Harley-Davidson to close Kansas City plant

[shwnrob]

Business
Harley-Davidson shuts plant as woes worsen for Trump's model manufacturer

The Milwaukee-based motorcycle maker will close its factory in Kansas City, Missouri, and consolidate production in York, Pennsylvania, according to a statement Tuesday. The restructuring will eliminate about 260 U.S. jobs, Chief Executive Officer Matt Levatich said on a conference call. Trump praised the company last year as a "great example" of a business creating jobs and building factories in the country.

In closing the Kansas City plant, Harley will eliminate about 800 jobs; it will add 450 in York, a mix of full-time, part-time and contract positions.

“They didn’t even give us a call ahead of time,” Joe Capra, directing business agent for Local 778 of the International Association of Machinists & Aerospace Workers, told The Kansas City Star. “It is real devastation for these people who work here and work hard in the Kansas City area.”

Harley-Davidson plant closes
Jim Parker gives a final check to a V-Rod on the assembly line at the Harley-Davidson plant in Kansas City , Mo., in this 2006 file photo. Harley-Davidson announced on Jan. 30, 2018, it will close the Kansas City plant, at the cost of 800 jobs. (Nuccio DiNuzzo / Chicago Tribune)
Harley is consolidating its U.S. manufacturing presence as its bike sales fall on every continent. 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.

U.S. motorcycle ridership has stalled in spite of Levatich's efforts to introduce models for first-time buyers and teach more Americans how to safely get around on bikes. Harley shares fell as much as 9.4 percent in New York, the biggest intraday drop since July.

The issue for investors isn't the fourth-quarter miss, which was complicated by a number of one-time items, David Beckel, an analyst with Sanford C. Bernstein & Co., said in a note to clients.

"The story is, or continues to be, that Harley is in the throes of a significant secular decline," he wrote.

Sales in the crucial U.S. market fell 11 percent in the fourth quarter and 8.5 percent for the year. Harley executives said they're drawing more consumers to their brand, but couldn't say during the call with analysts how many are buying used instead of new bikes.

As bike demand weakens, one of Harley's rival brands is calling it quits. Polaris Industries Inc., which started winding down its Victory motorcycle operations early last year, projected adjusted profit of as much as $6.20 a share for 2018, well below analysts' $6.99 a share average estimate. The Medina, Minnesota-based company's stock plunged as much as 17 percent, the biggest drop since November 2008.

Harley-Davidson to close its Kansas City motorcycle assembly plant
Harley-Davison Inc. announced Tuesday, Jan. 30, 2018 that it will close its Kansas City motorcycle plant by the summer of 2019. About 800 workers will lose their jobs. (Keith Myers / The Kansas City Star)
The Kansas City plant closing will cost Harley as much as $200 million through 2019, then result in annual cash savings of $65 million to $75 million after 2020. Levatich declined to say how much production capacity will be reduced. At the same time, the company is building a factory in Thailand that will assemble bikes using components shipped from the U.S.

Unions representing Harley workers accused the company in September of trying to "systematically dismantle" its hourly workforce. A spokesman for the International Association of Machinists and Aerospace Workers said the union didn't have an immediate comment Tuesday.

Harley reported profit of 5 cents a share in the last three months of the year, well below the 46 cent average analyst estimate. The company reported a $53.1 million charge related to the U.S. tax bill and a $29.4 million charge for a product recall.

"Harley can't get younger people into the hobby and the bikes are too big to be transportation in Europe or Asia," Kevin Tynan, a Bloomberg Intelligence analyst, said in an email. "That future is really dark."

[Dordrecht]

As bike demand weakens, one of Harley's rival brands is calling it quits. Polaris Industries Inc., which started winding down its Victory motorcycle operations early last year, projected adjusted profit of as much as $6.20 a share for 2018, well below analysts' $6.99 a share average estimate. The Medina, Minnesota-based company's stock plunged as much as 17 percent, the biggest drop since November 2008.

Forgot to mention that Polaris replaced the Victory brand with the Indian brand name and that they manufacture many other vehicles such as snowmobiles and quads.

Young people are to busy playing with electronic gadgets, they don't go out and play on motorcycles anymore.

[Evang.Benincasa]

Originally Posted by Dordrecht

Forgot to mention that Polaris replaced the Victory brand with the Indian brand name and that they manufacture many other vehicles such as snowmobiles and quads.

Young people are to busy playing with electronic gadgets, they don't go out and play on motorcycles anymore.

Amen

The person who wrote this article and people they interviewed, obviously are more focused on proving the current president wrong. If Donald Trump never said anything about Harley, no one would be discussing this. What about Ducati? that isn't an entry level bike, and it is a specialty bike. Harley only had Milwaukee and York, they will continue. Harley is like the UPC, everyone is waiting for the death but the old girl keeps on ticking while taking a licking. AMF years everyone predicted her demise. When AMF bought Aermacchi Aeronautica everyone thought the worst, but they sold off the brand to another Italian manufacture.

Ronald Reagan stepped in and levied a tariff on imports over 700cc. That's when we started to get 700cc bikes swamp the market, instead of 750cc. But the Ronald Reagan years also saw the Reaganometer which had a 55 mph red circle placed on motorcycle speedometers. I have watched Penton/KTM, become a major contender, and give the big four a run for their money. Ducati once was thought to be going the way of the dinosaur way back when but she is a high level bike now. I don't agree with a Sportster going for close to 10 grand, because the bike isn't worth that. But I don't have to buy them. The Harley Davidson purist is going to save their pennies, count the cost, but to them its worth it. Donald Trump was correct, Harley Davidson kept it together, and continues to survive in a market where they were building an outdated motorcycle. All while Japanese flooded the market with technologically advance cheaper machines.

Yet, Harley is still Harley, Moto Guzzi is Moto Guzzi, Ducati is still the Duke. They have a following, which Wall Street can't see or remember at times. Indian label slapped on a bike and everyone shells out big peanuts for those relabeled Polaris Victorys. Triumph made a comeback, because they have a following. When I owned a shop my motto was, "their is a hind end for every seat." This is a fact in the motorcycle world.

Harley Davidson will never be Honda, and she should never try to be.

[Aquila]

None of this has anything to do with Trump.

And while Harley might experience hard times, I don't see Harley going under.

[Dordrecht]

Actually the Harley market in Asia is booming.
Kevin Tynan has no idea what he's talking about.

Yet, Harley is still Harley, Moto Guzzi is Moto Guzzi, Ducati is still the Duke.

That's true, you will never see a Harley guy on a Ducati, a BMW or a Moto Guzzi.

I have owned two Harleys.
Right now I own two Triumphs.
Harley guys are also Triumph guys. :-)

[Evang.Benincasa]

Originally Posted by Dordrecht

Actually the Harley market in Asia is booming.
Kevin Tynan has no idea what he's talking about.



That's true, you will never see a Harley guy on a Ducati, a BMW or a Moto Guzzi.

I have owned two Harleys.
Right now I own two Triumphs.
Harley guys are also Triumph guys. :-)

Amen, the article was totally based on bashing Trump concerning what he said about Harley Motor Co. If he would of said something about Little Debbie Snack Cakes. The article would of been about how people in Thailand couldn't eat them with chop sticks.

[Aquila]

Originally Posted by Evang.Benincasa

Amen, the article was totally based on bashing Trump concerning what he said about Harley Motor Co. If he would of said something about Little Debbie Snack Cakes. The article would of been about how people in Thailand couldn't eat them with chop sticks.