Last Friday evening August 14, I was informed by an unofficial source that “Big Dog Motorcycles was stopping production for the rest of the month of August 2009. That for the remainder of the year there will be temporary production furloughs. That a 20% pay reduction across the board was applied to all employees left after the layoffs“.
At my request, Paul Hansen, Marketing Director of Big Dog Motorcycles, sent me the following statement:
“Cyril. Thank you again for the opportunity to comment on the information you received regarding the recent announcement at Big Dog Motorcycles. As you know, the challenging economy continues to affect Big Dog Motorcycles and the entire U.S. motorcycling industry as retail lending practices tighten and consumer confidence and discretionary spending are still at historically low levels. Yet, we are still pleased to inform that we continue to be the leader in the high performance, high style motorcycle niche and have developed strategies to maintain this position over the long-term, which includes maximizing operational efficiencies, hunkering down to dramatically reduce costs, and accelerating our international distribution. All while keeping a keen focus on new product development.
To maximize efficiencies and reduce costs, Big Dog Motorcycles began a temporary production furlough on August 17, totaling seven weeks from today until the end of the year. The seven weeks are not taken consecutively and include an immediate four weeks combined with extended holiday leave. This is a result of the company adjusting production levels from now through the rest of 2009 and preparing for the model-year changeover. No layoffs were announced and all employees affected by the furlough are eligible for unemployment benefits. All company staff also received a temporary 20% reduction in pay.
The furlough combined with a temporary reduction in pay allows the company to carefully control costs through what we predict to be a difficult fourth quarter for the motorcycling industry. With our international efforts and signs the recession may be coming to its long-awaited end, we expect spring and summer 2010 sales to be encouraging.
Our all-new high-end bagger – the Bulldog – has recently been approved for export to Canada, joining several other models. Canadian sales have exceeded our expectations and we anticipate continuing to name new dealers in several major Canadian markets. Our assault on the international market also includes advanced negotiations with distributors in Europe and the Middle East and aggressively seeking European compliance.
While the recent announcement was difficult to make and is never easy, it was a painful, necessary step as we work through the economic downturn and position ourselves to be the leader in our niche and a major force in the industry for years to come” Paul Hansen, Big Dog Motorcycles Marketing Director.
Note from Cyril: For those not familiar with the word “furlough”. “Furloughs are mandatory time off work. Implemented by employers as a cost saving measure and an alternative to layoffs. The affected employees are usually eligible for unemployment benefits”.