Harley Davidson Inc. reported a second-quarter profit of $19.8 million, or 8 cents a share, down 91 percent from the $222.8 million it booked a year before. The lower than projected profit was caused by the tough market soured consumer spending and those factors sent bike sales sliding. Harley Davidson representatives said they were responding to the slump, and protecting the brand, by cutting bike production far more aggressively than expected, a move that sent its shares higher.
Harley Davidson Inc. said the temporary production cuts, as well as more permanent job cuts and plant closures, would ultimately save it between $140 million and $150 million a year. Harley-Davidson
Retail sales of new Harleys skidded 30.1 percent and revenue fell to $1.15 billion from $1.57 billion. Analysts were expecting $1.14 billion.

Harley Davidson Inc. slashed its 2009 shipment expectation to between 212,000 and 228,000 new motorcycles, down from the 303,479 it shipped in 2008. They had previously said it expected to ship 264,000 to 273,000 motorcycles this year.
As a result of the lowered shipment volume, the company said it would cut 700 more positions in its hourly workforce and slash the salaried workforce by about 300 positions. It said it plans to offer a voluntary separation incentive package to eligible salaried employees. They had already announced cuts of 1,400 to 1,500 hourly production positions in 2009 and 2010 and about 300 salaried positions.

This is tough news for the beloved motorcycle company but Harley Davidson anticipates it will come out for the better and be stronger in the long run.

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