G oog le BadWeB | Login/out | Topics | Search | Custodians | Register | Edit Profile


Buell Forum » Balancing Allegiance with Rebellion, the H-D Way » "Harley says it will cut 1,100 jobs, after dismal fourth quarter" » Archive through January 23, 2009 « Previous Next »

Author Message
Top of pagePrevious messageNext messageBottom of page Link to this message

Mikej
Posted on Friday, January 23, 2009 - 09:53 am:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

Not sure if this is already being discussed:

http://www.jsonline.com/business/38211079.html


quote:

Harley says it will cut 1,100 jobs, after dismal fourth quarter
By Rick Barrett of the Journal Sentinel

Posted: Jan. 23, 2009 5:57 a.m.

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.

Harley employs about 3,600 people in the Milwaukee area, including nearly 1,000 at the Juneau Ave. headquarters . In 2008, the company cut 730 jobs, including several hundred at its headquarters.

About 80% of the assembly line job reductions in 2008 were at Harley's largest plant in York, Pa., which has more than 2,770 hourly workers.




How is Buell doing, does this affect them?

Do I read it right? Is H-D shutting down the Capitol Drive engine assembly plant and moving those operations to the Menomonee Falls Sportster/Buell engine assembly plant?
Top of pagePrevious messageNext messageBottom of page Link to this message

Bandm
Posted on Friday, January 23, 2009 - 10:03 am:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

I just read this, same thing, different source.


NEW YORK (AP) -- Harley-Davidson Inc. said Friday it will cut 1,100 jobs over two years, close some facilities and consolidate others as it grapples with a slowdown in motorcycle sales.




The Milwaukee-based company also reported its fourth-quarter profit fell nearly 60 percent, and said it is slashing motorcycle shipments in 2009 to cope with reduced demand.

The iconic motorcycle maker said it will consolidate two engine and transmission plants in Milwaukee into its facility in Menomonee Falls, Wis. It will shrink its paint and frame operations in its York, Pa., plant and close its distribution facility in Franklin, Wis., whose duties will be handled by a third party.

Harley also said it will end its domestic transportation fleet operation.

The company said the cuts include 800 hourly production positions and 300 non-production, mostly salaried positions. It said 70 percent of the job cuts will occur this year and the rest in 2010.

The cuts will result in one-time charges of $110 million to $140 million over 2009 and 2010, Harley said. Once they are finished, the cuts will save between $60 million and $70 million per year.

Harley has been stung by the rapid downturn in motorcycle demand. The economic recession has prompted many consumers to put off purchases of its high-end bikes, while the credit crunch has kept some would-be customers from obtaining financing.

Meanwhile, the company remains in the midst of a shake-up among top management. Chief Executive Jim Ziemer said last month he would retire in 2009, and the company remains in the process of finding a successor. Sy Naqvi, the head of Harley's troubled financial-services arm, resigned earlier this month. Chief Financial Officer Tom Bergmann has taken on Naqvi's old duties until a replacement is found.

Harley said worldwide retail sales fell 13.1 percent in the fourth quarter, with sales in the U.S. -- its biggest market -- falling nearly 20 percent. International sales crept higher, though, and the overall heavyweight motorcycle sales fell 25.5 percent in the same period, Harley said.

For the full year, worldwide retail sales fell 7.1 percent.

Harley said it is slashing new motorcycle shipments in 2009 to between 264,000 and 273,000 to cope with the down market. That would be a drop of 10 percent to 13 percent from a year earlier.

In 2008, Harley said it shipped 303,479 new motorcycles, down 8 percent from 330,619 new motorcycles in 2007.

Harley said its fourth-quarter profit fell 58 percent to $77.8 million, or 34 cents per share, for the quarter ended Dec. 31, compared with $186.1 million, or 78 cents per share, in the same quarter last year.

Revenue fell 6.8 percent to $1.29 billion from $1.39 billion in the year-ago quarter.

The results fell short of Wall Street estimates. Analysts surveyed by Thomson Reuters expected 57 cents per share on sales of $1.29 billion, on average.

Harley said its financial-services division swung to an operating loss of $24.9 million in fourth quarter, hurt by write-downs totaling $63.5 million. The company said it is evaluating "a range of options" to provide funding for the ailing Harley-Davidson Financial Services. Many analysts have suggested the lending unit may have to be sold because it has been unable to unload its debt in the financial markets.

For the full year, Harley said its earnings fell 30 percent to $654.7 million, or $2.79 per share, from $933.8 million, or $3.74 per share, in the same quarter last year. Sales fell 2.3 percent to $5.59 billion from $5.73 billion in 2007.

Analysts expected $3.02 per share on sales of $5.61 billion in revenue for the year. Harley said it would not provide earnings guidance for 2009, but analysts call for $2.15 per share.

Shares of Harley plunged $2.20, or 17.7 percent, to $10.20 in premarket trading on Friday. The stock is down 69 percent in the last 52 weeks.
Top of pagePrevious messageNext messageBottom of page Link to this message

Swordsman
Posted on Friday, January 23, 2009 - 10:38 am:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

"But a slowdown in the global economy, coupled with a strengthened U.S. dollar, has put a damper on overseas sales. "

Errrr... how and when did THAT happen???

~SM
Top of pagePrevious messageNext messageBottom of page Link to this message

Moxnix
Posted on Friday, January 23, 2009 - 11:06 am:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

"Harley said its financial-services division swung to an operating loss of $24.9 million in fourth quarter, hurt by write-downs totaling $63.5 million. The company said it is evaluating "a range of options" to provide funding for the ailing Harley-Davidson Financial Services. Many analysts have suggested the lending unit may have to be sold because it has been unable to unload its debt in the financial markets."

The F&I guy at most dealerships must be lonely.
Top of pagePrevious messageNext messageBottom of page Link to this message

Anonymous
Posted on Friday, January 23, 2009 - 11:20 am:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

Got an email from a Buell employee they will not be affected at all
Top of pagePrevious messageNext messageBottom of page Link to this message

Jaimec
Posted on Friday, January 23, 2009 - 11:32 am:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

Hey, I did MY part! I BOUGHT a brand new Buell in the fourth quarter! What about the rest of you slackers??
Top of pagePrevious messageNext messageBottom of page Link to this message

Mikej
Posted on Friday, January 23, 2009 - 11:39 am:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

Good news for the Buell folks.
They're probably being flooded with internal transfer requests from H-D folks.
Top of pagePrevious messageNext messageBottom of page Link to this message

Spatten1
Posted on Friday, January 23, 2009 - 12:44 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

"But a slowdown in the global economy, coupled with a strengthened U.S. dollar, has put a damper on overseas sales. "

Errrr... how and when did THAT happen???


The dollar is strengthening only because other economies have hit the skids. Our long-term fundamentals still suck.
Top of pagePrevious messageNext messageBottom of page Link to this message

Rfischer
Posted on Friday, January 23, 2009 - 01:01 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

Actually, it's a bit more complicated than that. The dollar has strengthened because of a big increase in demand for US Treasuries by foreign investors and governments.

We're still "the only game in town" for risk management; there is a huge flight to safety by capital leaving developing markets, Asia, and Europe. Russia saw $20B leave in 2 weeks back in November, for example.

Look at the discount on US govt. paper; people are quite literally PAYING the Feds to loan money to them. Which, BTW, is how the govt. is [so far] getting away with running the money printing presses 24/7 without inflationary risk.

So far....

(Message edited by rfischer on January 23, 2009)
Top of pagePrevious messageNext messageBottom of page Link to this message

Spatten1
Posted on Friday, January 23, 2009 - 01:22 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

Yeah all true, but eventually our trade deficit is still going to be our downfall.

As you state, we are currently a relatively safe haven, as other economies suffer.

However, I don't believe that we can sustain our level of debt and net export very much longer. The USA's credit was in question only 6 months ago, before other economies got hit too. It will be in question again soon, when we pull out of this recession. I think this would change if our wage expectations or currency declines and we ramp up manufacturing and/or intellectual export many-fold.

The relative strengthening of the US dollar is just allowing the gov to borrow more effing money and it makes it tougher for our manufacturing base that was just starting to get a footing again under the weak dollar of recent years.
Top of pagePrevious messageNext messageBottom of page Link to this message

Bads1
Posted on Friday, January 23, 2009 - 01:28 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

Got an email from a Buell employee they will not be affected at all


Can anyone really make that Assumption Annony??? My next door neighbor was a white collar worker at Bombardier in my hometown here since the company started here almost 9 years ago. She lost her job. They took 70% of the total workforce out of there. BTW she will not be called back. Neither will the rest. They were told this the day of the termination. She was also told they were not going to be effected. Marine outboards and watercraft are hurting to. They are also a company they builds planes,ATV's,trains...and what not. Its tough out there. Another company in my Town.... Modine is let 25% of there total work force go this Friday. This company just houses Enginneers and Execs. Case Tractor company let go 300 some workers a week ago here in town. They let 350 plus go just a month ago. Chrysler is also here its about ready to throw in the towel on its workers here. This sucks big time. I'm hoping Buell will not be effected but what about in 6 months or ??? It going to get worse before better I think.
Top of pagePrevious messageNext messageBottom of page Link to this message

Jlnance
Posted on Friday, January 23, 2009 - 01:44 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

Can anyone really make that Assumption Annony?

They can make the assumption that none of the 1100 people mentioned will be Buell employees.

They can not make the assumption that nothing else will affect them.
Top of pagePrevious messageNext messageBottom of page Link to this message

Corporatemonkey
Posted on Friday, January 23, 2009 - 01:55 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

Got an email from a Buell employee they will not be affected at all

Anyone else think this is an odd statement from an Anon?


Top of pagePrevious messageNext messageBottom of page Link to this message

Rubberdown
Posted on Friday, January 23, 2009 - 02:07 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

I thought Anon's were Buell employees.
Top of pagePrevious messageNext messageBottom of page Link to this message

Rfischer
Posted on Friday, January 23, 2009 - 02:10 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

Very odd.
Top of pagePrevious messageNext messageBottom of page Link to this message

Spatten1
Posted on Friday, January 23, 2009 - 02:10 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

Probably a moderator just trying to get us good information without leaving a trail.
Top of pagePrevious messageNext messageBottom of page Link to this message

Corporatemonkey
Posted on Friday, January 23, 2009 - 02:23 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

Probably a moderator just trying to get us good information without leaving a trail.

That was my first thought. Maybe Court is trying to officially stay out of this one.

Seriously though, when was the last time we had a real anon post?
Top of pagePrevious messageNext messageBottom of page Link to this message

Anonymous
Posted on Friday, January 23, 2009 - 02:35 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

Not all anonys are employees but have links to them that need to use anony to protect said links and employee(s)

And Buell is largely unaffected by this announcement, is what I should have said.
Top of pagePrevious messageNext messageBottom of page Link to this message

Cityxslicker
Posted on Friday, January 23, 2009 - 02:35 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

The key to any economy, is to get out while the getting is good, you always want to leave on an upswing, or at least before it hits rock bottom. ; )
Top of pagePrevious messageNext messageBottom of page Link to this message

Bill0351
Posted on Friday, January 23, 2009 - 03:12 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

It seems to me Harley is doing what it needs to do to survive. If they can shrink overhead by roughly the same margin that they lose sales, they are going to come out OK and be ready to expand again when the economy recovers.

As long as Buell is seen as an asset that adds to the bottom line, they will not have any problems. As soon as they become a liability, the clock will start ticking on Buell's future with HD.

Even if Buell is merely at "break even" they could be in danger as Harley leans out its operation. At some point they are going to have to decide whether they make motorcycles, or if they just make Harley Davidsons.

Following that same logic, MV needs to be wondering what the future holds too.

I doubt even Claudio Castiglioni or Erik Buell would have a ton of advance notice before the axe would fall, much less an anonymous internet poster who purports to have some inside information.

I know it’s a cliché, but right now, the only certainty in this whole economy is uncertainty.

(Message edited by bill0351 on January 25, 2009)
Top of pagePrevious messageNext messageBottom of page Link to this message

Anonymous
Posted on Friday, January 23, 2009 - 03:21 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

At least the anonny poster knows how to Spell Erik Buell
Top of pagePrevious messageNext messageBottom of page Link to this message

Corporatemonkey
Posted on Friday, January 23, 2009 - 03:26 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

It seems to me Harley is doing what it needs to do to survive.

(The Monkey dons on the hat of pure opinion)

It is about damn time...

I always look at things from a financial situation. I had knowledge on good authority over a year ago that HD was forcing bikes on some of the larger dealers to get them off their own books. A lot of bikes ended up in storage waiting to be sold.
Now HD is offering very advantageous loans to dealers (including Buell dealers) to heavily expand/upgrade.

I like HD products but if you are flooding the market with your product, and have been for some time, nothing good can come from that. Not from a dealer standpoint, not from an existing customer standpoint (residual value), or a share price.

It just smells a little like GM/Ford the last few years.
Top of pagePrevious messageNext messageBottom of page Link to this message

Bads1
Posted on Friday, January 23, 2009 - 03:55 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

I know several Buell Employees. Does that mean I get special treatment to post annony??
Top of pagePrevious messageNext messageBottom of page Link to this message

Svh
Posted on Friday, January 23, 2009 - 03:56 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

Well picking today to tour the factory I can say that what we heard was that Buell is going to be largely unaffected. Buell is doing well promoting their brand and with sales, although largely in other markets. Their workers already are doing 3-4 jobs as it is and doesn't seem to be much if any "fat to trim".
Top of pagePrevious messageNext messageBottom of page Link to this message

Ferris_von_bueller
Posted on Friday, January 23, 2009 - 04:20 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

At least the anonny poster knows how to Spell Erik Buell

Sounds like something that would be said in a chat room by 15 year olds.
Top of pagePrevious messageNext messageBottom of page Link to this message

Rich
Posted on Friday, January 23, 2009 - 04:26 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

It is interesting to note that Harley's 4th quarter net income was a positive $78 million, and full year net income was a positive $665 million. In other words, they still made money this year.
Top of pagePrevious messageNext messageBottom of page Link to this message

Svh
Posted on Friday, January 23, 2009 - 04:32 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

I always liked seeing the familiar Harley trucks driving down the road delivering motorcycles or parts. Too bad those are going away. In Milwaukee today as you can imagine this is the big story of the day and one thing that was said at the press conference but not in these press releases was that they are not hurting yet but these measures are being taken to continue to be strong in the marketplace.
Top of pagePrevious messageNext messageBottom of page Link to this message

Slaughter
Posted on Friday, January 23, 2009 - 04:34 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

I duzzint no howe 2 spiell mush - butt eye chur ken spiel ERIK!
Top of pagePrevious messageNext messageBottom of page Link to this message

Gentleman_jon
Posted on Friday, January 23, 2009 - 05:04 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

The real problem, according to the Wall Street Journal is that HD Financial Services has $1 billion in unmet cash flow needs for 2009, and no obvious way to fill the gap.

Without the ability to finance sales, in a low credit environment, sales are very likely to fall. Not too many people buy Harleys for cash.

Harley has applied for Federal Gov't assistance, through the Temporary Liquidity Guarantee Program, known as TLGP which guarantees unsecured corporate debt against default, and which perhaps will permit Harley to enter the unsecured debt market.

I have no idea how Harley Financial Services got into this bind, but I do know that the president of HDFS, Sy Naqvi abruptly left the company early this month.

On top of this, the current President Jim Ziemer has announced that his will retire this year.

Bottom Line: Fasten your seat belt.

Harley was down 7% today, closing for the week at $11.50

Even though Buell is enjoying some success on its own, the financing for Buells comes out of the same pocket as Harley Financing, or so I believe.
Top of pagePrevious messageNext messageBottom of page Link to this message

Spatten1
Posted on Friday, January 23, 2009 - 05:22 pm:   Edit Post Delete Post View Post/Check IP Print Post    Move Post (Custodian/Admin Only) Ban Poster IP (Custodian/Admin only)

I have no idea how Harley Financial Services got into this bind,

I'd say it's most likely because the home equity ATMs got cut off, and that was driving luxury purchases in this country for the last 8 years.

I'd bet the default rate on Harleys is ugly, considering how many people are walking away from their homes, which are much more of a necessity than payments on a $20,000 chrome beast.
« Previous Next »

Topics | Last Day | Tree View | Search | User List | Help/Instructions | Rules | Program Credits Administration