Harley to Cut 1100 Jobs

[Hellgate]

Harley to cut 1,100 jobs as 4Q profit falls: Financial News - Yahoo! Finance

 

[madmanmaigret]

no one is immune........

 

[Wolfman]

Dont like Harley's, but no-one ever likes to see jobs going belly up. Just goes to show, that even a Marquee with impeccable creditals in the market place is not immune to this horrendous economic situaton the whole world has plundered into.

 

[Kilbane83]

Is anyone else worried yet? I have a feeling we're heading towards the next great depression in a hurry. If you have tried job hunting lately you know what I mean. We'll see where this ride goes and we're all along for the ride.

 

[urbanj]

maybe its only where i live but forking out $30,000 on a new harley all chromed up that see 2000km a year leads me to think that most either have the money to blow or are fad followers that take out bike loans to get them. Now here in vancouver canada the economy is slowing down but we still have jobs, credit and money. But in the states where this credit problem started, I can see how HD's target market has definitely dried up.

plus the product is inferior compared to others.
everyone thought honda/toyota was a joke in the 70's and 80's. now people laugh at the big three.

 

[DefyInertia]

Great depression? No, I doubt it.

 

[urbanj]

Sorry that was my little HD bashing. Wrong thread I guess But I agree 100%. My point was really that HD was once a premium brand with a premium price tag bought buy people with money and a image to fill or a midlife crisis that needed to be satisfied. But with the current economy and because of their price point a lot of people wont be buying them.

Someone that could afford a new ferrari last year probably still has enough money to get one today if they wanted to. It's the middle class that is hurt.

I hope your friends are not affected too bad. I don't know what they do exactly but I'm sure they are skilled enough and worked for a good company that finding or being recruited to a new job will come easier.

 

[Hellgate]

Harley brought this on themselves via Screamin' Eagle Credit. They sold a metric butt load of sub-prime loans in order to keep their factory going. Now things get tight and the people who couldn't afford a $17,500 motorcycle to begin with stop paying and HD wonders why the balloon burst. I read that over 60% of HDs loans are junk, shame on them. Did you notice that the executive in charge of consumer financing quit?

They won't go out of business but they will be much, much smaller and may be a target of a take over. Maybe Honda will buy them and stop making those God awful Shadows? One can only hope.

 

[madmanmaigret]

Harley brought this on themselves via Screamin' Eagle Credit. They sold a metric butt load of sub-prime loans in order to keep their factory going. Now things get tight and the people who couldn't afford a $17,500 motorcycle to begin with stop paying and HD wonders why the balloon burst. I read that over 60% of HDs loans are junk, shame on them. Did you notice that the executive in charge of consumer financing quit?

They won't go out of business but they will be much, much smaller and may be a target of a take over. Maybe Honda will buy them and stop making those God awful Shadows? One can only hope.

That sucks that the big corporations hose down the middle class people because they want to write checks their a$$ can't cash. I have had to fire two people in the last seven months due to "reductions in force" I can't imagine having to tell that many people they are no longer employed. Good luck to all of them.

 

[Hellgate]

maybe its only where i live but forking out $30,000 on a new harley all chromed up that see 2000km a year leads me to think that most either have the money to blow or are fad followers that take out bike loans to get them. Now here in vancouver canada the economy is slowing down but we still have jobs, credit and money. But in the states where this credit problem started, I can see how HD's target market has definitely dried up.

plus the product is inferior compared to others.
everyone thought honda/toyota was a joke in the 70's and 80's. now people laugh at the big three.

The lack of credit is BS. For small businesses and consumers with good credit there is plenty of money at very, very good rates. I can go down to my local Credit Union and get a 72 month auto loan for 4.69%, we just refinanced both houses, one at 5.00%, the other we paid the points and got 4.60%. I was quoted a very good rate on a business loan from a local bank last week too. Point being the large banks got greedy and broke traditional lending rules and now they are getting smoked. The credit unions and small/local banks stuck to their rules and they are fine.

 

[wolfc70]

The lack of credit is BS. For small businesses and consumers with good credit there is plenty of money at very, very good rates. I can go down to my local Credit Union and get a 72 month auto loan for 4.69%, we just refinanced both houses, one at 5.00%, the other we paid the points and got 4.60%. I was quoted a very good rate on a business loan from a local bank last week too. Point being the large banks got greedy and broke traditional lending rules. Now they are getting smoke. The credit unions and small/local banks stuck to their rules and they are fine.

I totally agree, any bank but the super mega national ones are strong, and have plenty of cash to lend (I work for a CU).

I hate to see HD lay off 1100 Milwaukee employees, as GM just laid off ~3800 a few months ago when the Janesville plant closed. The Wisconsin economy is starting to look bretty bleak.

 

[Bruce McCrary]

The lack of credit is BS.

Well yeah, to a point. The examples you listed are indeed true, but probably only on loans for items with good collateral value and/or personal loans where the lending institutions are loaning the customer money based on knowledge/history.

The other side of the coin are those whose credit scores aren't jet airplanes but even as little as a year ago were considered good risks. In our industry we've always struggled to get people financed, it has been and remains the single biggest obstacle. A year ago the industry average for getting people financed was in the mid 30% range, now it's in the 20's or roughly 2 in 10 getting financed. That's an awful lot of wheel spinning out there on the showroom floor.

Bruce

 

[rdsrus]

Also read somewhere that Harley was goinng to line up and ask for some of the bailout money.Wouldn't surprise me a this wouldn't be the first time they have asked for gov't assistance.

 

[Bruce McCrary]

It isn't. They got some federal aid back in the 80's if memory serves.

But, the Japanese aren't exempt from 'bail outs' either. It's just that their gov't requires them to help each other in times of need. For example, Honda owned 20% of Suzuki for years. Suzuki got in trouble financially so Honda bought up a bunch of stock, then sold it back to them for the same price once they recovered.

The Kawasaki/Suzuki deal of a few years ago was not a financial bail out, but a technical one. Neither company had the resources to go forward on some specific engineering issues so they formed a technical alliance and shared intellectual properties until they were both in a place where they could proceed on their own.

Bruce

 

[Hellgate]

Alliances are pretty common because to cost to develop new technology is so high. In Semiconductors it is very common to see competitors team up; Intel, Freescale, Samsung, Applied Materials, etc. all teamed up to make the jump from 200mm to 300mm wafers. The cost of a 300mm fab is about $5 billion.

Bruce you are correct the only time Harley need government cash was in the '80's after the AMF disaster. That chunk of change brought us the then new Evolution Motor and at the time the magazines raved about it.

I hope Harley makes it but the junk loans may bite them.

 

[08fz6]

I saw this coming hd motorcycles have been almost half of the motorcycles being sold at the north east powersports auction. they are all being sold by banks.......... in the trifold the there was almost always almost 3 full columns of hd the next biggest was like 1- 1 and a half columns..... and the hd's were mostly 2006-2008 the rest of the stuff in there was alot of 00-07 but that is also over 2 years.....

 

[Bruce McCrary]

Alliances are pretty common because to cost to develop new technology is so high. In Semiconductors it is very common to see competitors team up; Intel, Freescale, Samsung, Applied Materials, etc. all teamed up to make the jump from 200mm to 300mm wafers. The cost of a 300mm fab is about $5 billion.

Bruce you are correct the only time Harley need government cash was in the '80's after the AMF disaster. That chunk of change brought us the then new Evolution Motor and at the time the magazines raved about it.

I hope Harley makes it but the junk loans may bite them.

Yeah, I hope they survive it too, but your right, the bad loans (which was what kept the preseived 'value' so high) will have a huge effect on them. That and the fact that boomers are aging out and they haven't found a marketing foothold with younger generations.

Bruce

 

[bottomedout39]

Maybe they should lower the prices of their bikes, they might sell more.:spank:

 

[Bruce McCrary]

Wellllll...

Maybe, maybe not. Simply lowering prices would ultimately kill them. The Harley business model is a money eating machine, and it goes all the way from the corporate level to the dealership level. Just look at all the million dollar dealerships located right beside major interstates and highways. It's not cheap to operate at that level.

Bruce

 

[Hellgate]

Wellllll...

Maybe, maybe not. Simply lowering prices would ultimately kill them. The Harley business model is a money eating machine, and it goes all the way from the corporate level to the dealership level. Just look at all the million dollar dealerships located right beside major interstates and highways. It's not cheap to operate at that level.

Bruce

Boy that is the truth Bruce. Their overhead must be through the roof.

Since I was laid off in October I've been researching franchises and I've got hundreds of hours into studying various business models, what works, what doesn't work and for giggles I looked into Harley. To even be considered for an HD franchise you must have a net worth of $2 million and $1 million of that must be liquid. A McDonalds only has a requirement of $1.6 million and at least there you can make money 24/7/365 and you don't have to build a massive facility.

Cowboy HD here in Austin built a HUGE building on the south side of town. So to counter Centeral Texas HD build a huge on on the north side and left their original shop open in the central part of town.

I've managed enough P&Ls over the years to know with the massive fixed costs that a huge facility creates your top line number must have that much more massive. I really don't see how they do it. Oh wait I know. The charge 2X and give you half the equipment on 30 year old technology, eg: one brake caliper on a Sportster and a simple box steel swing arm and an $89.00 pair of JC Whitney shocks.

Selling motorcycles is a very tough business as you know better than any of us, but selling HDs in a recession must be worse.