Harley Davidson to Shut Down Kansas City Plant
Written by: Colin M.
While most other industries recovered from the last recession, the motorcycle industry is still in hard times. Motorcycle sales plummeted in 2008 and have continued to decrease ever since. Companies have released new models and new technology in an attempted to gain consumers, however, all have proved unsuccessful. This problem proved unsuccessful for all companies including the industries top manufacturer, Harley Davidson. According to MSN, “Harley made $8.3 million in the fourth quarter of 2017, compared with $47.18 million in the fourth quarter of 2016”(Shilling). With most of their consumers being the baby boomers, they are no longer able to ride as they get older. The hit that Harley is taking may be too big to come back from.
This years fourth quarter profits down over 80% compared to last years fourth quarter profits, and their sales have been steadily declining for years. Retail motorcycle sales for Harley-Davidson internationally, and in the U.S. fell by an average of over 6% in 2017 compared to 2016. Some of the information behind the hit in sales is linked with the lack of safety. With younger generations having safety concerns and the baby boomers, who are a large demographic of their consumers, are getting older. Overall this is leading to a large decrease in demand for Harley’s products.
Due to the struggle in the last few years, Harley-Davidson has made the decision to shut down their third largest United States facility. The Kansas City plant is to be closed in 2019, losing almost 15% of their employees. The workload the plant previously held will be transferred to their plant in York, PA. While this may seem like a big blow to the company, if they are able to keep production up by increasing efficiency, it should help increase revenue.
Additionally at their plant in York, is where their electric motorcycle will be produced starting 2019. The electric motorcycle is also part of their plan to acquire new riders and consumers. Since electric motorcycles don’t have a transmission, the rider doesn’t have to learn how to shift gears. Production of the electric motorcycle also internally benefits the company, as it will bring in 450 new jobs. Harley-Davidson is doing everything they can to keep relevant and succeed, only time will tell if it pays off.
Works Cited
An electric motorcycle. “An Electric Harley-Davidson Is Coming in 2019.” CNNMoney, Cable News
Network, 30 Jan. 2018,
money.cnn.com/2018/01/30/technology/harley-davidson-electric-motorcycle/index.html.
Shilling, Erik. “Harley-Davidson Is Sad And Getting Sadder.” Harley-Davidson Is Sad And Getting
Sadder, 31 Jan. 2018,
www.msn.com/en-us/autos/motorcycles/harley-davidson-is-sad-and-getting-sadder/ar-BBIu0
I didn't know that Harley Davidson was steady decreasing their sales! Are they specifically trying to advertise to the younger consumers? With this new electric bike, theres a good chance that a lot of the millennials may start expressing interest in buying a motorcycle. But, they may' need to target more specifically. The accessories that you can buy from Harley Davidson are often black with skulls, but it seems like this younger generation is more mellow and less harsh. Maybe some changes in the designs of the jackets and helmets might attract the younger demographic.
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Much like the downfall of Harley Davidson, we will see many industries become nearly obsolete as consumption by the baby boomers dwindles. As we've seen previously with Blockbuster, book stores, and now many cable sevices, more businesses will be going bankrupt now that there target demographic is aging and spending less money.
ReplyDeleteWhile I was very unaware of the decreasing Harley sales, it makes sense that the company isn't selling much. The younger generation likes sleeker, faster bikes. But Harley-Davidson would have to change their whole demographic and style of bike to sell to younger customers. That's where they have their hands tied because the style of a Harley is such a staple. Hopefully this electronic bike will increase sales for them.
ReplyDeleteI believe that motorcycle sales will continue to go down as time goes on. They might go up a little when the electric motorcycle comes out in 2019, but I believe that it will continue to go down soon after. As far as I know, I agree with you that the newer generations are not as interested in motorcycles as the baby boomers were. We hear about the dangerous and fatal stories of motorcycle riders, and it turns away interest. I believe that Harley Davidson will have to create something truly amazing and innovative to avoid shutting down.
ReplyDeleteThis is very interesting because I always remember seeing Harley motorcycles on the road. I didn't really realize that the sales dropped off so much. I have noticed that a lot of people don't need to drive them as much because a car is more practical. The demand for motorcycles in the United States is down because people can't drive them in the winter. Harley is going to have to reduce their supply of them or they will be continually taking loses.
ReplyDeleteI didn’t even realize the motorcycle industry was declining in consumers, but it does make sense with the baby boomers getting older and the lack of safety built in the motorcycles. Even if Harley Davidson is going through hard times in the business, the electric motorcycle seems like it’ll be a great hit and will help with employment rates as well. Even if they close down the Kansas City Plant, losing 15% of their workers, the employees might be able to find a job with the new and improved motorcycle coming out -- possibly a new plant to work at because they will have the experience.
ReplyDeleteIt was stated in the article that Harley Davidson lost 80% of its profit in one year. That is due to safety concerns from younger generations and their main consumers the baby boomers getting too old to ride. As Harley Davidson cuts back will there be a competitor that steps up to meet the demand of the new market. A company that comes out with new, safer bikes for people to ride. Or will Harley Davidson make a switch to the new market before someone snatches it from their hands?
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