St. Louis, MO
Posted - 02/28/2011 : 8:00 AM
Shortly after announcing the Buell Blast would no longer be produced, H-D announced the entire Buell line would be no more. A heart-wrenching announcement from Eric Buell is available here.[The original announcement no longer exists. I changed the link to what remains. - JRD]
As other media reports, this means that 80 production jobs and 100 administrative jobs will be lost just before Christmas and joins the other 1,00 jobs lost at other H-D plants this year. Admittedly it's a small number in the big USA job loss picture but surely not small for those employees who join the millions out of work.
And just over a year after Harley-Davidson bought MV Augusta for roughly $110 million USD, the Motor Company announced today that it was selling the European motorcycle manufacturing group.
The radical about face is just part of Harley's press release on its third-quarter report:
The company went from an operating profit of $35.6 million in the third quarter of 2008 to an operating loss of $31.5 million for the third quarter of 2009-or a change of $67.2 million.
The financial services subsidiary, HDFS, went from an operating income of $107.7 million in this quarter last year to an operating loss of $110.8 million this year.
In the past nine months, H-D shipped 187,085 motorcycles compared to 226,898 motorcycles in 2008 with revenue falling from $3.23 billion in 2008 in motorcycle shipments to $2.62 billion.
U.S. retail heavyweight motorcycle sales declined 38.7 percent year to date in 2009, compared to 2008.
Net income for the third quarter was $26.5 million, compared to $166.5 million in the third quarter of 2008, which is an 84.1 percent decline in net income.
Diluted earnings per share were $0.11 for the third quarter of 2009 compared to $0.71 in the year-ago period-or to put it another way-an 84.5 percent decline in diluted earnings per share from the year-ago quarter.
New CEO Keith Wandell put the best face he could on the bleak picture: "While the environment remains challenging for us, we are mildly encouraged by the moderation in the decline of dealer retail Harley-Davidson motorcycle sales."
Wandell was brought in to replace James Zeimer who lead the Motor Company from the heights to the depths in just four short years. Zeimer wasn't the only one to lose his job-Thomas Bergmann who was brought in to take Zeimer's place as CFO and then took over for Donna Zarcone who led the way into Harley's wild subprime loan underwriting strategy that resulted in almost a third of all the loans being subprime. Harley lost tens of millions in defaulted loans.
James McCaslin was demoted from President of Harley to Executive V-P of Product of product planning and development.
Ironically, perhaps, Harley had moved Matthew S. Levatich from MV Augusta to take McCaslin's spot and hired Enrico D'Onofrio away from Ducati to take Levatich's job. Lucky, perhaps, for Levatich-not so lucky from D'Onofrio.
The game of corporate musical chairs, however, did not help the beleaguered company that had, in a great many ways, played the same fast and loose subprime/securitization game that has caused so much devastation in our economy over the past year.
Still, the iconic Motor Company appears that it will make a profit in a very tough year.
Harley explains it's decision to drop both the Buell and MV Augusta lines as a decision to focus on the Harley brand only by "leveraging unique Harley-Davidson strengths."
The company's press release did not address the future of its dealership-based, corporate controlled motorcycle training program, Rider's Edge. Harley had previously announced that it would continue to produce the Buell Blast-without the name-as a training motorcycle.