Harley Reports Grim 1st Quarter Results, Braces for Layoffs and Slashed Production
Jerry Garcia had a point when he sang that "every silver lining's got a touch of grey," as any earlier optimism about Harley has been eclipsed by bleak first quarter earnings results. U.S. retail sales for Harley were down 12.8%, and Harley can no longer afford to temporarily shut plants down; they'll be taking more extreme measures by cutting an estimated 730 jobs-- about 8% of their workforce-- and delivering 27,000 fewer bikes this year.
The Motor Company recently ensured they could meet production demand by sealing their union deal, but unfortunately demand appears to be low. Though overseas Harley sales are up 16.8%, the U.S. motorcycle business is hurting enough to make it hard for Harley to stop the slide: in fact, the sale of heavyweight bikes in the U.S. has dropped 14% during the first quarter of 2008, so Harley is actually outperforming the dismal market.
"A $20,000 motorcycle is something people are going to think twice about, or just hold on to their current bike for a little bit longer and just kind of wait until they feel a little more confident about the economy," explains consumer analyst Robin Diedrich in an AP report, echoing earlier reports that the overall motorcycle market is down. So while new models like the Cross Bones, Rocker, and Fat Bob may reflect Harley's ability to play up its past, but one has to wonder what the future holds in store. At least those strange merger rumors haven't resurfaced... yet.
Photo © Basem Wasef
Click to enlarge
Comments
I went over to Queens on Saturday to visit some dealers. The Yamaha/Honda dealer already had a used Rocker in on trade. They were really busy. Over at the H-D dealship it was pretty quiet. A sales person actually had time to talk to me.
GM, Ford & Chrysler are in the same boat…and they’re selling a “necessity”…not a “toy”.
There has to be a common denominator though…maybe it’s over priced, poor quality union shop output?
Just purchased a 2008 Sportster 1200N. This is a lower priced - sub-10K model. Rising gas prices have led me to do more riding and less driving. Approx 50 mpg from the Sportster. Interestingly, the H-D dealership in the NY/CT area seem to be doing pretty well.
The metric bikes continue to give better performance and upward technological design and integration. Harley seems to continue to design for the babyboomers, and that cannot last forever. Look at Honda, relocating to Japan, but to a brand new motorcycle facility. Harley cannot continue to depend on retro designs forever.
Nothing to do with Harley but Economics as a whole….I prefer retro profiles is good for my back…Nobody can stand 6 hours on a 1000RR whatever Japanese marks….I’m a BB very happy with Harley…
Harley isn’t the only one doing bad. Went to a Honda dealer in Central Jersey and they had BRAND NEW 2006 VTX’s (1300 and 1800) on the floor. Trying to sell them for $9600. Guess the economy is hurting everyone not just Harley.
There seems to be a glut of used Harleys on the market and with this downturn, maybe the used bike sellers will get a better deal?
So, Harley is finally getting it’s comeuppance. The glory days are nearly gone. Harley hasn’t seen things this bad since AMF nearly ruined them. They are strictly for status seekers. For me, Harley’s are way overpriced and you can buy 2 great metric bikes for the price of one midsize Harley. I’m happy with my Suzuki and don’t need to be a “Harley Poser”…
Greetings. The news that Harley-Davidson is experiencing financial woes is not surprising, given the current economy, but it sure does hurt. I recently had the distinct opportunity to meet and work with some of the Motor
Company’s employees. To hear that some of them will be laid off, hurts. Maybe H-D can offset this by producing revolutionary “e-bikes”, that really are economical to ride, thus recouping the initial purchase price. Now might be the time to consider alternate fuels
and technologies to reflect a lessening dependence on fossil fuels. For those who have Faith, Pray!
Ride Safe! GOD Bless!
The over-priced and overrated Motor company is now taking a hit. Maybe a another Company will buy Harley and bring it up to date. The old long hair Hippy-dippy H.D. riders are getting OLD. Maybe a scooter is in their future. I am a BB and had a H.D. junk–NO LONGER–bought a good metric bike. The only thing Harley can do is get rid of that sorry ass union and get some leadership and make some up to date bikes.
There was a stupid rumor floating around last year that HMC was looking to but H-D….obviously it did not, nor will it going to happen.
The question almost everyone asked was “Why would they buy H-D? …. Honda is smarter than that”
If things get bad enough, the Gov’t will bail them out - again.
No Surprise There. Harley shot itself in the foot by not being more technologically savvy. By producing the same old cookie cutter bike year after year and not advancing and seizing on the latest in bike performance and safety. Their first attempt at ABS was a crock. And they don’t make a bike worth 10,000 dollars much less the 20,000 the ask for the piles of Taiwan and Chinese and Japanese parts that make up the whole pile of junk. Plus they got Labor Unions screwing the company out of any profit margin , that alone ups the cost of their slow lumbering machines that actually require you to own a truck to get the thing to the shop when it breaks down and leaves the rider stranded.
Good Luck Harley!
Now a BMW on the other hand holds its value and you just don’t ever see ‘em offered for sale in your local classifieds, EVER! Maybe Harley ought to do what it did in the 40’s and 50’s COPY BMW. SELL MORE BIKES IN THIS COUNTRY AND ABROAD. Get with the program , for Christ’s Sake.
I mean that with the deepest respect, OK?
Harley was bailed before, same issue unions, (high wages), high price, reliability, etc. etc. if you can’t compete or take the heat get out of the kitchen. Wages in all areas are too high in USA and the US is not competing effectively with the rest of the world and it is Now A Days a World Economy. They need to kick out the unions, and/or move South like most businesses in the North/Mid-West, where they can lower the prices.
Unions had their time and place, but now they are Just Big Businesses with Big Overhead and they do nothing but contribute to the Economic Down Fall of most Big Businesses in the USA.
What almost everyone overlooks is the fact that Harley will still sell over 300,000 motorcycles this year!!! I ride a Victory. Victory sells are up this year but they would be lucky to sell 10,000 bikes this year. Add in Triumph, Ducati, MotoGuzzi, BMW, KTM, and a few others and they still are a small percentage of Harley sells. Sorry but I have a hard time feeling sorry for a company that has such a huge market! The MoCo will not suffer as much as the local dealer. They will still have to pay for their overstuffed boutique buildings that Harley required them bo build to have the dealership.
It surprises me that there aren’t more people riding to save on gas prices. Regardless of the brand. I don’t ride for brand names. I don’t care if Harley is having problems. You have to know what you need and then find a bike that fills that need, then you’ll be happy. If not you’ll be the guy selling your bike because you’re dis-satisfied with riding. That’s a bad thing.I’ve been riding since 1966, all weather rider, and I have seen all of this before. It’s just a shake-up in the market, and we will all benfit from it in the end.
I did spend a great deal of time in the H-D showroom but ended up with a smaller and lighter Kawi 500 cruiser, thousands less than a H-D Sporty. I bought for gas mileage and for a quiet easy bike to learn on. If H-D is still around in a couple of years and I live though the learning curve - I will be back. H-D may be an anacronism but I want one, old that I may be.