Is Harley Davidson going to Survive the present Economic Depression?

California Motorcycle Accident Lawyer and Biker Attorney Norman Gregory Fernandez Harley Davidson Electra Glide
California Motorcycle Accident Lawyer and Biker Attorney Norman Gregory Fernandez's Harley Davidson Electra Glide

I recently read an article by Steve Parker of the Huffington Post which painted a bleak picture of Harley Davidson’s current, present, and future financial situation.

He cited an October 15, 2009 press release which stated:

“Worldwide retail sales of new Harley-Davidson motorcycles declined 21.3 percent in the third quarter compared to last year’s third quarter, an improvement from the 30.1 percent decline in this year’s second quarter. An 84.1 percent decline in net income and an 84.5 percent decline in diluted earnings per share from the year-ago quarter reflected lower motorcycle shipments and the effects of the economy on retail and wholesale loan performance at Harley-Davidson Financial Services.”

He also discusses Harley Davidson’s shut down of the East Troy, WI factory where Buell sport bikes are manufactured putting 180 people out of work. This adds to the 1,100 factory workers that Harley Davidson laid off in January 2009.

He also discusses the fact that Harley Davidson purchased Agusta Motorcycles of Italy for $109 million dollars in 2008 before the depression hit. Augusta also builds Cagiva motorcycles. Now Harley Davidson is looking to sell Augusta.

Steve’s article is downright disparaging of bikers and motorcyclist such as me who buy and ride Harley Davidson’s. He makes an analogy comparing Harley Davidson’s to Hummer’s, by stating (in his words not mine)

“Harley-Davidsons, like Hummers, are overpriced, overweight and overwrought. Buyers who wanted a Harley would accept nothing less, though, similar to Hummer buyers, and with fast and easy cash pouring through the economy starting in the 1980s and continuing through the end of 2008, the bikes sold in record numbers.

The company even established a modern image while still considered ruffian and gangster-like, something H-D does little to downplay in its advertising or even on its website.

Many recent owners probably would never have bought a H-D if “bigger is better” vehicles didn’t become a symbol of success in those phony mortgage-backed security years.

Is a Harley-Davidson nothing but a two-wheel Hummer? And is that necessarily a bad thing”

I think Steve is over reaching and full of crap in this regard. I myself do not ride a Harley Davidson for status. I love my Electra Glide and there is no comparable motorcycle like it on the market. A Honda Goldwing does not have enough leg room, and the other big touring bikes do not compare. Anyway, I am getting off subject here.

Steve goes on to cite the fact that the Love Ride was cancelled this year as a basis for his article which paints a bleak future for Harley Davidson.

He states that “But as it has for Hummer and other American motoring products including Plymouth and Saturn, the economy seems ready to come down on Harley-Davidson.”

Although there are some disparaging remarks about bikers and motorcyclist in Steve Parker’s article, it is a good read and raises some serious issues to contemplate with respect to whether Harley Davidson will survive the current depression.

You can read his article at The Huffington Post by clicking here.

By California Motorcycle Accident Lawyer and Biker Attorney Norman Gregory Fernandez, © 2009

Harley Davidson Getting out of the Sport Motorcycle Business; Profit Tumbles, Shares Fall.

Harley Davidson is selling Buell MotorcyclesU.S. motorcycle maker Harley Davidson reported a smaller-than-expected profit Thursday, sending its shares lower in premarket trading, as the economy’s slow recovery weighed on bike sales.

The company plans to discontinue its Buell product line and sell its MV Agusta unit, essentially exiting the sport bike market. It expects to book $125 million in one-time costs associated with the moves.

The company plans to discontinue its Buell product line and sell its MV Agusta unit, essentially exiting the sport bike market. It expects to book $125 million in one-time costs associated with the moves.

Harley-Davidson’s third-quarter profit tumbled 84 percent to $26.5 million, or 11 cents a share, from $166.5 million, or 71 cents, a year earlier. Sales fell 21 percent to $1.12 billion.

Analysts, on average, expected the Milwaukee-based company to report a profit of 21 cents a share on sales of $1.1 billion.

Retail sales of new Harleys skidded 21.3 percent during the quarter. In the United States, the company’s biggest market, retail sales of the company’s bikes fell 24.3 percent from the year-earlier period.

The company’s finance unit, meanwhile, reported an operating loss of $31.5 million as a result of higher provisions for credit losses in both the retail and wholesale portfolios as well as increased interest expense.

Its shares were down 3.4 percent at $25.36 in premarket trading.

Harley Davidson has been through tough times before. They have been around a long time. I am sure that Harley Davidson will make it through these tough economic times as well.

By California Motorcycle Accident Lawyer and Biker Attorney

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