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.