Harley Davidson continues to tighten its belt adjusting to financial pressures. Harley is closing the test facility in Talladega, Alabama, eliminating about 100 jobs. Plans call for consolidating test operations from Talladega, Naples, Fla., and Mesa, Ariz. to the Arizona Proving Grounds in Yucca, Ariz.
Harley Davidson also announced that they would be outsourcing non-core operations like small-parts stamping, sub-assembly and chrome plating, at the York, PA facility whether they decide to keep the facility open or not. Assembly, metal fabrication and painting would stay.
Right on the heels of the Buell announcement, these new actions show the Motor Company is aggressively cutting costs wherever it can. It will be interesting to see how many more cost cutting measures will be necessary before sales alone can keep the company afloat.
Link: Miami Herald
Link: York Daily Record
Joe says
outsourcing to whom? China? I guess they could go the route of the American car companies and outsource to Mexico and still be able to legally call it “domestic.”
Bob Nedoma says
Harley Davidson continues to tighten its belt……….??
More like a noose. No?
Walt says
I’ll bet HD leaders have been asking themselves for years how and when they could build more or all of their machines in a low-cost site outside the USA. Tough call, since HD has wrapped themselves so tightly in the American Flag and their history as the only surviving old-school American motorcycle company.Many core HD riders are American blue collar workers who have seen jobs and companies shipped overseas, and they’ve about had enough of that. This just adds to the dilemma.
I hope HD can find a way to keep making bikes in this country. Here in Everett, Wash., where Boeing makes its wide bodies, we just learned today that the second 787 line will open in North Carolina, outside union territory. Last year’s two-month strike had to be a factor, and I’m betting the company will use the NC workforce to pressure the union here in the Northwest. Hard times make for hard choices.
Mark X says
I am correct, damn-it! Sometimes it sucks to be right. Harley-Davidson would rather close their doors, than produce anything but overweight, underpowered, overpriced,overstuffed,overpainted,and overchromed fashion statements, disguised as motorcycles. They seem to be willing to shut themselves down, one painful step at a time, rather than modernize. Too bad. Good Bye Harley-Davidson. RideSafe, Mark.
ducati guy says
we really don’t need harley …no loss
Jeny says
Whether we like it or not, outsourcing is here to stay and if you are a businessman who doesnt want your business shut, better opt for outsourcing.
steve w says
Oh Children, such talk! This country needs every job it can keep. You might not like HD but You better root for it. Your job may be the next to go and then you can’t afford your Ducati or Yamasaki or whatever. What makes me question HD is what have they done with the money they made during the big run? They can’t just sit on their duffs this time and if they don’t have something really new in the works far past the development stage they they may be in trouble. You had better wake up and realize that this won’t be just HD in the tank. I can go down to the local Rice shop which has all brands and it is pretty slow. If it wasn’t for ATV’s they too would have troubles.
dannyb says
finally all those self rightous harley owners who ask “nice trumph…when you gonna get a harley?” can start to shut there yaps.
Kurt says
While not a big fan of HD I would hate to see the additional job losses that would occur due to outsoursourcing or close downs. Perhaps if they trimmed their cruiser models down to 15 models and started producing Buell sportbikes, they could make a transistion and increase their product line and business.
Randy says
Hmmmm, predictable hatred of HD. Some just can’t get over it. Anyway, HD has been in business how long, 105 years or something? Seems maybe they learned something along the way about survival. I doubt they would think the main chance into the future is to give up what has made them successful – large Veetwins – to continue to build what is clearly an unsuccessful sportbike – Buells.
I’m not a Harley guy, but I don’t have an irrational hatred of company, the bikes, or the people who ride them. There is no denying HD builds bikes that appeal to a great many people. Why is that so threatening to some? I also don’t particularily like or dislike Buells – I view them with mild interest, never enough to consider buying one. I do think if Buells were as great as the Buell marketing hype, people would pay MSRP for them, and HD would view them as positive or at least neutral to their future. Events show Buells were a marginal bike that appealed to a tiny minority of riders, and because of that Buell won’t make it through these tough times.
Maybe Eric Buell will start another bike company. If so I hope he learned something from the Buell failure and makes something with enough appeal that more than 0.1 percent of the motorcycle world buys one. I think something like an the old “tubie” but with the Rotax, that would be very interesting.
D-Man says
I surely don’t want to see HD go under. What would be great is to see them modernize and upgrade their line to a higher degree of performance and variety. They do what they do well, but their market is at the weakest end of motorcycling (the “cool” image crowd) that will not hold up under economic pressure. Functionality and performance are way more deep and enduring traits – traits necessary for market longevity. I find it interesting that “brand loyalty” is only as strong as the economy.
Buell could give HD legitimacy in the present economic climate. Up performance, control pricing, add some more “flavors” by including a progression of models taking customers “up” to better performance/experience. Finally, Why not lower prices and maintain position rather than quitting altogether?
4Cammer says
Chrome plating is not a core operation at HD? Really?
Randy….seems like you might have “predictable hatred” for Eric (sic) Buell and his bikes?
todd says
Not many people outside of The Kneeslider and other industry news sites will know the difference. There is a perception, that will remain forever, that Harleys are still being built by hand one at a time in a little garage in Milwaukee… alongside little old ladies sewing up tassels.
-todd
David says
Yet another American icon falls prey to the current economic times. There doesn’t appear to be any way that American manufacturing can continue to compete with both hands tied behind their collective backs. Rising healthcare, unemployment insurance, and other costs put America on uneven footing with the rest of the manufacturing world. Adopting leaner manufacturing practices and automation can help keep (some) jobs here, but the key is having products that customers want (or can’t live without). I mean, how come we have to beg for models that are already being sold in Europe ( XR1200 anyone? )? Harley are you listening? Times like these will separate the winners from the losers. I would hate to see Harley become something you only see in museums or on T-shirts. I really hope that Buell is able to rise from the ashes too.
MikeC says
While I am not a fan of H-D, I would hate to see their demise, however, H-D ceased to be a motorcycle company when the boomer generation began purchasing them and more importantly, their merchandise, in droves. H-D became a marketing and merchandising company that surely made more on accessories than motorcycles. Now with disposable income nearly dried up, and buyers looking for value, their merchandising is limited, and their motorcycles are over valued. Combined, they could strike a deadly blow if not managed properly from above. Makes you wonder where all the cash went when things were great a couple of years ago.
glenn says
Seems like I can just barely remember something like this happening a few years ago when H-D was sold to AMF and turned out some crappy junk. Are they so stupid that they are going to go through that again?
Jess says
I have owened 15 HD in the 33 years I’ve been riding.Over the years I have seen the American Icon go to the dogs (amf) and back.But the real heartbreaker has been the amount of parts that have already been outsourced.I now have a 2009 Ultra and it is a fine machine that I truly enjoy riding.It has a tour pak full of parts from every corner of the globe.So I really don’t think outsourcing is going to effect the outcome of the HARLEY DAVIDSON COMPANY as a leader in the industry.
Jess says
If HD were my baby I think I would try losing a few models and doing away with the cvo line all together.Most riders want to make each bike they ride a personal extension of themselves,be it metric or domestic.The cvo models take that away.How many Sportster models do you need?Dynas? Softails? Touring? Cut back on that! Save yourselves from yourselves!
dresden says
Maybe they’ll go crying to the government again and get enough tariffs laden on imports so that their bikes look affordable. 😉
Jim says
At the start of the HD boom in the early-mid 90’s there was a meme comparing the US domestic content of Harley’s v. Honda’s Ohio manufactured Gold Wing. According to the meme, HD had more foreign sourced parts and sub-assemblies on their bikes than the GW. Whether that was true or not is irrelevant, but it points out that HD has long outsourced the manufacturer of components. While I don’t know if this is the current situation, for a long time all fiberglass and plastic body panels were outsourced to a fabricator in Wisconsin.
What’s important for our economy, isn’t whether HD makes everything, but that who ever they outsource to is using domestic labor to deliver the product. HD is not at any risk of going under, but it could be if it can’t get its cost aligned with its sales. To do that they will need to shrink the company in the short and mid term to reflect the motorcycle market unless or until they can find growth in new markets and that is more painful than growth.
David/cigarrz says
There sure are a lot of David’s on this list so rather than make us all look like one Schizophrenic person I’m changing my moniker to cigarrz. The most common out sourcing American companies burdened with labor unions use are small American non union manufacturers and not overseas. Many Americans gladly make parts for well known American companies brought to their competitive knees by labor unions. ISO insures quality and there are far less problems with shipping and misunderstandings cultural or language. If you’re a Harley hater don’t run for your shovel to bury the motor co. just yet take your Lexapro and hope those great industrial conglomerates don’t decide to shelve your favorite brand to keep their ship builders afloat or their heavy industry flush.
bblix says
The move to “outsource” certain elements of manufacturing of a vehicle have been around for as long as there has been vehicles. Technically I’ve been outsourced labor for years now, as a design engineer working for supplies of companies such as Honda, Nissan, GM, and Harley-Davidson. It has been a long time since any manufacturer of large, complex systems has done it all in house. There’s too much capital investment required and then you’re forced to answer the question of what do you do with a machine that can make 100,000,000 parts a year when you only need 1, 000,000? Better to let someone else buy the machine and figure out that problem, we just want the parts.
I’m not surprised that they’d shut down their chrome plating line. Chrome plating is dirty business as far as the EPA is concerned, again, let someone else deal with that.
While H-D’s P&A group does use overseas sourced chrome plated parts, by in large, the vast majority of the OE product comes from sources state side. There is a sprinkling of overseas product, but it MUST meet the exact same requirements as all of the other products.
bblix says
To answer to Jim’s point about content…I worked for a number of years for a Tier 1 supplier to many of the domestically produced Japanese “imports”. Actually, I’m not sure how they’re called imports when the VAST MAJORITY of the components were produced in the States by engineers and production workers living in the States. GM, Ford, etc, shipped production to Mexico and engineering to Asia
Tin Man 2 says
Harley is growing Market Share, In these slow times HD is still outperforming its Rivals. The current problems at HD are not product related, they are Financial Services related.(as is the whole recession). HD is responding to the Economy with prudent cutbacks and mild changes, while consentrating on its core products.This is not the time to change everything in a futile attempt to attract buyers of cheap non profitable Sport Bikes. The xr1200 is a sales success in Europe, but not here in the U.S.. What does that tell you about the American market? Like it or not the U.S. is home to the profitable Cruiser Class bikes, that its foreign rivals are desperatly trying to copy to get a piece of the profit pie.
Masonv45 says
I think everyone has this idea that “outsourcing” means going outside the USA. It doesn’t. It just means having a different company perform the work that you used to do in house. Usually it benefits both companies.
The “main” company gets the product\service cheaper and usually better quality because the company that now does the work specializes only in doing that particular work.
And the “outsource” company gets the business. And if they want to keep the business, they better damn well be sure to produce consistent high quality products\service.
So the “main” company now produces a better product for less money. Makes sense to me…
Mikey says
Just so I understand, Is HD in trouble now?
I thought they were doing pretty good. Buell’s failure I can understand… we don’t need a 2nd HD based competitor. But the thing is, did I not see recently on these very pages, a major news story about HD wanting to build another factory in either TN, KY, IN, or possibly next dorr to the KC facotory?
What the hells going on here? Are they up or not?
David/cigarrz says
@ tin man 2, bblix, masonv45
Quite trying to confuse people with facts or logic this is all about hating Harley and big business. I would be LOL if it wasn’t so sad a commentary.
John says
I love my Harley, and other makes? Some I like a lot others maybe a little and others don’t care for at all but these people that are giddy over the thought of Harley going under or constantly rag on Harley,I can’t say I hate them but surely have no respect for them. I wonder what would make people feel like that other than jelousy.
John says
Easy to talk about Harley sales up and down and all the internet “experts” commenting on it ,because it is so easy to find the statistics,Harley openly shows the stats,all you have to do is go to the HD website.2009 YTD sales are 87,904 domestic,44.945, international for 132,849 total sales YTD 2009.And that is only streer bikes remember.I tried every way I could think of to google the other makes for the same 2009 YTD sales figures,went to thier web sites etc. and could find nothing.Why is it so hard to find thier data?Are they affraid of comparason?
todd says
John, H-D is a publicly traded company. They are required, by law, to expose their books. This is no act of altruism.
While I’m no H-D hater I can understand the common sentiment; it has been H-D’s core marketing strategy that they are the best and everyone else can stuff it-type attitude. This attitude has influenced (or at least appeals to) the people who buy their product. When the folks at Harley begin to realize this is a global market place and that they are just as good as the rest (sometimes not as good) the common sentiment against anything H-D will change. A little humility is due the company and its customer base.
-todd
John says
Thats ridiculous Todd,you seem to think the other manufacturers take a we’re just a small part of the whole attitude? They all claim to be the best and for you to say humility is due from the company and it’s customer base to who?, you and the other haters?That’ll be the day.The passive agressives want to see the company put it’t tail between it’ legs so you’ll say nice things.Laughable.
David/cigarrz says
Now I am laughing do you mean to imply that all the rest sell themselves as second best or kinda good? That their customers are so inclined to think they ride something less than the best? Really? I don’t know a single rider that goes out to buy parity instead of the best that they believe they can afford. I don’t hear much humility from Honda if they win on Sunday sell on Monday. I’m pretty sure they want everyone to know who they beat and how bad. A wingabago rider will talk your ear off about how good his bike is just like I will for my geezerglide. Humility from the company and their customers? How do the say it on ESPN, CMON MAN
Rosscoe says
The Motorcycle Industry world wide is suffering ~ not just Harley.
Honda sales are down 50%, the other Japanese makers are experiencing similiar sales declines. Honda recently moved M/C production from it’s Spanish facility to Italy due to poor sales there. Honda and Yamaha both have closed factories in Japan for
a month or two to better match output to demand. As was noted earlier, we hear
about Harley’s situation because it is publicly traded. I’ve no doubt that all the
manufacturers are looking very closely at their individual situations to find ways to
rationalize production, save money and hang on to whatever market share they have
until the world economy turns around. I think we are only seeing the tip of the iceberg.
The loss of any brand does no good for any of us no matter what your particular
preference in motorcycles may be.
FREEMAN says
The whole consumer world is in a recession. Where manufacturers can cut costs, they should do so to survive. If that means cutting production or paying somebody else to manufacturer your product components rather than owning and servicing the equipment required to produce it in a factory that needs to be maintained and pay employees to do all the above, then go for it. This isn’t about Harley haters or karma or whatever, this is about recession and lean manufacturing. And yes, it sucks employment-wise. So instead of carrying on about how you hate Harley and “are you listening?” and “I told you so,” maybe we should be thinking about how best to climb our way out of this recession and get the economy back into a proper state.
John says
David/cigarzz,Rosscoe and Freeman,I agree 100% with your common sensical posts.Some of these guys want to suggest that it is only Harley and thier riders because of thier audaciousness that are to blame for financial troubles and all the rest are doing just fine.It’s hard to find sales figures but I have heard suggested that Harley still outsells them all with street bikes. They only listen to what they wana hear.
John says
Those last three posts are right on.I think Harley is still outselling the rest when only street bikes are counted.Some seem to think Harley is the only one having problems and it’s because of “attitude”, ridiculous.
steve w says
As for market power you only need to look as far as HOG chapters to see the HD will be fine. There is no other motorcycle group i know of that has more functions and purchases more product than these people. I know in my area many riders who have switched to HD, not just for the bike but interaction with functions. I am not one of them but it is still a fact you can’t denie. It’s just a rotten market place to do anything today.
Paulinator says
I’ve said it before… H-D sells 1/3 of its product abroad? Grow that market by eliminating unfair barriers.
James says
uh Kneeslider could you kindly post a link to a direct Harley Davidson announcement, I could not find anything on there website and while the Miami Herald seemed straight forward it did not clarify anything, (the last time Harley outsourced, it was to an American company) and the York Daily Record just plan smelled of hype and shock, and I would like to know if they are going to outsource over-sea’s for American product, or not (ok I lied the last time they outsourced was to India for Asia sales [so it doesn’t really count as news worthy])
Jim says
Mikey: Is HD in trouble?
Depends on your perspective. HD is in no danger of going out of business. It is making a profit and selling motorcycles and if it were a private company it could go along like this forever. But its a public company and Wall St. is screaming for ever larger profits.
The value of HD’s stock has been dropping and the shareholder (the companies owners) are unhappy. There are several reasons for this drop, the recession, the aging of the core HD buyer, the decline in the interest in motorcycling in the US among younger demographics and unproven market appeal in Asia. Most of the issues are faced by all MC manufacturers with a couple being HD specific (but other brands have their own issues).
During the HD boom, everyone was fat, dumb and happy, as they should have been. But the company got, well, fat and what the new management is doing is slimming down to increase profitability.
Now out here amongst we, the unwashed masses of motorcyclists, there is a bit of schadenfreude, not so much aimed at the company, but at the HD fanboys who can be obnoxious beyond belief.
RandyXB9R says
Remember AMF? The new Beancounter In Charge (BIC) is taking the company rapidly down the road to the bad old days.
Talladega is the reason their products are of such high quality today. Big mistake. Slam the door on Buell and 26 years of brilliant R&D? Big mistake.
Next will be ways to cheapen parts to save money… guess what… Big mistake.
They bought MV to get Tambourini. After he sat in one of their meetings, he walked. Now what to do with MV?!? HD sat there holding MV like a new father holds his first soiled diaper. Big mistake.
Make enough of these big mistakes and you won’t have to worry about the little ones anymore…
mike says
waiting to see how much longer before they go public with seeking a bailout from the feds.
Todd8080 says
Wow, so many Harley haters. I can’t help but notice how happy it makes you to see the MoCo suffering in these bad economic times.
Fear not, Harley survived you all buying cheap Jap junk in the Seventies, it survived you all buying fake oriental Harleys in the Nineties and it’ll survive this.
Keep riding your disposable plastic wheelie toys, one day you’ll be adults and [hopefully] will be able to afford a real motorcycle, the kind that’s designed to last a lifetime.
Nicolas says
Well, 8080, don’t be upset about the “harley haters” if you can’t be open minded enough yourself to understand that Japanese bikes are not junk, I know a lot of “cheap japanese junk” from the 70s that will outlive you …
Let’s get it straight : there are folks who don’t like HD bikes, and folks who don’t like japanese bikes, and folks who don’t like italian bikes, and everybody who doesn’t like chinese bike … well, if any of these bikes were as bad as their haters want to believe, they would have disappeared now. If Honda, Harley, and Ducati are alive and kicking now, it’s because they have been making their customer base happy, and still do it.
Everybody has preferences, but let’s all be smart enough to understand that other riders have other expectations or tastes, that makes them ride other bike than yours, and thanks god that would be really boring if we all had the same ride …
Now haters from all sides, please shut it up.
Nicolas
Marshall says
Thanks Nicolas.
@Jim:
“…decline in the interest in motorcycling in the US among younger demographics…”
I’m curious if that is a personal observation, or known to be the case (and relative to who/when)? I personally feel like I’ve observed the opposite, but as a young male of course everyone around me seems to be getting into motorcycles, because this is just the age where it happens. Might also have to do with the fact that I never shut up about them…
Jess says
It seems to me a lot of posters have strayed from the subjact that Kneeslider brought to us.It was not for us to view personal preference it was about outsourcing,remember.Outsourcing,the practice of out of house manufacturing of product to companies who are most likely smaller in size less overhead and most important of all in need of the work for their workforce.
Devilish says
The profits that HD made during its best times ended up just like all the other companies profits. In the pockets of the shareholders. This country has basically profited itself into financial ruin. No company can survive if it doesn’t put money back into itself to keep its product apealing to buyers. The auto industry is prime example! We don’t make anything much anymore…on top of that everyone is a share holder, and to keep profits coming they have to send our jobs overseas to a cheaper labor base.
Bob Lawrence says
Did the Motor Company ever think to lower the price of motorcycles to sell more bikes and did the big wigs thank about a pay cut for them selves?
James says
@Bob Lawrence
yes they did think of lowering the price of there motorcycle’s and they did, years ago, to the point of undercut the majority of the cruisers from Japan from hundreds to thousands for comparable bikes, the problem currently is not with the prices at all, but with the company ‘s reputation for expensive bikes something that they tried to promote in the late 90’s (and please do bring any reliability “issues” in to this, every company has made it’s far share of factory lemons and have a bad rep somewhere for it, even legends)
Chris Robson says
Seems strange that since HD picked a new CEO (and a non rider) outside HD (from Johnson Controls), we are seeing fundimental business decision that go contrary to the motorcycle industry. I could see if the decisions made logical sense, but they don’t. We see blunder after blunder. Closing the testing facility in Alabama is just another monumental blunder when the new automotive hub of the USA is centered in Alabama. Hell, I would have closed York and built in the South where there is an abundance of engineering and manufacturing talent. The misconception that the South is a bunch of gun toting Red Necks is just that, a misconception. Alabama is a right to work state, that is not saying it is union free, but this is not the 30s and 40s where people needed union production for a safe work environment, the unions of the north killed manufacturing in the north and they forgot who signed their paycheck. Times change, so does the attitude of the American labor force need to change. For HD to move tesing to Arizona, now that is stupid, most of their operations are East or on the Mississippi River, logistically it does not make sense. Must be some bean counter friendly golf courses near by. Lastly, closing Buell was another monumental blunder, Erik Buell brought class, creative thinking, enginuity to the HD family, it goes to show you what kind of loons are running the show at HD now, to let a forward thinking company and individual slip through their fingers. The Corporate Pinheads think it is about the shareholders value. It’s about the Bikes stupid!