Harley's Cutbacks

A lot has changed since that beautiful Labor Day weekend when Milwaukee hosted the Harley-Davidson 105th Anniversary Celebration.

Press Release

Milwaukee, Wis. (January 23, 2009) - Harley-Davidson Inc. (NYSE:HOG) reported decreased revenue, net income and earnings per share for the fourth quarter of 2008 compared to the year-ago quarter. The Company said it plans lower motorcycle shipments in 2009 and made public its overall strategy to deal with the current economic environment.

“We have a strong core business anchored by a uniquely powerful brand, but we are certainly not immune to the current economic conditions,” said Jim Ziemer, Chief Executive Officer, Harley-Davidson Inc. “We have a clear strategy to not only deal with the economic conditions, but also strengthen our long-term operations and financial results. We are executing that strategy with confidence and conviction.”

Read the complete release.

Here's how the Milwaukee Journal Sentinel reports the news:

Harley-Davidson Inc. says it will cut 1,100 jobs over two years and scale back its operations as its fourth-quarter earnings fell amid the slowing motorcycle market.

Harley says it will consolidate two engine and transmission plants in Milwaukee into its Menomonee Falls plant. It will close a distribution facility in Franklin and shrink its paint and frame operations in York, Pa.

The company also says it will end its domestic transportation fleet and plans a 10% to 13% reduction in motorcycle shipments for 2009.

In a news release this morning, Harley said earnings fell 58% to $77.8 million, or 34 cents per share, from $186.1 million, or 78 cents per share, last year. Sales fell 6.8% to $1.29 billion.

Analysts expected earnings of 57 cents per share on sales of $1.29 billion.

Harley shares have taken a beating in recent months amid declining motorcycle sales tethered to sinking consumer confidence.

CEO Jim Ziemer recently announced that he will retire sometime in 2009. Earlier this month, Sy Naqvi, president of Harley-Davidson Financial Services, announced his resignation effectively immediately.

Analysts see considerable downside from the dual impact of declining motorcycle sales and tightened credit markets.

Until recently, international sales had been a bright spot for Harley. But a slowdown in the global economy, coupled with a strengthened U.S. dollar, has put a damper on overseas sales.

I thought Barack Obama promised to save or create three to four million jobs.

Where is he?

Surely the messiah can make this all better.

Actually, I don't think Obama can. He'd be wise to back off his proposed disastrous tax hikes, to make it clear to Americans that he isn't going to pick their pockets. He should admit that he was completely misguided when he made those campaign promises to punish business owners and investors. He should admit that he made reckless campaign promises.

Obama should promise not to penalize industry. He should back off. He should stop creating a climate of economic fear, preaching that this is the Great Depression II. It's a self-fulfilling prophesy.

Got hope? Not if Obama pursues his promised economic strategy.

I do have confidence in Harley.


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MILWAUKEE – County Executive Scott Walker issued the following statement regarding the announcement by Harley-Davidson Motor Company on job cuts:

“The news from Harley-Davidson would be bad at any time, but it is even worse now. This is a serious blow. We need to get more money into the economy and the quickest way to do that is through bold tax cuts.

Reducing the payroll tax can be done immediately and that will put more money into the hands of consumers who can then buy things like Harley-Davidson motorcycles.

I hope that we can save some of the 1,100 jobs by getting the economy
roaring again.”