Harley-Davidson Puts Wisconsin on Notice

04/30/2010 @ 3:13 pm, by Jensen Beeler28 COMMENTS

Harley-Davidson is looking to slash costs wherever they may be, and that includes its assembly/manufacturing line labor costs. HD and Milwaukee go together like peas and carrots, but Harley-Davidson has warned that if it doesn’t see lowering labor costs, it could walk away from Wisconsin all-together. At issue is nearlt $54 million in what Harley calls “costs gaps”, which the company attributes to the high cost of manufacturing at its Menomonee Falls and Tomahawk facilities.

With over 1,400 employees combined, these plants represent two out of the three plants that Harley-Davidson runs. The other plant in York, Pennsylvania has already had it’s labor force reduced, after the local unions made concessions when Harley threatened to move the York plant elsewhere. The same fate seems to be heading west.

Harley-Davidson reportedly would like to stay in Wisconsin, but is doing its research and exploring other options. Knowing Wandell, dollars and cents will likely fuel this decision and not sentimental attachment. The newly hired CEO has being trimming fat wherever he can find it in the company, and has already proven capable of making hard decisions, despite the PR consequences.

Source: DealerNews

  • wayne

    They should come on down to OKC and set up shop in the old GM plant. Then they could hire all the old GM employees and t….oh wait. Never mind.

  • John Morrow

    Now if only they could trim the fat off their bikes…. lol

  • Skipper

    Harley owes Warren Buffet 650 million dollars at 15% interest that HD borrowed to bail out HDFS. They have to pay the lease on the empty Buell plant and there sales are in the toilet. HD reports increasing sales but what every one does not realize is HD loads bikes on the dealers and then counts those as sales. The only way HD could sell bikes was to finance anyone who walked in the door with a pirate outfit on thru HDFS. Those days are gone and the interest alone on the HDFS loan is almost 100 million a year. Harley has not brought out anything new in years and there sales show it. Take the “new” 48 for example. It cost $11,000 and only has 60 hp and a 2 gallon gas tank. Harley can’t rebag the old models with new paint and a new name forever. There are just too many better bikes out there for less money and years ahead of Harley in technology.

  • RSVDan

    They should move production to China.

  • Skipper

    Harley could shut down all production and just sell there t-shirts, ash trays, belt buckles and other HD badged stuff. Contract with Honda or Yamaha to build the bikes overseas and ship them here. Better yet, just have Honda re badge there bikes with the HD logo and ship them to the Harley dealers. Most Harley dealers have at least 80% of there showroom devoted to the aftermarket HD badged stuff anyway. They could survive for years selling that stuff to the present Harley owners. Every Harley owner has to have the decals and shirts and pants and whatever that has a Harley name on it.

  • Watchman

    Yesterday the United States Navy placed an order for 48,000 Harley Ultra’s. Each ship in both fleets will be ordered to replace there 2 present anchors with 2 Harley Ultra’s. President Obama stated that this would be good news for the ailing motorcycle company with there aging line of bikes.

  • Flumpies

    sounds like more corporate blackmailing of the workforce…quite similar (in a way) to Walmart demanding tax breaks to build a store in a city near you, similar to corporate welfare.

    and they were supposed to be so patriotic…

    the only ones who suffer from these behaviors is us!

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  • B_Man

    After the Buell shutdown I could care less what happens to Harley Davidson.

  • RT Rider

    I have never seen any other bike manufacturer offer to give you back what you paid for your bike if you trade it in on a another new one. Harley must be in deep trouble to offer a stupid deal like that. What are they going to do with all the used ones that they paid way over market for? The newspaper are already flooded with used Harley for cheap prices. I guess the buyers realized what they really bought and want out at any price. If I had HD stock I would take my loss now and get rid of it. Harley should have spent R&D money years ago and designed a modern motor and a new lighter line of bikes that would appeal to the youth market. There current outdated line-up will not carry them into the future and the HD management doesn’t seem to realize that with the shutdown of Buell which will cost them more than the 125 million they said it cost. A aging line of overpriced bikes, an aging buyer and too many bikes in there current line up does not spell relief. I predict a major shutdown and a buyout of HD.

  • Sean Mitchell

    Step back folks, the leviathan is in it’s death throws.

  • Mike

    They spent 125M on Buell to shut it down. And now they threaten the Union workers to cater to the demands of a clueless bean counter?

    What’s wrong with this picture?

    Why not just ash can the V Rod and save all that money for paying bills? No one wants that dud anyway.

    If you want an anachronistic Harley, better buy one now, the hand writing is on the wall………..

  • Slippery

    The Harley crowd does not like the V-Rod because it does not sound “cool” with straight pipes. That is the one and only reason the V-Rod has such poor sales. The Harley morons only care about the sound. If there was a nationwide ban on loud exhaust Harley would be out of business in 6 months. The Porsche designed V-Rod motor is there best motor but they chose to ignore it. It is 110 or so horsepower vs the 60 or 70 hp in the old air cooled boat anchor motors. The die hard Harley rider only wants the bike to sound loud and they like the sound of the old air cooled v twin. Harley recently spent 4 million dollars on a “sound lab”. This is basically a fancy room that HD invites the public into to listen to engine sounds. They then vote on the “best sound”. This is a good example of Harley R&D….. Mike stated to ash can the V-Rod. This might be a very good idea but I would also ash can the air cooled v twin and use the V-Rod motor in the full line-up. I am sure HD will use there poor sales to shit can the union. Harley has been pumping there sales figures for years. They dump bikes on the dealers and then call these actual sales when they are not. Also, there sales are further degraded by there HDFS division. This division was giving bike loans to anyone that walked in the door and was breathing. I was told that HD will sell 200,000 bikes this year. Well, how many would that be if they only counted the “actual out the door sales” and then cut out the free for all financing. There sales would be a fraction of what HD claims. Now if you buy a bike HD will guarantee you your purchase price back if you trade it in on another Harley. What kind of stupid marketing is this? This is one of the reasons HD had to borrow 650 million to bail out HDFS. I guess HD is hoping the American public will bail them out like GM.

  • Grammar Police

    Before calling others stupid, you might want to at least make sure your grammar is correct:

    They’re is the contracted form of They are. This form is used in sentences using “they” as the subject of the sentence with the verb “to be” used as either the helping verb (e.g. They’re going …, They’re playing …) or the principal verb of the sentence.


    They’re working hard this week.
    They’re very interested in helping out.

    There is used as an introductory subject is sentences with “There is” and “There are”. It is also used as an adverb of place meaning “in that place”.


    There are many people in that room.
    That’s my house over there.

    Their is the possessive pronoun form. This form is used to express that “they” have a specific quality, or that something belongs to “them”.


    Their house is in Los Angeles.
    He liked their looks!

  • Correcting grammar on a message board—seriously? C’mon … I know the few of us that are up to speed on grammar have wanted to call out every person who ever messes up “whose” and “who’s,” but c’mon.

  • wayne

    @Grammar Police: Really? You do realize you’re reading the comment section and not grading term papers, right?

  • Harley Business Culture … In the words of Hooper X from “Chasing Amy”, here’s a dollar. I want you to go down to the corner store and buy yourself a clue.


    The HD Motor Company’s financial woes are evident, but it’s not just Harley Davidson that’s leading itself into bankruptcy by it’s poor business choices. Harley-Davidson, and Harley dealers, are deluding themselves out of business. Not the least of which is an unwillingness to recognize the economic times, and adjust to the realities of the marketplace. They want to continue to operate as if they were selling in the middle of the boom economic times of the ’90s.

    Take pricing and negotiating: M.S.R.P. The dealers live by it … Not only will they not negotiate on it, but several dealerships in my area are looking to charge $1000, or more, over M.S.R.P. for 2010 models.

    Then, of course, they also want to jack you for additional shipping, emissions compliance, and other add-ons, including a mysteriously varying number for “dealer setup” that has got to be the biggest ripoff on the planet. One dealer I visited wanted $950 for “setup” on a 2010 Dyna Street Bob, claiming it takes them 10 hours to get the bike ready to sell. Ridiculous.

    Now, can we talk about HDFS for a minute for a minute? At a time when most manufacturers are offering interest rate deals between 1.99 and 8% to get rid of distressed inventory, HDFS starts out quoting about 9.5% (which nobody qualifies for), and heads skyward from there. Someone with above average credit is looking at about $6,000 in interest over the term of a 72-month loan at about 12.5%.

    Used stock? The dealerships are buying bikes back from financially-strapped sellers at substantially less than KBB trade-in rates, and looking to re-sell them at thousands over KBB Retail. Negotiation is not in their vocabulary, although greed is a concept they well understand.

    Harley may want to blame the unions, and site the need to cut costs as the way to a better bottom-line, but unless they accept the realities of the market place and start dealing competitively, all the cheap labor in China won’t save Harley from being the next American motorcycle company to go out of business.

  • Stephen J.

    Doug is absolutely correct and right on the numbers. I recently stopped a 2 local Harley dealers for pricing on a new Ultra. This is really a mystery to me. Both dealers wanted to sell me a different exhaust system, $3,600 worth of engine “enhancements” extra chrome trim and different tires. Everything came to over $5,800 installed. Both wanted MSRP plus “dealer setup” of $620 and $550. Both offered me a free T-Shirt and one offered me the T-Shirt plus 50% off on all HD branded clothes for 1 week. Needless to say I purchased a new Victory Cross County. Not because it was cheaper but the dealer experience was much better as the Victory dealer was not pushing me to buy any extra stuff. The Victory has a much more modern motor and far better brakes with no vibration and a smooth riding bike. As it has been stated, there were many used Harley’s in the local papers at a greatly reduced price. Most are late models with less than 3,000 miles. This presents a problem to me because if the Harley is supposed to be such a great motorcycle then why are so many for sale with such low miles and at a real reduced price. I did not and will not buy into the Harley “lifestyle” nonsense. This is a real trick to get a person into buying all sorts of extra Harley branded clothes and parts etc. The Harley dealers spent more time trying to sell me the HD branded stuff than the actual motorcycle. It seemed like it was there privilege just to sell me a Harley.

  • 305ed

    @ Stephen J – Your argument makes no sense. You want a Harley. The dealers “wanted” to sell you a bunch of extras that you had no interest in. Instead of saying “no, thanks” and buying the bike that your heart desired, you went off to another dealer and bought a completely different motorcycle, which in your opinion is far superior than the Harley. Why’d you even stop at the Harley dealer? The statement that there are so many used Harleys for sale at reduced prices is laughable. EVERYTHING is currently selling at reduced prices. Try selling that modern motored Victory once you’ve rolled it out of the showroom, then come back and let us know what a great deal it was…..

  • Stephen J.

    I have no intention of selling my Victory. I can tell you that there are plenty of people “trying” to sell there Harley’s. The paper is full of them and the prices keep dropping. As far as “everything” selling at reduced prices that is a bunch of crap. There is currently 1 Yamaha dirt bike, 1 Honda cruiser, 1 Honda crotch rocket, 1 Triumph a scooter and 14 Harley’s. All of the Harley’s have less than 4,000 miles on them. It seems like these people realized the outdated junk they bought. One Harley Ultra ad is willing to trade for a late model Gold Wing plus cash. So Mr 305ed, it sounds like you got your official Harley undies in a tither over nothing. You are absolutely wrong and just like the rest of the Harley “lifestyle” crowd. Go hang out at your Harley dealer and tell each other want a wonderful motorcycle you have because you will not convince us with your HD BS.

  • Marker

    Harley is a sinking ship. The death struggle is evident with there latest market ads. Back is the outlaw image, stupid bike names and now worst of all is the buy back plan. Buy a new Harley and you will get all your money back if you trade it in on a new model Harley. I do not see Honda, Yamaha, BMW or the rest of the modern motorcycle manufactures making ridiculous offers like that. Harley has been making the same motorcycle for years will little or no improvements and it is now catching up with them. The lets play pirate dress up and ride my Harley crowd can not get the free Harley financing now so they are out of the picture. Harley can not sell enough motorcycles to keep in business with out there HDFS division. They are trying to sell an outdated low horsepower air cooled motor on an overweight heavy framed cruiser with poor brakes. Without HDFS Harley is basically out of the market. Any smart banker that reads the there local newspaper want ads will see that the majority of motorcycles for sale are Harley’s and at greatly reduced prices. This has an adverse effect on the lending decision and how much the bank is willing to lend on a Harley. Wit the moron dealers still sticking to the MSRP plus that leaves the buyer in a pickle with no more HDFS to the rescue. HDFS is broke and deep in debt with a huge portfolio of bad loans. If HDFS dumped all the bikes on the market that were taken back and in the process of getting back the bottom would fall out of the HD market. Harley will have to put these bikes on the market at some time but they are creating a false market by holding on the them. I am sure there lenders will force HD to unload them sooner or later. Warren Buffet will want his 650 million back and HD can’t afford to pay 15% interest forever. Harley Davidson better see the light before it is too late. There overpriced and overweight and outdated heavy cruiser is in bad need of a make over. I’ll wait for the fire sale………………

  • Doug

    @ Marker

    To be fair, though, it’s a fact H-D is shipping fewer units and actively reducing inventory, and last quarter let’s not forget that HDFS turned a surprising profit. Their business is turning around, slowly; however, it definitely needs to do something about engaging young riders … the 883 Iron just doesn’t turn me on. Also, I agree that the one-percenter image it markets is outdated and pretty ignorant.

    Buffet is known as a long term investor, so it’s not like he’s going to surprise H-D by demanding his money back too soon.

    And I’m confused by your statement about the probable “false market” … Are you referring to its competitive trade-in program? I don’t understand how that will adversely affect the market for used H-D. If you’re referring to a different program, please correct me.

  • Marker

    I guess by false market is was referring to HD keeping the 1000’s of used bikes that were repossessed thru HDFS. It is my understanding that HD has these bikes sitting at dealers and HD is paying storage and there are hundreds also in warehouses. If HD was to put all these bikes on the market it would greatly depress the used value of any Harley. Most of Harley’s bigs sales numbers in past years were bikes sold with HDFS financing. Buyers were given the breath test as a loan qualification. If you were breathing you got the loan. Harley Davidson’s sales are never “real world” like other motorcycle manufactures. Harley loads bikes on dealers and counts those as sales and then there is the give away HDFS financing. I wonder what HD’s real sales numbers are.

    Harley has no motorcycle to market to the youth market. Young riders want a light weight high performance easy to handle and safe bike to ride. Harley has none of these. A Harley is heavy and under powered and has poor braking systems. I guess if a person just wants to ride around town and show off loud exhaust a Harley might be ok but more and more communities are enacting strict noise ordinances and this will eliminate the only useful thing a Harley is good for. Riding slow in town and making a fool of yourself with loud exhaust.

    Harley advertising is an embarrassment to motorcycle riders.

  • 305ed

    @ Stephen J – You’re the one who went to buy a Harley then couldn’t man-up and say “NO” to the salesman. Who’s the one wearing panties, hmmm?

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  • Andy R

    Alot of y’all sound like you know what you are talking about. I’ve owned four Harley’s and two Japanese motorcycles and ridden numerous other brands. All but two of my six bikes have been dressers (1450 cc ->1830 cc). I’ve logged ~120K on motorcycles in the last 10 years – not a record or even major league – I commute, day trip, and have done several long haul’s (3100, 5300, and 10,400 miles). It’s because of the dealership network and customer service that I ride one of my two Harley’s almost everday and all year long. There has been plenty of innovation and as many new model growth on the HD showroom as any where else…..for those that are looking. HD sure has been around along time for a company that’s s’posed to be in the crapper. Proof’s in the puddin’….figure it out……