Harley-Davidson Inc. is moving manufacturing operations at its Kansas City plant into the company’s Springettsbury Township facility.
Announced in the company’s fourth quarter earnings report, the consolidation is the heart of a two-year plan to lower manufacturing costs.
The motorcycle manufacturer expects the effort to cost between $170 million and $200 million over the next two years with capital investment of $75 million. After 2020, it expects annual cash savings of $65 million to $75 million. No other details were given on when or how the consolidation will begin.
According to Harley president and CEO Matt Levatich, the decision to move operations came “after very careful consideration of our manufacturing footprint and the appropriate capacity given the current business environment. Our Kansas City assembly operations will leave a legacy of safety, quality, collaboration and manufacturing leadership.”
The change might come as a surprise to watchers of the York County factory. It was just April of last year when Harley-Davidson announced it would be cutting 118 jobs from the Springettsbury plant and sending them to Kansas City along with its Cruiser line of motorcycles, leaving the plant with 800 factory employees.
Overall, the company has seen a steady decline in sales in both national and international markets. U.S. sales fell 11.1 percent in the fourth quarter of 2017 compared to the same quarter of 2016. International sales fell 7.7 percent in the same time frame. Worldwide sales dipped 6.7 percent over the entire 2017 fiscal year.
Harley-Davidson posted net income in the fourth quarter of $8.3 million, down from $47.2 million during the fourth quarter of 2016. Net income in all of 2017 was $521.8 million, down from $692.2 million in 2016.
The company also confirmed it is on track to begin selling its first electric motorcycle within the next 18 months and will “invest more aggressively” in the electric vehicle market.
“The EV motorcycle market is in its infancy today, but we believe premium Harley-Davidson electric motorcycles will help drive excitement and participation in the sport globally,” said Levatich.