Harley-Davidson Inc. (NYSE: HOG) announced early Thursday morning that it would be cutting 730 jobs and temporarily halting production at some plants. Daily production rates will also be adjusted to account for lower demand of the motorcycles.The company has definitely been affected by the slowed economy. Sales have been down, and losses in Harley's in-house consumer loan division have hit the company hard. The stock hit a 52-week low of $34.10 during Thursday's trading. It did rebound quickly in the morning, but things still aren't looking so hot.
Harley plans to cut shipments of motorcycles between 23,000 and 27,000 this year, which would mean total shipments for the year would be 7% or more below last year's total shipments of 330,619. The job cuts include 370 union positions (mostly in Pennsylvania) and 360 non-production jobs (mostly in Wisconsin), on a total current workforce of 5,600 production workers and 3,560 non-production employees. That makes for a total reduction of about 8%.
Earnings per share for 2008 is expected to be 15% to 20% lower than 2007, which was already down from 2006. As a company that sells what many would consider luxury goods, who knows when their sales numbers will rebound. They have also been hit by the credit crunch, and with few consumers with available equity in their homes, that is not a good sign for Harley's numbers either. I'm hoping that this American icon can hold on and weather the current economic storm.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.











Reader Comments (Page 1 of 1)
4-17-2008 @ 7:38PM
Boats said...
Way over priced. Got a used Valkyrie "Hog Slayer" in mint condition for a third of what a Harley would cost. Much better bike, too.
4-17-2008 @ 9:45PM
Jim Cleary said...
Harley quality always sucked they make more money from there t-shirts than there oil leaking bikes
4-18-2008 @ 12:08AM
jim said...
i think everybody needs to hold on. harley-davidson will survive. they have sufficient reserves for a couple of years. i ride one. i paid cash for it. this little ding going on should make all the planners at h-d pay attention. anyone taking equity out out their home to buy a toy should be shot. down-size h-d. still make your bikes. riding the subprime wave. shame on you. purists only need apply. with cash. fmc and gmac are making the same mistake, only on a larger scale. so, my little diatribe over, go forth, earn, save, buy a toy or not, live well human folk.
4-18-2008 @ 12:08AM
jim said...
all you hog-haters need some schooling. can't spell, can't compose,jap-bike riding layabouts.
4-17-2008 @ 11:49PM
steve said...
buy a rice burner and lose value in two years worth nothing
4-18-2008 @ 1:02AM
RIck said...
All of those older guys who bought in the 80's and 90's are now much older and selling their low mileage bikes. Why buy new? This glut was projected by analysts years ago.
4-18-2008 @ 6:43AM
dennis said...
I bought a 1952 FL Harley Davidson 28 years ago, restored it way back then, still have it, and have rode the guts out of it all these years.......I think I'll ride it today, it's suppossed to be near 80 degrees. My 41 U Harley Davidson's engine is currently in the machine shop for a bottom end rebuild and will run long (decades) after I'm gone. I'm restoring it for my son so we can ride together. If HD goes under, it will join the ranks of other greats from the past....Indian, Crocker, Excelsior, Henderson, etc.
4-18-2008 @ 8:24AM
Melinda said...
HD makes a great bike and their factories are amazing to see at work, but they've priced themselves right out of the market by strictly sticking to the "luxury" crowd. They should focus more on their lower end bikes, maybe do some price breaks to keep their workers working. People actually WANT motorcycles now because of their efficiency. All the people in upper management can see is numbers on a page. Typical American company in that regard. Those workers put their hearts and souls into these bikes so bad decisions at the top can lose them their jobs.
4-18-2008 @ 9:09AM
whadapickle said...
50 mpg. Bought my 06 used for 1/2 price from a estate auction, added it to my other 2 dating back to a 51 pan, 74 flh dresser, all still run like factory new. All have great resale value. If HD just slows down and can bring down manufacturing cost they will be just fine.
10-23-2008 @ 2:48AM
Clifford said...
I think it is funny the ones that cannot afford nor have ever owned a Harley put them down. I have a 2003 dyna wide glide and it is and will be for many years a great bike. When I pass mine on to my son it will still be a great bike. And it is made in the U.S.A. any one who buys out side of the united states any more with the way things are going is not an american as far as I feel. What is wrong with you people you are talking about how wonderful a bike from Japan is are you nuts. Your bike wont be around in 20 years mine will and it does not leak oil. My dad has a 1953 KH and it is still a better bike then any Janpan made machine. If you want people to have good jobs in the U.S.A. then buy from the people who make thier products in the U.S.A. it only makes sense. So ride on my Harley friends and lets keep America going strong.
Cliff