Harley-Davidson sheds Buell and MV Agusta

The new Harley-Davidson strategy focuses on extending the Harley-Davidson brand, emphasizes productivity and strengthening the core cruiser business. This leaves the American motor company in a position where they will now discontinue the Buell Product Line and divest the famed and historic MV Agusta motorcycle brand. This sudden move was a shock to many and a confirmation to what insiders have been hearing for the last few months.

So yes, it is true… The Harley-Davidson Motor Company will discontinue production of Buell motorcycles. Remaining inventories of Buell motorcycles, accessories and apparel, while they last, will continue to be sold through authorized dealerships. Warranty coverage will continue as normal for Buell motorcycles and the Company will provide replacement parts and service through dealerships. 

The decision will result in a reduction over time of about 80 hourly production positions and about 100 salaried positions at Buell. Employment will end for a majority of Buell employees Dec. 18, 2009.

Harley-Davidson, Inc. expects to incur approximately $125 million in one-time costs related to the discontinuation of the Buell product line. The Company expects to incur approximately $115 million of that amount this year.

Relative to MV Agusta, the Company will immediately commence efforts to sell the business, which is based in Varese, Italy. So if you have some pocket change, here is a chance to "steal" the MV Agusta motorcycle company and claim all those world championships for yourself. Sources say the American company wants to do this "espresso" style. Note to Jay Leno, Brad Pitt, Michael Jordan and Tom Cruise: "I know you guys love motorcycles so why don’t we pool our money and take a run at it?" "I will take care of all the details and will hire and manage a world-class management team to turn you a healthy profit in the process!".

In the third quarter, Harley-Davidson, Inc. recorded a one-time fixed-asset impairment charge of $14.2 million related to Buell and a goodwill impairment charge of $18.9 million related to MV Agusta.

This action is due to the retail Harley-Davidson Motorcycle Sales Decline over the last year and 2nd Quarter as well as an Operating Loss that impacts Finance Unit Impacts Profits.

"Buell and MV Agusta are great companies, with proud brands, high-quality exciting products and passionate enthusiasm for the motorcycle business. Buell has introduced many innovative advancements in motorcycle design and technology over the years and MV Agusta is known in Europe for its premium, high-performance sport motorcycles. However, our strategy to focus on the Harley-Davidson brand reflects the fact that we believe our investments in that brand are a better utilization of overall company resources," said Wandell.