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Harley-Davidson posts first loss in more than a decade
[WISCONSIN] Harley-Davidson posted its first quarterly loss in more than a decade as the iconic motorcycle maker's restructuring plans were undermined by the onset of a global pandemic.
Jochen Zeitz, a former Harley board member who became chief executive officer in February, has been working to shrink the company and narrow its focus amid a five-year sales slump in its core US market. He has starved dealers of new bikes to clear out excess inventory, a move Harley said helped it charge full price for 2020 model-year bikes.
"We're not willing to sacrifice the strength of our legacy in a quest for pure volume growth going forward," the CEO said on a conference call Tuesday.
But Mr Zeitz's belt-tightening wasn't enough to offset a 59 per cent plunge in Harley's second quarter shipments after the coronavirus halted production in its US factories for two months. The bikemaker reported a loss of 35 cents a share, missing the lowest analyst estimate and below a consensus for a profit of 18 cents a share.
The Milwaukee, Wisconsin-based manufacturer said it would speed up turnaround efforts by cutting about 30 per cent of its model lineup and concentrating on 50 markets. Harley said in its latest annual report that it had dealers in about 100 countries worldwide.
That comes on top of Zeitz's earlier decisions to cut roughly 14 per cent of the workforce, prune the US dealer network and delay product launches. His plans for a turnaround have been waylaid by the spread of the coronavirus, putting pressure on the company as it prepares to unveil a five-year strategic plan sometime in the fourth quarter.
Harley declined to give financial guidance for 2020, saying the impact and the duration of the pandemic is still too uncertain.