East Troy’s Buell Motorcycles to shut down
The announcement came after news Thursday that Harley-Davidson’s third-quarter profits slid 84 percent because of fewer motorcycle shipments. The company also reported recession-related difficulties in getting loans for its customers.
The shutdown will be effective Oct. 30, Harley-Davidson spokesperson Pat Sweeney said. About 80 hourly positions and 100 salaried positions will end early December, she added.
Company founder Erik Buell announced the shutdown in an emotional video posted on the company’s Web site Thursday.
“I will always be proud of American’s little sport bike company that took on the world,” Buell said. “While I regret that we will not be able to build new Buell Motorcycles, Harley-Davidson will stand behind Buell’s full warranty.”
“We’ve proven that a small group of passionate and inspired people can compete against industry giants,” Buell said.
Buell Motorcycle Company, a subsidiary of Harley-Davidson Inc., was founded in 1983 by Buell, a former racer and motorcycle designer.
Buell said dealers still have a limited number of motorcycles, and he encouraged customers in the market to get one before they’re gone. The company will not produce any more Buell motorcycles, but Harley-Davidson will provide parts as needed, he said.
“They’re truly superb motorcycles,” Buell added. “They’re great American technology and a legendary history.”
Thursday’s announcement puts an end to a series of challenging decisions by Harley-Davidson officials facing a tough market for the motorcycle business.
Harley-Davidson spokesperson Bob Klein said the moves have been part of a series of restructuring and cost-saving measures.
Production at Buell Motorcycle Co. had been scheduled for a partial shutdown between November 2009 and January 2010, leaving about 52 employees without work.
Harley-Davidson officials also have put in place temporary shutdowns at an engine and transmission plant in Milwaukee and at locations in York, Pa., and Kansas City, Mo.
The company’s temporary shutdowns vary from five to 14 weeks, Klein said. The two 14-week shutdowns are in Milwaukee and Kansas City.
In May, officials decided not to consolidate five leased facilities in East Troy into one facility that would have been built at the village’s industrial park. The plan was to reduce costs and improve efficiency in the long run.
Harley-Davidson spokesperson Rebecca Bortner said company officials chose not to consolidate to avoid short-term expenses.
At the time, officials also cut 10 jobs in East Troy, about 5 percent of Buell’s workforce, and put in place a series of restructuring initiatives in Harley-Davidson’s Milwaukee headquarters.
Other measures include layoffs that could affect 1,900 hourly employees by the end of 2010, Klein said. The temporary shutdowns are not considered permanent layoffs, he added.
Harley-Davidson’s economic concerns come on the heels of a 2.3 percent decline in revenue for 2008.
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.
The company planned to reduce motorcycle shipments in 2009 after an 8.2 percent decrease in wholesale shipments in 2008 compared to 2007.