Harley to shutter Missouri plant amid sales slump

NEW YORK • HarleyDavidson Inc. will close its Kansas City, Mo., plant as part of a cost- cutting move as it sells fewer of it iconic motorcycles.

T he Milwaukee- based company reported a 7.9-percent drop to 241,498 motorcycle shipments in 2017 and expects the figure to continue dropping. It forecast 231,000 to 236,000 motorcycle shipments in 2018.

“The decision to consolidate our final assembly plants was made after very careful consideration of our manufacturing f ootprint and the appropriate capacity given the current business environment,” said president and CEO Matt Levatich.

U. S. motorc ycle s ales peaked at more than 1.1 million in 2005 but then plummeted during the recession. They’ve had trouble coming out of that trough because of demographic shifts. As baby boomers stop riding, there aren’t enough millennials taking up the slack, analysts say.

Specifically, Harley-Davidson said it is consolidating the Kansas City assembly plant into its York, Pa., facility. The move will mean 800 layoffs at the Kansas City facility, beginning mid- year, and it will close by the third quarter of 2019.

The company said it will add up to 450 new positions at the York facility.

It expects to book restructuring and other costs of US$ 170 million to US$ 200 million and capital investment costs of about US$ 75 million over two years. The move is expected to lead to ongoing annual savings of US$65 million to US$75 million after 2020.

The motorcycle maker reported an 82- per- cent slide in fourth- quarter profit to US$ 8.3 million, or 5 cents per share, partly on charge related to the new tax code. Earnings, adjusted for pretax expenses and non-recurring costs, were 54 cents per share.

Revenue rose 12 per cent to US$ 1.05 billion, mainly on pricing as retail sales of motorcycles fell 9.6 per cent worldwide.