| Author | Message | ||
     Mikej |
http://www.jsonline.com/watch/index.aspx?watch=1&d ate=4/17/2008&id=38480&format=print
More in the article. I wonder how much this winter's weather had to do with this. | ||
| Greenlantern |
IMO looks like Harley is being proactive before any damage can take root. It always sucks to see people lose their jobs for any reason but a margin heavy company such as HD is always go for production /job cuts before cutting margins because they are in a position to weather the economic storm. They know that (hopefully) sooner than later the disposable income will return and justify their not devalueizing the brand.  | ||
| Chellem |
As a dealer, I have mixed feelings about this announcement. It sounds worse than it is, really, at least for us. I wouldn't wish for that many people to lose their jobs - that sucks - but I think it's far worse for the company and the dealer network in the long run if they just keep shipping bikes to dealers who can't move them in a timely fashion. It's darned expensive sitting on motorcycles. I'm not really worried though. I'm glad their watching things like this, instead of continuing in their "production-driven-get-'em-out-there" methods. Just my $.02. ->ChelleM (When did they take the cents sign off the keyboards??) | ||
| Mikej |
In the past few years it's been a "normal" winter slowdown. (The last ¢ symbol I saw on a keyboard was on an old manual typewriter.)  | ||
| Greenlantern |
option $ (on a mac keyboard anyway.) ¢¢¢¢¢¢¢¢¢  | ||
| Hughlysses |
It'd be interesting to know how Buell's sales are doing right now and how this affects them. | ||
| Chellem |
The Buell sales should be tucked away somewhere in the quarterly financials, no? I haven't had the opportunity to sift through it all. For us though, Buell is doing great. :P ->ChelleM | ||
| Court |
Buell sales are much less econo-cyclical than Harley-Davidson. In addition, in an obtuse way, Buell can be see as "competing" goods . . .a term some of you recall from Econ 101. In other words, my Budget does not allow a $14,000 Super Glide . . . but the $8,000 Buell Super TT fits in. The are tremendous opportunities for Buell at this time. I see one that could essential increase Buell sales by 35% . . . I'm watching to see what the marketing folks do. Good times to be in the motorcycle business in my PERSONAL opinion. | ||
| Trackdad |
Chellem, Sales for Buells in the first quarter were down roughly 200 units. Figure its pretty good overall especially with a NEW, completely new model. | ||
| Trackdad |
Here's the figures... First numbers are 1st qtr 08 vrs 1st qtr 07. Harley-Davidson, Inc. Condensed Consolidated Statements of Income (In thousands, except per share amounts) (Unaudited) Three months ended March 30, April 1, 2008 2007 Net revenue $1,306,313 $1,178,875 Gross profit 476,137 423,046 Operating expenses 214,533 187,803 Operating income from motorcycles & related products 261,604 235,243 Financial services income 93,289 109,163 Financial services expense 58,382 50,226 Operating income from financial services 34,907 58,937 Corporate expenses 5,458 4,939 Income from operations 291,053 289,241 Investment income, net 2,042 8,915 Income before provision for income taxes 293,095 298,156 Provision for income taxes 105,514 105,846 Net income $187,581 $192,310 Earnings per common share: Basic $0.79 $0.75 Diluted $0.79 $0.74 Weighted-average common shares: Basic 237,078 257,326 Diluted 237,250 258,158 Cash dividends per common share $0.30 $0.21 Harley-Davidson, Inc. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) (Unaudited) March 30, December 31, April 1, 2008 2007 2007 ASSETS Current Assets: Cash and cash equivalents $332,639 $402,854 $310,010 Marketable securities 524 2,475 618,502 Accounts receivable, net 330,147 181,217 147,732 Finance receivables held for sale 729,814 781,280 297,885 Finance receivables held for investment, net 1,565,022 1,575,283 1,550,001 Inventories 441,205 349,697 369,418 Other current assets 187,436 174,508 122,627 Total current assets 3,586,787 3,467,314 3,416,175 Finance receivables held for investment, net 937,495 845,044 767,529 Other long-term assets 1,340,117 1,344,248 1,262,794 $5,864,399 $5,656,606 $5,446,498 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable & accrued liabilities $925,014 $785,124 $854,464 Current portion of finance debt 1,111,036 1,119,955 463,530 Total current liabilities 2,036,050 1,905,079 1,317,994 Finance debt 980,000 980,000 890,000 Postretirement healthcare benefits 199,978 192,531 203,514 Other long-term liabilities 216,946 203,505 199,503 Total shareholders' equity 2,431,425 2,375,491 2,835,487 $5,864,399 $5,656,606 $5,446,498 Note: On January 1, 2008 the Company recorded a reduction to shareholders' equity of $18.1 million ($11.2 million, net of tax) to adopt provisions of Statement of Financial Accounting Standard No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FAmerican Sport Bike Statements No. 87, 88, 106 and 132( R )" that require sponsors of defined benefit pension and postretirement plans to measure the funded status of those plans as of the date of the year-end statement of financial position. Harley-Davidson, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three months ended March 30, April 1, 2008 2007 Net cash provided by operating activities $146,778 $519,624 Cash flows from investing activities: Capital expenditures (43,239) (40,775) Finance receivables held for investment, net (24,735) (12,940) Collection of retained securitization interests 10,796 14,493 Net change in marketable securities 2,019 40,622 Other, net 1,511 4,545 Net cash (used by) provided by investing activities (53,648) 5,945 Cash flows from financing activities: Net decrease in finance-credit facilities and commercial paper (9,392) (353,540) Dividends (71,023) (54,103) Purchase of common stock for treasury (100,096) (61,251) Excess tax benefits from share-based payments 312 1,157 Issuance of common stock under employee stock option plans 584 12,953 Net cash used by financing activities (179,615) (454,784) Effect of exchange rate changes on cash and cash equivalents 16,270 828 Net (decrease) increase in cash and cash equivalents (70,215) 71,613 Cash and cash equivalents: At beginning of period 402,854 238,397 At end of period $332,639 $310,010 Net Revenue and Motorcycle Shipment Data (Unaudited) (Unaudited) Three months ended March 30, April 1, 2008 2007 NET REVENUE (in thousands) Harley-Davidson( R ) motorcycles $1,017,218 $891,518 Buell( R ) motorcycles 22,075 21,655 Parts & Accessories 181,942 188,235 General Merchandise 84,006 76,112 Other 1,072 1,355 $1,306,313 $1,178,875 HARLEY-DAVIDSON UNITS Motorcycle shipments: United States 47,826 48,740 Export 24,042 19,021 Total 71,868 67,761 Motorcycle product mix: Touring 26,435 21,802 Custom 29,072 30,768 Sportster( R ) 16,361 15,191 Total 71,868 67,761 BUELL UNITS Motorcycle shipments: Buell 2,392 2,558 Retail Sales of Harley-Davidson Motorcycles Year to Date March 2008 2007 Total Worldwide Retail Sales of Harley-Davidson Motorcycles 66,561 70,533 North America Region 49,255 55,473 United States 46,572 53,426 Canada 2,683 2,047 Europe Region (Includes Middle East and Africa) 10,149 9,415 Europe* 9,075 8,686 Other 1,074 729 Asia Pacific Region 5,300 4,434 Japan 2,738 2,292 Other 2,562 2,142 Latin America Region 1,857 1,211 Data Source (subject to update) Data source for all 2007 and 2008 retail sales figures shown above is sales warranty and registration information provided by Harley-Davidson dealers and compiled by the Company. The Company must rely on information that its dealers supply concerning retail sales, and this information is subject to revision. Only Harley-Davidson® motorcycles are included in the Harley-Davidson Motorcycle Sales data. * Europe data includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. Heavyweight Market Data Data Through Month Indicated 2008 2007 United States (1) (March) 93,155 108,337 Europe (2) (February) 47,764 39,785 (1) - United States industry data includes 651+cc models, derived from submission of motorcycle retail sales by each major manufacturer to an independent third party. (2) - Europe data includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. Industry retail motorcycle registration data includes 651+cc models, derived from information provided by Giral S.A., an independent agency. ---- | ||
| Natexlh1000 |
That's true. Harley people and Buell people are somewhat different age groups, right? Which demographic is being squeezed more now? | ||
| Xl1200r |
I would guess that EVERYONE is getting squeezed right now. Everything I hear talks about high food and high gas prices, which everyone uses. | ||
| Mikej |
I think you'll find that the demographic age group of Buell owners on this site ranges from 15 - 70+ years old. I suspect that you will find the same or wider age range of owners on any of several H-D focused web sites. | ||
| Buellinachinashop |
I thought I read somewhere here that the average age of a Buell person was 40+ | ||
| Cityxslicker |
I close my eyes and I see a long summer vacation | ||
| Reepicheep |
I would have thought that while they are loosing domestic sales, that the huge exchange rate "bonus" would. Or do the importers get all that $$? And with gas at $3.50 per gallon, how long would it take to "pay off" a $8000 Sporty 883, or a $7100 XB9SX? | ||
| Blake |
I wonder where the WSJ got the 730 jobs. The HDI press release says the following: “We will achieve the shipment reduction through temporary plant shutdowns and adjustments to daily production rates. This will result in a decrease of about 370 unionized employees over the next several months. Our management group and union leaders will work together to implement this reduction.” The rest must be non-union professional types? | ||
| Blake |
370 vs 730? Or more likely,  (Message edited by blake on April 18, 2008) | ||
| Ferris_von_bueller |
What do they say...it's a recession when your neighbor loses their job - it's a depression when you lose yours | ||
| Dynasport |
This has been a long time coming. The construction/development industry has over built and over priced housing here in Florida. The mortgage industry has made loans that should have never been made. The consumers have taken these loans they couldn't afford and bought houses that were over priced. Now, gas prices are at all time highs in spite of the fact that the oil industry is making record profits. Home owners insurance rates have gone through the roof thanks to a string of hurricanes. Many people have been overspending and living off their credit cards, borrowing on their future, and taking out second mortgages because home prices had been soaring and all of a sudden everyone had equity to finance the vacation, the motorcycle, even eating out seven times a week. That type of living has now come to at least a temporary stop. I have buddies who bought Harleys with home equity lines of credit. No one is doing that now. Of course some have been hit harder than others, but many people are stretched too thin. I would love to buy a Buell right now. Today. But I am not willing to sink myself deeper into debt at the present. Hopefully things will turn around quickly. I agree that it is better in the long run for HD to cut production instead of have fire sales on a glut of bikes in the showroom. Not better perhaps for those now unemployed. But hey, I am no economist, so everything I said is probably wrong. | ||
| Crusty |
In addition, Harley said it will cut about 360 non-production jobs. 360 non-production + 370 production = 730 total lost jobs. | ||
| Rex |
Normal business. It is tough right now. I know our company just let over 400 people go across the country. HD spent a lot of money over the past several years getting production up to a maximum in all plants. A lot of extra work for a while. They finally have bikes in the show rooms, where in the past you could look at a brochure and order the bikes. I now get calls almost weekly from the sales guys wanting me to come in and test ride a bike. Have you seen what they are now asking for the HD bikes on the floor? some up to 35,000 dollars. Hard to swallow some of that.....so without sales going thru the door, better to cut production work now, then to have money going out of the door. Time to gear up the marketing dept. to get more people in buying sportsters and buells for a lower price, and to promote the mileage part of a harley davidson....also time to start marketing more of the clothes to the current bike owners. they know who has bikes, so get them back into the shop more often and offer them something to buy, even if it is a hat. Keep the money coming into the dealers at least. Promote service on current bikes. | ||
| Buellinachinashop |
Now's the time for HD to release the XR1200 here in the US. | ||
| Freeflyer |
Hmm people here are saying its better for hundreds of people to loose their jobs than to devalue bikes by cutting margins, but I disagree I think $30,000 for an aircooled chromed out bike is way too much, thats why people buy the same version in a jap bike for $9,000 instead of $19,000. HD needs to become more efficient and competitive, especially in todays market cause the economy is not going to turn around over night. I have a feeling theres alot of FAT that could cut out of the HOG that calls itself Harley Davidson. But I guess we will see how they adapt, personally Id rather see more american bikes on the road at less rediculous prices than fewer bikes at elitist prices only CEO's lawyers on Docs can afford | ||
| Chellem |
Have you seen what they are now asking for the HD bikes on the floor? some up to 35,000 dollars. Man, I don't know what these dealers are selling for $35,000, but even the most expensive, Ultra Classic super-jobber has an MSRP of $23,270, WITH the Anniversary Colors (Which is the most expensive color choice this year). IF you add ABS and the wheel option and the freight, AND the security system, it still only brings it to like $25,000 and change. EVEN if you add in tax, and maybe prep, it's still far far from $35,000. So I'm not sure where that dollar amount comes from. We at Liberty sell Thunder Mountain Customs, which are higher priced than Harleys by a considerable amount, which are in that price range ($35,000 or so) but those are the exception, not the rule. Unless you're speaking of the CVO Ultra, which does MSRP for $35,000 or so (not sure exactly) but again, that's the exception, not the rule. There's very few made, and they are VERY custom bikes. A fairly chromed H-D MSRPs for in the vicinity of $16,000 or so dollars. A Sporty will start you off closer to $7,000, if money is a concern. I think people's perception of H-D is that it's "overpriced Chrome and crap" (oh wait, maybe that's just here?  ) but frankly, you can get almost any H-D for under $30,000 these days. And a great many of them for under $20,000. And still more for under $10,000. Just throwing that out there. You can see all the MSRPs for yourself in the specs of each model at h-d.com. As for not flooding the market, I think they're trying to look at the long term. I'm quite sure they did NOT want to have to lay people off. But producing bikes that are not going to sell quickly is going to put the dealers in the uncomfortable position of having too many bikes, which, as I said earlier, is expensive to keep, and in the long term, dealers will just start refusing bikes. Then, H-D will have to bear the expense of sitting on them. And they don't want to do that any more than we do. I think they're making the right long-term move. Anyway, I hope they are. But I'm not an economist. So what do I know? :P ->ChelleM | ||
| Dynasport |
Certainly HDs cost more than their Japanese counterparts for the most part. I believe a Goldwing costs more than an ElectraGlide Ultra Classic, but I am not positive. I do believe there is a quality difference when comparing the HD cruisers with their Japanese competitors. You'd be surprised how much plastic many of those bikes have on them. While plastic may be normal in the sport bike world, it is considered inferior to metal in the cruiser world where saving a pound here and there is not a big concern. I also believe the finish and details on the HDs are superior to the competition. Is all that worth the extra money? Does it make the riding experience any better? That is an individual decision. It was for me. Maybe not for others. I view HD as a premium motorcycle brand. Like BMW and Ducati. Does that mean that their bikes are always superior to a Suzuki or Yamaha. Of course not. Just as a BMW car is not always superior to a Toyota. And just as I don't think BMW would be happy to find their cars selling at significant discounts off the showroom floor, as it cheapens the brand, I don't believe that would be good for HD in the long run either. Not if they want to remain a premium brand. And yes, HD does have some price competitive Sportsters, but for the most part the Sportsters are still more expensive than their entry level competition from Japan. OTOH, as unpopular as this statement may be, Buell is not seen by most as a premium brand. I don't think it would be as harmed by discounts of its bikes. In fact I have seen several threads on here about people buying brand new Buells at pretty decent discounts. Buell does have to be price competitive more so than HD. | ||
| Buellgrrrl |
I'm disappointed in HD's management. They can cut production, but they still have plants to pay for, and the savings in wages will be offset by higher unemployment insurance rates. It'd make more sense to offer more low priced models and bring more customers into the brands. When the market improves those customers will be trading in for more profitable models. For HD to try and increase prices in today's market is suicide. | ||
| Xb9ser |
back in 03 where I bought my buell they had a chromed out fat boy on the floor for $28,000 | ||
| Rocketsprink |
I see more $20k plus bikes on the dealers floors than $10k bikes. chellem, your dealership must be the exception to the rule. H-D can lay off all they're factory employees. Still won't change the fact that most of their bikes are overpriced and being that we ARE in a recession, they probably won't be selling too many. Got to love that 3 world nation currency we have now! | ||
| Court |
Interesting. Opinions vary based on experience and perception. |
