JULY 9, 2020 — MAJOR REORGANIZATION CONTINUES WITH 700 PLANNED LAYOFFS
The company has announced that the restructuring effort, code-named rewire, under its new CEO, Jochen Zeitz, will result in 500 layoffs in 2020, with a total reduction in force anticipated to be 700 employees globally. This is in addition to the 140 layoffs in June.
The search is on for a new CFO to help secure additional funding, reduce costs, and improve operational efficiencies.
The company appears to be under the influence of activist inbvestors.
JUNE 24, 2020 — 90 EMPLOYEES AT THE YORK, PENNSYLVANIA MANUFACTURING FACILITY.
The company has announced that it will be laying off 90 workers at its York, Pennsylvania manufacturing facility.
The layoff decision was driven by “an adjustment to its production volume” caused by a significant decline for the company’s products in an aging customer cohort and a travel-restricted environment.
According to a company spokesperson, “As course of normal business, Harley-Davidson regularly adjusts its production plan and appropriately sizes its workforce. The company announced it will adjust its production volume, which will result in a workforce reduction of approximately 90 York employees."
Other layoffs are expected as the company continues to react to changing circumstances.
MARCH 18, 2020 — ACTIVIST INVESTOR’S HEAVY HAND STRIKES HARLEY
Activist investor Impala Asset Management claims that the Harley CEO was fired and they are nominating two directors to the Board.
According to an Impala spokesperson…
“Impala believes that with the right leadership, Harley-Davidson can return to its former position of strength.
We have had significant concerns about the strategic direction and actions taken by the Board under former Chairman Michael Cave’s stewardship for some time – and we have voiced these concerns privately to Harley.
Notably, it took our urging to convince the Board to terminate the prior CEO, Matthew Levatich, despite years of poor performance.
The Board has still not shown that it is focused on positive change. To the contrary, one of the first decisions the incumbent directors made after firing Mr. Levatich was to reward their longstanding colleague, Jochen Zeitz, the new Acting President and CEO, with a pay package that could provide up to $8.5 million in salary, bonuses and restricted units for a short assignment. This is yet another instance of this Board being tone deaf to the plight of shareholders and further demonstrates the need for new perspectives on the Board.”
MARCH 1, 2020 — WARNING: TURBULENCE AHEAD. LONG-TERM PRESIDENT AND CEO LEAVES.
It is almost axiomatic when a new President and CEO is hired, their first act is to demonstrate to the Board that they can cut costs, implement a recovery or growth plan, and, of course, satisfy the demands of Wall Street.
The company has announced the departure of Matt Levatich, president and CEO of Harley Davidson after a 26-year career. He will be replaced by a board member who will function as the acting president.
The company is facing an aging consumer base, changing consumer tastes, more safety conscious consumers, and a national culture change.
This does not bode well for long-term employees.
SEPTEMBER 14, 2019 — ANOTHER 40 EMPLOYEES GONE FROM THE APPAREL DIVISION.
The company has announced the layoffs of another 40 employees in its apparel department. A company spokesperson noted, “Harley-Davidson announced that it will restructure its general merchandise organization to capitalize on growth opportunities. This supports the company's commitment to manage our business with focus and discipline as we invest in growing the next generation of Harley-Davidson riders globally."
With an aging customer base that appears to believe they are invincable and immune from danger, the company now needs to attract the “snowflake” generation which spends more time on video games than outdoor activities.
UPDATE: AUGUST 3, 2016 -- IT BEGINS IN KANSAS CITY
Two of three shifts at the plant are being eliminated at the present time, with the third shift shutdown in the near future.
A number employees are upset with the company for building a new plant in Thailand and not reinvesting in an American-made product. The company's response noted that the American market is aging while the Asian market is growing.
Original Post...
Once again, the iconic American company, motorcycle manufacturer Harley-Davidson has hit a slick spot in the road and is sliding sideways. Due to a prolonged financial downturn, an aging customer base, a decline in motorcycling with expensive “heavy hogs,” and increasing foreign competition involving currency issues, the company has announced the consolidation of its manufacturing activities to meet lower projected demands. This will result in the closure of the Kansas City plant and the layoff of approximately 800 workers, with the operations being transferred to facilities in York, Pennsylvania. The restructuring will add approximately 450 jobs in the York facility. Layoffs in Kansas City are expected to start around June 2018 with full closure estimated in the third quarter of 2019.
Harley-Davidson CEO and President Matt Levatich said, "The decision to consolidate our final assembly plants was made after very careful consideration of our manufacturing footprint and the appropriate capacity given the current business environment. We are constantly evaluating capacity, and our current U.S. capacity exceeds U.S. demand.”
According to Edward Jones equities analyst Robin Diedrich, "As safety becomes a concern for aging baby boomers, domestic sales for the heavyweight motorcycle industry should slow. We expect certain international markets, particularly in Asia and South America, to have higher growth rates in heavyweight motorcycles than the U.S.," Diedrich said.
Harley-Davidson represents more than a brand, it represents a lifestyle and a dream of freedom of the road that is passionately embraced by a large contingent of Harley fanatics. Not all of whom are willing to spend tens of thousands of dollars on stock or customized motorcycles. There will always be a market for Harleys -- even if it isn't a mass market.
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life, or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?