Harley-Davidson revealed the details of its strategic plan today including equity grants for its factory workers and a stronger commitment to electric vehicles.
The motorcycle manufacturer also announced it had successfully reset its operations through The Rewire, lowering the company’s costs by $115 million annually, said Jochen Zeitz, chairman and chief executive officer of Milwaukee-based Harley-Davidson.
“2020 was an extraordinary year in many ways and our team navigated many challenges,” Zeitz said. “We managed COVID-19 impacts, kept our community well-being at the forefront, protected liquidity and delivered $250 million in cash savings.”
Zeitz says The Rewire gives Harley a strong foundation to implement its 5-year strategic plan, The Hardwire. However, Harley’s fourth quarter earnings suggest the company has a long road ahead.
Harley reported a 32% decrease in revenue in the fourth quarter of 2020 or $725 million compared to $1.07 billion the fourth quarter of 2019. The company also reported a net loss of $96 million, or 63 cents per share, compared to a net income of $13 million, or 9 cent per share, in 2019’s fourth quarter.
Harley attributed the decrease in revenue from its motorcycles and related products segment to lower wholesale shipments to dealers in the fourth quarter. The company is now unveiling products closer to the start of the riding season, which is why shipments were down 48% percent for the quarter and 32% for the year.
As part of The Hardwire, Harley will offer equity grants to approximately 4,500 employees, including every hourly factory worker as part of its new “inclusive stakeholder management” initiative. However, Zeitz did not provide specifics for the equity grants.
“It is only fitting that this inaugural action is for our own Harley-Davidson community who continue to deliver our iconic products and experiences with great pride and craftsmanship every day,” Zeitz said.
The future of electric motorcycles at Harley was unclear after a software issue with its LiveWire electric motorcycles led the company to recall 1,000 vehicles. However, the company is now dedicating a seperate division and leadership team exclusively for electric motorcycles, confirming that the company is committed to electrification long-term.
“The creation of a separate division will allow full autonomy to EV development, freeing the business unit to behave with the same agility and speed as a tech startup while still leveraging the support, expertise and oversight of the broader organization, allowing for cross pollination with innovation in electric with combustion product development,” Zeitz said.
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