Motorcycle: Harley- Davidson to Discontinue Buell Sport Bikes

According to a story published in The New York Times
By Jerry Garrett

Continuing hard times at
Harley-Davidson came to something of a head Thursday with the announcement that
the company was killing it’s Buell line of sport bikes almost immediately and
actively looking for a buyer for its MV Agusta brand.

Harley, which is based in Milwaukee,
also disclosed continuing losses at its finance unit and a decline in sales of
its heavyweight Harley-Davidson motorcycles. Overall, Harley’s net income for
the third quarter plunged by 84 percent from last year, which was also a down
year for the company.

The Buell brand, based in East Troy, Wis., will shut down later this month,
although Harley will continue to supply replacement parts and honor warranty
claims. About 180 workers will lose their jobs.

Just last month, Buell won the American Motorcyclist Association’s coveted
SportBike championship – the first for an American motorcycle maker since 1986.
But Harley had struggled to make a sales success of the innovative sport bikes;
earlier this summer Harley announced that it would drop plans to build a $10
million Buell factory.

The Buell decision is expected to saddle Harley with about $125 million in
costs associated with the shutdown. The bottom line in the MV Agusta
divestiture will not be known until the brand is sold, but Harley said it had
already taken a “goodwill impairment charge” of $18.9 million related to the
brand in the third quarter.

Harley raised eyebrows in the industry with its $109 million acquisition just
16 months ago of MV Agusta, a boutique line of very expensive sport bikes
manufactured in Italy.

Throughout its operations during the recent economic downturn, Harley had
already cut more than 1,000 jobs and trimmed production forecasts by at least
30 percent. The company said it was also considering what to do with its under-utilized
assembly plant in York, Pa., and would make announcements about its fate later
in the year.

In announcing these changes, Harley said it would refocus its business model
solely on its core Harley-Davidson brand.

As bleak as the announcement was for Buell and MV Agusta, Harley said sales
of its cruiser motorcycles dropped 21.3 percent worldwide in the third quarter,
better than the industry average decline of 35.9 percent.



Filed under: Uncategorized

Leave a comment