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Author Topic: Harley Announces Kansas City Plant Closing  (Read 5519 times)

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iski

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Re: Harley Announces Kansas City Plant Closing
« Reply #1 on: January 30, 2018, 08:45:32 AM »

Just saw that on a Fox network news. The down hill slide.
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Re: Harley Announces Kansas City Plant Closing
« Reply #2 on: January 30, 2018, 10:25:38 AM »

The Keith Wandell Legacy (curse) lives on...   :-X
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Re: Harley Announces Kansas City Plant Closing
« Reply #3 on: January 30, 2018, 11:26:12 AM »

This is how I see it.  Big cruiser MC market is shrinking.  Fewer bikes purchased each year.  Lots of reasons for that, what is important here is: do not foresee a reversal of that downward trend.  Not sure where the "bottom" is for sales numbers.  HD has extra capacity and/or inefficiencies in maintaining 2 assembly plants.  Consolidating those operations into one plant increases cost ($200 million)  in the short term and requires $150 million capital investment over the next 2 years at York. After 2020 they project they will save $75 million a year by doing so.  ROI after 2020 is about 5 years, if projections are accurate.  Reasonable expenditure.  Sadly, KC employees (800)  will lose their jobs for the most part.  York will hire 450 more.  Net decrease of 350 employees. 

HD must cut costs to survive in a shrinking sales market. If they fail to do so, they will bleed red ink until they go bankrupt.  Production capacity is determined by overall sales - the numbers must not be there to support both KC & York.  Perspective from an old guy who used to mange distribution centers & shipping:  Shipping costs usually average better from a central US location - KC, Memphis, etc.  Freight cost must not have been enough to move the assembly to KC when combined with the capital expenditure required to move the York operation there. 

I have worked in a "declining" industry.  Each year, when overall sales are flat or decreased some cost must be eliminated.  The companies that fail to do so eventually are bought out or cease to exist usually.  The best scenario is for sales to increase and companies expand as a result.  HD enjoyed that scenario for years, but as most companies who have been in business for many years have done they have survived sales decreases in the past. 

I would rather see HD survive as a company than watch it spiral out of existence like so many others have.  Others have opinions that differ from mine as to HD's survival tactics & the good & bad of these tactics.  Sure I would prefer to see HD selling more, building more plants, and lowering the costs of the bikes they sell  :).   Not happening. 
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tazmun

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Re: Harley Announces Kansas City Plant Closing
« Reply #4 on: January 30, 2018, 12:16:56 PM »

Pretty soon, they may move the engine plant? I personally think, everything should have stayed in Milwaukee!
I  also wonder what Kansas City gave HD, and if they got back their investment?
A real sad day for the employees there!

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Re: Harley Announces Kansas City Plant Closing
« Reply #5 on: January 30, 2018, 12:24:23 PM »

They keep thinking if you build junk they will keep coming....
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Re: Harley Announces Kansas City Plant Closing
« Reply #6 on: January 30, 2018, 01:19:05 PM »

I bought 10 H-Ds over a period of about 20 years. Felt obligated, spouse worked there and got the employee discount. Now she's retired. Bought 2 new bikes in the past 15 months. Neither is an H-D. Maybe the Harley mystique has just plain worn off.
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Heatwave

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Re: Harley Announces Kansas City Plant Closing
« Reply #7 on: January 30, 2018, 01:31:35 PM »

Sad to read how tough the 4th qtr sales were for HD. So bad the stock is down almost 9% today. They have just announced HD is closing their Manufacturing plant in Kansas City. 800 jobs lost and all the work transferred to York, Pa. Not sure what the impact will be on CVO manufacturing.

https://www.usatoday.com/story/money/cars/2018/01/30/harley-davidson-kansas-city-plant-motorcycle-sales-fall/1078008001/
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Re: Harley Announces Kansas City Plant Closing
« Reply #8 on: January 30, 2018, 01:33:58 PM »

Harley customers, we are a dying breed. Plus the cost of buying and maintaining a Harley are as much or more than most cars.



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Re: Harley Announces Kansas City Plant Closing
« Reply #9 on: January 30, 2018, 01:57:07 PM »

So sad for the employee's, those are good, decent paying, hard to find jobs. Best Wishes guys & girls in the future.
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Re: Harley Announces Kansas City Plant Closing
« Reply #10 on: January 30, 2018, 02:09:53 PM »

If they added $200 to every bike, and $12.00 to every shirt they could make it up,.....LOL!!!
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Heatwave

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Re: Harley Announces Kansas City Plant Closing
« Reply #11 on: January 30, 2018, 02:19:40 PM »

Units shipped in the 4th qtr were up but total for 2016 vs 2017 units were down significantly.

https://www.aimag.com/harley-sales-down-shipments-reduced-as-fourth-quarter-full-year-2017-results-released/
« Last Edit: January 30, 2018, 06:30:16 PM by Heatwave »
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skorch

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Re: Harley Announces Kansas City Plant Closing
« Reply #12 on: January 30, 2018, 02:35:29 PM »

Sad to read how tough the 4th qtr sales were for HD. So bad the stock is down almost 9% today. They have just announced HD is closing their Manufacturing plant in Kansas City. 800 jobs lost and all the work transferred to York, Pa. Not sure what the impact will be on CVO manufacturing.

https://www.usatoday.com/story/money/cars/2018/01/30/harley-davidson-kansas-city-plant-motorcycle-sales-fall/1078008001/

They also need to address the dealer network price gouging,at least here in NC.
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J.D.

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Re: Harley Announces Kansas City Plant Closing
« Reply #13 on: January 30, 2018, 02:45:15 PM »

HD's problems are being compounded by their chronic quality/reliability issues, IMHO.
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Re: Harley Announces Kansas City Plant Closing
« Reply #14 on: January 30, 2018, 03:45:03 PM »

May be a wake up call for the dealers. Also I think the 2018 softail are full of cheap components take a close look at them you'll see what I mean
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Re: Harley Announces Kansas City Plant Closing
« Reply #15 on: January 30, 2018, 04:07:14 PM »

The dealers don’t care YET, they still think this is 1990 and they can abuse customers and we’ll all put up with it like we did in those days. The moco knows it’s in trouble, even though it’s too late and too little, and a mistake to abandon the baby boomers, they are trying to keep their head above water. Hiking prices up this year was just stupid, combined with dealer attitude means I’m not buying anymore new stuff. Why buy a new bike when I can spend 4 grand to get my tc built up to 117 cu.
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Re: Harley Announces Kansas City Plant Closing
« Reply #16 on: January 30, 2018, 06:22:33 PM »

No new Harley for me.  If they offered more than their 2 year warranty they would go broke.
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mark

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Re: Harley Announces Kansas City Plant Closing
« Reply #17 on: January 30, 2018, 08:51:00 PM »

Combine all these posts and you've identified the problem - aging boomers, high prices, expensive service, dealer's cavalier attitude towards customers, reliability/quality, and competition from other manufacturers.  Based on what I saw for model year 2018, styling and paint-wise, the MoCo needs a strong dose of Willie G.
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Re: Harley Announces Kansas City Plant Closing
« Reply #18 on: January 30, 2018, 08:53:59 PM »

This is how I see it.  Big cruiser MC market is shrinking.  Fewer bikes purchased each year.  Lots of reasons for that, what is important here is: do not foresee a reversal of that downward trend.  Not sure where the "bottom" is for sales numbers.  HD has extra capacity and/or inefficiencies in maintaining 2 assembly plants.  Consolidating those operations into one plant increases cost ($200 million)  in the short term and requires $150 million capital investment over the next 2 years at York. After 2020 they project they will save $75 million a year by doing so.  ROI after 2020 is about 5 years, if projections are accurate.  Reasonable expenditure.  Sadly, KC employees (800)  will lose their jobs for the most part.  York will hire 450 more.  Net decrease of 350 employees. 

HD must cut costs to survive in a shrinking sales market. If they fail to do so, they will bleed red ink until they go bankrupt.  Production capacity is determined by overall sales - the numbers must not be there to support both KC & York.  Perspective from an old guy who used to mange distribution centers & shipping:  Shipping costs usually average better from a central US location - KC, Memphis, etc.  Freight cost must not have been enough to move the assembly to KC when combined with the capital expenditure required to move the York operation there. 

I have worked in a "declining" industry.  Each year, when overall sales are flat or decreased some cost must be eliminated.  The companies that fail to do so eventually are bought out or cease to exist usually.  The best scenario is for sales to increase and companies expand as a result.  HD enjoyed that scenario for years, but as most companies who have been in business for many years have done they have survived sales decreases in the past. 

I would rather see HD survive as a company than watch it spiral out of existence like so many others have.  Others have opinions that differ from mine as to HD's survival tactics & the good & bad of these tactics.  Sure I would prefer to see HD selling more, building more plants, and lowering the costs of the bikes they sell  :).   Not happening.

I agree with most of what you have said.  To add, The KC plant produced the VRod, which is no more due to low sale.  The KC plant produced the Dyna line, which is also no more.  It also produces the Street which has low sales in much of the USA.  It also produces the Sportster.  So with them only using 50% or less of the plant capacity it makes economic sense to shut it.

With Sales down on both Softtails and Touring bikes the York plant is not at full capacity.  Makes sense to consolidate the plants.  Harley has to downsize so they do not over produce or overspend.  They have to get their costs in control. 

Every brand is suffering a sales decrease.  Victory was the first victim of sales decreases. 

Hopefully some of the KC employees will be offered a transfer to York.  York has to hire more, so why not use those from KC who would be willing to transfer. 


They also need to address the dealer network price gouging,at least here in NC.

Dealers are privately a owned business.  They can set there prices and there is not much Harley Davidson Co can do.  Its up to the customers to not pay the inflated prices.

There are dealers that sell CVO at MSRP.  We have a couple dealers in my area that use to gouge bad.  We got another dealer near by 60 mile.  He sells at MSRP.  The other dealers sales went way down.  They will no sell at MSRP, but many of us remember how they were and will not enter their store.  I ride by two dealer to go to the one I use.
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iski

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Re: Harley Announces Kansas City Plant Closing
« Reply #19 on: January 30, 2018, 10:37:10 PM »

I agree with most of what you have said.  To add, The KC plant produced the VRod, which is no more due to low sale.  The KC plant produced the Dyna line, which is also no more.  It also produces the Street which has low sales in much of the USA.  It also produces the Sportster.  So with them only using 50% or less of the plant capacity it makes economic sense to shut it.

With Sales down on both Softtails and Touring bikes the York plant is not at full capacity.  Makes sense to consolidate the plants.  Harley has to downsize so they do not over produce or overspend.  They have to get their costs in control. 

Every brand is suffering a sales decrease.  Victory was the first victim of sales decreases. 

Hopefully some of the KC employees will be offered a transfer to York.  York has to hire more, so why not use those from KC who would be willing to transfer. 


You identify the problems with keeping KC open. Those now orphaned lines were what kept KC going.  Even if HD produced bulletproof bikes and could keep price increases to an absolute minimum, they would still need to downsize production.  The younger generations just are not buying bikes at anywhere near the numbers of the generation of Baby Boomers before.  HD could sell more bikes if their price points were lower and if their quality as well as customer service were better.  Still would have to close a plant & reduce costs, because those factors would not increase sales enough.  Several friends I rode with a only couple of years ago have sold their Harleys due to health/age reasons & no matter what HD does, they are not buying another one.

Am interested to see what HD offers to these younger buyers eventually, since cruisers/tourers that weigh 700-900# apparently do not appeal to them.  Will also be interesting to see what market share Indian ends up with in a few years.
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scottt

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Re: Harley Announces Kansas City Plant Closing
« Reply #20 on: January 31, 2018, 12:35:35 AM »

Started riding Harleys in 1998, 12 new Harleys later I owned a 14 Rushmore Limited. Not going into all the time it spent in the shop and how over the years the ownership experience changed. Then I had a health issue, if I was going to ride it needed to be lighter, easier to lift up and back up. Didn't want a tour pak anymore, it was adjust or stop.

Next I learn all the reasons why used Rushmore bikes were of so little value. Nobody wants a outdated bike, bla, bla, bla. 3 short years earlier it was the biggest change, best Harley ever. Now is less than 50% of what it was even with under 10,000 miles and thousands in upgrades. Finally sold the bike or should I say gave it away.

Started thinking of a lighter bike. Didn't want to go down the same road again with Harley, buying a starter kit.

I test road the new 18 BMW K1600b or bagger. Wow! Came stock with a beautiful 6cyl putting out 160hp. Performance like I have never experienced. Electronically controlled suspension that rides so smooth, handles like it's on rails and linked brakes that put everything I had ever rode to shame. All for the price of a Road Glide. Forgot to mention, reverse and a option to shift clutchless. Without question the fastest, best bagger I have ever rode....now I own one.

This is what is happening to Harley. Roughly 75 percent of the new BMW K1600B or Bagger owners I have meet came from a Harley.



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muddypaws

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Re: Harley Announces Kansas City Plant Closing
« Reply #21 on: January 31, 2018, 07:36:40 AM »

Things are getting worse for Harley-Davidson, the maker of motorcycles that your dad aspired to ride. They will be closing a plant in Kansas City, Missouri, the company disclosed today, while reporting fourth-quarter profits that fell 82 percent (!) compared to the fourth quarter of last year. They also announced they’ll be making an electric motorcycle, so there’s that, too.

Harley made $8.3 million in the fourth quarter of 2017, compared with $47.18 million in the fourth quarter of 2016, according to the Milwaukee Journal Sentinel. The company has been in decline for years now, as sales have sagged because consumers are worried about things like safety. In addition, baby boomers, who bought a very large amount of motorcycles back in the day and remain a big part of Harley’s demographic, are also getting older.
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Re: Harley Announces Kansas City Plant Closing
« Reply #22 on: January 31, 2018, 09:10:15 AM »

I am all for cutting production. The market has been flooded for years, and depreciation is a hard hit. I don't think things need to go back to the days when you waited a year or 2 for a new one, but if new supply doesn't quite meet demand it will definitely help drive used prices up. The only good thing about the used market is you can go buy a very nice used low mileage ten year old bike for a song and a dance.
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Re: Harley Announces Kansas City Plant Closing
« Reply #23 on: January 31, 2018, 10:35:50 AM »

Other than those of us who own stock in HD (I don't), how does this affect us?

We already have our HDs, and some of us are branching out to BMWs and GoldWings. Perhaps parts might become sparse, and service prices will go up, but most of us already have found a good independent shop.

I was never one to buy a bike or car as an "investment", although I did manage well in the 90s.

Just curious.
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Re: Harley Announces Kansas City Plant Closing
« Reply #24 on: January 31, 2018, 03:11:00 PM »

Harley-Davidson sees lower 2018 bike shipments, shares sputter

30-Jan-2018
Harley-Davidson shares sputtered on Tuesday after the motorcycle maker said its shipments fell short of its own target last year and predicted a decline in 2018 as well.
Harley-Davidson shares fell more than 5 per cent to $52.50 in pre-market trade after the company said its overall motorcycle shipments suffered a 7.9 per cent year-on-year decline in 2017 to 241,498 - at the low end of its earlier guidance for shipments of between 241,000 to 246,000 units.
Moreover, for 2018, the Milwaukee-based company said it expects shipments to fall again. It is forecasting motorcycle shipments of between 231,000 to 236,000 or down by about 2 to 4 per cent — with about 60,000 to 65,000 of those being shipped in the first quarter.
The drop in shipments came as Harley reported a 6.7 drop in global retail motorcycle sales to 241,788 last year, compared to 2016, led by an 8.5 per cent decline in the US.
Harley has previously said it aims to have 2m new riders by 2027. The company which is struggling to draw in millennial consumers is targeting the electric market as it seeks to grow its customer base. Harley said on Tuesday that it remains on target to launch its first electric motorcycle in 18 months.

The company also said that it would close its assembly plant in Kansas City and merge those operations into those of its plant in York, Pennsylvania, resulting in 400 net job loss.
It expects to incur restructuring costs of between $170m to $200m and capital investment of about $70m over the next two years. It is also expects ongoing annual cash savings of between $65m to $75m after 2020.
“Our actions to address the current environment through disciplined supply and cost management position us well as we drive to achieve our long-term objectives to build the next generation of Harley-Davidson riders globally,” said Matt Levatich, chief executive.
In the fourth quarter, sales were down 9.6 per cent in total, with an 11.1 per cent slide in the US and a 7.7 per cent fall overseas.
In the fourth quarter, net income fell to $8.3m from $47.2m in the year ago period. That translated to earnings per share of 5 cents, down 81 per cent from 27 cents in the year ago quarter.
Profits were hurt by a $53.1m tax charge associated with the enactment of the US Tax Cuts and Jobs Act and a $29.4m pre-tax charge for a voluntary product recall. Adjusting for one-time items, earnings of 47 cents a share topped the average analyst estimate of 45 cents, according to a Thomson Reuters poll.
Revenues for motorcycles and related products rose 12 per cent from a year ago to $1.05bn, just ahead of estimates.
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mark

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Re: Harley Announces Kansas City Plant Closing
« Reply #25 on: January 31, 2018, 03:20:48 PM »

Other than those of us who own stock in HD (I don't), how does this affect us?

We already have our HDs, and some of us are branching out to BMWs and GoldWings. Perhaps parts might become sparse, and service prices will go up, but most of us already have found a good independent shop.

I was never one to buy a bike or car as an "investment", although I did manage well in the 90s.

Just curious.

How does this affect us?  Maybe some of these: Less profitable dealerships might close, more overseas production and/or parts manufacturing, fewer models, resale/trade-in values trending downward, labor rate reduced, and being able to negotiate a better deal on purchases.
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Re: Harley Announces Kansas City Plant Closing
« Reply #26 on: January 31, 2018, 03:21:32 PM »

Surprised at this statement!

In the fourth quarter, sales were down 9.6 per cent in total, with an 11.1 per cent slide in the US and a 7.7 per cent fall overseas.
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Re: Harley Announces Kansas City Plant Closing
« Reply #27 on: February 01, 2018, 11:00:22 AM »

The new generation of buyers are more into electronics, automatic transmissions, lighter, more comfortable and reliable bikes.  Harley misses on all points and the new Wings are showing the way.
Harley will have to retreat to become a boutique brand or get taken over. As the stock goes down splitting will not save it this time (imo).
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mark

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Re: Harley Announces Kansas City Plant Closing
« Reply #28 on: February 01, 2018, 06:28:13 PM »

The new generation of buyers are more into electronics, automatic transmissions, lighter, more comfortable and reliable bikes.  Harley misses on all points and the new Wings are showing the way.
Harley will have to retreat to become a boutique brand or get taken over. As the stock goes down splitting will not save it this time (imo).

You're correct...wouldn't surprise me if we see a hostile takeover.
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Re: Harley Announces Kansas City Plant Closing
« Reply #29 on: February 01, 2018, 11:42:46 PM »

You're correct...wouldn't surprise me if we see a hostile takeover.

The faithful always step in when the stock is cheap and come to the rescue, but this time the faithful are distracted as evidenced by the sales figures.
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Re: Harley Announces Kansas City Plant Closing
« Reply #30 on: February 03, 2018, 06:03:24 PM »

Revzilla - Common Tread coverage on both Harley and Polaris. Looks like Polaris sales are growing but they may need to steal away some Harley market share to get larger than projected sales increases.

https://www.revzilla.com/common-tread/tuesday-was-not-a-cheerful-day-in-the-us-motorcycle-industry?utm_source=Sailthru&utm_medium=email&utm_campaign=2/02/2018%20-%20CT&utm_term=Common%20Tread%20%7C%20Combined
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windjammer

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Re: Harley Announces Kansas City Plant Closing
« Reply #31 on: February 04, 2018, 07:34:15 PM »

Closing Kansas City and opening in Thiland it's a global enconomy.
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J.D.

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Re: Harley Announces Kansas City Plant Closing
« Reply #32 on: February 04, 2018, 07:47:43 PM »

Loss of sales unfortunately is likely the only thing that will force HD to improve both product quality/reliability and dealer experience.  Kudos to the consumers.  Unfortunately the workers at the plant have to be so directly impacted by what in part can be traced back to the management.
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FLSTFI Dave

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Re: Harley Announces Kansas City Plant Closing
« Reply #33 on: February 05, 2018, 07:02:10 AM »

Closing Kansas City and opening in Thiland it's a global enconomy.

The plant in Thailand is only for the bikes to be sold there.  The reason is, it is almost impossible to import a harley into that country due to the very hi Tariffs.  So Harley has figured out how to be able to sell there.  Build there.  This is not taking American jobs, as you can't import the bike if its built here as the Tariff makes it way to expensive.

Loss of sales unfortunately is likely the only thing that will force HD to improve both product quality/reliability and dealer experience.  Kudos to the consumers.  Unfortunately the workers at the plant have to be so directly impacted by what in part can be traced back to the management.

I full agree on needing to improve quality and reliability.  Dealer experience depends on the dealer.  There are some that are very good.  There are many that are mediocre at best.  There are many that are horrible.  They will have a hard time getting the horrible dealers to become good.
« Last Edit: February 05, 2018, 07:04:59 AM by FLSTFI Dave »
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Re: Harley Announces Kansas City Plant Closing
« Reply #34 on: February 05, 2018, 08:31:31 AM »

The plant in Thailand is only for the bikes to be sold there.  The reason is, it is almost impossible to import a harley into that country due to the very hi Tariffs.  So Harley has figured out how to be able to sell there.  Build there.  This is not taking American jobs, as you can't import the bike if its built here as the Tariff makes it way to expensive.

I full agree on needing to improve quality and reliability.  Dealer experience depends on the dealer.  There are some that are very good.  There are many that are mediocre at best.  There are many that are horrible. They will have a hard time getting the horrible dealers to become good.

Actually, Harley has had the ability to dictate to and punish dealers through their favorable franchise agreements for a long time, especially compared to their counterparts in the auto business.  Unfortunately the time to fix the lousy dealership problem was when they had the dealers by the you-know-whats with limited production volumes versus high dealer and customer demand.  Instead of going that way, Harley chose to run off the Mom and Pop long time dealers and bring in the lowlife types from the used car industry (and others).  Now that dealer sales are dropping, H-D has lost a big part of their ability to dictate to dealers.  Manufacturers, even in the car business, do have the ability to heavily influence dealership behaviors IF THEY WANT TO DO SO.  But it takes commitment from corporate management and follow through on their part.  I've never seen such commitment at H-D.

JMHO - Jerry
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bigsixman

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Re: Harley Announces Kansas City Plant Closing
« Reply #35 on: February 05, 2018, 01:10:10 PM »

Well said Jerry, you hit the nail right on the head in my opinion.
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