There remain questions about his future electrical setup
Harley-Davidson, the famous The Milwaukee-based company, which launched its first series electric motorcycle last year to restart sales and appeal to a younger customer base, has cut 700 jobs from its global operations. Around 500 employees are due to be made redundant by the end of the year, the company said on Thursday.
The company's CFO, John Olin, has also left office. Harley-Davidson's current vice president, Treasurer Darrell Thomas, has served as interim CFO until a successor is appointed. "Significant changes are needed and we need to break new ground," said Harley Davidson chairman, president and CEO Jochen Zeitz in a statement.
Harley-Davidson called his job cuts and restructuring plan “The Rewire,” which Zeitz spoke of in the company's earnings recall for the first quarter of April. At the time, Zeitz said the company was still committed to its other strategic plan, known as "More Roads," which aimed to unite the manufacturer through marketing and dealer initiatives and a number of new products, including small-displacement motorcycles Accessible Global Brand to Make Asian Markets and Electric Vehicles LiveWire.
Nevertheless, Zeitz said in April that it was time for a change.
"Based on my observations and assessments, I have come to the conclusion that we need to take significant action and now re-cable the company in terms of priorities, execution, operating model and strategy to achieve sustainable profit and long-term growth," he said in April . "We call it The Rewire. And it is our playbook for the next few months that will lead to a new five-year strategic plan that we will share when visibility returns for the future. "
Looking ahead has apparently returned, and Harley-Davidson believes it is time to cut costs and possibly return to core products. First Rewire measures are expected to result in restructuring costs of approximately $ 42 million in the second quarter of 2020, Harley-Davidson said in its announcement on Thursday. The company plans to release a summary of The Rewire with additional costs and expected savings when it releases its second-quarter results. The Rewire will lay the foundation for a new strategic plan for 2021-2025, which is expected to be released in the fourth quarter.
Harley-Davidson has seen sales decline in the United States, the largest market, in recent years as Baby Boomer's main customers have grown older. The COVID-19 pandemic continued to dampen sales and the company has already cut production, resulting in dozens of job cuts in its Wisconsin and Pennsylvania factories last month. The push for electric vehicles and products for Asian countries was aimed at expanding into new markets and breathing new life into Harley-Davidson.
It is unclear how The Rewire could affect the company's foray into electric vehicles. The LiveWire that started Last fall, Harley-Davidson planned a future line of electric vehicles, including motorcycles, bicycles, and scooters. Harley-Davidson did not respond to a comment request. theinformationsuperhighway updates the article when the company responds.
In the HD declaration, electric vehicles are not explicitly mentioned. The key elements of the restructuring plan were simply to strengthen core strengths and better balance expansion into new areas, prioritize key markets, reset product launches, and expand the accessories and merchandising business.