Harley-Davidson Inc. lays off 440 workers

[OhioChick]

Tuesday, February 13, 2007

MILWAUKEE - Harley-Davidson Inc. laid off 440 employees in Wisconsin on Monday because of an ongoing strike in York, Pa., at the company's largest production plant.

About 240 employees were laid off at a production plant in the north central community of Tomahawk, said Bob Klein, spokesman for the Milwaukee-based motorcycle maker. About 200 were laid off at plants in southeast Wisconsin, he said.

The company said last week it could lay off up to 500 employees in the region, so more layoffs could be coming, he said.

The layoffs were both voluntary and forced, he said, though he declined to say how many were forced. He said it's unclear when the employees will be back to work at the plants, where parts such as engines and windshields are made.

http://www.pjstar.com/stories/021307/BUS_BCCBVBQL.027.php

[Little Wing]

1. heh, the Bush touch of death strikes again

[BOSSHOG]

2. Note to Harley Fans

The New Orleans Harley-Davidson gift shop has moved to Decatur Street to a larger and more accessible facility.

[Greyhound]

3. I'd rather be riding my rice-burner than pushing my hog any day.

Over-priced, over-rated, crap, but buy amerikan the Davidson's need more $$$.

[Kolesar]

4. How many MPG do you get?

I don't own a motorcycle. I am just curious.

[melm00se]

5. depends upon the bike and rider.

small displacement bikes (250cc or so) can get in the 80-90mpg range (ridden conservatively), larger displacement bikes (1000cc+) generally ranger between the high 30's and mid 40's.

[Kolesar]

8. Most Japanese makes seem to have a 250cc or 350cc "small bike"

Then they jump up to 650cc. Suzuki promotes efficiency on their site http://www.suzukifuel.com/

[melm00se]

11. bikes sold/marketed in the

USA are generally north of 800cc (americans have dispalcement envy)....while companies like honda, suzuki etc DO have small displacement bikes (250's and the like) they generally aren't on the floor, they are special order bikes (plus, as a sales person, would you rather sell a $3000 bike or a $6000 bike?).

Bike displacement has been creeping up in the USA over the last 20 years....it was only 10 years ago an 800cc bike was "big" and an 80 cubic inch (~1200cc) mill was "massive"....now an 800 is middle weight as is a 1200....you aren't a "man" unless you have a 1500+ engine.

Take a look at the bikes sold overseas, they generally focus more on the 400-650cc market, in a streetbike, as opposed to crusier, styling (http://www.globalsuzuki.com/motorcycle/index.html)

[Greyhound]

14. Too true. If you aren't on a track, a liter or larger is most likely just going to kill you.

Very few riders have the skill and experience to handle a bike that'll do 180MPH/300KPH. It's just ego and penile insecurity. OTOH, I wouldn't ride a tiny bike either because you often need the power to simply be elsewhere to stay alive.

[Sapere aude]

37. "It's just ego and penile insecurity" Where does this shit come from?

I have a 1500 cc Kawasaki. I love riding it. I ride it to work when I can to get better mileage than a car. I like my penis and I don't have a huge ego.

It seems more like you have a problem with people who own bikes. They don't have your problem.

[Greyhound]

49. I was agreeing with melm00se about the way sport bikes are marketed to the amerikan public

There is no reason on earth for anyone to ride, what amounts to a slightly de-tuned track bike, on the street. When and where are you ever going to do 180+ in the USA? Add this to the fact that hardly anyone that owns one of these has the skill to use it and the end result is another organ donor (hopefully they are at least that courteous). Remember the V-Max, 180hp out of the showroom? That bike had a 35% mortality rate and they stopped selling them, although I think they may have started again. Something about them wanting their customers to survive long enough to make another purchase.

I have ridden for over 30 years and especially love sport bikes and my 600cc is more than fast enough plus I can fit it into spaces the liter+ bikes can never get into or through, especially in Cali where lane splitting is legal. I equate these bikes with the Hum-Vee and the 4X4 trucks with a 24" lift, utterly useless and an obvious compensation.

A lot of cruisers are in the 1200cc - 1500cc range, including Harleys the topic that started this thread, but that is a wholly different animal. If I was going to ride 1000 miles I'd want a bigger heavier bike too, just for the comfort.

Finally, should I ever fuck up, I am an organ donor, although after this many years of abuse I'm not sure how good they would be, but as long as I don't need them anymore, why not.

[Greyhound]

13. The 600cc "crotch-rocket" gets in the range of 40 - 50 most of the time, but if you ride it hard you

can get that down to about 20 - 25. After all it is a de-tuned racing engine and the bottom line of all racing is that the more fuel you push through it, the faster it goes.

BTW, if you're thinking about taking up riding, please, please, please talk to somebody that knows what they're doing and get them to teach you the tips and tricks of surviving the experience.

[Red_Viking]

16. Great advice...

I learned to ride about 18 months ago, to get back and forth to school and save money on gas. My SO and I are both law students (and we're 40!) and decided to take the local motorcycle safety course. Best thing we did! I feel very comfortable riding, but I'm a 40-year-old mom on a BMW K75 and not a dude on a crotch-rocket. So, I ride pretty conservatively--although my favorite helmet has red flaming dragons on it. :P We save a ton on gas, and it's really addicting. I really love riding. Plus, we live in Oregon, so there's lots to see.

I support the idea that anyone interested in riding should get some instruction first!!

Peace,

RV

[Greyhound]

Oh cool, any chance you'll get to the next meet-up? I know it's a long way

but it is fun and I'd love to swap stories with you. I've been riding for 30+ years and have never suffered more than minor road-rash and a couple of exhaust burns from not thinking, so I've learned quite a few tricks.

Keep the shiny side up!

Peace.

[melm00se]

17. better yet

go take the MSF BRC course

www.msf-usa.org for locations.

mentors are good, but ONLY after you learn the basics...leave that to someone who has been taught how to teach.

[jakem]

22. i would often get 40-50mpg

on my Yamaha Roadstar 1600cc

[Kolesar]

28. thanks, all--eom

[melm00se]

7. harley has, in the past,

a very positive relationship with their unions. In fact their partnership with their unions saved the Motor Company from bankruptcy in the 80's.

this quote is from a business study done by the Univ of louisville:

Harley Davidson has an untypical relationship with the union. Continuous improvement techniques could have been stopped if the company did not have a good relationship with the union. The union viewed management as a partner instead of an adversary. Management's good-faith dealing's with the union was a factor in this special relationship. Harley-Davidson has a history of in-sourcing; it tries to bring as much work as possible into the plant to forestall any layoffs. The union has considerable control over what kind of work is outsourced to other companies. So the union is able to create a "job security" by choosing the work that is done in-house. Bob Klebar, the president of the union stated, "When times are good, we´d outsource it. But if things get tougher, we´d look at those projects and maybe bring them in-house to keep the employment" (Filipczak 41). He also mentioned that "instead of focusing on what we think we have a right to, his people work closely with the production department, and everyone concentrates on the final customer. It really binds us together and makes us go in the right direction" (Filipczak 41). Teerlink, Harley-Davidson´s CEO, said that total employee involvement (EI) cannot exist until management and labor can agree that they have a mutual goal: the long-term success of the company (Reid 173). In this joint process, joint union-management study groups identify issues or problems and then research all possible solutions.

I seriously doubt that this is a simple case of "management wants more money"....

[fasttense]

9. So what happened?

Why did they lock out about 2,000 employees and stop negotiations? Are they under new management?

[melm00se]

12. its tough to

tell...there is so much spin flying around (pro-union, pro-management) that the exact details are probably only truly known to the company and the union.

what is being publicly stated is the union rejected the company's proposed contract mostly because wage increases would be contingent upon the union finding a health-care plan Harley approved, a lower wage scale for new hires, health care for retirees and decreased pension benefits.

I think both sides are getting squeezed by things like increasing worldwide demand for steel and other raw materials (driving up costs), flattening sales (you can't sustain record sales growth indefinitely) preventing/restraining a corresponding increase in prices and an aging workforce. A middle ground must be reached for production to continue. (BTW, it may not be the corporate management that changed, it could also be a change in the union leadership...it takes 2 to tango)

[Greyhound]

15. I find it hard to believe that with the all-time record sales and enormous popularity

of Harleys and the endless ancillary products that the money isn't there. More likely, this is just another example of the tyranny of the MBA's ruining an formerly good relationship.

[melm00se]

19. the anicillary

products profitability is really tied to the dealer's bottom line...(keeps dealers loyal)....the HD logo is really just a licensing arrangement, while profitable, is not the primary source of revenue for the company.

again, all time sales only count for the year they occur....manufacturing and sales are year to year activities...the profits are spent (plant upgrades, shareholder dividends, pension funding and the like) and the scale is reset to zero.

BTW, their executive compensation is comparatively low:

Mr. James L. Ziemer , 56
Chief Exec. Officer, Pres $ 1.22M (includes salary and bonuses)

Mr. James M. Brostowitz , 54
Chief Accounting Officer, VP and Treasurer $ 430.00K(includes salary and bonuses)

Ms. Gail A. Lione , 57
Chief Compliance Officer, VP, Sec. and Gen. Counsel $ 570.00K (includes salary and bonuses)

So i doubt that is an issue...

Stock value has been moving up fairly steadily for the last 20 months or so (continuing a run that began back in 88).

so the issue may be something that is a bit more serious that making the rich richer on backs of the worker.

[Greyhound]

23. Where are the Davidsons? I thought they bought it back after the corporation(s)

nearly ended the name entirely.

Harley was the http://www.equitiesmagazine.com/america_most_profitable_co_06.html">89th most profitable company in America last year, if that isn't enough to take care of the employees, new management is definitely called for. Again, it sounds more and more like the MBA's have taken over and are bleeding the company dry.

[melm00se]

25. their ROE is pretty

good (ROE definition: http://beginnersinvest.about.com/cs/investinglessons/l/blreturnequity.htm)

But is not the sole definition of the a companies profitability.

Please define "bleeding the company dry".

where is the $$$ going?

[Greyhound]

27. It's what the MBA's always do, kill the ideal or spirit of a company

by moving it away from what it does to what is, at least in the short term, more profitable. Longevity, good will, loyalty, history, competence, all these things cannot easily be quantified on a ledger, so they are discarded as irrelevant.

It leads the company, and by extension the country, to exactly where we are today. We have a tiny fraction of our former capacity for production even though we have far more people to consume that production, all research is dictated by maximum potential profit, regardless of potential tangential progress and need, we have an overall declining standard of living, in spite of far more cash, etc.

The industries that remain are moribund and no longer capable of innovation (why can't GM/Ford make a decent car?), saddled with huge, bureaucratic, management that produces nothing but consumes more and more of the company's resources.

Am I making this at all clear? If not, I'm not surprised, defining decades of observation and experience probably requires a lot more literary talent than I have. The fact that you reference a class on investing, rather than production, is itself symptomatic of this insidious disease.

[melm00se]

30. response

The fact that you reference a class on investing, rather than production, is itself symptomatic of this insidious disease.

I point out a definition of ROE as that was what you were using as the watermark of profitability and not everyone has a clear understanding of ROE. This definition of profitability, while certainly valid, is not the sole definition.

Back to HD...One of their major marketing stances is (and has been): The last (and for many years the only) American made motorcycle. I believe that the current management of the Motor Company is struggling mightily to keep as much of their production and manufacturing as possible domestic and they are facing huge challenges as when it comes to labor costs.

Now, both sides must understand that and be prepared to make sacrifices otherwise HD may begin the slow fade that swallowed up other great American bike marques of the past...

Somethings got to give - the balancing act between costs, profits, prices and sales is a tough one...I wish I had a quick easy answer where the company and its shareholders made money, the workers made every penny they are worth, and customers got everything they wanted for the price they want...but I don't...

[zalinda]

6. Wow, it means the retiring middle class

aren't buying bikes. I guess they've seen the economy and thought they should hang on to their money.

zalinda

[melm00se]

10. not sure that it is driven by the state of the economy

HD's are, based upon price, at the upper end of production bike prices (high teens on up) so would be classified as "luxury" purchases. Now, when you couple those types of purchases, with the average number of miles ridden (2000-5000 miles per year, and I think that is high BTW, the casual rider doesn't respond to surveys) higher end bikes tend to last a long time.

So what you have is a situation in the early part of the decade with sales driven by motorcycle TV, and folks who want bikes have 'em. Those who don't have 'em, probably don't want 'em. so of course sales are going to slow down.

[guitar man]

26. Not Necessarily

They are buying bikes, it's just that there are more choices than there were 10 years ago. Victory Motorcycles, another American company which has sprung up, is in full swing and gaining popularity.

Then there are the custom "Harley Clone" companies out there like Big Dog and American Ironhorse and high end builders like Orange County Choppers and West Coast Choppers.

Not to mention the "metric cruisers" built by Honda, Yamaha, Kawasaki and Suzuki are extremely popular.

On the smaller end, competing with the Harley Sportster, Triumph is building street cruiser bikes again. When I bought my Sportster last year, I was seriously considering one of the new Triumph Bonnevilles.

So I imagine Harley may be feeling a bit of a pinch in the bike sales department, but plenty of people are buying bikes overall.

[E-Z-B]

18. The Harley management wanted to introduce lower wages for new workers

thereby eventually replacing the workforce with lower-paid employees in the long run. Plus, they now want the union to pay for health benefits. The local newspaper, the York Dispatch (which I suspect is sponsored by Harley), made an effort to interview irrelevant people such as a waitress from a local diner about the strike. Not surprisingly, they were all just about pro-company, anti-union. She was quoted as saying something to the effect of "welcome to the modern world" in regards to paying for health care. In a world that existed 15 years ago, it was normal that employees paid very little for health benefits. Since then, the health system became broken, and the masses have been brainwashed into thinking that the insurance companies are always right even if the people cannot afford health insurance any longer, such as this waitress. Currently, Harley has taken away the health benefits of the striking union. Meanwhile, the CEO and the top executives will make millions of dollars this year.

If Harley executives are "enjoying the good times", why can't the workers as well?

[E-Z-B]

20. Oh, the other thing is that the union gave up a lot during the last contract negotiations

and the company gave up nothing. They've even accepted only 2% raises thae past few years, I believe. Now the company is asking even more.

[melm00se]

21. see post #19

Meanwhile, the CEO and the top executives will make millions of dollars this year.

see post 19 for executive compensation....

[Fierce]

50. That comp list didn't show stock options.

I'm wondering about that.

[melm00se]

51. the only one with

exercisable options is Brostowitz, he has $ 3.18M, but he has been with HD for at least 17 years, you acquire a few options along the way.

[jakem]

24. Harley has been screwing around with its customer base

fow a long time now. They dissed the old school biker crown in favor of the building yuppie bike boom. Then they expoited the bikes yuppie factor with intentional shortages of supply.

It was only a matter of time before the yuppies got tired of their toys and started selling off their used bikes with 4000 miles on them.

Is it any wonder that the bubble is gonna burst?

[melm00se]

34. the customer sat

numbers don't really bear that out...their numbers are, comparatively off the chart (5 for 5, the only other manufacturer that comes close is BMW) and HD owners are fanatically loyal to their brand ("If I have to explain it to you, you don't understand" - BAH!) and have been that way since the 20's.

The tight control on supply had 2 major impacts on their business:

1) it maintained their dealer's overall profitability (kept their dealers loyal and exclusive)
2) it maintained the mystique/exclusivity of their brand (kept their brand up there in value)

while some might call it abuse, it's only abuse if you feel abused and the fact that harley's keep flying out the door year after year and have done so for the last 20 + years makes me think that their customer base disagrees.

[jakem]

35. You may be financially correct...

However, from the perspective of many a biker (not all), HD abandoned many of the people that kept them a viable company throught the ugly AMC years.

This was of course very good for business, they took the identity that their most dedicated customers created, and used this to market the 'biker image' to hordes of yuppies in midlife crisis.

Was this financially sound? sure, they made a crapload of $$ for themselves and their investors. Would I have dont the same thing if it were my business? Probably.

But it seems that used HDs dont get the resale value they used to, and their sales boutiques (yes, and i mean boutiques) no longer have a waiting list to buy bikes in most places.

Harley, IMO, has become bloated and complacent. They will face more and more serious competition from companies like Yamaha, who have turned out creative beautiful, classic looking bikes (with obvious design inspiration from HD, but no longer a copy) that are more powerful, ride better (yes, subjective) and cost half of what a new HD does today.

Their 'base' no longer puts a whole lot of miles on the product. I find it sad, thats all.

[guitar man]

41. I don't know

.....that I would call Harley-Davidson during the AMF years, especially the later AMF years a "viable" company. Even if the company was viable, much of their product was anything but viable. I know, I've been riding for 33 years and I bought, rode and wrenched on plenty of AMF garbage, including an almost new '79 FXS.

And, as much as people like to say that "Harley abandoned the hardcore biker crowwd" , that was a two-way street. I remember the first few years when EVOs came out, and the "I'd rather push a Shovelhead than ride an EVO" mentality was born. chances are, if you had a Shovel back then, pushing it was a pretty good possibility.

No sir, my hat is off to HD. I currenty ride an EVO Sportster, '99 model, and it is the best quality, most reliable motorcycle I have ever owned. I bought it used with 15k miles on it and I have put another 10k miles on it over the last 15 months and have not had a single problem with it.

[melm00se]

44. what you say is partially correct

however, complete or significant reliance on people who were in their 30's in the mid 70's (putting them in their 60's now) and not adapting to the new and developing core customer base is not a smart business model

as to resale value? with a large base of available bikes, the supply and demand curves kick in so the price will naturally begin to erode.

waiting lists? as i pointed out earlier, riding, like any higher risk activity, has an appeal to a finite audience and I beleive that those those who want (and can afford) harley's have made their purchases and you will see a slow decline in sales for the next 3-5 years and they will begin to swing back up, especially as bikes come up for upgrades and new riders choose to upgrade.

complacency? while HD may stick to tried and true designs (definitely a weakness but also a powerful strength), a truly complacent company would never have departed from their tried and true formula to develop and sell the V-Rod...a complete change from their classic cruiser line...

while the Japanese DO make an excellent product (I know, I own one), the Japanese penchant for changing their models on a fairly regular basis (every 3-6 years) makes customizing their bikes rather difficult as the aftermarket never really gets beyond the "basics" whereas the static/slow evolutionary designs of Harley allow for significant aftermarket products...

as to your final concern about miles ridden...i feel your loss, I really do, but a gain in the total number of riders, more folks joining the two wheeled brotherhood...that can only mean good things, long term for the sport.

[Sapere aude]

39. I'm not buying it. I been riding bikes for over 20 years and met a lot of Harley owners.

They are the farthest thing from a yuppie. The bike is their main transportation. If they own a car it is usually a piece of crap. The bike is their thing. They are my age, in their 60's with grey hair and beard. Maybe retired. Kids out of the house. Wife who doesn't mind if they are away a couple days out of the week. Many wives are on the back of the bikes or many of them ride themselves. Not yuppies at all. Just your older working class Joe six pack guys.

[jakem]

43. like everything else on this site, it was an opinion...

Ive been riding for 20 years myself, putting 20K+ miles on per year more years than not.

I dont begrudge you your opinion, and I claim mine as representative of my opinion only. I wasnt really going for an argument here...



Shiney side up boys, I dont care what you ride.

[guitar man]

47. jakem is partially correct

except much of the "yuppie biker" crowd with the "look at my shiny toy" mentality has moved away from Harley-Davidson to the botique chopper market etc.

If you want a status symbol, why buy a $15-20k Harley when you can have a $60-100k bike from Jesse James, Orange County Choppers, Billy Lane or some other custom designer. Just below that strata, there are the $30-45k
offerings from limited production companies like Big Dog, American Ironhorse, Confederate Cycles, etc. etc.

It seems that Harley is once again becoming the bike that actual bikers, (i.e. people that do more than ride them to the cappucino cafe and stare at them for awhile, then ride them home)are wanting to ride. Good deal, it's about time things came full circle.

As for my next ride, I'm going to do the "real biker" thing and build it up from one of these kits.


http://www.sinwear.us/SPSWorkingMan.html

[jakem]

48. while i appreciate the partial credit- :)

and while i really didnt want to continue in this thread anymore...

there are plenty of yuppie bikers on stock harleys (and japanese bikes) with lots of bolt on chrome bits, riding an hour on every 3rd sunny saturday in the summer. look for the shiney new chaps in front of the starbucks!

the custom chopper scene is for the rich and especially useless!

[Ganja Ninja]

29. I just bought a new toy in January.

I picked up a 2006 Triumph Bonneville with only 1200 miles on it. Here's a photo from the dealers website.

It gets 48 mpg in mostly country driving.
I just couldn't see spending the money for a Harley.

[melm00se]

31. this is mine

I like Harley as a company, I am highly impressed with what they have done but i don't like their products

[Ganja Ninja]

32. Nice, I was considering a new Yamaha 1100 before I bought

the Triumph. Now I'm thinking about adding one of these.

It's a Cozy sidecar made in India. I can probably get it done for around $3,500. The whole package bike and sidecar only amounts to $10,000. Here's a better photo of it attached to a Thruxton from the dealer up in Ocala.
http://www.melillimoto.com/photos/index.php?folder=/Shop/

[melm00se]

33. I had a vstar 1100 but it went one way and I went another

and I was on the shelf for 4 months (torn ACL)...the kawa is the replacement...working thru the break in priod now...aiming for Myrtle Beach bike week in May as its coming out party.

never did the sidecar thing...i know its a different skill set...is the learning curve steep?

[Sapere aude]

38. I like it. I have a Kawasaki Mean Streak. It is about the best bike I have

ever had. It is perfect for me.

[melm00se]

45. i really like the new

mean streak...with the flat black with the flames...slick.

[Sapere aude]

36. Well, when are they going to move the production off shore?

American Iron!

[melm00se]

40. highly unlikely

they would be ceding their long standing marque of being an american made motorcycle to Polaris and the nascent Indian brand...HD has been very proud of that branding since the 50's..they would be loath to give it up lightly.

[Sapere aude]

42. My Kawasaki was also made in the USA. All but the engine.

I'm thinking that many Harley parts come from foreign companies.

[melm00se]

46. i have read that something

like 40-45% of the components are foreign sourced, mainly things like switches, wiring and the like...the "heavy" stuff - engines, transmissions, drive shafts etc are made in america stuff.

[melm00se]

52. strike is over

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070216:MTFH53529_2007-02-16_23-16-21_N16425040&type=comktNews&rpc=44