Harley Shuts Down Buell and Plans To Sell MV Augusta

Tuesday, 20 October 2009 06:50

Harley Davidson announced it will discontinue production of Buell motorcycles. Remaining inventories of Buell motorcycles, accessories and apparel, while they last, will continue to be sold through authorized dealerships. Warranty coverage will continue as normal for Buell motorcycles and the Company will provide replacement parts and service through dealerships.

The decision will result in a reduction over time of about 80 hourly production positions and about 100 salaried positions at Buell. Employment will end for a majority of Buell employees Dec. 18, 2009. Harley-Davidson, Inc. expects to incur approximately $125 million in one-time costs related to the discontinuation of the Buell product line. The Company expects to incur approximately $115 million of that amount this year.

Relative to MV Agusta, the Company will immediately commence efforts to sell the business, which is based in Varese, Italy. In the third quarter, Harley-Davidson, Inc. recorded a one-time fixed-asset impairment charge of $14.2 million related to Buell and a goodwill impairment charge of $18.9 million related to MV Agusta.

"Buell and MV Agusta are great companies, with proud brands, high-quality exciting products and passionate enthusiasm for the motorcycle business. Buell has introduced many innovative advancements in motorcycle design and technology over the years and MV Agusta is known in Europe for its premium, high-performance sport motorcycles. However, our strategy to focus on the Harley-Davidson brand reflects the fact that we believe our investments in that brand are a better utilization of overall company resources," said Wandell.

Revenue from Harley-Davidson motorcycles during the third quarter of 2009 was $803.3 million, down 22.1 percent compared to the year-ago period. The Company shipped 54,236 Harley-Davidson motorcycles to dealers and distributors worldwide, down 27.4 percent from the third quarter of 2008 but in line with previous guidance of 52,000 to 57,000 units. Revenue from Parts and Accessories totaled $221.8 million during the quarter, down 14.4 percent and revenue from General Merchandise was $70.7 million during the quarter, down 15.9 percent compared to the year-ago period.

For More information visit www.harley-davidson.com