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Posts Tagged ‘operating efficiencies’

photos_large_5Don’t get your underwear wrapped around the axle with that title.

“Off the reservation” is a common phrase, which many people use without considering the context of its original meaning. Namely, that Native American peoples were restricted to reservations created by the U.S. government, and their freedom was severely limited by the terms of the treaties they were often forced to sign.

I’m using it in its literal sense (to deviate from what is expected) and as you might anticipate it’s a reference to Indian motorcycles rampant sales and intractable competition versus the Harley-Davidson Motor Company.

Harley-Davidson posted flat sales for Q2 2014, yet Indian/Polaris posted higher revenues for the second quarter 2014 at $1.01 billion, reflecting an increase of 20% over last year’s second quarter sales of $844.8 million.  Polaris stated that sales at its motorcycles division soared 107% year-over-year to $103.1M in large part due to strong demand for the new 2014 Indian motorcycles.  Clearly they have deviated from what was expected.  One could debate that given Polaris motorcycle revenue is much smaller than Harley’s, it’s easier for them to hit double digit growth numbers, but that would be down playing the strong demand for the Indian products.

Additionally, Harley-Davidson stated its share of the market for new heavyweight motorcycles with engines of 601 cubic centimeters or greater slipped to about 50% in Q2 2014 from 53% a year earlier.  Another indicator that competition is weighing on the company.

Financial calls with terms like ‘diluted earnings’ and ‘operating efficiencies’, don’t mean much to riders and it’s not like Harley-Davidson is hurting.  But, it’s good to see Indian doing well with North American retail sales up 15% year-over-year in the second quarter.

Congrats!

Full Disclosure:  I’ve got a riding buddy who traded his H-D Street Glide in on a new 2014 Indian back in January and loves it.  There is no dealer in Oregon yet and he went to the extra effort of buying it from a Seattle dealer.

Photo courtesy of Indian/Polaris.

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 For employees at our Kansas City, Mo., plant, building bikes is more than just a job.


From 2012 Annual Report — “For employees at the Kansas City, Mo., plant, building bikes is more than just a job.”

Falling sales and rising profits.

It’s a contradiction that many companies experience and one that Wall Street is impressed with if the HOG stock price is any indicator.  It closed at a 52-week high ($59.48) today.

Despite the surging profit in Q1, WDAF-TV in Kansas City is reporting today that H-D plans to lay off between 130 and 140 employees effective June 30th.  Seventy-five of the workers are “casual-employees” or seasonal workers who typically help during a surge in production.  The remaining employees that will be let go are full-time.  The Kansas City plant produces the Sportster, Dyna and VRSC models.

Harley management has consistently stated a restructure goal to have a more flexible work force and to permanently be in a position to generate strong profits on a lower revenue base.  You might recall the restructure move is all part of a new labor agreement signed in February 2011 that went into effect in August 2012.  The agreement included reducing the overall full-time employment at the plant to about 540.  Harley-Davidson management advised Kansas City workers that if they didn’t agree to the concessions, the plants work would be moved to York, PA.

It now seems that H-D is conserving cash and keeping a close eye on production.  It might be because there continues to be uncertainty about the stability of the recovery or it’s as simple as they’ve reached the end of their 2013 production run.

In the TV video the interviewed employee, Benjamin Stark stated that workers were walking around like zombies.  Not good.

American businesses have gotten used to being much leaner and the joblessness shows only a few signs of easing.  There is nothing I can say that will help ease the effects of being laid off, but I sincerely hope everyone affected rebounds quickly.

Photo courtesy of H-D.

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