Iconic motorcycle manufacturer
, which missed Wall Street profit expectations for the fourth quarter, will lay off 1,100 workers and close plants.
Harley announced Friday that it earned $77.8 million, or 34 cents a share in the fourth quarter, compared with $186.1 million, or 78 cents a share a year earlier.
Analysts were expecting 57 cents a share.
Revenue for the full year was $5.59 billion, compared to $5.73 billion in 2007, down 2.3%. Full-year net income was $654.7 million, compared to $933.8 million in 2007. EPS for 2008 was $2.79, a decrease of 25.4% from $3.74 in 2007.
Worldwide retail sales dropped by 13.1%, including a 19.6% decline in the U.S. For the full year, Milwaukee-based Harley shipped 303,479 units, an 8.2% decrease compared with 330,619 in 2007.
"We have a strong core business anchored by a uniquely powerful brand, but we are certainly not immune to the current economic conditions," said CEO Jim Ziemer. "We have a clear strategy to not only deal with the economic conditions, but also strengthen our long-term operations and financial results. We are executing that strategy with confidence and conviction."
As part of its production cutbacks, Harley will:
- Consolidate its two engine and transmission plants in the Milwaukee area into its facility in Menomonee Falls, Wis.
- Consolidate paint and frame operations at its assembly facility in York, Pa.
- Close its distribution facility in Franklin, Wis., consolidating parts and accessories and general merchandise distribution through a third party.
The job cuts will take place this year and in 2010 and include about 800 hourly production positions and 300 non-production posts, primarily salaried positions. About 70 percent of the cuts will happen this year.
"We obviously need to make adjustments to address the current volume declines," Ziemer said. "But we are also determined to do that in a way that will make us more competitive for the long term. Our management group will engage with union leaders, through our partnering relationship, regarding these changes."
This article was written by a staff member of TheStreet.com.