Harley Davidson Scales Back US Production, 800 Jobs Lost
Last year, Harley Davidson had to lay off 118 workers at its factory in Springettsbury Township in the state of Pennsylvania as it moved the production of its Softail cruiser to its Kansas City, Missouri plant. However, following a sales decline in 2017, the iconic American motorcycle brand is once again realigning operations, a move which could mean the loss of 800 jobs.
The latest realignment is part of a multi-year manufacturing optimization strategy that aims to transfer its Kansas City motorcycle assembly plant to the York plant, where the brand’s CVO, Touring, and Trike models are made. In contrast to the massive layoff in Kansas City, Harley will add about 450 jobs in York, consisting of full-time, part-time, and contract workers.
Harley recently announced that its retail sales suffered an 8.5 percent decrease, while international numbers were down 3.9 percent. With the consolidation of operations from Kansas City to York, the motorcycle brand expects to incur a capital investment of about $75 million and restructuring and consolidation costs of $170 to $200 million over the next two years. Despite the massive spend, Harley-Davidson also expects to save around $65 to $75 million on production costs after 2020.
“The decision to consolidate our final assembly plants was made after very careful consideration of our manufacturing footprint and the appropriate capacity given the current business environment,” said Matt Levatich, President and CEO of Harley-Davidson, Inc. “Our Kansas City assembly operations will leave a legacy of safety, quality, collaboration and manufacturing leadership.”
The Kansas City plant opened in 1997 and produced the Sportster and Street motorcycles aside from the aforementioned Softail. All operations at the plant are expected to end before the 2019 fall season.