Cutting KC and Australian employees will cost Harley up to $60 million

Restructuring plan could cost up to $200 million

Harley-Davidson headquarters
Harley-Davidson Inc.'s headquarters in Milwaukee.

Milwaukee-based Harley-Davidson Inc. will spend up to $60 million on employee terminations related to its closure of its Kansas City final assembly plant and Adelaide, Australia wheel facility, according to a new securities filing.

Harley-Davidson headquarters
Harley-Davidson Inc.’s headquarters in Milwaukee.

Harley announced in late January it would close its Kansas City facility and move all final assembly work to operations in York, Pennsylvania. The move would result in the elimination of about 800 jobs in Kansas City and the addition of 450 in Pennsylvania. Another 100 positions are being eliminated by the closure of Harley’s wheel production facility in Australia.

The company estimated employee termination costs will be $50 million to $60 million, the largest portion of the previously disclosed $170 million to $200 million manufacturing optimization program.

Other costs include $45 million to $50 million for accelerated depreciation, $40 million to $45 million for project implementation and $35 million to $40 million for temporary inefficiencies.

Harley also estimated the restructuring program would be complete by mid-2019 and said it would be making a $75 million capital investment in the York facility.

Shifting assembly to York and closing the wheel facility is expected to generate $70 million to $80 million in savings over the next three years. Starting in 2021, the company expects $65 million to $75 million in annual savings, suggesting it would take until 2022 before the company breaks even on the restructuring.

Sign up for BizTimes Daily Alerts

Stay up-to-date on the people, companies and issues that impact business in Milwaukee and Southeast Wisconsin

Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

No posts to display