1- Harley-Davidson Dealerships. At the end of 2009 the company had 1,340 dealerships worldwide. Last year, 28 U.S. dealerships closed and 6 closed in the first quarter of 2010. Because of the down economy the company is encouraging dealer consolidation in all markets. “Contraction right now is healthy to strengthen and protect the dealer network overall” declared Harley-Davidson spokesman Bob Klein. So, expect more closings in the coming months. U.S. retails sales of new Harley-Davidson motorcycles are down 35 percent compared to 2007.
2- MV Agusta Sale. More details are surfacing regarding the transaction. The agreement signed July 31, 2010 shows, as I reported, that a “nominal consideration” of €3 was received by Harley to return MV Agusta to its previous owner. But in addition Harley-Davidson paid Claudio Castiglioni €20 million to take MV Augusta back, and then forgave a €103.7 million loan that The Motor Co. made to MV Augusta while they were under common corporate ownership. The Motor Company bought MV Augusta for $109 million in July 2008. At the current exchange rate, the transaction buy/sell back had cost harley-Davidson $136 million.
3- Harley-Davidson Workforce. As part of the 2010 company restructuring plan hundreds of full-time workers were laid off or agreed to early retirement. More lay-off will occur in the next few months and the company plans to create pools of independent workers to be called for work when they have full-time workers out on vacation or sick leave. In this economy, flexibility of workforce is a key element for Harley-davidson survival.