine, unveiled in August at a company dealership meeting in Boston, powers the company's 2017 touring bikes and trikes. Harley says it's the biggest engine-product launch for the company since 1998 when the Twin Cam engine made its debut. It's a product milestone comparable with Harley's "Evolution" engine, introduced for the 1984 model-year, and the "Knucklehead" engine in 1936, according to the company. The company's 2017 product lineup includes touring bikes with improved suspension, in addition to the Milwaukee Eight engine. Many of the changes have come as Harley courts new customers, including women and younger riders. Harley has higher hopes for the current, fourth quarter, as its 2017 model-year bikes gain traction in the marketplace, the remaining 2016 model-year bikes are sold, and production is kept close to consumer demand. “As we look ahead, continued softness in the U.S. (motorcycle) industry is a clear area of concern, and we’re taking further steps to be sure we’re positioned appropriately,” Levatich said. Harley usually gets a boost in sales when it introduces a new line of bikes, or an engine like the Milwaukee Eight, said analyst Robin Diedrich with Edward Jones Co. However the motorcycle industry is weaker now and very competitive. “We do kind of question whether the new engine will be enough to really drive sales for the next year as much as Harley expects it to,” Diedrich said. Tuesday, Harley-Davidson shares closed at $54.19, up $4.49. The company’s shares have climbed more than 9% since the beginning of the year, while the Standard & Poor’s 500 index has climbed 4%. Read or Share this story: http://on.jsonl.in/2eMu02q

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