Motorcycle Maker Warns Of Problems At KC Facility
Outstanding HDF Member
Joined: Aug 2008
Posts: 2,951
Likes: 6
From: Kingman, AZ
Sorry.....I do not buy this is the same thing they did at Wisconsin and Pennsylvania plants. Maybe I missed it but in those cases they came out up front and stated they needed to renegotiate the terms with the collective. In this case it appears the plant management is in every bit as deep as the union workers. Poorly managed budget spend, poor accounting at plant level, inventory issues along with possibly too many heads making too few units plus many other factors it would seem is driving their overhead too high. The plant management/workers can pull together to cut the costs or the corporate will do it for them. Why would they sugar-coat the message about KC when they didn't the others?
I do not believe we will see bikes from HD here from India or Brazil, I think they know that would kill the core market they rely upon. IF HD does that then my wallet will vote to boycott their product. They are still an American company hiring US workforce to make a US produced product. Unfortunately less workforce in hard times, but nonetheless still building them here in the USA.
I do not believe we will see bikes from HD here from India or Brazil, I think they know that would kill the core market they rely upon. IF HD does that then my wallet will vote to boycott their product. They are still an American company hiring US workforce to make a US produced product. Unfortunately less workforce in hard times, but nonetheless still building them here in the USA.
Cruiser
Joined: May 2008
Posts: 208
Likes: 0
From: McKinney, TX
It all boils down to simple mathematics.
1,000,000 sq. ft. x 2 plants.
Producing the same number of bikes, that a 750,000 sq.ft. plant can produce.
Now, if your bean-counters aren't projecting a return to previous inventory levels, and there is talk on the retail side of the business that you are going to reduce the dealerships by 35%, AND you just sold off a Business unit (buell) that you bought and operated at a loss, that would suggest that you're not very efficient. Or at least haven't been paying very close attention to the ebb and flow of the market.
Face it, layoffs suck, whether it's 1 or 50 or 500, it sucks. And manufacturing orgs are particularly gun shy about them because of the PR jab associated with it. Now it's not as bad as say GE, because you can go buy another dishwasher from Maytag, Whirlpool or (gads) Samsung.
But in the HD world, you cannot go get another american V-twin that doesn't look like a spaceship....
So maybe they needed to, but didn't fire 50 heads a quarter until they maintained their Target GP...Maybe now they'll have to fire 500 to keep the ship righted for the remaining employees and for the good of the business, for the next 2-5 fiscal years.
In the end, every business deserves to make an honest profit margin, and although the price of HD is very inflated, they still absorb alot of Union pay, contracting, health benefits, insurance and facilities, marketing and warranty costs, to name just a few...
Something has to give.
1,000,000 sq. ft. x 2 plants.
Producing the same number of bikes, that a 750,000 sq.ft. plant can produce.
Now, if your bean-counters aren't projecting a return to previous inventory levels, and there is talk on the retail side of the business that you are going to reduce the dealerships by 35%, AND you just sold off a Business unit (buell) that you bought and operated at a loss, that would suggest that you're not very efficient. Or at least haven't been paying very close attention to the ebb and flow of the market.
Face it, layoffs suck, whether it's 1 or 50 or 500, it sucks. And manufacturing orgs are particularly gun shy about them because of the PR jab associated with it. Now it's not as bad as say GE, because you can go buy another dishwasher from Maytag, Whirlpool or (gads) Samsung.
But in the HD world, you cannot go get another american V-twin that doesn't look like a spaceship....
So maybe they needed to, but didn't fire 50 heads a quarter until they maintained their Target GP...Maybe now they'll have to fire 500 to keep the ship righted for the remaining employees and for the good of the business, for the next 2-5 fiscal years.
In the end, every business deserves to make an honest profit margin, and although the price of HD is very inflated, they still absorb alot of Union pay, contracting, health benefits, insurance and facilities, marketing and warranty costs, to name just a few...
Something has to give.
Club Member
Joined: Oct 2006
Posts: 1,582
Likes: 72
From: North East
I always enjoy these threads. More informed buying decisions, if they lay off more workers I may not buy another Harley yada yada yada. I hate to interject reality into this discussion but here's two thoughts to mull over:
1. All you die hard American built Vtwin motorcycle riders. What are you going to ride if Harley ceases to exist. Victory, BMW oh that's right they aren't American, Honda, not American either, I'm waiting.....
2. Take a look at the shipment numbers on the Harley website mentioned earlier in this thread. The total number of units shipped in 2010 will be at a level below 2009 which was below 2008 which was below 2007 and on and on. In 2003 Harley shipped 359,000 units from 3 manufacturing locations. I'm not really sure why Harley has 3 seperate manufacturing locations but I'm pretty sure they aren't going to need that much capacity to produce less than 200,000 bikes a year for the forseeable future.
If downsizing (consolidating locations) Harley production facilities makes Harley a stronger company for the long term, I applaud the move. Actually it would appear they are a little late based on 5 consecutive years of lower production/sales.
Time to wake up. It's 2010 not 2000 and the party days of the early 2000's aren't coming back anytime soon. Just my
1. All you die hard American built Vtwin motorcycle riders. What are you going to ride if Harley ceases to exist. Victory, BMW oh that's right they aren't American, Honda, not American either, I'm waiting.....
2. Take a look at the shipment numbers on the Harley website mentioned earlier in this thread. The total number of units shipped in 2010 will be at a level below 2009 which was below 2008 which was below 2007 and on and on. In 2003 Harley shipped 359,000 units from 3 manufacturing locations. I'm not really sure why Harley has 3 seperate manufacturing locations but I'm pretty sure they aren't going to need that much capacity to produce less than 200,000 bikes a year for the forseeable future.
If downsizing (consolidating locations) Harley production facilities makes Harley a stronger company for the long term, I applaud the move. Actually it would appear they are a little late based on 5 consecutive years of lower production/sales.
Time to wake up. It's 2010 not 2000 and the party days of the early 2000's aren't coming back anytime soon. Just my
Tourer
Joined: Jul 2007
Posts: 464
Likes: 1
From: NoCal
HD now has an outsider (Wall St type) at the helm. I am sure his package is incentive lace with hundreds of millions just like any other Wall St type CEO. He only has a few (~5) yeasr to hit these incentives and reap his millions. So just like every other CEO you slash and burn your way as the first step to bolster the bottomline (hence threats to York, Beer Town and now KC) and then meet your first round of bogies and reap the millions in bonuses. Next will be taking the easy way to grow top line (acquistions) followed by massive lay offs of the new organization to help pay for the acquisiton thus now meeting his revenue growth bogie and reaping the next round of incentives and reaping of more millions of bonuses. Now after 5 years the compnay is so f'd up the board finds a new CEO, pays the old one a huge good bye package and the cycle starts all over again.
No Wall St CEO type will go the slower way of building/growing a company (organic growth of the top line) because it takes to long and it is so much harder work (they do not have the experience for such growth type as the Harvard's have only taught them how to manage for the short term) and their packages do not give them an incentive to do so as their hundreds of million $ bonuses are based on short term gains.
Acquire and then slash and burn is they only way Wall St wants to see now and the schools are accommodating by teaching such methodolgy. As a mid-management type, 15 years ago it was planning horizons of 5-10 years with top management doing the 10+ year planning. Now mid and top management is only focussed on planning 1-2 years or less.
The only ones that benefit these days are the ones siting on the companies Mahogany row with huge golden parachute pkgs no matter how good of job they do!
No Wall St CEO type will go the slower way of building/growing a company (organic growth of the top line) because it takes to long and it is so much harder work (they do not have the experience for such growth type as the Harvard's have only taught them how to manage for the short term) and their packages do not give them an incentive to do so as their hundreds of million $ bonuses are based on short term gains.
Acquire and then slash and burn is they only way Wall St wants to see now and the schools are accommodating by teaching such methodolgy. As a mid-management type, 15 years ago it was planning horizons of 5-10 years with top management doing the 10+ year planning. Now mid and top management is only focussed on planning 1-2 years or less.
The only ones that benefit these days are the ones siting on the companies Mahogany row with huge golden parachute pkgs no matter how good of job they do!
Outstanding HDF Member
Joined: Aug 2008
Posts: 2,951
Likes: 6
From: Kingman, AZ
HD now has an outsider (Wall St type) at the helm. I am sure his package is incentive lace with hundreds of millions just like any other Wall St type CEO. He only has a few (~5) yeasr to hit these incentives and reap his millions. So just like every other CEO you slash and burn your way as the first step to bolster the bottomline (hence threats to York, Beer Town and now KC) and then meet your first round of bogies and reap the millions in bonuses. Next will be taking the easy way to grow top line (acquistions) followed by massive lay offs of the new organization to help pay for the acquisiton thus now meeting his revenue growth bogie and reaping the next round of incentives and reaping of more millions of bonuses. Now after 5 years the compnay is so f'd up the board finds a new CEO, pays the old one a huge good bye package and the cycle starts all over again.
No Wall St CEO type will go the slower way of building/growing a company (organic growth of the top line) because it takes to long and it is so much harder work (they do not have the experience for such growth type as the Harvard's have only taught them how to manage for the short term) and their packages do not give them an incentive to do so as their hundreds of million $ bonuses are based on short term gains.
Acquire and then slash and burn is they only way Wall St wants to see now and the schools are accommodating by teaching such methodolgy. As a mid-management type, 15 years ago it was planning horizons of 5-10 years with top management doing the 10+ year planning. Now mid and top management is only focussed on planning 1-2 years or less.
The only ones that benefit these days are the ones siting on the companies Mahogany row with huge golden parachute pkgs no matter how good of job they do!
No Wall St CEO type will go the slower way of building/growing a company (organic growth of the top line) because it takes to long and it is so much harder work (they do not have the experience for such growth type as the Harvard's have only taught them how to manage for the short term) and their packages do not give them an incentive to do so as their hundreds of million $ bonuses are based on short term gains.
Acquire and then slash and burn is they only way Wall St wants to see now and the schools are accommodating by teaching such methodolgy. As a mid-management type, 15 years ago it was planning horizons of 5-10 years with top management doing the 10+ year planning. Now mid and top management is only focussed on planning 1-2 years or less.
The only ones that benefit these days are the ones siting on the companies Mahogany row with huge golden parachute pkgs no matter how good of job they do!
I do not know what the new CEO's mandate/package is and you could be dead-on. Unfortunately businesses are not for employment, that is a nice side benefit when it's there. Unless any one of us own the company it is their ball, their choice. I can certainly appreciate your point.........and only hope it is not the case.
Road Captain
Joined: Jan 2010
Posts: 649
Likes: 0
From: milwaukee by da big water
All the talk of excess capacity at the moco brings to mind a couple things. 1. the three oldest manufacturing units, Milwaukee, York and Tomahawk, have already opened the existing union contracts to favor their own facilities survival with 7 year wage freezes and non union seasonal workers. 2. Kansas City is the only plant to produce the VROD. could this be the end for a bike that has had soft sales for years? W. G. Davidson has been quoted as saying that as long as he is alive the moco will not produce a watercooled touring bike.
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