Harley Cut Backs

[charley992002]

Well this is more detail than previous postings by other members.  My 02 Wide Glide will be with me for a long time regardless of the current financial crisis at HD.  But I would think that morale (sp) would be down with the workers, hence poor quality on what bikes are being produced.  Sad so very sad for those affected by pending job cuts.  Always wanted a job in their plant, just couldn't hack the cold weather though.

Here's the story...

http://www.dealernews.com/dealernews/Breaking+News/H-D-To-Cut-Jobs-Shipments-As-Economy-Stalls/ArticleStandard/Article/detail/577073?contextCategoryId=2704

[Jim Bronson]

I don't think the reduction in workforce will result in poorer quality. Manufacturers know that there is a high cost associated with poor quality. If I wanted a new bike, I wouldn't let the RIF stop me.

[1-Lonewolf]

Times are tough all over and I am not surprised that Harley is having trouble too. Harley Davidson is a Premium motorcycle company selling at Premium prices. I recently bought a Four wheeler for hunting and when I was at the dealer, I noticed they still had a bunch of 07/08 Honda quads forsale. I asked the salesman why they had so many, and he said that Honda makes more then they know they will sell in the current model year,but they do so, to keep their employees working? And when they become older models, they will still be able to sell them for less money and still be able to sell them at the cost of making them. So in the end, they will break even on those models. I thought that was an interesting point and in some ways smart. Would that work with Harley? I don't think so, the way the company is structured today? One thing I have learned from the Japanese is how they pay their employees, there is a huge difference then how the American companies do, including the Auto industry. From my understanding, the Top CEO of Honda makes 20% more then the line workers and most of the profits go back into the company. There is no need for a union, since this seems to be a fair practice for both sides and they keep working. How many of us have had some kind of a issue with our Harley and when we went back to the dealer, we were treated like we should be bless that Harley allowed us to buy their product? I have a few times and I just took it. Don't read me wrong, I love my Harley Davidson, and would never think about owning anything but a Harley (And I realize this come with a price), but my point is, Customer service is everything and too many companies have forgotten about the end user and only about how much profit they can make for the stock holders and not about keeping the company growing. I deal with this now, and from the companies view, I understand, but if your not selling, your not making a profit either. Times will continue to head downwards, until the job losses stabilize and consumers start feeling good about buying things again.
Sorry, I ranted too long and to some, I may be way off base, but this is what I have been feeling and I used this as a form of stress release.

[HDRDR]

Times are tough all over and I am not surprised that Harley is having trouble too. Harley Davidson is a Premium motorcycle company selling at Premium prices. I recently bought a Four wheeler for hunting and when I was at the dealer, I noticed they still had a bunch of 07/08 Honda quads forsale. I asked the salesman why they had so many, and he said that Honda makes more then they know they will sell in the current model year,but they do so, to keep their employees working? And when they become older models, they will still be able to sell them for less money and still be able to sell them at the cost of making them. So in the end, they will break even on those models. I thought that was an interesting point and in some ways smart. Would that work with Harley? I don't think so, the way the company is structured today? One thing I have learned from the Japanese is how they pay their employees, there is a huge difference then how the American companies do, including the Auto industry. From my understanding, the Top CEO of Honda makes 20% more then the line workers and most of the profits go back into the company. There is no need for a union, since this seems to be a fair practice for both sides and they keep working. How many of us have had some kind of a issue with our Harley and when we went back to the dealer, we were treated like we should be bless that Harley allowed us to buy their product? I have a few times and I just took it. Don't read me wrong, I love my Harley Davidson, and would never think about owning anything but a Harley (And I realize this come with a price), but my point is, Customer service is everything and too many companies have forgotten about the end user and only about how much profit they can make for the stock holders and not about keeping the company growing. I deal with this now, and from the companies view, I understand, but if your not selling, your not making a profit either. Times will continue to head downwards, until the job losses stabilize and consumers start feeling good about buying things again.
Sorry, I ranted too long and to some, I may be way off base, but this is what I have been feeling and I used this as a form of stress release.

Well said....and I agree

[HV]

Customer service practices are not dictated by the Parent Company   IE: The Honda Dealer will not have any better Customer service then a Harley Dealer ...the ease of selling is the Key... in years past most HD only stores sold all they could get and had a list of buyers ...not so with the Honda dealers... in the future the HD dealers will find that any customers you have are worth their weight in Gold... ( or $$$$ ) keeping them will keep you alive ....driving them away will be your END ...I would also look for more Multi Line Dealerships ...the MOCO may have to change some of their policies in this area or watch their Dealer network shrink Big Time

[Kansas]

Maybe it was dumb, but I sold my completely dialed in and meticulously maintained 1994 Low Rider in November for what seemed like a good price.  I figured I'd buy a new Softy Deluxe and ride it until I am too old to be a player.  I sure don't feel comfortable about that decision today.

[Princess Butt]

I'm surprised they made 300,000 bikes last year. I would have expected 200,000 or so. It's really bad out there, and a lot of people are scared. If nothing else, they can't get the credit to buy something, and those with the money are sitting on the money rather than spending it. Well, for the most part.

I was ready to rotate the fleet again, this time I wanted to replace my 14 year old truck with a 4 or 5 year old truck. When I started looking at the the price of used versus what dealers were giving them away for new, I decided on new. I wasn't about to pay 75% of the price of a new one to get a truck with 100,000 miles on it.

"This ones gonna hurt.." No, I didn't hear that from a banker. I heard it from someone who's really smart, and has not been ruined by a college education. A year ago, he was saying the bankers were starting to poop their pants, and they knew it was going to be painful. They were coming to him for help. So much for the Harvard education they all have.

Bad thing if you're selling. Good if you're buying. I picked up a decent Panhead for $6k during the summer. Same bike would have fetched $9k a year earlier. Runs nice, but I don't like the style, and I'll be rearranging it. I just troll Craigslist and the classifieds for parts, and eventually we'll get there.

BnEUC

[1-Lonewolf]

Customer service practices are not dictated by the Parent Company   IE: The Honda Dealer will not have any better Customer service then a Harley Dealer ...the ease of selling is the Key... in years past most HD only stores sold all they could get and had a list of buyers ...not so with the Honda dealers... in the future the HD dealers will find that any customers you have are worth their weight in Gold... ( or $$$$ ) keeping them will keep you alive ....driving them away will be your END ...I would also look for more Multi Line Dealerships ...the MOCO may have to change some of their policies in this area or watch their Dealer network shrink Big Time

Based on your opening statement, I am not sure I can agree completely with this?? Any company who has a customer relations department, does dictate or control the type of customer service they will provide. If they don't, they will not be in business too long. I have seen a decline in Companies taking care of their customers over the last several years. Time and time again, regardless of the product, trying to get companies to do the right thing has become harder and harder and if they do, it is all about how to do it the cheapest way they can or making the effort so bad, most customer go away and give up.
When I bought my 2004 Harley Davidson Fatboy, it came with a 2 year Unlimited mile warranty. Not even 8 months into the purchase, I had a issue and the Harley dealer wanted to charge me $180.00 for the service work. I contacted Harley Cooperate and went round and round with the person on the other end. Finally, I was able to get a hold of a Manager after talking to 2 different people, who agreed with me, but if I did not have my 1,000 or 5,000 mile service done and proof to send them, they were not going to cover it. Good thing I did and they ended up taking care of me, but not without them trying to find a out. When I had bought my 1986 Honda, I never had any issues, ever. A 2004 Harley, which I paid 3 to 4 times more for then my Honda, treated me like I was the one who caused the problem. Oh, the problem was a un-lubed shifter, which Harley stopped installing a "Zerk" fitting a few years back to save money. They had used them back in 2000, but not in 2004? And looking in my owners manual, there is no instructions for greasing this area or any mentioning of the fact this should be done? This was completely a Coperate issue, not the one person, I just so happen to get on the other end of the line. Companies set the tone for the customer service Representative and how they should deal with the customer as to what they will and what they won't take care of.   
As far as this being the reason Harley is hurting, I am not saying that exactly. But, I know a lot of riders have heard or seen things Harley has done with their products, to cut cost down and this makes some people want to stick with the old, rather then buy a new one and risk the quality and reliability. Look at what happened to the Auto industry. The big three built products with the intention that they would not last, while the Imports built products to last. Now, I think they are all very close, but it is very hard to convince some to go back to buying American, when they had to deal with issues in the past and they don't want to deal with it again. I have gotten into discusions time and time again, about the American quality, but some of my friends have had such stupid issues and the dealer/cooperation treated them, like they created the problem, they gave up and will not return. As I have pointed out, I have had issues and what I had to deal with, makes me think twice.

[Jim Bronson]

Maybe it was dumb, but I sold my completely dialed in and meticulously maintained 1994 Low Rider in November for what seemed like a good price.  I figured I'd buy a new Softy Deluxe and ride it until I am too old to be a player.  I sure don't feel comfortable about that decision today.

Why not? The Deluxe is a great bike, and I think you'll be very happy.

[JohnnyM]

A year ago the service department at my local dealer had a waiting list for simple service work.  It was reported that if you want an oil change they could get to you in 2-3 weeks.  Today they called me offering a discount on their service work.  Their offer included free pick up and delivery.  Years ago I bought a service manual and do the simple stuff myself so I declined.  I refuse to pay $75.00 labor for an oil change.  The call tells me that times are hard and the cash cow is going dry.

[apendejo]

It's the same with the car dealers. I was in my local Ford dealer a couple of weeks ago getting a new PCM installed in my '96 Tbird. The service bays were empty, the only cars in there were a couple of local cop Crown Vics getting serviced. Now this is a shop that used to have 16 bays full and an appointment list to wait on.
When they called me to pick up my car I saw a special deal, oil & filter change, fuel filter and tire rotate for 25 bucks posted on the window. I took the deal and 15 minutes later had my car back to me ready to go.
AP

[Kansas]

I was just told by a salesman at a dealership that Harley has sent out a memo that they are cutting back on production by 13% for the summer and closing the Milwaukee power line assembly and combining it with the York Pa. facilities.  Big layoffs in Wisconsin.  It wouldn't surprise me.

[PoorUB]

It had to happen sooner or later! I have been preaching that bikes sales were gonna fall off for a couple years, even before the economy went south. No way HD could continue to build bikes like they have. I wish I had the numbers yet, but when you look back on production the numbers in '93, 81,000 units. In 2003 HD shipped 290,000 units, plus ~10,000 Buells. In '06, 349,000 bikes, '07, 330,000 bikes. HD better hang on to there asses, my bet it will settle out at 200,000 bikes per year. It ain't over, certainly if HD don't watch the bottom line.

The last time I bought a new bike was in '80. If you guys remember you could not give a motorcycle away in the early 80's. The market just died. Looks like I did it again! Bought a bike on the high, and when it comes time to sell the market will be flooded with used, low mile, yuppie bikes. I figured it was gonna bite me in the butt and bought anyway! No matter, when I look for a new one, this '05 will be wore out!

[Hoist!]

I had to copy & post this. It is a very well written, interesting and in depth article from last week. Yeah, they got their issues!

Hoist!

"The stock  (HOG:Harley-Davidson, Inc) managed to bounce off the lows of the session but still ended down 90 cents at $11.50, putting its decline in the past year at 72%.
Harley also disclosed plans to take one-time charges of approximately $110 million to $140 million over 2009 and 2010. The effort will produce ongoing annual savings of approximately $60 million to $70 million.
"We have a strong core business anchored by a uniquely powerful brand, but we are certainly not immune to the current economic conditions," CEO Jim Ziemer said in a statement.

The cutbacks are expected to result in the elimination of about 800 hourly production positions and 300 non-production, primarily salaried positions over 2009 and 2010.
About 70% of the workforce reduction will take place this year.
Harley said earnings for the three months ended Dec. 31 dropped to $77.8 million, or 34 cents a share, from $186.1 million, or 78 cents a share, a year earlier.
The Milwaukee-based manufacturing firm missed the target of 57 cents a share in a survey of analysts by FactSet Research.
Revenue fell to $1.29 billion from $1.39 billion.
"Some of this report was in line with our expectations ... but the shocker was the mix shifting so much," Edward Jones analyst Robin Diedrich said. "The people that are buying are clearly avoiding the more expensive, higher margin bikes and buying the cheaper ones.
Harley retail sales in the U.S. dropped 19.6% in the quarter while the overall heavyweight motorcycle market plunged 25.5%. Worldwide, Harley sales fell 13.1% despite a near-1% increase in international markets.
For 2009, Harley is projecting shipments of between 264,000 and 273,000 new motorcycles, marking a 10% to 13% reduction from 2008.
"This slump is largely out of Harley's control at this point," Diedrich said. "It comes down to the global economy and we expect 2009 to be very without much of a rebound in the second half of the year."
To help cope with the downturn, Harley said it'll merge two plants in the Milwaukee area into another in Menomonee Falls, Wis. and consolidate paint and frame operations in York, Pa. Harley will also close its distribution facility in Franklin, Wis.
"We obviously need to make adjustments to address the current volume declines," Ziemer said. "But we are also determined to do that in a way that will make us more competitive for the long term."
Harley's lending unit was also slammed by the credit crisis and is looking at a "range of options" to obtain the liquidity it needs to fund loans to customers.
The division said it swung to a loss of $24.9 million -- a $63.5 million turnaround because of write-downs stemming from higher project credit losses. End of Story
Shawn Langlois is a reporter for MarketWatch"