Not to buzz kill the summer riding season, but the current recession is the longest we’ve seen in the post-war period.
Inclusive of the current downturn, there have been 11 recessions since WWII. Having officially started in December 2007, this month marks the 19th month of the current “slump.”
As you would expect, cut-backs in consumer spending are visible throughout the economy (see below chart) and Harley-Davidson has felt the weight of the “great recession” too. The company released its Q2’09 results today and worldwide retail unit sales of new H-D motorcycles were down 30.1% compared to the year-ago quarter. Retail new H-D motorcycle sales in the U.S. were down 35.1% and declined 18.2% in international markets compared to last year’s Q2. On a “positive” note the company’s earnings were $19.9M on $1.15B revenue and industry-wide retail sales of heavyweight motorcycles in the U.S. declined 48.1% for the same period indicating that H-D performed better than its competition.
In his first quarterly report to the investment community as the new President and CEO Keith Wandell stated:
“While the underlying fundamentals of the Harley-Davidson brand remain strong and our dealers’ retail motorcycle sales declined less than our competitors, it is obviously a very tough environment for us right now, given the continued weak consumer spending in the overall economy for discretionary purchases.” Wendell went on to say: “We plan to ship fewer Harley-Davidson motorcycles worldwide this year than we anticipate dealers will sell at retail,” which is meant to protect the brand.
Due to the declines in retail motorcycle sales, the Company has lowered its 2009 shipment expectations by 25-30%. Because of the lowered shipment volume, H-D announced further headcount reductions of approximately 700 positions in the hourly production workforce and 300 positions in non-production, primarily salaried headcount, including some at HDFS. This is in addition to the previously announced reduction of ~1200 positions bringing the total reduction to approximately 2,200. H-D started the year with 10,100 employees and of course H-D shares rise on news of the additional layoffs.
Looking forward, the company will introduce its 2010 models on July 25th at its Summer Dealer Meeting in Denver. I wonder if it’s time again for import duties or a Motorcycle Czar? For now let’s just hope for a great lineup of motorcycles that will create some riding buzz and motorcycle passion!
Photo and chart courtesy CEA.
Northwest Harley Blog 
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