When I announced on March 13th that Harley-Davidson would be laying-off 169 employees or 21.1% of its workforce at its 400,000 sq. ft Kansas facility, I mentioned that the company didn’t elaborate for the decision. Some of you commented that probably Harley intended to replace full time workers with seasonal employees. A few days after the layoff announcement, Kristen Cunningham, Harley Davidson’s Corporate Reputation And Communication Manager decided to talk to the media, explaining the layoffs. And it’s all about production adjustment and outsourcing.
“The shift is to align with our overall production needs for the facility, as well as the decision to source work performed in the Materials Velocity Center and certain sub-assembly work,” Cunningham said. “This is not easy news to share, and was a decision made after careful analysis and consideration given to our long-term manufacturing and business strategy.” The Kansas facility is where the Harley Street, Dyna and V-Rod models are produced. The layoffs will start on May 11 and continue through Sept. 30, 2015. (photo @ Harley-Davidson archives)
Outsourcing from China and India?
RIP HD 1903-1999
Said so at the time: the MOCO should have invested in the next generation V-Rod instead of the Teen Glide (aka Street) – now they are sitting with two dead ducks. In the end it is the people on the shop-floor that have to bare the brunt of poor executive decisions.
I said all bets were it was all about outsourcing . And here is the proof . Knowing what i know about the KCMO biker culture and the effect the plant and its previous level of employment had had when choosing what brand M/C to buy in the past ? [ having lived there for 5 1/2 years ] … I wonder what effect this will have on future purchases as well as overall brand loyalty ? In light of the stagnant economy [ declining actually ] in KCMO ? I’ll bet … pretty significant !
Oh well . Same old story here in the US of A of late . A community pony’s up to bring a manufacture into the region … with tax breaks , subsidies , cheap loans , freebies etc … a few years go by …… and said manufacture slowly pulls out for greener [ read ‘ cheaper ‘ ] pastures leaving the community in shambles and in debt
PS; Two thumbs up for getting the straight scoop on this Cyril & Co.
Victory is hiring. Harley is becoming a joke and I am with SIGFREED, Harley needs to put the VRod technology into their other bikes. Who still wants a chain driven primary?? not me…… that’s why I own a 2014 Cross Country.
Selling a myth is what HD is all about…I’ve owned them in the past would never do so again…..greedy is all they are and the bikes ain’t that good.
This is the way business is done today. You must produce product at the best cost. If not the competition will eat you up. Every little bit of savings is reflected in the selling price. When the selling price spirals upward, and becomes out of control sales will go to the competition.
Well … reading over the comments so far … I may be reading too much into this seeing as how its just the tight little group here commenting on the company’s recent actions … but …
This is beginning to look really negative … both from a publicity and marketing standpoint
So yeah … maybe this move will save them a dollar or two in the short run . But has anyone in the company even thought about never mind calculated what this may cost them in the long run ? 😉
tj martin…Are you willing to pay even more than you are now for cars, bikes etc.? Likely a lot more over time. EVERYONE that survives must consider cost and how it effects sales/profits. I wish it were not so but as I said previously, “this is the way businesses done today”.
@richards – so are you agreeing it is right just b/c “business is done this way”. By the way, more & more business is not done ‘this way’ today.
Keep managerial & executive salaries in check & produce a quality product with great service & you’ll be around long-term. It wouldn’t hurt to align yourself with like-minded investors either.
That plant is not in Kansas it is in Missouri, Kansas City Missouri!
I said it before & i’ll say it again
Mr Wandell needs to take some of his BONUS MONEY
& give it back to the people who earned it for him in the first place
The KC WORKERS !!!!
Outsourcing my rear end !!!!
The Street was ALWAYS going to be made overseas
Doug….No, I am not agreeing that it SHOULD be this way. If you re-read my post above, I say ” I wish it were not so” (that it’s the way business is done). However, it IS the way business is conducted in the world market.
I would say that these decisions are being made by the consumer, who values his own shekel more than he values anyone or anything else…we can talk all we want, but we speak every time we open our wallets and the majority speak cheaper more than anything else…
Look, business cycles go up and down.
As i recall, on this very blog, when HD was backlogged, opening new plants and developing a new V-rod model… etc, etc, ….. Everyone was pleased how well things were going.
Well, now the cycle has flatted out, there is more competition in the marketplace, and the political winds continue to drive the cost of doing business up. A company expecting to stay solvent has to be flexible enough to survive till the cycle turns around.
So i’m guessing this is part of their survival strategy.
Shifting their internal labor pool out to regional suppliers could be a first step, although that might make managing production volume a bit more tricky. But the flexibility is there If the economy falls out from under us.
In that case off shore outsourcing would be the best one could hope for.
-nicker-
It’s a Corporate like Apple,Ford,Coca cola,Toyota,polaris,Nokia,Samsung and lots of others, this is the way they behave !
I think Honda is still a family company if that is what you want go buy a Honda !
HD American sales are dropping, their foreign sales are growing.
Don’t forget HD had bikes built in Japan in the 30’s
The more things change the more they stay the same.
Don’t fool yourself in thinking Polaris or Triumph are any different.
This is the crappy corporate world we live in….
Corporatism and communism stifle individual growth and enslave us all……….
Good thing we won the cold war…bloody joke
No, except for profit being essential to survival, the moco has less in common with those brands than they have with each other.
The United States of America was so invested in the legacy of the bar and shield that we applied trade tariffs to protect it. Granted we have done that elsewhere but a motorcycle company does not typically get lumped in with national economic security sectors. I was proud to ride hawgs then, proud of the softtail, proud of the Evo.
Milwaukee sold itself as a quintessential American slice of apple pie. We believed it.Today it has traded in that golden goose for the global marketplace. Turns out the old saying about cake and eating it is true.
HD is starting to feel the competition from Polaris and other manufactures. I can only say this because of my own observations in the street. Customers can’t get the Indians fast enough. The police are riding Victorys and HD is building the sosdd. Too bad for the guys being laid off, wish you the best. ..Z
With the rise of the dollar worldwide and being the only safe haven left for investors, prices in the USA are beginning to make our goods unobtainable. What’s the manufacturer’s option? Cut costs. This is attrition and only that, and while I was against the street from the beginning, spreading manufacturing base worldwide has it’s benefits. It keeps production cost in line with offerings from other cost cutting manufacturer’s in Asia and allows the company to stay competitive in fast growing markets like India.
It’s a terrible outcome for line workers. However most companies manufacturing in the US do the same, either hire fewer employees and bolster their factory abroad, stop hiring and cut costs through attrition, layoff workers, or source more foreign parts to cut costs. A knife manufacturer did the same here:
http://www.nytimes.com/2015/03/27/business/economy/as-dollar-heats-up-overseas-us-manufacturers-feel-a-chill.html?hp&action=click&pgtype=Homepage&module=second-column-region®ion=top-news&WT.nav=top-news
Count me in as someone who still likes a chain driven primary.
I’m sorry but there are too many H-D apologists commenting here. For one, all businesses in general and Polaris in specific are not doing the same thing. Polaris is hiring for Indian and Victory workers, not laying them off. Sure every big company today operates in a global economy but that doesn’t excuse this. If your company is losing money or about to, and the only way to save it is to outsource…fine, better to have something than nothing. If you need to outsource so that you can lower the cost of your product, which increases sales, which would increase jobs…fine, smart business and everybody wins. Unfortunately the Wandell era has taught us that Harley doesn’t lay off people for either of those reasons. All the past layoffs have gone strait to higher margin and executive bonus. Harley is a profitable company and they don’t lower the prices on their products. This is a BS greed move plain and simple. Somebody at the top is looking at the payroll going to the workers and has decided to redistribute it to himself. First they replaced full time workers in York with temps, then they outsourced the IT department in Milwaukee, now this. They think we’re stupid enough not to notice if they do it a little at a time.
I’ve worked in the industry for MANY years as a manufacturer/supplier and I have to say that HD is the most cut throat company that I have ever dealt with. They preach transparency and win/win, but it’s really a one-way mirror and win/lose all the way. They squeeze you until the margins that you make aren’t even worth the trouble of doing business with these leaches. At the same time, their margins are frequently triple that of their suppliers…. hmmm.
They have similar practices with their dealer network as well. So their suppliers and their dealers mostly hate doing business with them, now they are working hard at ensuring that their customers (the riders) hate them as well. A recipe for disaster!
And yes, the other manufacturers are out to make the best margins possible. The difference is that they understand that they need to have good relations with their suppliers and dealers, so they treat them as real partners instead of patsies.
RIP HD
@ EX Supplier:
I’ve heard/seen this exact issue you’re speaking of. Would love to get a real inside scoop of what you’ve dealt with just for the advanced knowledge of “knowing”. I’ve been in “the industry” for 26 yrs now. 6 at a dealer, 7 were on the manufacturing side at S&S, and the rest as an indy shop. So I’ve a relatively good perspective of “how it works” but not a full understanding of the supply side of manufacturing. Curious, call me if you want.
TImes change, product cycles are called that for a reason, markets and interests of consumers with disposable income move from product to product, the plant makes two lines that are not big sellers and HD’s overall sales numbers are down. It’s just a function of market cycles in buying. If it bothers some of you so much, go buy a v-rod or a dyna to support the plant.
Has anyone considered that the tax benefit HD received from KC and the state of Missouri expired. These tax benefits our usually tied to a requirement to employ X numbers by the company. When the benefits end the company shaves the work force.
It happens all the time.
Yup and I’ll still see twenty 2014 to 2015 Hds for every 1 Vic/Indian on the road and at events this summer.
richards – in answer to your question .. if it would guarantee that production stay in the US as well as local and the quality remain high … yes … I would be willing to pay more .
Looking at todays headlines though [ e.g. Sturgis sponsorship and plaza/memorial they’re building to themselves ] …. its pretty obvious where much of that so called ‘ savings is being spent .
On marketing ploys … not employess .
Breeze – KCMO’s tax incentives generally are for either 10 or 20 years . Which program the company’s plant is under and when it was initiated we’d have to look into because I and those i know that work there currently do not know . All i do know is there was no negotiations etc with the city of KCMO to extend or initiate a new agreement before the company announced the lay offs
And yes … you’re right … once the tax incentives etc expire … its generally hasta la bye bye for the business in question . KCMO has been particularly hit by this as in the 90’s – 2000’s they and KCKS were handing out tax breaks [ as in Zero taxes ] like it was Christmas in a desperate move to get the city(s) back on their feet . The continuing story of the blatant bi-annual ransom GM has KCKS held hostage to in order to keep their plant open reads like something straight out of Al Capone’s playbook
Its both ironic and sad that all manufactures beg for and demand Brand Loyalty from the consumer … communities they exist in etc … but show no loyalty what so ever to anyone … including those like KCMO that are part and parcel of the brand’s success . There’s a lesson to be learned by all those communities towns and cities considering offering tax incentives etc . Though its doubtful the leadership will ever learn it 😉
Maybe if H-D hadn’t paid that multi-million dollar deal to be the “official” bike of Sturgis and build a big fancy picture spot they could’ve kept people on the payroll.
ZYON,,,you,re right,,,,,H-D is still very strong,,,,,
Yep. Another case of an American Company taking the dollars over the workforce. I seriously considered buying the new Road Glide a few weeks ago.
I just bought a new Indian–and I’m happy that I did.
I’ll miss HD, but I’m not sending my money to a company that puts the employees (and the dealers) last…
Yep my bosses who have been in the motorcycle business for 42 years today let go there harley franchise,hd wanted us to open a new shop and only sell harleys here in new zealand we will trade in any bike in good nick and on sell it and make good coin of them along side harleys but all they wanted to see was hd’s,so we are all out of jobs some guys have been here over 20years.Hd is run by bean counters and know nothing about the market they serve,bloody morons thanks for nothing.
Sad news for the employees losing their jobs, also sad that HD is continuing to outsource from offshore suppliers after so many years of pushing the “American” ideal. I feel a backlash for the MoCo is in their future. We have seen this before in the AMF years.
And the bikes don’t get any cheaper.
Business is business, the number value is always going be more important then the human value.
With HD it’s less about the product and more about the shareholders
Who said the outsourcing went overseas? Truth is the people being laid-off are being replaced by people working inside the four walls of the plant for less money and no benefits. Harley has been moving work offline into the warehouse for a couple years in order to make this move. Ask someone affected by the lay-off. Find a quarter in the past 20 years where HD reported a earnings loss. This move is corporate greed pure and simple!
Zyon & Morpion: You’re right and they’ll all look about the same. And all the focus will be on the bikes that look different from HD like Indian and Victory.
To all who produce world class quality bikes…there is hope down the road!!!
Enjoy the ride…y’all are unique individuals…second to none.
Triple D – DDD
Outsourcing and using “casual” labor equals DECLINE IN QUALITY.
HD is more about perception and hype rather than research, development, and innovation. A few years go I took my wife’s 2 yo sportster in for service. The tech said it needed new brake pads. Unfortunately they had nothing in stock and needed to order. 6 days later I got the bike back. This is not the first time I’ve had to wait a week for a common part! My friend owns a Yamaha and gets whatever he needs next day. There is a bright side to this story. I can walk into most HD dealerships and get any clothing item in any color or size. HD is more concerned about marketing to the general public! I loved the way things were 30 years ago, when dealers sold black tee shirts and cared more about motorcycles! I can do without the HD dog sweaters!
First dealership I ever went to was a converted Sinclair gas station. I was maybe 16.
One new FL and one new Sportie stuffed into the front room, and maybe three or four second hand hawgs and Trumpets out in front under the awning where the pumps used to be. Repair work in the bays and the only soul there, the owner it turned out, was hunched over a shovel top 68 turning wrenches.
I stood in the doorway looking around and he finally got up and noticed me. He said “What the F*** do you want?”
The MoCo shed dealers like him for automobile guys with glass and hardwood off ramp showrooms. They molded a dealership culture that prizes high dollar bookkeepers pencilwhipping spreadsheets in place of people with motorcycle oil for blood. Well, it worked. They got what they wanted. It’s been good for shareholders. Market share unfortunately was not high on my list of reasons to ride one.
Now, in times of a dwindling client base domestically it will be interesting to see if the Wharton School wizards that navigated Milwaukee into the cash cow it became will roll up their sleeves and figure out a strategy to yet again remodel the old girl to meet new demands.
Can they manage to make lightning strike twice in the same place? Who knows? I would bet that the people that defend their techniques so vocally now will be as disgusted with what they become as those of us who remember Sinclairs are disgusted with what they are now.
A half-century ago, CEOs typically managed companies for the benefit of all their stakeholders – not just shareholders, but also their employees, communities, and the nation as a whole. The shift from the 1970’s forward has been to favor shareholders over stakeholders. All american companies have cut unions, cut pay, cut jobs, cut hours, cut benefits and have automated or outsourced jobs to the cheapest source, all to favor the shareholders at the expense of the stakeholders.
In this case, the reality is that the HD board (shareholders) have decided to cut 169 more Americans and their community (stakeholders) out of the corporate profit equation. The HD board does not care about their US stakeholders as long as they can generate customers somewhere else at lower cost and with greater share values to themselves. They see more long term profits in Asia.
In the long run this is short sighted on HD’s part as there will now be 169 more Americans that will have few options than don’t involve taking lower pay, lower hours and/or lower benfits in the sad array of jobs being created in the American sector. These stakeholders will just be folks who will no longer have the buying power to purchase “American” motorcycles. HD is slowly eroding their presence in their country of origin to make money for their shareholders ….. welcome to big unregulated, run-a-way business in the US of A.
Personally, I think they should be firing more “Corporate Reputation And Communication Managers”.
im a causual and i do my best to put out the best product i can.whether it be for corporate profits or my paycheck that i need to live on. but one thing i have to say is that the people there all respect one one another no matter whats going on. and even if its for lower pay than an union employee. i want to keep working there. GOD I LOVE THIS JOB MY DREAM JOB! AND TRIPPLE D YES THERE IS HOPE DOWN THE ROAD. WORLD CLASS!!!