Harley-Davidson Reports Q2 2010 Results
Continued Wisconsin production hinges on collective bargaining agreement
Most of the improvement is attributed to the company’s financial arm, Harley-Davidson Financial Services, which reported $60 million in income compared to a $90.5 million loss in the second quarter of 2009. Sales revenue from motorcycles and related products remained relatively even at $1.1 billion, down just $633,000 from the same period in 2009.
“Harley-Davidson is making steady progress at executing its strategy to deliver results through focus,” says Keith Wandell, president and chief executive officer of Harley-Davidson, Inc. “We are seeing the benefits of our restructuring and continuous improvement activities reflected in our earnings performance.”
Motorcycle unit sales were down 5.5% in the quarter, thanks mostly to an 8.4% drop in U.S. sales. On the positive side, Harley-Davidson fared better than the industry-wide 10.1% decrease in U.S. sales of 651cc and higher displacement motorcycles. International sales decreased 0.2%.
Harley-Davidson plans to ship between 201,000 and 212,000 motorcycles worldwide in 2010 including 53,000 to 58,000 over the next quarter.
“We are pleased with the continued moderation in the rate of decline of retail new Harley-Davidson motorcycle sales again in the second quarter,” says Wandell. “At the same time, we continue to believe conditions will remain challenging this year for new motorcycle purchases and we will manage the business based on that expectation, with a continued strong focus on managing supply in line with demand.”
Negotiations are scheduled to begin this week between Harley-Davidson and unions representing its Wisconsin production employees. The discussions will focus on new labor agreements that will take effect in April 2012, when the current contracts expire. Harley-Davidson is threatening to relocate operations at its Milwaukee and Tomahawk production to another U.S. location should negotiations fail to deliver new arrangements by mid-September 2010.
Harley-Davidson continues to shop the MV Agusta brand. Currently listed in the books as a “discontinued operation”, MV Agusta accounted for $68.1 million in losses.