Facing declining motorcycle sales and lower-than-expected first quarter earnings, Harley-Davidson Inc., said late last week it will shrink its workforce by 370 unionized workers and 360 non-production workers.
Most of the reductions in non-production workers will come from the Milwaukee area, where the company is headquartered, Klein said. "We’re still working through the details of where those will occur, but most of the positions are in the Milwaukee area," he said. The company has not yet decided on specific areas where it will make cuts, but expects to decide and notify workers in the second quarter, Klein said.
About 80 percent of the union workers will come from Harley’s York, PA plant, said Bob Klein, director of corporate communications. Another 14 to 15 percent will be from the company’s Milwaukee-area operations, and most of the remainder will come from its Tomahawk, Wis. facility.
Harley will be working with its union on how to implement the reductions over the next several months, Klein said. The reductions in both union and non-production workers will be made through both voluntary retirement and permanent layoffs.
"We want to achieve as many through voluntary retirement as possible," Klein said. The company also said it will undergo several temporary plant shutdowns and slower production rates. "With growing weakness in the economy, U.S. retail sales of Harley-Davidson motorcycles were down 12.8 percent in the first quarter. Although these retail results are disappointing, Harley-Davidson’s U.S. dealers outperformed the heavyweight motorcycle industry, which was down 14 percent," said Jim Ziemer, chief executive officer of the company.
Harley’s first quarter income was 79 cents per share, or $187.6 million, a 2.5 percent decrease from the first quarter 2007. The company will ship fewer motorcycles this year because of the softening retail market, Ziemer said.
"In view of U.S. retail trends and uncertainty about the future of the economy, we now plan to ship 23,000 to 27,000 fewer Harley-Davidson motorcycles in 2008 than we shipped in 2007, resulting in total planned 2008 shipments between 303,500 and 307,500 units," Ziemer said. "We believe these actions will better position the company for a business environment that we expect to continue to be challenging."
