Harley-Davidson Inc to Lay Off 180 After Disappointing Q1 Results

Harley Davidson

After reporting disappointing U.S. sales, Harley-Davidson Inc (NYSE:HOG) will be eliminating 180 jobs at its plants starting this fall. The Menomonee Falls and Kansas City locations are expected to feel the brunt of the layoffs.

Temporary layoffs are also expected at the Menomonee Falls factory, which employs approximately 1,000 production workers. The plant manufactures engines and transmissions which are sent for final assembly to plants in Kansas City, Missouri and York, Pennsylvania. The York production plant is not expected to be hit with layoffs.

This is not the first time workers at these plants have experienced major layoffs. Back in 2015, the Kansas City plant eliminated 169 workers. There are currently around 600 employees at the plant now.

On Tuesday, July 18, Harley-Davidson announced that second-quarter revenue, for the period ended June 25, slipped 5.3% year-over-year to $1.58 billion. Worldwide retail motorcycle sales were down 6.7% while U.S. sales were down 9.3%.


Second quarter net income tumbled 7.7% to $258.9 million, or $1.48 per share.

Over the first six months of 2017, consolidated revenue fell 9.5% to $3.27 billion. Net income plunged 16.1% year-over-year to $445.2 million, or $2.53 per share.

For fiscal 2017, Harley-Davidson revised its guidance downward and now anticipates shipping 241,000 to 246,000 motorcycles worldwide. This represents a six-to-eight-percent decline from 2016. At the end of the first quarter, Harley-Davidson said full-year shipments would be flat to modestly down from 2016.

Despite the so-called improving U.S. economy, Harley-Davidson’s share price is down nearly 17% since the start of 2017 near $48.25. The company’s share price is up 4.4% over the last 12 months.

While not a foolproof means, U.S. sales at Harley-Davidson are a good indicator for the overall health of the U.S. economy and discretionary spending. Harley-Davidson is probably the most recognizable American motorcycle brand out there, with a 48.5% market share in the heavyweight motorcycle category, and has a loyal customer base.

A new Harley-Davidson would be considered a big ticket item. As a result, the U.S. economy would have to be doing well for people to commit to spending more than $25,000, or getting a loan. But tumbling U.S. sales suggest consumers aren’t as confident about the U.S. economy as they once were.


Harley-Davidson Announces Second Quarter 2017 Results,” Harley-Davidson Inc, July 18, 2017.

Harley-Davidson is eliminating 180 jobs after earnings fall from weaker U.S. sales,” Milwaukee Journal Sentinel, July 18, 2017.

Harley laying off 169 workers in Kansas City,” Milwaukee Journal Sentinel, last accessed July 19, 2017.