Motorcycle manufacturer Harley-Davidson Inc. (HOG) said Thursday that it would maintain its motorcycle operations in York, Pa., but plans to cut about 950 jobs, as a part of its restructuring activities.
The company employees at York, represented by the International Association of Machinists and Aerospace Workers, ratified a new seven-year labor agreement yesterday, following which the company's board approved the restructuring plan and related funding.
After conducting a two-path assessment that began in May, the company has determined to maintain its motorcycle operations in York. In recent weeks, the company identified Kentucky as the focus of its alternative site assessment.
"A restructured York operation will enable the plant to be competitive and sustainable for the future, and the new labor agreement is critical to making that happen," said Keith Wandell, president and chief executive officer of Harley-Davidson.
Harley-Davidson said that it would consolidate its York operation under one roof and focus on the core areas of motorcycle assembly, metal fabrication and paint.
The operation will have a smaller, more flexible workforce with about 1,000 hourly employees, compared to about 1,950 today.
The workforce will consist of about 700 to 800 full-time unionized production and maintenance employees and, on an annualized basis, about 200 to 300 unionized "casual" employees.
Casual employees work as needed, depending on seasonal production and volume needs and to provide coverage for vacations and other absences. The operation will also employ about 150 salaried employees, compared to about 270 today.
When fully operational in 2012, the company expects the restructuring activities to generate about $100 million in annual operating savings compared to the current structure.
The Milwaukee, Wisconsin-based company expects to incur about $200 million in restructuring charges related to York into 2012, of which about $100 million will be cash charges. The company also expects to make capital expenditures in connection with the York restructuring of about $90 million into 2012.
On a combined basis, Harley-Davidson expects the previously announced restructuring activities, together with the additional restructuring of the York operations, to result in one-time charges of $415 million to $445 million into 2012. The company expects to save $240 million to $260 million, annually, upon completion of all announced company-wide restructuring activities.
In 2010, the company expects to incur restructuring charges of $175 million to $195 million and related savings of about $135 million to $155 million, on a combined basis.
For the recent third quarter, Harley-Davidson posted a steep downturn in profit, reflecting lower motorcycle shipments and the effects of the economy on retail and wholesale loan performance at Harley-Davidson Financial Services.
During the quarter, retail sales of Harley-Davidson motorcycles fell 21.3% worldwide, 24.3% in the U.S. and 13.1% in the international markets. Industry-wide U.S. retail heavyweight motorcycle sales declined 35.9% during the quarter.
While reporting its third quarter results, the company also said it would discontinue its Buell product line and divest its MV Agusta unit, as part of its go-forward business strategy designed to strengthen Harley-Davidson for long-term growth and deliver results through increased focus.
The company further stated that its decision to discontinue production of Buell motorcycles would result in a reduction over time of about 80 hourly production positions and about 100 salaried positions at Buell. Employment will end for a majority of Buell employees December 18.
Moreover, Harley-Davidson said it would immediately commence efforts to sell its Varese, Italy-based MV Agusta unit.
Harley-Davidson is currently trading at $29.70, up 12 cents on a volume of 0.56 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.