Harley lays off hundreds of employees ... BMW Motorad posts record sales

redsqwrl said:

. . . I do know that the engineers are given competitors bikes to ride...... Ironically brian had a giant BMW last.....

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The Rewire and significant changes

The MoCo is making very significant changes. Much happened the in early part of this year. CEO Matt Levatich left the company Jochen Zeitz has taken the reins. Now, John Olin, Harley’s CFO is out and is being replaced by current VP and Treasurer, Darrel Thomas until a successor is appointed.
While the management shakeup is significant, bigger changes are being made. Clearly, some big changes are necessary and the Rewire is implementing them.

Recently, Harley announced more than 700 job cuts. That’s a very significant number of employees considering Harley’s dwindling employee base. In 2008, Harley had approximately 9,300 employees. But at the end of 2019, its employee count was down to approximately 5,000. With the recent news the additional layoffs, Harley will employ somewhere around 4,300 or about 46% of its 2008 heyday workforce.

“The Rewire”

All up, the Rewire is focused on the following elements:

• Enhance core strengths and better balance expansion into new spaces
• Prioritize the markets that matter
• Reset product launches and product line up for simplicity and maximum impact
• Build the Parts & Accessories and General Merchandise businesses to full potential
• Adjust and align the organizational structure, cost structure, and operating model to reduce complexity and drive efficiency to set Harley-Davidson up for stability and success

In addition, the Rewire’s changes include all areas of its business globally, from commercial operations to corporate functions.

Pan America Harley-Davidson rewire -- The Pan America will be Harley’s first entry into the “adventure” bike market.
However, it seems that the last bullet of their plan is their first priority at the moment. With the announcement, Jochen Zeitz is quoted as saying:

“The Rewire is progressing very well and substantial work is being done to eliminate complexity and get Harley-Davidson on a path to winning. Our new operating model is simpler, more focused and enables faster decisions across the entire company.

“We’ve taken a hard look at our entire set up, our spending, and how work is getting done, to align our operating model, structure and processes. We are building a strong foundation to drive a high-performance organization in the future.”

Zeitz is clearly making cost-cutting moves and for a company that is hurting for revenue, that can be a good thing. Reducing complexity to make a company more agile and responsive can also be of significant benefit.

Rewire Deeper dive

But let’s take a look at Harley’s other plans. Some of the other bullets are subtly coded messages about how the business will operate in the future. Let’s take a quick look at those.

Enhance core strengths and better balance expansion into new spaces
The message here is to go back to basics and concentrate on those bikes whose sales help support the company. But the second message, “better balance expansion into new spaces” seems to point to a pullback on new models like the Livewire and other electric mobility.

Priorities

Prioritize the markets that matter
“Let’s concentrate on the places where we’re selling bikes at a good clip” seems to be the message here. Harley’s previous international expansion will likely be slower.

Delay

Reset product launches and product line up for simplicity and maximum impact
“Less is more.” That seems to be the message here. Harley will decrease production quantities and the number of models in the hope that fewer machines will support and drive pricing higher. With higher prices, comes increased profitability. Zeitz has been quite clear that going forward, he wants Harley to be an “exclusive” brand.

Bronx Harley-Davidson rewire -- Harley’s Bronx streetfighter will be its first attempt at a “smaller” streetfighter model.

He is also delaying the rollout of some of Harley’s significantly anticipated models. The Pan America adventure bike and the smaller Bronx urban streetfighter will not make an appearance before 2021.


Build the Parts & Accessories and General Merchandise (PG&A) businesses to full potential

This is an interesting bullet. Harley’s PG&A has been one of its most profitable areas. Its PG&A profit margin is far and above higher than the profit percentage from its bikes. Whether this means PG&A will become more expensive or the PG&A line will be expanded is not stated. Most likely, it will be a little of both. So if you think you’ve seen a lot of Harley branded gear and accessories, you likely haven’t seen anything yet.

Comprehensive summary coming

Harley says that it will release a “comprehensive summary” of its Rewire actions and financial impacts with it releases its Q2 results later this month. That information will hopefully provide a more comprehensive roadmap showing where Harley is now and where it plans to go.

Zeitz is not a man to sit on his hands and he’s proving that he is willing to make significant changes. It will be interesting to see what else Zeitz has up his sleeve for the MoCo going forward. . .

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Harley-Davidson shares Q2 bad news, and details of five-year Hardwire plan
For now, the company still seems keen on the Pan America


Harley-Davidson saw a very tough second quarter for 2020, with the company sharing grim financial details earlier this week, as well as more information on the new Hardwire corporate plan.

For months now, Harley-Davidson has generally seen motorcycle retail sale numbers shrink, with drops in overall revenue. There’s been occasional bright spots, but overall, things haven’t gone well for a while. However, while the company’s fortunes have been declining, Harley-Davidson has still been making money.

That wasn’t the case for 2020’s Q2. In the second quarter, Harley-Davidson made $865 million in revenue, a 47 percent year-over-year drop from 2019—that meant $92 million in losses.

. . . H-D’s motorcycle and related products revenue was $669 million, a 53 percent drop year-over-year when compared to 2019.

. . . COVID-19 wrecked everyone’s plans for spring, 2020, and Harley-Davidson stopped shipping bikes to most dealers. Every brand was affected, but H-D took it particularly badly, and since then, the company has been busy restructuring, with big layoffs and new CEO Jochen Zeitz announcing this year’s Rewire corporate plan, followed by the five-year Hardwire plan, to rebuild the company.

Zeitz went over some aspects of the new plans, detailing a future that’s going to look much different from what outgoing CEO Matt Levatich planned. Levatich wanted to create 100 new models and expand, expand, expand. Zeitz’s plan sees the MoCo withdrawing from less profitable markets and focusing on a smaller number of models. What does that mean for the Pan America 1250 adventure bike? It seems H-D is still very interested in the Pan America, as it sees adventure riding as a growth sector. There also seems to be considerably less enthusiasm for the Bronx Streetfighter. . .​

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