Harley reconsidering, examining York, PA, Plant
According to a report by the Associated Press, Harley-Davidson Inc. is considering closing its main motorcycle assembly facility in York, Pennsylvania, and moving production elsewhere in an effort to reduce costs and cope with a sharp sales downturn. The report cited a Harley Davidson spokesman as making the announcement on May 13, 2009.
H-D Spokesman Bob Klein reportedly said the Milwaukee-based company is exploring ways to reduce costs at its York location. That could include a move, though he declined to say where. He declined to say what other locations might be under consideration for a move, and deflected any speculation suggesting a move to Mexico or other offshore location.
Klein said the York facility is not competitive as it stands.
"It relates to excess capacity, it relates to competitive and cost pressures both in the current economy and longer term," Klein reportedly said. "So what we've told employees is that we are going to be doing a major evaluation of the York operations."
The York facility employs about 2,400 workers and consists of two motorcycle factories that assemble its Touring and Softail motorcycles.
Pennsylvania Senators Arlen Specter and Bob Casey sent a letter to Harley Chief Executive Keith Wandell, saying the facility is important to the local economy and calling on the company to protect the factory's jobs.
"We strongly urge you to give serious consideration to any option that will protect the thousands of jobs at stake and preserve Harley-Davidson's presence in the region," they wrote.
The review of the facility is part of a broad cost-cutting plan implemented by H-D in January 2009 to counter shrinking profits and a downturn in sales of its iconic motorcycles. Harley is the leading maker of heavyweight motorcycles. The company has announced plant consolidations and is aiming to cut between 1,400 and 1,500 jobs over the next two years. Part of that plan is to cut between 525 and 575 hourly workers at York, some of which have already been cut.
Last month, Harley reported a 37-percent decline in profit for the first three months of 2009. The company's sales have been falling recently as the downturn in consumer confidence and the tighter credit markets have made many consumers skittish about buying its high-end bikes. The company asked for bailout money earlier this year, primarily to aide it’s ailing financing arm.
Further, Harley has also seen a wave of turnover among its top leadership in recent months. On May 1, Wandell took over as CEO from Jim Ziemer, who ran Harley for four years. The company's chief financial officer, Tom Bergmann, stepped down at the same time Ziemer left. Harley announced a new interim head of Harley-Davidson Financial Services and a new senior director of financial reporting, all as part of the effort to keep the company stable.
