Buell facilities won't consolidate
Harley-Davidson has decided to cancel the consolidation of its Buell Motorcycle Co. assembly facilities in East Troy, an official said Tuesday.
Harley-Davidson spokesperson Rebecca Bortner said the company had intended to consolidate five leased facilities in East Troy into one facility that would have been built in East Troy's industrial park.
The plan was to reduce costs and improve efficiency by consolidating.
According to Bortner, the company decided not to go forward to avoid moving costs and to keep financial flexibility in case of future economic struggles.
"For right now, we don't know what's going to happen in the economy," Bortner said. "The question is when are thing going to get better?
"Keeping flexibility right now into what we're devoting resources to is critical."
Harley-Davidson's economic concerns come in the heels of a 2.3 percent decline in revenue for 2008 compared to 2007.
In January 2009, company officials reported a 6.8 percent drop in revenue in 2008's fourth quarter and a 58.2 percent decrease in net income for the same period.
Officials have cut 10 jobs in East Troy, about 5 percent of Buell's workforce, and have put in place a series of restructuring initiatives in Harley-Davidson's Milwaukee headquarters.
The company plans to lower motorcycle shipments in 2009 after an 8.2 percent decrease in wholesale shipments in 2008 compared to 2007.
Two Harley-Davidson newcomers—President and Chief Executive Officer Keith Wandell and Chief Operating Officer Matthew Levatich—were the driving forces behind the change in plans, Bortner said. Both men joined Harley-Davidson in the last month as part of the company's efforts to restructure.
"That new management team reevaluated facilities and decided it wasn't a great decision given the ongoing economic climate," she added.
The East Troy Planning Commission on May 11 approved Buell's plans to implement its would-be one-factory operations.
The village board was scheduled to receive a presentation from Buell on Monday evening about the new building intended for the industrial park and decide on whether to grant the company final approval. The presentation was canceled at the request of company officials.
Buell Motorcycle Company, a subsidiary of Harley-Davidson Inc., was founded in 1983 by former privateer racer and motorcycle designer Erick Buell.