Harley-Davidson Inc. president and chief executive officer Matt Levatich today announced plans to shift spending within the company, which is expected to cost about $30 to $35 million in the fourth quarter.
The reallocation includes employee separation and reorganization, and about 250 employees will be laid off in the move.
“An early retirement incentive program will be offered to eligible employees in advance of what we believe will be a global reduction of around 250 salaried positions across the company, largely completed by the end of the year,” said Tony Macrito, a spokesman for the Milwaukee-based motorcycle manufacturer. “Adjustments in positions and structure will be made in essentially every part of the business to achieve the right focus and support the increased demand-generating investments.”
“We expect a heightened competitive environment to continue for the foreseeable future, and now is the time for us to dial things up with significant additional investments in marketing and product development,” Levatich said in the company’s third quarter earnings release. “We have a strong plan, built on our incredible foundation, to further assert Harley-Davidson’s substantial market leadership and accelerate growth. We have great confidence in our plans to drive demand and grow our reach and impact with customers globally.”
The company this morning reported third quarter net income of $140.3 million, or 69 cents per share, down from $150.1 million, or 69 cents per share, in the third quarter of 2014.
Operating income totaled $215.8 million in the quarter, down from $225.5 million in the same period a year ago.
Harley reported $1.1 billion in revenue, flat from the third quarter of 2014.
Dealer new motorcycle sales were down 1.4 percent in the third quarter versus the year-ago quarter.
“Despite some disappointing results, but thanks to lots of great strategy and planning work we’ve done over the last several months, I’m even more confident we have the foundation, plan and team in place to compete and win in the marketplace,” Levatich told analysts in a call this morning. “The quarter and the year to date did not unfold the way we expected. The market has thrown us some curve balls this year and competition has ramped up.”
The motorcycle maker also has completed eight recalls in the past two years, one of which included 185,000 bikes.
