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Harley-Davidson Says Layoffs Are ‘Necessary Changes’

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A Harley-Davidson motorcyclePhotograph by Anatoly Medved—TASS via Getty Images

Harley-Davidson (HOG), America’s largest motorcycle manufacturer, will lay off about 200 regular and casual workers this year amid declining revenues, a company spokesperson confirmed in an email to Fortune.

USA Today reported that the motorcycle maker, which employs about 6,300 people, will lay off a handful of employees at its Menomonee Falls, Wis. engine plant, and at least 35 more at its Tomahawk, Wis. windshield and plastic-parts plant.

“[Harley-Davidson] continually reacts to industry and market changes to provide the best products and services to our customers,” the spokesperson said. “As we adjust our production plan to align with 2016 guidance, we are making the necessary changes to right-size the company.”

The layoffs come at a pivotal point for Davidson: It recently lost market shares to foreign competitors, like Honda (HMC), Yamaha, and Kawasaki.

 

Earlier this month, Davidson agreed to pay the federal government $12 million in fines after the company was accused of selling roughly 340,000 “super tuner” enabling motorcycles, which pollute the air at a rate that violates the federal Clean Air Act.

Davidson lowered its shipment outlook in July after domestic sales fell 5.2% in the year’s second quarter. The National Highway Traffic Safety Administration started to investigate the company during the same month after reports of Harley riders experiencing “sudden brake system failure[s]” surfaced.

The inquiry involved 430,000 Davidson motorcycles with model years spanning from 2008 to 2011, which featured an anti-lock braking system that’s supposed to prevent riders from losing their grip when they hard-brake.

The company’s heavyweight market share for motorcycles with engines of 601 cubic centimeters or greater also fell below 50% last year from 58% in the last quarter of 2013.