Harley-Davidson will be shutting down New Castallow in Australia and outsourcing its production of wheel and wheel hubs to other existing suppliers. Harley is expected to save around $9 million a year by shutting down the facility.
According to the Wall Street Journal, New Castallow produces most of the cast wheels for Harley motorcycles. The production facility has 183 employees. Harley plans to complete the transition by mid 2013.
"The company's decision on wheel production follows a review of the long-term fit and competitiveness of the New Castalloy business with our strategy and was not made lightly," said President and Chief Operating Officer Matt Levatich. "New Castalloy has been a valued part of the Harley-Davidson team. We appreciate the many significant contributions of New Castalloy's employees over the years."
Harley purchased the wheel producer in 2006 when it was on the verge of bankruptcy.
According to Ultimate Motorcycling, Harley is currently concentrating on its production operations for motorcycle fuel tanks, fenders, frames, final assembly, and powertrain production. Harley says that work from outside those areas is being transitioned to suppliers since it "cannot be performed competitively in house."