Harley-Davidson Restructures with 700 Layoffs and CFO Departure
Harley-Davidson, the iconic Milwaukee-based motorcycle manufacturer, has announced a major restructuring plan dubbed “The Rewire”, including 700 global job cuts and the immediate departure of CFO John Olin. The move signals a pivotal shift for the company as it grapples with declining sales and an evolving market.
Key Changes Under the Rewire Plan
- Workforce Reduction: 500 employees will be laid off by year-end, with additional cuts expected.
- Leadership Transition: Darrell Thomas, VP Treasurer, steps in as interim CFO while the company searches for a permanent replacement.
- Restructuring Costs: $42 million in Q2 2020, with further financial details to be revealed in upcoming earnings reports.
Why Harley-Davidson is Shifting Gears
Harley-Davidson has faced declining U.S. sales as its core Baby Boomer customer base ages. The COVID-19 pandemic exacerbated these challenges, leading to production cuts and earlier layoffs at its Wisconsin and Pennsylvania plants.
CEO Jochen Zeitz emphasized the need for bold action:
“Significant changes are necessary, and we must move in new directions. The Rewire is our playbook to drive sustained profit and long-term growth.”
Strategic Priorities Moving Forward
While Harley-Davidson remains committed to its “More Roads” initiative—which includes electric vehicles (EVs) like the LiveWire and expansion into Asian markets—the Rewire plan focuses on:
- Strengthening Core Offerings: Refocusing on Harley-Davidson’s traditional strengths.
- Market Prioritization: Allocating resources to high-potential regions.
- Product Launch Reset: Streamlining new model introductions.
- Boosting Merchandising: Expanding accessories and branded merchandise revenue.
The Future of Harley-Davidson’s EV Ambitions
The Rewire plan leaves questions about Harley-Davidson’s electric vehicle strategy. While the LiveWire marked its entry into the EV space, the company’s latest statement avoids specific mentions of future electric models. Analysts will be watching for updates in its Q2 earnings report and the forthcoming 2021-2025 strategic plan, expected in Q4 2020.
Looking Ahead
Harley-Davidson’s restructuring reflects broader challenges in the automotive and motorcycle industries. As the company balances innovation with its heritage, the success of The Rewire will hinge on execution—and whether it can attract a new generation of riders while retaining its loyal base.
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