Harley-Davidson to end Buell line, cut 180 jobs

Discussion in 'Street and Performance Bikes' started by ALS, Oct 15, 2009.

  1. ALS

    ALS Super Moderator Staff Member

    [​IMG] Harley-Davidson motorcycles declined 21.3 percent in the third quarter compared with last year's third quarter.

    [FIMG=RIGHT]http://www.cleanmpg.com/photos/data/501/2010_HD_Dyna_Super_Glide.jpg[/FIMG]AL S. - CleanMPG - Oct. 15, 2009

    Harley-Davidson Inc. said Thursday that it will discontinue its Buell line of performance motorcycles and sell an Italian motorcycle unit in order to focus on its main namesake brand.

    Harley-Davidson announced decreased revenue, net income and earnings per share for the third quarter of 2009 compared to the year-ago period, while reporting a moderation in the decline of retail new Harley-Davidson motorcycle sales compared to the second quarter.

    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.

    Along with the third quarter results, Harley-Davidson unveiled key elements including divestiture of its MV Agusta unit and to discontinue in its entirety the Buell® product line.

    Details of Buell and MV Agusta Actions

    The Company will discontinue production of Buell motorcycles. Remaining inventories of Buell motorcycles, accessories and apparel, while they last, will continue to be sold through authorized dealerships. Warranty coverage will continue as normal for Buell motorcycles and the Company will provide replacement parts and service through dealerships.

    The decision will 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 Dec. 18, 2009.

    Harley-Davidson, Inc. expects to incur approximately $125 million in one-time costs related to the discontinuation of the Buell product line. The Company expects to incur approximately $115 million of that amount this year.
    Relative to MV Agusta, the Company will immediately commence efforts to sell the business, which is based in Varese, Italy.

    In the third quarter, Harley-Davidson, Inc. recorded a one-time fixed-asset impairment charge of $14.2 million related to Buell and a goodwill impairment charge of $18.9 million related to MV Agusta.

    “Buell and MV Agusta are great companies, with proud brands, high-quality exciting products and passionate enthusiasm for the motorcycle business. Buell has introduced many innovative advancements in motorcycle design and technology over the years and MV Agusta is known in Europe for its premium, high-performance sport motorcycles. However, our strategy to focus on the Harley-Davidson brand reflects the fact that we believe our investments in that brand are a better utilization of overall company resources,” said Wandell.

    "Our objective in acquiring MV Agusta last year was primarily to expand our presence in Europe, and was a recognition of MV Agusta's proud legacy. While growth in Europe and other global markets remains highly important to us, we believe that focusing our efforts on the Harley-Davidson brand is the optimal path to sustainable growth," said Matt Levatich, President and Chief Operating Officer of Harley-Davidson Motor Company.

    "This decision was not made lightly. MV Agusta is a great company with a proud heritage and brand, high-quality exciting products, and a passionate team with whom we have achieved a great deal over the past 14 months," Mr. Levatich added.

    Harley-Davidson acquired the privately held Italian motorcycle maker MV Agusta in August 2008 and key achievements since then have included the reinstating of production at the Company's Varese factory and the re-starting of product development - leading to the recent unveiling of the re-engineered Brutale to great accolades from dealers and customers alike.

    "With a streamlined business and such an exciting product pipeline we sincerely believe that MV Agusta is well positioned for the future," said Mr. Levatich.

    Harley-Davidson will now begin actively looking for a buyer for MV Agusta to continue along the development of the brand as an outstanding manufacturer of premium, Italian performance motorcycles.

    "As our announcement regarding Buell and MV Agusta indicates, we are moving with the speed and decisiveness required to bring our business strategy to life," said Wandell. "The fact is we must focus both our effort and our investment on the Harley-Davidson brand, as we believe this provides an optimal path to sustained, meaningful, long-term growth."
     
    Last edited by a moderator: Oct 19, 2009
  2. tkeller

    tkeller Well-Known Member

    I was planning on buying a Buell about five years from now, during my anticipated mid-life crisis. Seriously.
     
  3. jdhog

    jdhog Hyper Smiler

    I guess your plans might need to change a bit now then.
     
  4. St. Mushroom

    St. Mushroom doesn't wash his car.

    I hear Honda has nice bikes. And Victory...
     
  5. raveneon

    raveneon Well-Known Member

    That's sad news but not a complete shock. I've always felt that Buell was improperly marketed/advertised.

    Now that every other bike company builds bikes that look like conventional Harley's I wonder how long it will be before they import and apply logo's to all of their bikes?
     

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