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Harley-Davidson sheds jobs for savings

Harley-Davidson will shed 640 jobs this year for millions of dollars in savings as it streamlines the company to respond to weakening demand for their bikes.

Last month the company sacked 90 staff at their York Vehicle Operations in Pennsylvania and 50 at its Tomahawk facility in Wisconsin after temporarily suspending production over the pandemic in March.

Now they have announced a further 500 jobs will go globally as part of new CEO Jochen Zeitz’s “Rewire” strategy.

Harley is not alone in slashing jobs. Last month, Triumph Motorcycle announce it will slash 400 jobs as a result of the coronavirus pandemic and their plan to move more production from Hinckley to Thailand.

Jochen says they will produce fewer bikes for more “exclusivity”.

It follows several years of weakening sales.

Savings

Harley is expecting $US42m in savings this year from the job cuts.

Despite the savings, Harley-Davidson also announced last month that it had access to a loan of up to $US350 million (about $A500 million) over the next year.

While the company has not committed to the entire amount of the loan, it is committed to draw at least $US150m (about $A215m).

It’s all very confounding, but Jochen says he will reveal details later this month when he announces second quarter financial results.

Simpler operation

Jochen Zeitz with LiveWire rewire shares
Jochen Zeitz with the electric LiveWire

“Our new operating model is simpler, more focused and enables faster decisions across the entire company,” he says.

“The Rewire is progressing very well and substantial work is being done to eliminate complexity and get Harley-Davidson on a path to winning.

“Our new operating model is simpler, more focused and enables faster decisions across the entire company.

“We’ve taken a hard look at our entire set up, our spending, and how work is getting done, to align our operating model, structure and processes. We are building a strong foundation to drive a high-performance organization in the future.”

Meanwhile, VP Treasurer Darrell Thomas will become interim CFO, replacing CFO John Olin who is retiring.

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