Follow the Job to Missouri or Lose It

The first-quarter numbers are out, and things have certainly looked better for the MoCo in recent history. Diluted earnings-per-share are down a whopping 22.8 percent to land at $1.05 per share. Compare that to the $1.36 value at this time last year and you will start to see the problem here. In spite of these seemingly glum numbers, Harley says it is right on track.

Continue reading for more on the first-quarter earnings and what it means.

What Does It Mean?

Harley-Davidson Relocates 118 Jobs Amid Heavy First-Quarter Loss
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“First quarter U.S. retail sales were in line with our projections and we remain confident in our full-year plan despite international retail sales being down in the first quarter,” said Matt Levatich, CEO, Harley-Davidson. “We are very pleased with our continued growth in U.S. market share and the progress our U.S. dealers made in reducing their inventory of 2016 motorcycles in the quarter.”

I would point out that Harley also has a huge overstock situation on its hands right now, and has resorted to a bribe (rebate, whatever) for dealerships with incentives to keep old stock on the showroom floors. I don’t have to tell you that it really messes with the floor plan in smaller showrooms, and storage becomes a problem as well. In short, this isn’t the behavior of a healthy business. It isn’t all bad news, though. H-D is enjoying a boom in popularity in Latin regions with a concurrent 24.2-percent increase in sales. Is it enough to displace the lost business in North America and Asia/Pacific markets? No, not even close, but only a fool would count H-D out for a wiggle on the earnings graph.

Job Migration

Harley-Davidson Relocates 118 Jobs Amid Heavy First-Quarter Loss
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As much fun as it would be to credit the first-quarter slip for this next move, the truth is that it’s been in the plan since 2015, and nobody is surprised by this. Harley is moving 118 jobs from its York, Pennsylvania, plant to one in Kansas City, Missouri. The MoCo says this is to consolidate its cruiser operations and eliminate redundancy in its tooling and production equipment. Makes perfect sense, and the only thing that really changes here is that the affected workers are looking at a stark choice; move to Missouri or find another job. I expect the KC plant to be hopping for the foreseeable future between this increase in production capacity and Harley’s new mission to put 100 new models on the road inside the next decade. All good stuff, and I look forward to seeing how well H-D rebounds from this Springtime dip.

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