Workers at East Troy Buell plant face temporary shutdown during holiday months
The shutdown at the East Troy facility is part of a series of restructuring and cost-saving measures, said Bob Klein, Harley-Davidson director of corporate communications.
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.
Officials expect the shutdown to be temporary and that workers will be back by Jan. 4,
"The temporary shutdown is volume-driven, related to the economy," Klein said. "As a result of the economic situation, we have reduced our production and shipment volumes."
The last day of production is planned to be Oct. 31.
Employees affected will be paid earned wages and benefits at the time of shutdown. The company will pay eight days of holiday pay and continue medical benefits during the shutdown.
The company's temporary shutdowns vary from five to 14 weeks, Klein said. The two 14-week shutdowns are in Milwaukee and Kansas City.
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 in 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.
In May, officials decided to not 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 to not 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.
The company planned 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 April as part of the company's efforts to restructure.
Buell Motorcycle Company, a subsidiary of Harley-Davidson Inc., was founded in 1983 by former racer and motorcycle designer Erick Buell.