Harley-Davidson Seeking Federal Bank Bailout Funds

Harley–Davidson is hoping to have an answer Tuesday about whether the Federal Deposit Insurance Corp. will designate the company as eligible for federal funding under a bank bailout program.

Sen. Bob Casey, D-Pa., has asked the agency to approve Harley’s request, ideally ahead of the company’s fourth-quarter earnings report due out Friday. H-D employs nearly 3,000 people at its plant in York County, Pa., and another 1,500 work at dealerships in the state.

H-D has asked that Harley-Davidson Credit Corp. and Eaglemark Savings Bank be declared eligible for the Temporary Liquidity Guarantee Program, or TLGP, which guarantees unsecured corporate debt against default. That would cover the bills of Harley-Davidson's internal financial entities if they were unable to pay bills themselves.

Casey told the York Dispatch that without the designation, “it puts their financing company in a much more precarious situation."

Four analysts — Goldman Sachs, Standard & Poor's, RBC and Raymond James — have downgraded Harley shares in as many weeks, and the company’s former HDFS president, Sy Naqvi, left the company early this month. H-D’s stock price has dropped from $80-plus per share in December 2006 to $13.70 today. (Financial markets are closed today in observance of Martin Luther King, Jr. Day.)

Against an industry wide slowdown, analysts expect Harley sales to be down 20 percent for the fourth quarter, and Raymond James analyst Joseph D. Hovorka said in a client note that sales among 55 dealers surveyed were "the softest reading ever for our survey." Sales are expected to slide another 20 percent to 30 percent this year as consumers cut purchases of luxury goods.

That's ok, I still got mine!

Everybody else is asking for a free handout....Harley didn't do it until now, thats not too bad, not as bad as the car companies...

Momma wrote: That's ok, I still got mine!
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Harley didn't even design that bike.

The current crop of Harley-Davidson motorcycles are all powered by an engine that has its roots firmly planted in the mid-1930s. Sure it looks and runs much different than it’s ancestor, but essentially it is still the same 45º OHV v-twin that powered the 1936 EL Knucklehead. Harley-Davidson has done a magnificent job of improving and updating that old engine to keep pace with advancing technology. The Evolution and Twin-cam engines are a testament to the prowess of their engineers, and Corporate desire to stay true to the expectations of the Harley faithful who want the same engine … only better.

The world has changed significantly since 1936 and the old must make way for the new. Harley’s old v-twin is incapable of meeting the performance standards that motorcyclists expect and new, more stringent emission standards that are being levied on all gas powered, internal combustion engines. If Harley had not come up with a new engine design for their bikes they would have been banned from much of the world by 2004, and eventually even in the US and Canada. Harley sensed this dilemma and contracted with Porsche to help in the development of a new engine.

Damn ass rednecks couldn't get the old design out of there heads to make a new one. They had to call on a foreign company to design it.

www.biker.net/roadtest/vrod/vrod.htm

"with Porsche to help in the development"

That's all I'm saying about this topic, I've seen ur site, all u do is bash Harley. It's fruitless to discuss this with u....U like Jap bikes and thats that.....to each his own. I would rather support Harley than some Jap company...Bailout or no bailout...

Enough you two...

NEW YORK – Harley-Davidson Inc. said Friday it will cut 1,100 jobs over two years, close some facilities and consolidate others as it grapples with a slowdown in motorcycle sales.

The Milwaukee-based company also reported its fourth-quarter profit fell nearly 60 percent, and said it is slashing motorcycle shipments in 2009 to cope with reduced demand.

The iconic motorcycle maker said it will consolidate two engine and transmission plants in Milwaukee into its facility in Menomonee Falls, Wis. It will shrink its paint and frame operations in its York, Pa., plant and close its distribution facility in Franklin, Wis., whose duties will be handled by a third party.

Harley also is exiting its domestic transportation operation — its fleet of long-haul truckers who transport parts between manufacturing facilities — and outsourcing duties to a third party. The cuts make up slightly more than 10 percent of the company's total work force.

"Harley-Davidson is not immune to the current economic conditions," said Jim Ziemer, the company's outgoing chief executive, in a conference call. "We're going to show great discipline in protecting the value of the brand."

The company said the cuts include 800 hourly production positions and 300 non-production, mostly salaried positions. It said 70 percent of the job cuts will occur this year and the rest in 2010.

In an interview, Ziemer said about 650 of the cuts will be in Wisconsin, while more than 400 jobs will be lost at its facility in York, where its transportation operation is also based. About 85 cuts will be made at the company's motorcycle plant in Kansas City, Mo., he said.

"Right now, it's more fear than anything else, and consumer confidence" that's hurting demand, Ziemer said.

The job cuts will result in one-time charges of $110 million to $140 million over 2009 and 2010, Harley said. Once they are finished, the cuts will save between $60 million and $70 million per year.

Harley has been stung by the rapid downturn in motorcycle demand. The economic recession has prompted many consumers to put off purchases of its high-end bikes, while the credit crunch has kept some would-be customers from obtaining financing.

"It's industrywide," said Robin Diedrich, senior consumer analyst for Edward Jones. "It's the global economy that's impacting discretionary items, especially something that's as discretionary as a motorcycle."

Meanwhile, Harley-Davidson remains in the midst of a shake-up among top management. Chief Executive Jim Ziemer said last month he would retire in 2009, and the company remains in the process of finding a successor. Sy Naqvi, the head of Harley's troubled financial-services arm, resigned earlier this month. Chief Financial Officer Tom Bergmann has taken on Naqvi's old duties until a replacement is found.

Ziemer said the company's board of directors remains on track in its search for his successor, adding that he is committed to staying on the job until the search is complete.

Harley said worldwide retail sales fell 13.1 percent in the fourth quarter, with sales in the U.S. — its biggest market — falling nearly 20 percent. International sales crept higher, though, and the overall heavyweight motorcycle sales fell 25.5 percent in the same period, Harley said.

For the full year, worldwide retail sales fell 7.1 percent.

Harley said it is slashing new motorcycle shipments in 2009 to between 264,000 and 273,000 to cope with the down market. That would be a drop of 10 percent to 13 percent from a year earlier.

In 2008, Harley said it shipped 303,479 new motorcycles, down 8 percent from 330,619 new motorcycles in 2007.

Harley said its fourth-quarter profit fell 58 percent to $77.8 million, or 34 cents per share, for the quarter ended Dec. 31, compared with $186.1 million, or 78 cents per share, in the same quarter last year.

Revenue fell 6.8 percent to $1.29 billion from $1.39 billion in the year-ago quarter.

The earnings fell short of Wall Street estimates. Analysts surveyed by Thomson Reuters expected 57 cents per share on sales of $1.29 billion, on average.

Harley said its financial-services division swung to an operating loss of $24.9 million in fourth quarter, hurt by write-downs totaling $63.5 million. CFO Bergmann said Harley-Davidson Financial Services needs $1 billion in funding in 2009, and is exploring several options to obtain the money, including attempting to access the capital markets and increasing a $500 million commercial paper lending facility it negotiated last month.

Bergmann said delinquency rates on loans from HDFS have crept higher from last year as cash-strapped consumers are having difficulty making payments. The troubled financial arm has hobbled Harley-Davidson recently, and many analysts have suggested the lending unit may have to be sold because it is struggling to unload its debt in the financial markets.

For the full year, Harley said its earnings fell 30 percent to $654.7 million, or $2.79 per share, from $933.8 million, or $3.74 per share, in the same quarter last year. Sales fell 2.3 percent to $5.59 billion from $5.73 billion in 2007.

Analysts expected $3.02 per share on sales of $5.61 billion in revenue for the year. Harley declined to provide earnings guidance for 2009, citing the uncertain economy, but analysts call for $2.15 per share.

Shares of Harley dropped $1, or 8.1 percent, to $11.40 in midday trading after hitting a new 52-week low of $10.07 earlier in the session. The stock is down 69 percent in the last 52 weeks.