Harley-Davidson has announced that the company has temporarily laid off most of its global production employees and implemented salary cuts as the American motorcycle brand makes efforts to lower costs, as the coronavirus pandemic has hurt its business. The latest announcement comes after Harley-Davidson withdrew its earnings forecast for this year, saying disruption due to the COVID-19 outbreak could dent the brand's ability to supply and sell motorcycles. As part of the cost cuts, Harley-Davidson said the company will "significantly" reduce all non-essential spending.
Also Read: Harley-Davidson Withdraws Financial Forecasts For 2020
Harley-Davidson has shut down at least three production facitilies in the US after an employee tested positive for coronavirus
"The effects of COVID-19 on economies around the world have been swift and unprecedented. It is essential for us to respond quickly, adapt and position the company to manage near-term challenges while preparing to re-energize the business for the recovery and beyond," said Jochen Zeitz, acting President and CEO, Harley-Davidson.
"We understand that navigating this new reality has a real impact on our employees," added Zeitz. "Their dedication to Harley-Davidson is never taken for granted, and we thank them for supporting one another and rallying together as we manage the profound impact of COVID-19."
Also Read: Harley-Davidson Suspends US Production Over Coronavirus Crisis
Harley-Davidson's CEO and Board of Directors will forego their salaries, the company said, although Harley-Davidson didn't specify for how long. Salaries of executive leadership will be cut by 30 per cent, while most other salaried employees will see a reduction between 10-20 per cent in their paychecks. The company said salary reductions will be reassessed at the end of the second quarter, and has also added that it will not hand out merit increases for 2020 and will freeze hiring. Harley-Davidson said it will take similar actions outside the US, so salary cuts and layoffs are expected across the world, including India.
Harley-Davidson had already suspended all motorcycle production at its plants in the US after an employee tested positive for COVID-19. The iconic American motorcycle brand has already been reeling under slowing sales, and had suspended motorcycle production recently in the wake of the COVID-19 outbreak. Additionally, the company has also been facing management issues, with Matt Levatich stepping down as CEO after more than two decades in the brand, and reports of a new battle between the board and one of its main investors.
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