Worldwide sales for the first quarter of 2010, which were announced two weeks ago, dropped by 18.2 percent from the same period last year (which was not a great quarter). Although earnings were down 16.7 percent, Harley-Davidson was still profitable. H-D reported first-quarter 2010 income from continuing operations of $68.7 million, or $0.29 per share.
As usual, the workers are expected to take the hit with wage and benefit concessions. It's beginning to look like Mercury Marine all over again.
The following is a list a headlines gleaned from Newsplurk over the past several days surrounding Harley-Davidson's quest to non-politicize its lower earnings.
Harley Won't Politicize Financial Problems
WTAQ 5/1/2010
"Wisconsin officials mobilize to retain Harley-Davidson"
USA Today 4/30/2010
"Harley-Davidson may leave Wis. if costs don't fall"
The Associated Press 4/29/2010
"State talking with Harley Davidson"
Wisconsin Radio Network 4/30/2010
"Harley Davidson may be leaving Wisconsin"
WEAU-TV 13 ( 4/30/2010
"Cost cutting measures at Harley Davidson call for union concessions, some say"
Fox11online.com 4/30/2010
"Harley-Davidson Impact"
WJFW-TV 4/30/2010
"Harley-Davidson To Leave WI? Doyle Says No"
WMTV 4/30/2010
"WisPolitics: Doyle says combined reporting not to blame for Harley's woes"
WisPolitics.com 4/30/2010
"Lawmakers Hop on to Save Harley-Davidson"
WTAQ 4/30/2010
"Harley Davidson may move operations out of Wisconsin"
CBS 5 - Green Bay 4/30/2010
"No out-sourcing for Harley"
Milwaukee News Buzz 4/30/2010
Bill Moyers Final Broadcast: Plutocracy and Democracy Don't Mix
2 comments:
I believe it would be an injustice to place the entire blame on Harley and Mercury on union shops. On the other hand, all parties have skin in the game. The State legislature's passage of the combined reporting law drives 47% of the $54 million dollar problem or $22 million annually. Wages have a role and the economy cuts up the rest.
The underlying problem is the failure of the State and local jurisdictions to provide realistic, long range policies for taxes, business expansion and growth. The patchwork of dysfunctional land use, planning, zoning and fees eats into every businesses pocketbook. Like it or not, if there is not a profit, businesses fail, jobs are lost and economies crumble. Only government cannot go out of business.
You could be right. But according to news reports that I've seen so far, H-D is the one driving the entire discussion and they are not the ones quoting concern over the combined reporting. That's being driven by state politicos and fed to the newspapers. Instead H-D said, "they must cut $54 million in manufacturing costs to remain competitive or possibly leave the state in search of a better business environment" yet tell state officials to stay out of it. At the same time, they are driving the discussion to cut labor costs as the key area where cost gaps exist to trim the $54 million. It's only fair to subtract a perceived $22 million dollar tax increase as part of the $54 million in losses, so long as we acknowledge that H-D still reported $68 million in profits for the quarter, during hard times.
My view of this is H-D discovered accumulative cost and efficiency losses that arose, but only as a result of declining sales for the past two years and they want to use the mismanaged paper losses as a sticking point for labor concessions. That's job one - bring down wage and benefit costs. Once they get the concessions, they'll turn to the state to make up for any shortages - in the meantime they're paying dividends.
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