Both Harley and Polaris announced major job cuts today in response to poor fourth quarter 2008 sales. Harley-Davidson will eliminate 1,100 jobs over the next two years as it reduces its motorcycle manufacturing by ten to thirteen percent in 2009 compared to 2008. Polaris plans to get rid of 460 jobs.
Harley’s job cuts will come as a result of it consolidating its
production into fewer facilities, shifting its parts, accessories and
general merchandise distribution to a third party and eliminating its
domestic transportation fleet. The job cuts will be made up of 800
hourly production positions and 300 non-production “primarily salaried”
positions. The moves are expected to result in a one-time expense of
between $110 and $140 million and an annual savings of $60 to $70
Polaris’s cuts include approximately 160 full-time jobs (5% of the
workforce), with the remaining coming from contractors, part-time and
temporary jobs. Polaris has not yet announced fourth quarter or
full-year 2008 results.
The interesting thing about all this is how well both companies appear
to be weathering the recession. Compared to the car industry, which now
relies on taxpayer money to keep operating, neither motorcycle maker is
doing all that badly. Harley’s total revenue for 2008 was $5.59
billion, compared to $5.73 billion in 2007. Harley made a $654.7
Million profit in 2008. Extremely impressive for a manufacture of
expensive luxury goods in an economy that’s lost easy access to credit
and full of consumers who currently fear for their jobs.