Harley-Davidson announced that it would shut down its manufacturing plant in Kansas City, Mo due to a sharp decline in sales. The plant is responsible for Harley’s vehicle and powertrain operations, assembling all Dyna models, VRSC, Sportsters, and making the powertrain for the V-Rod bikes. Harley will be shifting plant operations to its York, PA plant resulting in a loss of 800 jobs in Kansas City and an increase of 450 employees in PA.
Sales of Harley bikes have dropped dramatically all over the world, and Robin Diedrich, an analyst with Edward Jones CO., told the MilwaukeeJournal-Sentinel it’s due to foreign competitors benefiting from a strong U.S. dollar which makes it more profitable to sell foreign-made bikes in the U.S. Another factor is aging baby boomers who largely supported Harley over the last few decades are getting older and less able to ride. Bloomberg Intelligence analyst Kevin Tynan said this in a report by Bloomberg:
“Harley can’t get younger people into the hobby, and the bikes are too big to be transportation in Europe or Asia.”
The issue is so big that Harley’s net income fell 82 percent since late 2016 and, with things getting much worse, a major change is needed. Harley plans to fight the decline in sales and popularity by releasing it’s LiveWire electric bike within 18 months. They also have a 10-year plan that includes training 2 million new U.S. riders, growing international markets to 50 percent of sales and releasing 100 new “high impact” motorcycle models.
Harley still has time for a comeback, and their 10-year plan looks promising. We have seen seemingly unstoppable companies like AOL and Blackberry completely crumble due to staying stagnant and not changing with the times. Let’s hope that’s never the case for the iconic Harley-Davidson Motor Company.