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By Rick Barrett of the Journal Sentinel
Posted: Jan. 23, 2009 5:57 a.m.
Harley-Davidson Inc. says it will cut 1,100 jobs over two years and scale back its operations as its fourth-quarter earnings fell amid the slowing motorcycle market.
Harley says it will consolidate two engine and transmission plants in Milwaukee into its Menomonee Falls plant. It will close a distribution facility in Franklin and shrink its paint and frame operations in York, Pa.
The company also says it will end its domestic transportation fleet and plans a 10% to 13% reduction in motorcycle shipments for 2009.
In a news release this morning, Harley said earnings fell 58% to $77.8 million, or 34 cents per share, from $186.1 million, or 78 cents per share, last year. Sales fell 6.8% to $1.29 billion.
Analysts expected earnings of 57 cents per share on sales of $1.29 billion.
Harley shares have taken a beating in recent months amid declining motorcycle sales tethered to sinking consumer confidence.
CEO Jim Ziemer recently announced that he will retire sometime in 2009. Earlier this month, Sy Naqvi, president of Harley-Davidson Financial Services, announced his resignation effectively immediately.
Analysts see considerable downside from the dual impact of declining motorcycle sales and tightened credit markets.
Until recently, international sales had been a bright spot for Harley. But a slowdown in the global economy, coupled with a strengthened U.S. dollar, has put a damper on overseas sales.
Harley employs about 3,600 people in the Milwaukee area, including nearly 1,000 at the Juneau Ave. headquarters . In 2008, the company cut 730 jobs, including several hundred at its headquarters.
About 80% of the assembly line job reductions in 2008 were at Harley's largest plant in York, Pa., which has more than 2,770 hourly workers.
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