Hd Shutting Down Buell And...

...selling MV Augusta, according to a tweet just received from Cycle World.

 

Buell w/ the rotax motor will run on its own.

 

They can do whatever they want with Buell... even burn it to the ground if they have to. But they sure better leave MV Agusta intact and in just as good of condition as they were before Harley picked them up.

 

The MV Agusta's are sweet. 2 wheel Lamborghini's.

 

I can't say that I have ever ridden a Buell; I can say, however, that every Buell Blast I see for sale reads something like this:

"2006 Buell Blast, Only 1,063 miles, like new. $1,700."

Clearly, the last thing a Blast owner ever wants to do is actually ride his or her Blast.

Ironic, if true; Buell finally makes a real sport bike and then H-D pulls the plug. H-D was absolutely the wrong buyer for this mfgr. I know the Erik Buell/H-D history but the line should have been bought (if by anyone) by a Japanese maker who could market it in the same showrooms with its foreign products.

If it kept production in the states it could have legitimately touted the "Made in good ol' USA" angle, while actually having potential Buell buyers come through the showroom doors, as opposed to the typical H-D buyer staring at a Buell on the H-D showroom floor like it was something stuck to the sole of his boot.

Joe

 

Who even knew HD owned MV?

 

I think everybody but you... :lol: Was the biggest news when it happened.

 

I agree. I was always interested in checking out the Buells, but that meant going to an HD dealership, so I never went. If Buells would have been available at dealerships selling Hondas, Yamahas, and the other Japanese makes, I bet they would've sold many more units. I could not imagine myself going to an HD dealership. Call me weird, but that's probably one of the last places I'd wanna go.

 

Official H-D letter to suppliers

Harley-Davidson Motor Company 3700 W. Juneau Ave., P.O. Box 653, Milwaukee WI 53201
COMPANY NEWS
October 15, 2009
HARLEY-DAVIDSON ANNOUNCES 3RD QUARTER RESULTS,
UNVEILS LONG-TERM BUSINESS STRATEGY
Retail Harley-Davidson Motorcycle Sales Decline Moderates from 2nd Quarter
Operating Loss at Finance Unit Impacts Profit
Strategy Focuses on Extending Harley-Davidson Brand, Emphasizes Productivity and Strengthening Core Business
Company to Discontinue Buell Product Line, Divest MV Agusta
Harley-Davidson, Inc. (NYSE:HOG) 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.
Harley-Davidson also unveiled major elements of its go-forward business strategy to drive growth through a single-minded focus of efforts and resources on the unique strengths of the Harley-Davidson brand, and to enhance productivity and profitability through continuous improvement. As approved yesterday by Harley-Davidson’s Board of Directors, the Company will discontinue its Buell product line and divest its MV Agusta unit as part of this strategy.
“While the environment remains challenging for us, we are mildly encouraged by the moderation in the decline of dealer retail Harley-Davidson motorcycle sales,” said Keith Wandell, Chief Executive Officer of Harley-Davidson, Inc. “And moving forward, our strategy is designed to strengthen Harley-Davidson for long-term growth and deliver results through increased focus.
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“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.”
Third Quarter and Nine-Month Results
Net income for the third quarter was $26.5 million, compared to $166.5 million in the third quarter of 2008, on revenue of $1.12 billion, compared to $1.42 billion in the year-ago period. Diluted earnings per share were $0.11 for the third quarter of 2009 and $0.71 in the year-ago period.
Through nine months, Harley-Davidson, Inc. reported net income of $163.6 million, down 71.6 percent and diluted earnings per share of $0.70, down 71.4 percent from the year-ago period. Revenue through nine months was $3.57 billion, down 17.1 percent from the same period last year.
“Delivering Results Through Focus” Strategy
A key element of the Company’s go-forward strategy is to focus on extending the Harley-Davidson brand by leveraging unique Harley-Davidson strengths. The strategy focuses company resources on Harley-Davidson products and experiences, global expansion, demographic outreach and commitment to core customers. In addition, the Company will continue to expand its initiatives to enhance profitability through continuous improvement in manufacturing, product development and business operations.
“We are refocusing our business with the expectation that we can provide growth that is both profitable and sustainable over the long term,” said Wandell. “We believe we can create a bright long-term future for our stakeholders through a single-minded focus on the Harley-Davidson brand.”
The Company said it would share additional details about the strategy during its investor conference call today.
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.
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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.
Motorcycles and Related Products Segment
Third Quarter. Revenue from Harley-Davidson motorcycles during the third quarter of 2009 was $803.3 million, down 22.1 percent compared to the year-ago period. The Company shipped 54,236 Harley-Davidson motorcycles to dealers and distributors worldwide, down 27.4 percent from the third quarter of 2008 but in line with previous guidance of 52,000 to 57,000 units. Revenue from Parts and Accessories totaled $221.8 million during the quarter, down 14.4 percent and revenue from General Merchandise was $70.7 million during the quarter, down 15.9 percent compared to the year-ago period. Gross margin was 33.1 percent of revenue for the quarter compared to 34.0 percent in the year-ago quarter. Operating margin was 9.5 percent compared to 16.4 percent in the third quarter of 2008. Operating margin was affected largely by lower gross margin, restructuring charges and impairment charges.
Nine Months. Through nine months, revenue from Harley-Davidson motorcycles was $2.62 billion compared to $3.23 billion in 2008 on shipments of 187,085 Harley-Davidson motorcycles, compared to 226,898 motorcycles in 2008. Revenue from Parts and Accessories totaled $623.1 million during the first nine months, down 11.8 percent and revenue from General Merchandise was $215.5 million during the nine-month period, down 12.0 percent compared to the year-ago period. Gross margin was 34.6 percent and operating margin was 14.1 percent, compared to 35.4 percent and 18.9 percent respectively in the year-ago period.
Retail Motorcycle Sales. During the third quarter, retail sales of Harley-Davidson motorcycles decreased 21.3 percent worldwide, 24.3 percent in the U.S. and 13.1 percent in international markets, compared to the prior-year quarter. Industry-wide U.S. retail heavyweight (651cc+) motorcycle sales declined 35.9 percent during the quarter, compared to the year-ago period.
For 2009 compared to 2008 through nine months, retail sales of Harley-Davidson motorcycles decreased 22.9 percent worldwide, 25.5 percent in the U.S. and 16.5 percent in international markets. Industry-wide U.S. retail heavyweight motorcycle sales declined 38.7 percent year to date in 2009, compared to 2008.
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Harley-Davidson Financial Services
Harley-Davidson Financial Services recorded an operating loss of $31.5 million for the third quarter of 2009 compared to an operating profit of $35.6 million in the third quarter of 2008. This decrease of $67.2 million was due to a higher provision for credit losses in both the retail and wholesale portfolios as well as increased interest expense. Year to date through the third quarter, HDFS reported an operating loss of $110.8 million, compared to operating income of $107.7 million for the prior year period. The nine-month operating loss includes two non-cash charges recorded in the second quarter of 2009: a $72.7 million credit loss provision for a one-time reclassification of motorcycle loan receivables; and a one-time $28.4 million charge to write off goodwill associated with HDFS.
HDFS continues to successfully access the credit markets to fund its lending activities. On October 9, HDFS completed a $700 million term securitization transaction with a weighted average interest rate of 1.2 percent.
Update on Restructuring Activities
On a combined basis, the Company expects previously announced restructuring activities, together with the discontinuation of Buell operations, to result in one-time charges of $215 million to $245 million over 2009 and 2010, or an increase of $55 million from the estimate provided July 16, 2009. The Company estimates annual ongoing savings from restructuring of approximately $140 million to $150 million.
The Company continues to pursue its previously announced “two path” study to determine whether additional major restructuring at York, Pa. facility can make those operations competitive and sustainable long term, or alternatively, whether the Company will relocate those operations to another U.S. location. As part of the restructuring analysis, the Company has begun contract talks with the union representing employees at York and expects to make a final decision on the status of the York operations by the end of this year.
Income Tax Rate
The Company's third-quarter effective income tax rate was 61.8 percent compared to 38.2 percent in the same quarter last year. This increase was due primarily to the tax implications of MV Agusta, including the non-deductible write down of goodwill, and the impact of reduced Company earnings. The Company expects its full-year 2009 effective tax rate on continuing operations, excluding MV Agusta, to be approximately 59 percent due to the previously reported one-time charges for the Wisconsin tax law change and the non-deductible goodwill write-off for Harley-Davidson Financial Services, as well as the impact of reduced earnings for the remainder of the year.
Cash Flow
Cash and cash equivalents totaled $1.52 billion as of Sept. 27, 2009, compared to $504.4 million at the end of the year-ago period. Cash provided by operations was $511.1 million and capital expenditures were $89.4 million during the first nine months of 2009. For the full year, capital expenditures are now expected to be $125 million to $145 million, including $15 million to $25 million related to restructuring activities.
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Guidance
The Company is narrowing its guidance for full-year 2009 shipments, and now expects to ship 222,000 to 227,000 Harley-Davidson motorcycles to dealers, including 35,000 to 40,000 during the fourth quarter. The Company continues to expect full-year gross margins to be between 30.5 percent and 31.5 percent.
Company Background
Harley-Davidson, Inc. is the parent company for the group of companies doing business as Harley-Davidson Motor Company (HDMC), Buell Motorcycle Company (Buell), MV Agusta and Harley-Davidson Financial Services (HDFS). Harley-Davidson Motor Company produces heavyweight custom, touring and cruiser motorcycles. Buell produces American sport performance motorcycles. MV Agusta produces premium, high-performance sport motorcycles sold under the MV Agusta® brand and lightweight sport motorcycles sold under the Cagiva® brand. HDFS provides wholesale and retail financing and insurance programs primarily to Harley-Davidson and Buell dealers and customers.
Forward-Looking Statements
The Company intends that certain matters discussed in this release are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as the Company “believes,” “anticipates,” “expects,” “plans,” or “estimates” or words of similar meaning. Similarly, statements that describe future plans, objectives, outlooks, targets, guidance or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Certain of such risks and uncertainties are described below. Shareholders, potential investors, and other readers are urged to consider these factors in evaluating the forward-looking statements and cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this release are only made as of the date of this release, and the Company disclaims any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
The Company’s ability to meet the targets and expectations noted depends upon, among other factors, the Company's ability to (i) execute its strategy and successfully exit certain product lines and divest certain company assets (ii) effectively execute the Company’s restructuring plans within expected costs and timing, (iii) successfully achieve with our labor union partners flexible and cost-effective agreements to accomplish restructuring goals and long-term competitiveness, (iv) manage the risks that our independent dealers may have difficulty obtaining capital, and adjusting to the recession and slowdown in consumer demand, (v) manage supply chain issues, (vi) anticipate the level of consumer confidence in the economy, (vii) continue to have access to reliable sources of capital funding and adjust to fluctuations in the cost of capital, (viii) manage the credit quality, the loan servicing and collection activities, and the recovery rates of HDFS’ loan portfolio, (ix) continue to realize production efficiencies at its production facilities and manage operating costs including materials, labor and overhead, (x) manage production capacity and production changes, (xi) provide products, services and experiences that are successful in the marketplace, (xii) develop and implement sales and marketing plans that retain existing retail customers and attract new retail customers in an increasingly competitive marketplace, (xiii) sell all of its motorcycles and related products and
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services to its independent dealers, (xiv) continue to develop the capabilities of its distributor and dealer network, (xv) manage changes and prepare for requirements in legislative and regulatory environments for its products, services and operations, (xvi) adjust to fluctuations in foreign currency exchange rates, interest rates and commodity prices, (xvii) adjust to healthcare inflation, pension reform and tax changes, (xviii) retain and attract talented employees, (xix) detect any issues with our motorcycles or manufacturing processes to avoid delays in new model launches, recall campaigns, increased warranty costs or litigation, and (xx) implement and manage enterprise-wide information technology solutions and secure data contained in those systems.
In addition, the Company could experience delays or disruptions in its operations as a result of work stoppages, strikes, natural causes, terrorism or other factors. Other factors are described in risk factors that the Company has disclosed in documents previously filed with the Securities and Exchange Commission. Many of these risk factors are impacted by the current turbulent capital, credit and retail markets and our ability to adjust to the recession.
The Company’s ability to sell its motorcycles and related products and services and to meet its financial expectations also depends on the ability of the Company’s independent dealers to sell its motorcycles and related products and services to retail customers. The Company depends on the capability and financial capacity of its independent dealers and distributors to develop and implement effective retail sales plans to create demand for the motorcycles and related products and services they purchase from the Company. In addition, the Company’s independent dealers and distributors may experience difficulties in operating their businesses and selling Harley-Davidson motorcycles and related products and services as a result of weather, economic conditions or other factors.
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The thread heading "Official H-D letter to suppliers" is incorrect.
The document title reads "H D Q309 Results"
Wanna be straight up with the info.

SPID

 

Translation of letter:

Instead of investing our profits in R&D for new and better Harley-Davidson and Buell motorcycles during the boom years, we squandered the money and kept making outdated and overpriced bikes.

Now that we've run our company into the ground during a recession, we've made the relatively easy choice to shutter Buell and sell MV Agusta, since we never understood how to manufacture and market their products in the first place.

But don't worry! You'll still be able to buy our 1950s-era technology, slow, heavy and poor handling bikes for years to come, provided we don't go belly up, too. And don't forget to buy all our blingy chrome-plated crap for your bike and everything we make that says "Harley-Davidson" or has our logo on it, because buying that stuff shows you're a real biker.

 

HD maybe thinking new products.

http://www.goingfaster.com/angst/harleycomputer.htm

 

MVs are gorgeous and awe inspiring (if somewhat unobtainable for most of us), HD ownership is the biggest strike against them!

 

VFRWorld buys MV Agusta!

Let's all chip in and take it off HD's hands. Wouldn't that be nice?

 

This recession stuff is really weird, it makes ya wonder...Buell unprofitable? Must be that all that new fangled techno crap was devaluing the antique powerplant(?) MV unprofitable? Must be a profound lack of three toothed knuckledraggers standing in line to finance those bikes through the HD predators who would surely give them the finance deal all the other sheep in the flock got!

 

I know I'm just hatin' now but I'd still prefer to buy a bike from a dude named Claudio then one named Willie! The beginning of the end was writing on the wall IMO.

 

They deserve to go broke for their stupid short term insular thinking, and personally I reckon the road would be clearer without them.

Bring on the flames, lol

 

I wish I won a HUGE lotto, I'd buy MVA!

 

MVA F4

HD uke:

'nuf said :wink:

 

Actually, (shudder) it was not the HD product line that brought this about. HD Finance, along with most "banks", gave 100% financing to people who should not have been allowed to borrow coffee money. This year those $15,000 - $25,000 loans were defaulting on a massive scale to the tune of about 20% going bad and that is where the losses came from. The repos aren't selling since bike sales are down globally for most manufacturers, including HD. HD owners/buyers are an extremely brand loyal group (When is the last time you saw someone with HONDA tattooed on their bicep?) but why buy a repossessed HD when they have new ones on the showroom floor that are being discounted. (along with Honda et al who have new 2 year old bikes available) So, we have another example of greedy bankers doing everything possible to make a good short term bottom line and ignoring sound practice, which is largely how this whole economic mess came about.

 

I agree with a lot of this, but the banks aren't at fault for idiot buyers getting in over their heads. Many of those loans were "$99 per month for the 1st 12 months" deals, after which the payment doubled or tripled. People didn't think their finances thru, or thought they'd be able to sell their toy for full value when they couldn't afford it anymore. It's one thing to make an easy $99 payment for awhile, but another when it jumps to $300/month.

Of course it's also true that many Harley buyers are blue collar workers, whose ranks have been hit hard during the recession. They couldn't know a couple years ago how bad it would get. :frown: