Cycle News is a weekly magazine that covers all aspects of motorcycling including Supercross, Motocross and MotoGP as well as new motorcycles
Issue link: https://magazine.cyclenews.com/i/936927
IN THE WIND P32 HARLEY-DAVIDSON TO CLOSE KANSAS CITY MANUFACTURING PLANT H arley-Davidson will close its manufacturing plant in Kansas City, Missouri, following a sharp drop in sales in the final quarter of 2017. The company released its fourth quarter report, January 30, and said its net income dropped 82 percent in its fiscal fourth quarter to $8.3 million compared to $47.2 million in 2016. "Harley-Davidson plans to further improve its manufacturing operations and cost structure by commencing a multi-year manu- facturing optimization initiative anchored by the consolidation of its motorcycle assembly plant in Kansas City, Missouri, into its plant in York, Pennsylvania," a statement from the company read. "The company expects to incur restructuring and other consolidation costs of $170 to $200 million and capital invest- ment of approximately $75 mil- lion over the next two years and expects ongoing annual cash savings of $65 to $75 million after 2020." The decision to close the Kan- sas City plant means around 800 workers will be out of a job. "The decision to consolidate our final assembly plants was made after very careful consid- eration of our manufacturing footprint and the appropriate capacity given the current busi- ness environment. Our Kansas City assembly operations will leave a legacy of safety, quality, collaboration and manufacturing leadership," said Matt Levatich, president and chief executive of- ficer, Harley-Davidson, Inc. Harley-Davidson share earn- ings were five cents per share, which is down from 27 cents per share in 2016, although revenue was up to $1.23 billion, com- pared to $1.11 the previous year. Part of the reason for the earn- ing drop came via a $53.1 million tax charge relating to President Trump's enactment of the 2017 Tax Cuts and Jobs Act, as well as a $29.4 per-tax charge for a product recall. Overall, Harley-Davidson's worldwide retail motorcycle sales fell 6.7 percent compared to 2016, with U.S. sales down 8.5 percent and international sales down 3.9 percent. On the plus side, the com- pany maintained its number one 601+cc motorcycle market share position in countries including the U.S., Canada, Japan, Aus- tralia and India for 2017, with 57 new international dealer points added to the network. "Our actions to address the current environment through disciplined supply and cost management position us well as we drive to achieve our long-term objectives to build the next gen- eration of Harley-Davidson riders globally," said Levatich. "We finished 2017 with over 32,000 more Harley-Davidson riders in the U.S. than one year ago, and we delivered another year of strong cash generation and cash returns to our shareholders." CN The last quarter of 2017 was not a good one for Harley-Davidson.