The student news site of Marquette University

Marquette Wire

The student news site of Marquette University

Marquette Wire

The student news site of Marquette University

Marquette Wire

Harley-Davidson to cut more jobs

  • Harley-Davidson announces further job cuts in Milwaukee and nationwide.
  • A total of 400 more reductions are planned, including 50 to 80 in Milwaukee factory.
  • Net income, profits both down in first quarter.

In August, Harley-Davidsons roared through the streets of downtown Milwaukee to celebrate the company's 105th anniversary. Today, the company faces more job cuts as its first quarter profits have dropped 37 percent from 2008.

According to an April 2008 Harley-Davidson news release, the first round of cuts will affect 730 jobs nationwide, several hundred of those at the company's headquarters in Milwaukee.

According to the report, as part of a restructuring plan within the organization, the company planned an additional 1,100 job cuts nationwide in factory and office positions for 2009-'10.

Amanda Lee, Harley-Davidson spokeswoman, said there are now 400 new nationwide job cuts that will be added on to those 1,100. Fifty to 80 of those will occur in Milwaukee.

"I wish we didn't have to talk about these cuts, but it is business," Lee said.

Lee said the company is planning its Annual Shareholder Meeting for Saturday, despite the cuts, which she described as "an unfortunate part of business."

Harley-Davidson Director, President and Chief Executive Officer Jim Ziemer, who plans to retire this year, released a statement on April 16 regarding the situation.

"We don't make any job reduction decisions lightly," Ziemer said in the statement.

According to Harley-Davidson's financial report released April 16, its net income is now $117.3 million (50 cents per share) in its first quarter, down from $187.6 million (79 cents per share) at the same time last year.

According to the report, its U.S. motorcycle sales fell 9.7 percent in the first quarter of 2009 and worldwide fell 17 percent.

Steven Crane, associate professor of economics, said he has kept a focus on the company since it announced its first wave of job cuts in April 2008.

"It's a classic straightforward example of firms having to adjust when revenue goes down," he said. "To try and lower costs, the company has to try to eliminate losses."

He said since Harley-Davidsons can be considered a luxury good, the demand will naturally go down in times of recession.

"The demand for workers is a derived demand," Crane said. "This is traced to the final products themselves. When the demands for inputs go down, the demand for labor goes down significantly."

Lee said the company is undergoing a restructuring process, the job cuts coupled with the change in leadership.

According to a Harley-Davidson news release, Keith Wandell, president and chief operation officer of fellow Milwaukee-based company Johnson Controls Inc., will succeed Ziemer.

Kerry Thomas, executive director of Transit Now, an organization dedicated to education on transit issues in Southeastern Wisconsin, said the number of both cars and motorcycles on the road has dwindled due to the global economic crisis.

She said a drastic increase in mass transit use has occurred as a result.

"More people than ever in history are turning to transit across the country because it saves them money and gives them more time to spend doing the things they enjoy," Thomas said in an e-mail.

She said relying on transit is a viable option for commuters, but when demand goes up, costs will naturally increase.

"Unfortunately, at a time when the demand for transit is at an all time high, in Southeast Wisconsin we have had to raise fares and cut service so much due to insufficient funding that many people do not have the affordable connections that they need," Thomas said.

Thomas said the investment in automobiles, motorcycles and transit will help with economic growth in the long run.

"Now is a critical time for this region to invest in transit to help get people to jobs, create more jobs and build our economy back up," Thomas said.

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