And do you really think that a 4% pay increase and no health care concessions helped Harley when almost all other businesses were asking for wage freezes, wage reductions, more insurance co-pays, furloughs, etc. etc. Maybe the cost wouldn't go down with the workers making less, but they certainly wouldn't have to go up in order to keep the company afloat. And if the concessions led to more profits for the company, the employees would have more security with their jobs; i.e., Harley wouldn't be thinking about closing York right now if it operated at a lower cost. I'm telling you right now, the way the York Union dealt with Harley last year stuck in the craw of management and they aren't going to forget it.

 

Well, since this thread got soooooo far off the original topic, I have a question. A bunch of you "experts" out there have all the solutions to our country's economic woes, when are you going to do something about them besides type rants at your keyboard? Just wonderin'?

 

Actually the thread was about how to save HD in tough economic times.... Don't see how an economics discussion was off topic.

To answer your quesion - We could never get elected and influence policy making since we aren't beating around the bush, lying, and telling the special interest groups what they want to hear. The truth will never get you in office.

 

 

A 4% wage reduction and health care copays resulting in an overall 8% decrease in the rank-and-file employee compensation would probably result in less than $250.00 savings per bike. $250.00 more or less isn't going to make a difference on the sales floor numbers.

This is what companies do - use the economy, sluggish sales, competition, whatever they can think of as tools to get Americans to accept less. The ecomony is in the $hitter, accept that means fewer sales and lower profits, possibly no profits especially when your company doesn't manufacture a necessity.

Perhaps Harly should diversify, and start making guns.

Unions, by their very existance always stick in the craw of management. And if sales are down and a plant has to close so be it. At least when the plants are open, the jobs are good and families can live well. Who the heck thinks turning Harley Davidson's jobs into McWalMart jobs is a solution?

 

Geez - First my Broken Frame Threads and now.....

Very Good Reading - I am jones'n - picking up my bike tomorrow :-)

Any way - like I said - do not wait for the 2010 bikes - buy a 2009 , as it looks like the 2010 bikes are going to be slow in showing up at the dealers...

Hated to see AMF Voit take over HD , but it all worked out fine..

Maybe China will take over if they keep loosing $$$$$ - I sell Printed Circuits for China , Korea - 100% of your computers and cell phones come from one of the facilities I work with - Foxcom - SCI etc.... no worries they are RoHS compliant - LOL

Anyway.... tell your friends we are just about to lose our last true Red White and Blue company...My Grand Father was a Getty Oil Union worker for 48 years - so I like the Unions

If they were thinking about buying a HD, now would be a good time - may do actually nothing for the bottom dollar - but hey, be great to see more HD riders on the road.

And all this from the guy who seems to have the only Missed Factory Weld on his 3k mile 2009 FLHTCU bike that has been in the shop for 17 days 2 hours, 22min. and 40 seconds...

Stupid Robot - non-union working crap..

Save HD and Jobs - otherwise my Chinese buddies will swoop in - then what we all going to say...... "Nie Ha"

PS - I am Greek , bore 100% in the USA - my father did not talk to me for years when I started working with China , but got him a great deal on his cell phone and a new computer every year.. he seems ok with it today....

Did I say I am jones'n to picking up my bike Friday....after not seeing her for 17 days !!!!

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Like that will happen. Dealers will fold when buyers go somewhere else. Brand loyalty is gone. The people who bought at any price are gone.

 

OK, nobody is going to convince you of the error of your argument. I don't blame you for wanting to earn the best possible income but, it isn't about SHARING, in our society it is about EARNING. You have certain skills of value and you will sell your services at the best price you can get - that is earning. If you are better than the next guy, you will be able to earn more.

The problem occurs when unions remove competition and create artifically high prices for their services and restrictions on who an employer can hire or fire. The employer is then motivated to find ways to reduce their reliance on union labor through mechanization and technology or, to eliminate the union altogether by moving manufacturing somewhere else.

When you are selling your labor, you are not "entitled" to more than the value of that labor just because the business was successful. There is a lot more that goes into a successful business than the actual manufacture of the product. In fact, many times the manufacture of the product is really a fairly minor part of the whole equation, although possibly the most expensive. And that is why it is so easy to find less expensive alternatives.

Good luck and ride safe.

 

Not true, plenty of guys better than me earn less - what they lack is leverage, a union to back them up and PROFESSIONALLY negotiate on their behalf. I'm an electrician, not a negotiator. Me against a company with 45 more guys behind me vyying for the same position is in NO position to negotiate. That's not my forte, trade, profession, whatever. I hire the best to do that dirty work for me, and they do it well.

And getting the most out of your effort isn't about sharing, it's about equitable distribution. Without a union, the employer holds all the cards and the deck is stacked agains every employee. Take it or leave it. But can we really choose not to work at all?

I say, the problem occurs when nonunion competition exists and people assume that the nonunion wage is the "standard," thereby the union wage and fringe package is outta line. Sure it is, when compared to those earning less than 1/2. But then again, nonunion wages and fringes are out of line when compared to slaves too...

If we are to base fairness on what happens when competition and free market supply/demand economics are allowed to flourish, we cannot introduce a wildcard cheap labor provider that isn't a member of the socioeconomic strata in question.

Free trade is not fair trade... I am not worth less just because some dupe in SriLanka is willing to do it for 25% of what I earn.

I am however entitled to sell my labor for the highest price possible using all the lawful tools afforded me. Teaming up with others is one of those tools.

 

Ok, I am loving this thread so much I have to chime in – However, be prepared for one long-winded post that many will just say, “Screw that” and not read! That’s ok too and I apologize to you in advance!

Some intelligent posts in here on both sides. However, we need some accountants to verify some facts!

Someone said, paraphrasing here, “It doesn’t matter what the cost to manufacture something is, the sales price is what the market will bear or someone is willing to pay for it”

While that statement rings true in my ears, it’s certainly opposite of the intent of the original poster in my opinion.

Pricing is based on looking at your Cost of Goods Sold along with your anticipated dollar volume sales revenues. How many are you going to sell of that item that gives you enough gross profit to pay your operating expenses + make profit (which I know of few businesses that are hopeful to do more than just break even in today’s market).

Let me identify what COGS (Cost of Goods Sold) is:
Materials + Labor + Freight + Taxes (if applicable) to go into making your inventory item.

Operating Expenses (everything else that goes into the management/support of making that inventory item) have NOTHING to do with COGS or NET Profit. We’ll get more on this later.

Like at home, businesses have a “nut” to cover (Operating Expenses). You must have enough money left over to pay those Operating Expenses after paying your COGS (Cost of Goods Sold). The amount left over after paying COGS is your GROSS profit. From that GROSS profit, you pay your Operating Expenses and whatever is left over and have your NET profit.

Say you anticipate you have to generate $125,000.00 a month to cover your “nut” (Op Expenses). You can do this two ways, Sell few items that will give you a gross profit of $125K minimum or sell a whole lotta items that will give you a gross profit of $125K minimum. We’re not even talking profit here yet.

Now, for the sake of this part of the point, it doesn’t matter if your labor is Union or Non-Union. The labor goes into the COGS portion.

You got an item made of steel that you make. Your Steel Costs $10 and your labor with burden (Benefits, Unemployment Taxes, Workman’s Comp, etc) is $40, freight is $1 and your State has a Use Tax for say $2. Your Total Cost of Goods Sold is $53.00. You think you can sell 10,000 of this certain part a month and for ease of convo here, it’s the only thing you make. Your Op Expenses (Sales Reps, Admins, Rent, Lights, Phones, Office Supplies, etc) are $125K a month for this example. So…whatcha gotta sell that for to cover your Op Expenses?

We know our cost for 10K of these will be $530,000.
We know our Op Expenses are $125,000.00

We want to sell it and make 8% Net Profit?

$71.195 each (we’ll round up being greedy bastards to $71.20 each)

Ok, to check our Math:
If we sell 10K in a month at $71.20 each we’ll generate in Revenue $712,000

The Plan:
$712,200 Revenue
<$530,000> COGS (Cost of Goods Sold>
-------------------------
$182,000 Gross Profit
<$125,000> Operating Expenses
=$57,200 NET Profit, we divide this by the Revenue and yes that’s 8%

Problem is…at the end of the month I only sold 5,000 instead of the 10,000 I thought. I don’t know why either, I had a gazillion hits on my website so I figure it’s something folks are interested in, so…what’s the deal?

The Reality - Here’s what it did financially:
$356,000 Sales Revenue (selling 5K @ $71.20 each)
<$265,000> COGS
------------------------
= $91,000 Gross Profit
<$125,000> Operating Expenses
= <$34,000> Net Profit (aka LOSS in this case)


Now you have choices to make. Do I raise my price and hope to cover my Op Expenses? I might sell less if that’s the case and make my financial situation worse. Do I lower my price and try to sell more? What if I don’t sell enough to make up the losses and I’m selling for less to boot! What if there’s no more buyers than 5K a month to sell in this market? I gotta pay the light bill!

These situations are as REAL as they come. Now what? You can sell 5K for sure of your item, but that’s not covering it. You go to your steel guy and ask for $1 off the materials, you look at your labor costs so you can sell the item for the same but your gross profit is higher to pay for Op Expenses….What to do?!!


Many are stuck with leases on buildings, office equip, etc. Your insurance costs are gonna happen one way or another, your licensing fees are constant, etc. The facts are labor is likely the most controllable item in your Op Expenses. Therefore, you’re seeing lay-offs and folks taking less, etc. No one wants to see anyone take less financially (employees, your loyal vendors, etc) – Well, maybe your competitors! Haha…but that’s the way it is in today’s market. Maybe not in 2006, but today yes. I’m working for 50% less, the rest of our employees are at a minimum working for 15% less. It’s not that you “want” to do this, it’s that many today HAVE to do this in order to work. Not working is not being able to cover your nut. This is the single most adjusted expense in businesses today because folks have no other choice…it sucks.