Harley leaving Milwaukee

[Kaiser]

Excerpt from this article:

http://articles.moneycentral.msn.com/Investing/top-stocks/blog.aspx?post=1789378&_blg=1,1789378

"Harley's CEO told The Associated Press the company will reach a decision on relocation within a month or two. Harley execs aren't necessarily going to leave the United States and are reportedly scouting out American locales outside of Wisconsin. There's also a push to establish incentives to keep the 1,630 manufacturing jobs where they are in Milwaukee, but that's up in the air. "

Any bets as to where they go?  I'm guessing Mexico.  So, if that happens...how to flip the "Jap Crap" jokes back on them?  Maybe "hey, nice Mexi-CACA bike you got there."

[Doc Moose]

It'd be a shame to have them move out of the country.  A LOT of traditionalist owners would be pissed and it could possibly hurt sales even more.    They'd no longer be able to trumpet "American Iron".
Victory MC could be a winner.

[Squealy]

There's alot of empty automotive factories in Kokomo Indiana they could look at.....

[Serk]

I'll make a wild prediction that IF they leave Milwaukee, and IF they stay in the US, they'll be moving to a Right to Work state...

[NITRO]

It seems like Harley has been making some good decision lately and finding success/possible success. Their Sportster line is as popular as ever and they are considering building a plant in India. Moving out of Milwaukee, and especially the US, seems like a very bad idea. The article hit it on the head: it's the high cost of a Harley that is killing their sales in this sluggish economy. Unless HD can drop their prices dramatically through cheaper labor, there's no way they would sell enough bikes to make up for the customers they'd lose by leaving the US.

I think all of this is a scare intended to push the city, state, and union to do as HD wishes.

[9Ball]

having moved from Wisconsin two years ago, the current Governor and the state assembly have passed so many anti-business taxes that a lot of companies have either left or are planning to move.

It's a fairly expensive state to live and work in....and way too cold and snowy.

[Jack]

I read an article last week about Harley considering a plant in INDIA as well.

[Valkflyer]

I read an article last week about Harley considering a plant in INDIA as well.

If that's the case here's all I have to say to them about that.......

[Serk]

I read an article last week about Harley considering a plant in INDIA as well.

http://thekneeslider.com/archives/2010/07/23/harley-davidson-considering-assembly-plant-in-india/

This would NOT be the first Harley factory outside the US though... They don't talk about it much, but they opened an assembly plant in Manuas Brazil in 1998...



Source - http://www.harleyhelp.com/hist.html

[alph]

It's a fairly expensive state to live and work in....and way too cold and snowy.

under tommy tompson (a republican governer), we were up to being the fourth highest taxxed state in america!!  now, everyone else has just cought up to us!!  plus, i don't know what jrhorton is talking about "way too snowy!", the last several winters have just been to F-ING COLD!!

as for harleys moving to mexico, that would make them "mexican jumping beans"  

my self, it would be the only company that i wouldn't mind seeing move out of state, or to move production over the border!  for years i've delt with that "jap-crap" calling, and it would be wonderful to return the insults!

[Walküre]

I see  that they blame "workers wages" as a main ingredient. It's ALWAYS worker's wages...while up 'til now, they've been doing pretty good...

I personally think that a large part of it, is saturation of the product lines. Around here, even with the large number of Purdue students with crotch rockets, I'd say HD's out number ALL other motorcycles, at least 3-4 to one, maybe even a LOT more than that. Everyone I know, that either "always wanted" or "gotta be a" Harley, has one. Now, they spend all their extra coins, on buying HD "jewelry" for the bike. Oh yeah, and HD bandana's and skivvies.

I've had HD's, so has my wife. Granted, I'm sure they've come a long way since MY first one, but still, they "shake, rattle, and roll" too much for my tastes. It has always been down to "do I want tomorrow's engineering, built overseas", or do I want "100 year old technology, built in the US"? Now, if they move outside the US, the answer will be simplified to "do I want tomorrow's engineering, built in the US", or do I want "100 year old technology, built overseas"?

When I first started riding Honda's, Kaw's, etc. the high-revving, air cooled motors lasted about 30K miles, same as a HD of that time. I have no idea how many miles the newest HD motors can  be expected to last, but I'm sure it's not the 200K+ that a maintained Valk or Wing can be expected to.

Oh yeah, and I'd rather ride a rice-burner, than trailer a Harley...

R

[fiddle mike]

I'll make a wild prediction that IF they leave Milwaukee, and IF they stay in the US, they'll be moving to a Right to Work state...

They have already looked at KY and FL for that very reason. Their own employees  seem to be H-D's worst enemy. 

[Jabba]

is Harley Davidson a UNION company?

 

Jabba

[G-Man]

having moved from Wisconsin two years ago, the current Governor and the state assembly have passed so many anti-business taxes that a lot of companies have either left or are planning to move.

Happening here in New York as well.  Many businesses have been forced out of the immediate NYC suburbs due to insane taxation.  Families as well. 

[Davemn]

My guess would be South Dakota.

[SANDMAN5]

Victory MC could be a winner.

Didn't I read somewhere that Victory was moving to Mexico?

[Jack]

Victory MC could be a winner.

Didn't I read somewhere that Victory was moving to Mexico?

Victory said they would move some of their product lines to Mexico but NOT the motorcycle production.

[Sludge]

I seriously doubt HD would ever leave the US.  The made in US thing drives their domestic sales too much.  Someone mentioned the market being saturated.  I fully agree with that.  They have been TOO good at selling their product.  Its been the best brand management I have ever seen up to this point.  Im sure labor is hurting them too if the Unions are involved.  I would think production in KY, SC or GA would be appealing to them if they do end up moving. 

[Serk]

I seriously doubt HD would ever leave the US.  The made in US thing drives their domestic sales too much. 

Around 40% of Harley's sales are already made overseas, and that number will do nothing but increase in the coming years and decades... And that percentage doesn't care nearly as much WHERE the bike's are made...

[Walküre]

Im sure labor is hurting them too if the Unions are involved.

Keith E. Wandell

President and CEO
HARLEY-DAVIDSON INC (HOG)
Headquarters: MILWAUKEE, WI

In 2009, Keith E. Wandell received $6,363,579 in total compensation ($3,060 an hour), but that's based on a a base salary of $650,025 from his start date of May 1 through the end of 2009. By comparison, the average worker made $32,048 ($15.41 an hour) in 2009. Keith E. Wandell made 198 times the average worker's pay.

To make the equivalent of Wandell's 2009 salary:

An average worker would have to work until 2208 A.D.
A minimum-wage earner would have to work until 2431 A.D.

Then again:

The President of the United States would have to work until 2025 A.D.
AFL-CIO President John Sweeney would have to work until 2033 A.D.

yup, I'm sure it's labor...

 

[Jabba]

Is the set up here that the average workers TOTAL compensation was only $15/hr?  I ain't buying it.

Plus... this IS America.  They can go open their OWN company, and make whatever they can. 

Why don't the workers get together and buy the company, and FIRE that guy? 

Jabba

[fstsix]

Interesting...Indian Motorcycles New plant in NC could mean not only America's first motorcycle, But could be America's last Real motorcycle, so if this happens i will feel good about my purchase of a Power Plus.http://www.indianmotorcycle.com/index.php?submenu=Factory_Delivery&src=gendocs&ref=Factory%20Delivery&category=Factory%20Delivery

[Walküre]

What I AM saying, is that labor is almost always blamed, right off the bat. If your company is in financial straits, why then, do you pay the top CEO over $6M a year, then blame the hired help?

Latest figures I could find, based on Simply Hired, is:


Average Harley Davidson Salaries

The average salary for harley davidson jobs is $35,000. Average harley davidson salaries can vary greatly due to company, location, industry, experience and benefits.

This salary was calculated using the average salary for all jobs with the term "harley davidson" anywhere in the job listing.
Harley Davidson Salary Information

This free salary calculator uses salary data from millions of job listings indexed by Simply Hired's job search engine. The harley davidson salary comparisons feature allows job seekers to get the information required to make important career decisions and negotiate salary ranges.

In addition, compare the present CEO, to the last CEO...

Wandell, 60, replaced James L. Ziemer, who retired last year after 40 years with Harley-Davidson and four years as its CEO. Before taking over Harley, Wandell was chief operating officer of the car battery and building ventilation systems maker Johnson Controls Inc.

During his final four months as CEO, Ziemer received a pay package valued at $2.9 million. That includes a base salary of $455,144, a bonus of the same amount and stock and options valued at $1.9 million when they were granted.

He received other compensation worth $44,221, including $14,800 in cash instead of perks and $22,521 in contributions to a deferred compensation plan.

The Milwaukee-based motorcycle maker has hit hard times recently as consumers put off buying its high-end bikes. The company ended the fourth quarter with a loss $218.7 million, its first quarterly loss in 16 years.

The company has been laying off workers, closed factories and shuttered or sold unwanted brands.

The AP’s total pay calculations include executives’ salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

The blame seems to ALWAYS be placed on labor. Management would like to pay below minimum wage, yet workers want to make enough, to survive, and enjoy life. The ever-present struggle...

[9Ball]

It's a fairly expensive state to live and work in....and way too cold and snowy.

under tommy tompson (a republican governer), we were up to being the fourth highest taxxed state in america!!  now, everyone else has just cought up to us!!  plus, i don't know what jrhorton is talking about "way too snowy!", the last several winters have just been to F-ING COLD!!

We moved from Kewaunee in June of 2008 after the snowiest winter on record in Wisconsin.  My mailbox by the street had 4 feet of snow drift above the mail box.  It started snowing before Thanksgiving and we didn't see our lawn again until sometime late in April.  I think that meets the definition of too much snow....

[fstsix]

Is the set up here that the average workers TOTAL compensation was only $15/hr?  I ain't buying it.

Plus... this IS America.  They can go open their OWN company, and make whatever they can. 

Why don't the workers get together and buy the company, and FIRE that guy? 

Jabba

Been doing a lot of remodel work this year at our local HD dealer, Personal friend of the owner, while we were working there i ask about the Mechanics and their certifications and so on to do factory warranty work, and of coarse how much they make ? about 15 tops per hr, i was a little surprised myself         

[Walküre]

On Indian...if ANYone can do it, Stephen Julius, Chairman, can! He's currently doing the same, with ChrisCraft boats.

I always wanted an Indian front fender...JUST the fender, but that would be enough.

Years ago, when Dad was in the Navy, he took me to a buddy's house, that had a shop with probably 20-30 fully restored Indians. I was around 12-13, so that would have been 45 years ago. The biggest memory, was the 12 foot tall pile, of just spare Indian parts, waiting until he needed them.

I may be able to get my fender, yet!






R

[98 T]

Not to stir the pot too much, but I live just outside Milwaukee and know many people who work at one of the 3 plants we have around here...  while our taxes have always been insanely high... just behind New Jersey and New York, over the last 8 years or so our governor has done all he could to drive business out of the state.  Many new fees and taxes have been assessed on various parts of the manufacturing process,  overly harsh  EPA standards.  There are many other cities probably offering tax-free incentives to get HD to move there..  the mayor of Milwaukee has done nothing to keep Harley here either - he has been known to give speeches about the evils of big business and how they have to pay their fair share which is code for "tax the hell outta them".

A number of years ago, Briggs & Stratton had a huge plant in Wauwatosa.... I think around 2400 employees ...  there was the usual talk about union wages etc... as one reason it was getting too expensive to compete... but the taxes were way too high too.  The governor essentially dared them to leave... they did... 2400 jobs gone forever.   Wisconsin has really turned anti-business in the last 10 years.

Say what you want about the evil of giving a tax break to a company to stay around here... but you can't put a price on the impact when you lose that many jobs.... 2000+ people without jobs, no longer paying taxes and supporting the tax base AND the goose that laid the golden eggs is now gone forever too.

Just my 2 cents....

[Rams]

Poor economic conditions combined with an old product, long overdue for redesign, combined with high labor costs. rising benefit packages costs and unfriendly business conditions in the form of taxes will cause any company to look at options.  Top executives may or may not be over compensated but, that is something the shareholders set.  Not everyone can run organization like HD.  I'm not suggesting there is any one thing out of balance but quite a few things combining to make HD an organization with a bleak future if something isn't changed.

I could have purchased an HD but, it just doesn't fit my style or my idea of a modern motorcycle.

blackrams

[Tropic traveler]

Harley aint goin' anywhere! All just corporate posturing trying to get a sweeter deal from all parties involved.
I do eventually see Harley opening more overseas plants for their export market but given most of what they sell here is image, the USA plant is safe.

[Rams]

Harley aint goin' anywhere! All just corporate posturing trying to get a sweeter deal from all parties involved.
I do eventually see Harley opening more overseas plants for their export market but given most of what they sell here is image, the USA plant is safe.

You may be right.  I don't have any inside information to debate the issue.  But, similar conditions that I mentioned in my previous post existed in CA in the not too distant past and were the reason many companies left that state.  I do know that HD has looked at moving it's operation to KY because of several incentives KY offered and it is also a right to work state.

blackrams

[GreenLantern57]

Harley already has a Mexico assembly plant. If the serial number starts with the number 3, it is a Mexico bike. Can't find any facts on the internet, but that is what I heard.

[Jabba]

Corporations don't pay taxes.  They pass them onto the next guy in line.  Period.  When you tax a manufacturer, all you're doing is making his product more expensive, and less competetive. 

Let's skip the BS and move to the FairTax.

www.fairtax.org

Jabba

[Walküre]

Harley already has a Mexico assembly plant. If the serial number starts with the number 3, it is a Mexico bike. Can't find any facts on the internet, but that is what I heard.

All I've ever been able to find, is that the Mexico plant does some major assembly's, wiring harnesses, etc, then ship them back, for FINAL assembly. Could even be the frames, I think. So that effectively makes it a "supporting" supplier, instead of an "assembly plant".

And Jabba - I've heard that "corporations don't pay taxes" before. I don't buy that 100%. If the corporation had to add $10 to something, your statement means that the product will cost me $10 more. Now, say, I'm willing to pay $1.00 more, but not $10, and I'm the "norm", if they raise it $10, it won't be selling. So they'll try at $9, and pretty soon, they'll end up at a price people WILL pay. So, an "across the board" statement, about passing costs down, doesn't always hold true.

I'm STILL trying to get my head around the "fairtax". Having a tough time understanding it all. Pretty dry reading, and number-crunching, is NOT my forté. But I keep struggling through it.   


R

[Jabba]

Harley already has a Mexico assembly plant. If the serial number starts with the number 3, it is a Mexico bike. Can't find any facts on the internet, but that is what I heard.

And Jabba - I've heard that "corporations don't pay taxes" before. I don't buy that 100%. If the corporation had to add $10 to something, your statement means that the product will cost me $10 more. Now, say, I'm willing to pay $1.00 more, but not $10, and I'm the "norm", if they raise it $10, it won't be selling. So they'll try at $9, and pretty soon, they'll end up at a price people WILL pay. So, an "across the board" statement, about passing costs down, doesn't always hold true.

R

No... what they do is move to a more tax friendly locale... like either somewhere else in America, or MEXICO.

Isn't that what we're talking about here?

Plus, embedded taxes make the cost of goods more expensive, and less cometetive overseas as well.  Eliminating those embedded taxes would make America a MUCH more manufacturing friendly place, and would make it A LOT competetive globally as well.

Jabba

[MP]

No, they do not "always" pass 100% of the cost.  But, as some point they become uncompetitive with someone who does not have to pay that tax because they are in a different country/state/town.  So, when they are taxed to unprofitability, they either:

1.  Go out of business.
2.  Move to where they can compete.

This goes for taxes, as well as wages, and ALL other costs.

If company X can make a motorcycle cheaper in Timbucktoo than Harley can make it in Milwaukee, at some point, as YOU point out, the customer stops buying the Harley, and buys from company X.

Thus, unless Harley moves to where its costs, all of them, are lower, they are out of business.

And, that is what has happened to LOTS of companies.  How many "Made in USA" electronics do you see on the store shelves?  None.
When I was growing up in the 60's, there were LOTS.

Companies making them cheaper overseas, either caused the USA company to move so it could compete, or it went out of business.

The customer has voted with their pocket book.  They have voted for cheaper goods over "Made in the USA" products.  Look at Walmart.  They get cussed all the time, but, where are the customers buying?  Walmart.

Cheaper goods.  When you convince the US customer to pay 25-50% more, for the same product made in the US, then companies can come back.  But, it will NEVER happen.

Like it or not, those are the economic facts.  The more we raise wages ant taxes, and other costs, the more we force business overseas.

MP

[Jabba]

One step at a time.

Let's try the FairTax.  Get the taxes out of the production chain and see what happens with manufacturing in this country.

Jabba

[RuthlessRider]

I've lived in Wisconsin most of my life and traveled extensively in the U.S. and I disagree wit the high tax label. There was a time when this was true, but recently (the last 10 years) Wisconsin has done much to reduce taxes. I worked for Frito-Lay in Beloit for almost 5 years. For those of you who know Wisconsin, Beloit is right on the Illinois border. Because many of the managers transferred into the plant came from outside of WI, the management of the plant hired a consulting firm to assess the tax situation between the two states so that incoming managers could decide where they wanted to live when the came to the area. While they found that income taxes and property taxes were higher in WI, the fees paid in IL more than made up for the difference in the tax structure. Besides that I have lived in TX, AL, NC, SC, KY and CA and none comes close to WI in quality of life in my estimation. And, last but certainly not least, while I enjoy the daylights out of riding my Interstate during the season, there is no such thing as too much snow.

I agree with those whose posts have asked why do we always blame the guy lowest on the ladder for a companies failure to maintain their position in the marketing pecking order? Management (not just their salaries) make the decision that keep a company competitive. Remember that those labor contract were negotiated not dictated.

[RuthlessRider]

Jabba

Passing taxes on is probably just what they do, but when you get all the taxes repealed, what kind of  a suspension system do you think we will need to smooth out those pot holes? And when that accident happens, how long do you think you will have to wait for that ambulance. And if you think your kids schools aren't what they should be now, what do you think they will be like when there are no taxes to support them?

[Charlie]

If company X can make a motorcycle cheaper in Timbucktoo than Harley can make it in Milwaukee, at some point, as YOU point out, the customer stops buying the Harley, and buys from company X.


MP

So why then was Harley able to price their bikes half again as high as Honda's Valkyrie, and why didn't the Valkyrie sell more and Harley sell less???

The truth is, though there is some accuracy to your point, it isn't anywhere near completely factual.  I think Ruthless Rider is making good points.  Harley's decision has more to do with increasing already high profit margins by getting cheaper labor.  The taxes have little to do with it, and are necessary for the infrastructure of the country.

I do not know many who can not afford the taxes they pay.  I do know many that do not like paying them, primarily because how they are spent.  That says to me the problem lies more in the administration of our government...

[big turkey]

A lot of talk about Harley.

Must be something there, I don't hear anyone talking bad about the other brands the way

ya'll do about Harley.

Must be the tug at your soul of a traditional American sound and brand that makes you

and us a little proud to be Americans.

I like all motorcicles, just an observation on a ole Harley loving and Honda loving dude.

Not meant to offend just an observation.

Ya'll love to talk about and hate Harley's a lot.

Big AL

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