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Posts Tagged ‘Layoff’

Customize It And Stand Out

According to Reuters, Harley-Davidson Inc. has laid off 40 employees in Milwaukee at their general merchandise division.

It’s not a large number of employees, but most unfortunate if your career “rug” was just pulled out from underneath you as someone impacted by this reorganization.

Important to note is that Harley-Davidson’s second quarter earnings report, released July 23, 2019 reported general merchandise sales of $64.6 million, a 5.8% decline from 2018. The company saw a 4.2% decline in the first half of 2019 from 2018 in general merchandise.  It’s also no secret that Harley-Davidson continues to see a decline in motorcycles sales in the U.S. and abroad as it works to adapt to changing clientele.

In the Reuters report the motor company stated the general merchandise division re-org was to manage it’s business with “focus and discipline.”  That statement reads like a quote from the Six Disciplines playbook.  Was the division previously an over-committed reactionary one with no focus and discipline?  That euphemistic “focus and discipline” term seems to be more about flattering management because at the end of the day it’s a “reduction in force,” which is an old school straightforward term.

SAVE, SAVE, SAVE

And speaking of general merchandise — have you noticed the significant up-tick of emails from Harley-Davidson corporate or your local dealer?  I follow Harley-Davidson on multiple channels to stay current on their events and product announcements and always get a number of emails, but I’ve seen a dramatic drum-beat increase over the last couple of months.

It’s starting to have a feel of desperation to survive and meet sales quotas.  Here are a couple recent examples:

Motorclothes, Last Chance to Save Up to 50%…
Harley-Davidson VISA…Reap The Rewards…
End of Summer Sale…
Customize It and Stand Out…
Finance Interest Rate Specials…
Schedule a test ride today…
The 2020 Models are here…
Ride into Fall sale…
Performance Workshop this weekend…

Why is email solicitation so popular?  Because it’s a free alternative to tele-marketing and direct-mail campaigns.  The cost of sending an email is minimal compared to the cost of printing and mailing paper and the email “opportunity” goes directly to your inbox for review.

I predict we’ll see more and more sales email as the motor company works even harder to capture and retain our interest.

Photos courtesy of Harley-Davidson email blasts

All Rights Reserved (C) Northwest Harley Blog

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New Castalloy workers Martin Parker, Edward Fern and managing director Michael Tamasi celebrate the Harley-Davidson news.

New Castalloy workers Martin Parker, Edward Fern and Michael Tamasi celebrate the news.

I blogged back in December 2011 (HERE) that Harley-Davidson made a decision to shift wheel and hub manufacturing from Adelaide-based New Castalloy to China.

The plant was set for closure by mid-2013.

This news hit the Australian Workers Union State Secretary and union workers just prior to the Christmas holiday and resulted in some name calling and bad blood with the motor company.

Jump ahead a 1.5 years and New Castalloy had shed approximately 90 of the 212 workers, but there was some good news this week!  Harley-Davidson reversed the decision to shutter the plant and struck a 4-year deal, on both an extension to the plant’s lease and a new wage-agreement were obtained.

It would seem logical to assume that New Castalloy greatly improved its cost structure as they are now viewed as competitive at producing low-volume, high finish wheels.  The Australian government, which owns the Mooringe Ave. plant waived rent at the site to help secure the deal.

Congrats!  I’m sure the nice folks in Adaelaid feel good knowing they’ll continue to help H-D riders around the world express their own style of freedom.

Photo courtesy of Dylan Coker.

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“It’s disgraceful, but how about the heartless timing for Christ’s sake.”  — Australian Workers Union State Secretary Wayne Hanson said to reporters.

It’s not well known, but the majority of cast wheels and hubs for Harley-Davidson motorcycles are produced in Australia and shipped to Milwaukee.  Harley acquired Adelaide-based New Castalloy in 2006 when continuity of wheel supply was an issue.  The Australian subsidiary is New Castalloy and was a long-time supplier that was on the verge of bankruptcy of its then parent company, Ion.

Now Harley-Davidson plans to shift the manufacturing to China (according to South Australian Trade Minister Tom Koutsantonis) where it will save the motor company about $9 million a year.  The decision to cease operations  at New Castalloy will effect 183 employees and 29 contract workers. Harley expects to complete the transition to “outsourcers” by mid 2013.  The company estimated the related restructuring costs at $30 million, of which $10 million will be recorded in 2011 and $20 million in 2012.

South Australian Trade Minister Tom Koutsantonis said to reporters, “To tell a group of workers before Christmas they may not have a job is insensitive and I think quite silly.”  Mr Koutsantonis also stated that the motor company had given no indication to the government of the closure and as a result were unable to provide any assistance.  The South Australian Employment Minister Tom Kenyon stated that workers would get between $3K – $5K each in job training, but he was rather candid in that there was no place for them once we’ve got them through the right training.

The Australian manufacturing sector is bearing the brunt of global uncertainty (read layoffs) and high Australian dollar.  Ever the politically correct, President and Chief Operating Officer Matt Levatich said,  “The company’s decision on wheel production follows a review of the long-term fit and competitiveness of the New Castalloy business with our strategy and was not made lightly.”

As we know and have read many times, Harley has been recreating itself as a premium brand and smaller manufacturer while trying to grow its market share outside the U.S.

Made cheaper in China might be the new corporate mantra and correct decision based on pure Wall Street math, but there can’t be much pride in that choice.

UPDATE: July 10, 2013 — Harley-Davidson reverses decision to shutter the Adelaid plant (HERE)

Photo courtesy of H-D and New CastAlloy

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It started as whispers, but lately we’ve heard more and more about the “R” word.

Recovery of the economy.

Economists are starting to down play the recession and clearly chatter from our D.C. representatives is all about a turning point as retail sales beat forecasts and for the first time in 10 years 160K jobs were created in the month of March.  However, the unemployment rate remains steady at 9.7% nationally and it really looks like the pace of growth won’t drive rapid improvement in the labor market.

And speaking of job growth, Harley-Davidson has taken some of the oxygen out any recovery in Milwaukee.  According to the Biz Journal the motor company filed a mass layoff notice this week with the Wisconsin Department of Workforce Development informing the agency that it was undergoing a permanent reduction in force and will lay off 94 employees at its distribution center in Franklin beginning June 7.  Unemployment remains steady at 8.7% in Wisconsin.  This news was not unexpected as the motor company announced more than a year ago that it was closing the distribution center as part of a major reduction in operations, with a third-party company picking up parts, accessories and general merchandise distribution.

Clearly the labor market distress remains high and I’m not making light of hard working folks difficulties.   But, if it’s any consolation – plus the fact that this week Tiger returned to the Masters, launched a new 3D PGA Online Game and Nike’s greedy geniu$ made us feel CREEPY for the multimillionaire after rolling out a new ad featuring his dead father’s voice – Wisconsin is ranked among the top states for its ratio of golfers to courses and during this most distressful time, might I suggest a round of golf to reduce stress?  Better yet, maybe you could snag a 4-some in the middle of the day with Mr. Keith Wandell (H-D CEO) who according to a number of press reports is an avid golfer and discuss etiquette or share tips!

Photo courtesy of GoGo Caddy and H-D.


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Out Of Busines

Harley-Davidson has undergone a grueling restructuring over the last year to better compete amid less demand.

The economy and housing bubble depleted consumers’ wealth and left a lot of folks unwilling to spend on Harley’s high-end bikes.  I anticipate that Harley will remain at least three quarters away from achieving positive retail sales trends in the U.S., especially given the companies lapse of a successful promotion in the first quarter.

I’m genuinely concerned.   More so about the decay of prosperity in the local motorcycle shops, parts suppliers, and dealers.  Be it routine service or customization, the local shops most often operate on their ability to make sure YOU are happy. They know if you leave satisfied, you will tell your friends about your experience with the shop.  Word of mouth is an integral part of a shops reputation in the local area and carries a lot of weight in generating new business.  “Giving” local shops rebuild, repair, or service work on your bike, while appreciated, is not going to keep a shop in business.   The industry at large will need sales to rebound or the local motorcycle businesses will lay-off their skilled workers or worse – close down operations.

Unless you own or work in a local shop, you have no idea of what it takes to stay in business.  Facility overhead, staff salaries, phones, heat/electricity and advertising are things everybody thinks of.  But what about insurance, hazmat costs, licensing fees and money paid to local city and state governments for all the TAXES they require?

And speaking of taxes, I’m very skeptical of government spending our way to prosperity.  Increasing the tax liability on small business owners does nothing to encourage businesses to take care of their employees.  In fact, in Oregon there is a special ballot measure on personal and corporate tax increases.  In my opinion this one-size-fits-all legislation may well force motorcycle shops to shut down.  You’ve heard of Measures 66 and 67 and read more about net profits and corporate structures to last a life time so I’ll avoid explaining the details.  Instead, let me ask a simple question.  Did you get a raise last year?  I know I didn’t.  And if you’re lucky enough to still have a job, I’m willing to bet that you didn’t either.  Most likely you took a pay cut.  Or had your hours reduced.  Or were required to pay a larger share of your health insurance coverage.

At the same time you and I were taking cuts the Oregon Legislature voted to increase the tax burden on higher incomes and businesses by $750 million dollars, it also authorized $248 million in pay raises for state employees.  Yep, that’s right.  State workers got raises during the worst economy we’ve been through since the Great Depression.

Still don’t care?  Then how about this.  The legislature approved a budget that increased state spending by 9%.  If I was operating a motorcycle shop I can assure you that if my business increased 9% over the past two years I’d be most happy.  The legislature increase is about $4.7 billion more than the previous two years.  Time for another question.  Do you think state services have improved as spending has increased?  Are the schools better? Is our infrastructure better?  At a time when Oregon has lost over 120,000 private-sector jobs in the past 18 months the state has added 10,000.  It would seem that in Oregon, government has become the ONLY growth industry!

I’m not sure about where you live, but in Oregon during the winter many think about what customization you can do to your bike in the off-season.  Before long you’ll be sitting at your MacBook, surfing the web looking to make some modification dreams come true.  You’ll likely have questions and find yourself on the phone calling the local motorcycle shop trying to get all those questions answered.  Before long you’ll have spent most of an hour discussing scenarios, getting advice and prices from the local shop expert.

What if they don’t answer your call because the parts expert is no longer employed?  What if they’ve gone out of business?

We’re told by the “spinsters” in Salem that the state is making “budget cuts.” Huh?  In fact it means simply they can’t have as much of an increase as legislators would like.  A 9% increase is NOT a cut!  It’s my opinion that the private sector creates wealth.  Government does not.  I hope you’ll join me in voting NO on Measures 66 and 67 to send a clear message to the Oregon legislators that a CUT means CUT.   

Increasing taxes on motorcycle shop owners means more will go out of business.

Source: Statistics from The Oregonian

Photo courtesy of Flickr.

All Rights Reserved © Northwest Harley Blog

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Keith Urban

Keith Urban

Whoa!  My two previous posts on the current state of the Harley-Davidson state was clearly like a sad country song in an old rundown coffee shop, yup one of those “bummer zones” so, we need a change of scenery.

Speaking of, have you been to Nashville?  If you haven’t been to the Country Music Hall of Fame and Museum you’re the worse for it.  Yeah, you may think you don’t care about boot-kickers, but you’re missing out on the history of America.  From slavery to the Dust Bowl to Elvis and the tragedy of the Williams family.  To go to the Country Music Hall of Fame and Museum is to become a fan.  And to insure that it lives on, Vince Gill proposed a “All For The Hall” event where every artist cough up one night of revenue for the Hall.

Keith Urban is one who took him up on it and at the Sommet Center (the Staples Center of Nashville), he hosted some of country music’s finest as they raised money for the Hall.   Keith and his band played one my favorites, “Who Wouldn’t Wanna Be Me“:

“I got no money in my pockets
I got a hole in my jeans
I had a job and I lost it
But it won’t get to me”

That’s the power of music.  It crowds out all the negative and replaces the bad thoughts with joy and inspiration.  And when you watch Keith Urban ride his Harley and hear him wail on his guitar, you’ll smile with a good feeling.  I don’t know about you, but after yesterday’s jaw-dropping news from H-D and the layoffs at Buell I needed some “sunshine blown up my skirt.”

Life.  It’s full of hopes and dreams.  And victories and losses.  What gets you through is your friends, family and the music.

Photo courtesy of Keith Urban.

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LosersAssemblywoman Dede Scozzafava proclaims that Harley-Davidson would see similar results, like those of Advanced Micro Devices (AMD) if they were to relocate the Pennsylvania manufacturing plant to upstate New York.

Scozzafava wrote a letter to Matt Levatich, H-D president and COO, citing all the strengths including skilled workforce, college network, low-cost power and economic incentives as reason to give the area consideration.  She cited AMD as the poster-child of “success.”  The NY Public Authorities Control Board offered up incentives to the tune of $1.2B with a combination of tax breaks and a $650M grant to entice AMD to commit to a $4.6B ‘chip fab’ in Malta/Saratoga Springs that is expected to come on line in 2012 and employ ~1500 people.

Well, Ms Scozzafava if you’d done “The Google” you would have noticed that AMD has consistently lost money, for so long in fact that AMD spinners now report “profitability” as losing less than the year before!  Pink slips have become more common than “Good Morning” emails!  They are burning cash and bleeding personnel.  So much so that it lead AMD to hold a smaller than expected stake in the NY fab and the creation of a joint venture with Advanced Technology Investment, the government of Abu Dhabi which is capitalized by crude oil.

Cheerleading by the hometown assemblywoman isn’t too surprising, but does she really think H-D wants to co-locate and model success after AMD results?  They have had numerous product introduction slips, 11 straight unprofitable quarters, deep employee cuts for so-called “profitability”, off-shored manufacturing to Dresden, Singapore and Malaysia and now have the Arab government as investment partner.   About the only thing AMD seems to win in is legal litigation.

I noticed that Ms Scozzafava didn’t suggest for H-D to co-locate and take a page from IBM – who took taxpayer assistance ($140M), cut employees and moved jobs overseas.  Experience should teach us about the danger of a bureaucrats zeal — well-meaning but without understanding.

Photo courtesy of Andy Diggle and DC Comics.

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