Motorcycle Maker Harley-Davidson Suspends Production At Pennsylvania Plant

Harley-Davidson, a motorcycle manufacturer, has temporarily suspended production at its plant in Pennsylvania. It is the second time that the company is suspending operations at this plant in over 12 months. The company attributed the latest decision to a shortage of parts.

Harley-Davidson halts production at Pennsylvania plant

The production at the Pennsylvania plant is the largest by the company. This plant has nearly 1,000 union employees, and it is set to resume production activities on June 13, according to a statement sent by email.

The company has not mentioned the parts that were affected by the shortage. However, it is not the first time that the motorcycle maker is taking such a drastic move to suspend assembling activities at this plant.

Harley-Davidson had previously suspended production at this plant in May last year. At the time, the company had attributed the decision to a brake hose issue from a third-party supplier. However, in the latest development, there is no mention of the affected parts or the problem at hand.

Harley-Davidson posts positive quarterly results

In April, Harley-Davidson posted better-than-expected results for the first quarter of the current financial year. However, during the period, the retail sales posted by the company in North America declined.

The earnings reported by the company during the period were attributed to the building demand for its popular models. However, there are concerns that the demand for motorcycles might start to drop because of fears of a recession and volatility across the broader market. A negative economic outlook might lead to consumers halting the purchase of leisure products.

At the time, the Chief Commercial Officer at Harley-Davidson, Edel O’Sullivan, commented on this development, saying that in a climate where interest rates were rapidly increasing and inflation levels remained high, there was some moderation in the behavior of customers.

While reporting the quarterly results, the company reaffirmed the full-year forecast for revenue growth, which is projected to range between 4% and 7% for the motorcycle division. These results have disappointed investors that have been yearning for an upward revision on the forecast, which would signal that the company was achieving growth despite an uncertain climate.

Analysts noted that one of the reasons why the company failed to revise the forecast upwards was because of concerns over whether the remainder of the year would still post a strong performance as what was seen during the first quarter.

During the period, the sales made from motorcycles and other related products increased by 21% to $1.56 billion, with the growth being attributed to an increase in wholesale shipments and a continued increase in prices. The net profit came to $2.04, which was above analyst expectations of $1.39. The revenue from the motorcycle division was $1.56 billion.

The financial services division at the company posted a 32% drop in growth, which affirmed the fears that investors have about the general market. Investors are worried that consumers are not borrowing more money because of the high-interest rates.