Harley-Davidson’s Fast-Paced COVID-19 Response
Harley-Davidson has several new cost-cutting measures in place as part of the company’s response to the COVID-19 pandemic. These cost-cutting measures are expected to leave the motorcycle company poised to more effectively serve stakeholder interests and to carry the company through the second quarter and rest of 2020 with reduced costs in all areas of the company. These measures are being taken not only to help protect employees, but to continue representing the Harley-Davidson name as a company representing Freedom, Passion and Adventure.
According to acting Harley-Davidson President and CEO, Jochen Zeitz, these cost-cutting measures are an essential part of managing the company’s near-term response to coronavirus and for positioning the company for recovery moving forward when the crisis passes.
Harley-Davidson's Short-Term Response to COVID-19
Before the advancement of the coronavirus pandemic, HD’s 2020 Q1 financial report revealed a 15.5% drop in US retail sales when compared to the same quarter in 2019. This made it even more urgent for the company to act quickly.
Some steps enacted in April at the company’s US manufacturing locations included, but not limited too: salary reductions for the CEO and higher up's at the corporate level, and temporary reductions on "types of spending".
Internationally, where Harley motorcycle sales have declined by 20.7 in Q1 2020 compared to Q1 2019 and Harley-Davidson nabs 7.6% of the European motorcycle market share, similar measures are in place, and most of the production employees are on temporary layoff with benefits intact.
The Road Ahead for Harley-Davidson Back in 2018, the company released its “More Roads to Harley-Davidson" plan. The plan included the creation of new products to appeal to a wider market base and seeking out ways to provide access to more potential Harley riders. It also included plans for providing more support to dealers and amplifying the Harley-Davidson brand to help riders feel a stronger connection.
Today, after 4 consecutive years of declining sales paired with the likelihood that COVID-19 will keep the numbers low for the next quarter, it’s more important than ever for the company to pare down "unnecessary spending" and focus on its core competencies, which they have already started to do! The company’s latest plan, The Rewire, is set to continue to do exactly that. It’s geared toward keeping riders happy while offering investors the kind of security they’re seeking! An all-around win, win, don't you think!