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NOW IN OU
26 EA t R h
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T H E L E A D I N G B U S I N E S S M A G A Z I N E F O R T H E I N T E R N AT I O N A L C U S T O M M O T O R C Y C L E A N D PA RT S I N D U S T RY
“Manufacturing optimization” is
response to -11.1% final quarter
decline in domestic U.S. retail sales
As has been well reported, Harley-
Davidson’s response to its hugely
disappointing 2017 4Q and full year
results has been to constrain future
manufacturing capacity by closing two
factories for a total net job loss of
around 500 jobs in what it describes as
“Manufacturing optimization”.
Having reduced its York, Pennsylvania
footprint some years ago, Harley-
Davidson described its plans to close its
Kansas City, MO final assembly plant as
a step to “improve” its manufacturing
operations and cost structure by
“commencing a multi-year
manufacturing optimization initiative
anchored by the consolidation of its
motorcycle assembly plant in Kansas
City into its plant in York, PA. The
company expects to incur restructuring
and other consolidation costs of $170
to $200 million and capital investment
of approximately $75 million over the
next two years and expects ongoing
annual cash savings of $65 to $75
million after 2020.”
The closure of the Kansas City plant is
expected to cost some 800 direct jobs
in that area, with some 400 new hires
slated for York. The other facility to close
is Harley’s New Cast Alloy wheel factory
at Adelaide in southern Australia at a
cost of a further 100 direct jobs.
At the time of the announcement
Harley CEO Matt Levatich said that “the
decision to consolidate our final
assembly plants was made after very
4Q domestic
US retail sales
-11.1 percent
careful consideration of our
manufacturing footprint and the
appropriate capacity given the current
business environment. Our Kansas City
assembly operations will leave a legacy
of safety, quality, collaboration and
manufacturing leadership.”
In response to its disappointing 2018
fiscals, Levatich pointed to “progress in
building riders”, expanded product
development through increased
investment in electric motorcycle
technology and the fact that despite
new model sales being soft, overall the
number of Harley riders had grown due
to an uptick in demand for used models.
“Our actions to address the current
environment through disciplined supply
and cost management position us well
as we drive to achieve our long-term
objectives to build the next generation
of Harley-Davidson riders globally,”
said Levatich.
“We finished 2017 with over 32,000
more Harley-Davidson riders in the U.S.
than one year ago, and we delivered
another year of strong cash generation
and cash returns to our shareholders.”
Harley is making much of its
management of production numbers
and inventory, but revealed that “fourth
quarter revenue from motorcycles and
related products was up versus the prior
year behind higher motorcycle
Continues on page 10 >>>
MAR 2018
ISSUE #224
HELLO CURTISS,
GOODBYE
HYDROCARBONS!
TIER 1 TUNERS +CCT
CUSTOM DYNAMICS
"LIGHT PIPE" TECHNOLOGY
The 2017/2018 J&P Cycles Ultimate Builder Custom Bike Show competition series came to a crescendo at the
penultimate Progressive International Motorcycle Show (IMS) on February 9 - 11 at the Donald E. Stephens
Convention Center, Chicago, Illinois with Texas based Motorcycle Missions Veterans scooping the $20,000 top
prize as the official 2018 ‘King of the Builders.’ Respect and kudos to founder Krystal Hess - full story next month.