Harley-Davidson took its tax cut, closed a factory, and rewarded shareholders

[douglas9]

In September 2017, House Speaker Paul Ryan traveled to a Harley-Davidson plant in Menomonee Falls, Wisconsin, to tout the Republican tax bill, which President Trump would sign later that year. “Tax reform can put American manufacturers and American companies like Harley-Davidson on a much better footing to compete in the global economy and keep jobs here in America,” Ryan told workers and company leaders.

Four months later and 500 miles away in Kansas City, Missouri, 800 workers at a Harley-Davidson factory were told they would lose their jobs when the plant closed its doors and shifted operations to a facility in York, Pennsylvania — a net loss of 350 jobs. Workers and union representatives say they didn’t see it coming.

Just days later, the company announced a dividend increase and a stock buyback plan to repurchase 15 million of its shares, valued at about $696 million.

It’s a pattern that’s played out over and over since the tax cuts passed — companies profit, shareholders reap the benefits, and workers get left out. Corporate stock buybacks hit a record $178 billion in the first three months of 2018; average hourly earnings for American workers are up 67 cents over the past year. Harley-Davidson is an American symbol, and President Trump has trotted it out as an example of business success. But as it’s getting its tax cut, it’s outsourcing jobs and paying shareholders.



https://www.vox.com/policy-and-politics/2018/5/22/17350180/harley-davidson-tax-buyback-kansas-city-factory

[Wellstone ruled]

1. Don't like to rub salt in a wound,

I told you so. Harley has tons of internal cost controls that they have refused to address. Major one,outdated Manufacturing process.

Another issue facing this company is this,changing demographics,and this is the biggee.


And,the UAW bought the Rethug Bull Crap,now they have to live with it. In all my years of Labor negotiation,honestly,never found a Rethug I could trust. Been down that road and watch a few wrecks happen in slow motion.

[Turbineguy]

2. Patriotism is a big thing.

In its new republican interpretation.

[CentralMass]

3. A related article on Harley Davidson moving work to Thailand.

https://www.usatoday.com/story/money/cars/2018/05/11/union-harley-davidson-ship-work-thailand-closing-u-s-plant/601033002/

[HeartachesNhangovers]

4. Harley's stock peaked way back in 2014

and then dropped for 2 years. Over the last 3 years Harley stock has LOST over 22% while the S&P has GAINED 30%. So this stock buyback was probably a desperation move to prop up the stock - but it didn't work. Characterizing it as a "reward" to stockholders is misleading, since their "reward" was maybe losing slightly less money than they otherwise would have.

Harley has a fundamental problem of making expensive products that mostly appeal to older people and people who can't afford them. Consolidation is their future.