Harley Considers Moving Operations from York PA
Harley-Davidson Inc. is planning a major restructuring of its operations in York, Pa., possibly moving them to another U.S. location.
The York operations, where Harley makes Softail motorcycles and touring bikes, are not competitive long term as they are structured, company spokesman Bob Klein said Tuesday.
A study assessing the options for York is expected to be completed this fall. A union contract is due to expire in early 2010.
The number of employee hours it takes to produce a motorcycle at York is too high, according to Harley.
“We know that a major restructuring of the work currently performed is needed,” Klein said. “That fits under the overall strategy we have of getting our cost structure right” at all of the manufacturing plants, including Milwaukee.
Klein said the company would work closely with the union to find solutions for the York operations, which employ about 2,650 people at two plants.
Closing the plants is not the only option the company is considering, Klein said, adding that he would not speculate where the work would be moved if the York operations were shut down.
Earlier this year, Harley announced a shake-up of its manufacturing that included hundreds of job cuts. The company is closing its Capitol Drive Plant in Wauwatosa in 2010 and is closing its Franklin distribution center this year.
In April, Harley said further job cuts were needed based on a deeper analysis of production requirements.
The company is in the midst of a restructuring effort announced earlier and now under the direction of Keith Wandell, the company’s new chief executive and former Johnson Controls Inc. president and chief operating officer.
Harley’s worldwide motorcycle sales declined 12% in its most recent fiscal quarter, and its U.S. sales fell nearly 10% from a year earlier. The company is slashing motorcycle shipments this year to between 264,000 and 273,000 bikes to cope with the down market, a drop of 10% to 13% from last year.
The York employees have been told that closing the operations is a possibility. Earlier, the company announced a consolidation of the paint and frame work in York but now says more restructuring is necessary.
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