Harley-Davidson to Shut Down Production for 14 Weeks

Dealer News Press

Harley-Davidson plans production shutdowns and line rate adjustments at powertrain operations in Menomonee Falls and Wauwatosa, Wis., and at motorcycle assembly operations in York, Pa., and Kansas City, Mo.

The shutdowns and line rate adjustments are part of the OEM's plan to cut production by 25 to 30 percent and lay off up to 1,000 workers in an effort to reduce output, match demand and shrink inventories.

Sportster and V-Rod motorcycle final assembly operations and V-Rod motorcycle powertrain production in Kansas City, and production of Sportster motorcycle powertrains in Wauwatosa will be shut down for approximately 14 weeks in 2009, including the entire fourth quarter. The company anticipates that other production operations will be shut down for a total of approximately five weeks over the rest of 2009.

"When it comes to protecting and enhancing the brand, managing supply in line with demand is one of the most important things we can do," says H-D President and CEO Keith Wandell. "We've got a great lineup of motorcycles and one of our top priorities is to reduce complexity and improve efficiency throughout our product development and manufacturing processes."

H-D earlier this year announced plans to consolidate its two Milwaukee-area powertrain (engine and transmission) plants into one facility; consolidate paint and frame operations at its York facilities into one plant; and close its Franklin parts and accessories distribution center and consolidate those operations with general merchandise distribution through a third-party logistics company. Also, in April, the OEM completed the transition of its U.S. transportation fleet operations to a third-party provider as part of its restructuring initiatives.

Since the announcement of the original consolidation plans, Harley-Davidson has determined that the company's York operations are not currently competitive or sustainable.

H-D has undertaken a "two path" study to determine whether major, additional restructuring at York can achieve cost and efficiency targets to make the operations viable, or alternatively, whether the company will relocate the York operations to another U.S. location.

H-D leadership expects to make a decision on the status of the York operations later this year.