Harley-Davidson Planning To Close Kansas City Plant Amid Low Motorcycle Sales

Harley-Davidson to shut down manufacturing plant.

Harley-Davidson will shut down its Kansas City plant.

Motorcycle manufacturer, Harley-Davidson, struggled to make ends meet in 2017 as motorcycle sales fell drastically. In an attempt to consolidate its manufacturing operations, the company intends to close its plant in Kansas City, Missouri.

Harley-Davidson has suffered considerable losses for four years straight, managing to compensate its lackluster US sales with overseas growth.

The world’s largest maker of heavyweight motorcycles revealed its net income to be 82 percent lower in its fourth quarter to $8.3 million. Harley-Davidson shares were 5 cents each, 27 cents lower than in 2017. The company’s accumulated revenue totaled to $1.23 billion, up from $1.11 billion a year earlier.

These low figures are mostly due to the charge they took from President Trump’s tax cut, as well as a $29.4 million charge for a voluntary product recall.

Worldwide, Harley-Davidson motorcycle sales were down 6.7 percent in 2017 compared to the previous year, while the company’s US sales were down 8.5 percent. International sales shaved off 3.9 percent.

The Milwaukee-based company wants to tackle these issues, one of which includes limiting motorcycle production.

“Our actions to address the current environment, through disciplined supply and cost management, position us well as we drive to achieve our long-term objective,” said Matt Levatich, president and CEO of Harley- Davidson.

Following the Kansas City plant shutdown, the company will move production to its plant in York, Pennsylvania.  The plant closure will leave about 800 people without a job.

Harley-Davidson expects to save between $65 million to $75 million after 2020. To get to that point, however, they would have to invest around $170 million to $200 million over the next two years.

According to Levatich, the decision to shut down the Kansas City plant was made after “careful consideration” of their manufacturing footprint.

Harley-Davidson is one of many motorcycle manufacturers who has suffered heavy losses due to a weakened economy and low demand of motorcycling products.

Image Source: Pixabay

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