Harley-Davidson Inc. (HOG) said it plans to further improve its manufacturing operations and cost structure by commencing a multi-year manufacturing optimization initiative anchored by the consolidation of its Harley-Davidson Electric Motorcycle assembly plant in Kansas City, Mo. into its plant in York, Pa.
The company expects to incur restructuring and other consolidation costs of $170 million to $200 million and capital investment of approximately $75 million over the next two years and expects ongoing annual cash savings of $65 to $75 million after 2020.
The company also launched its model year 2018 lineup of the Harley-Davidson Electric Motorcycle, featuring the all-new, highly-acclaimed Softail motorcycles featuring the powerful Milwaukee-Eight engine. Harley-Davidson remains fully committed to investing in product development to inspire new riders through redefining its product in traditional spaces and expanding into new spaces. The company is on target to launch its first electric motorcycle within 18 months. Today, the company said it will invest more aggressively to lead in the application of electric motorcycle technology to inspire ridership among a new audience.
For 2018, Harley-Davidson anticipates full-year motorcycle shipments to be approximately 231,000 to 236,000 motorcycles. In the first quarter of 2018, Harley-Davidson expects to ship approximately 60,000 to 65,000 motorcycles.
Harley-Davidson expects full-year 2018 operating margin as a percent of revenue to be approximately 9.5 to 10.5 percent including manufacturing optimization costs of $120 to $140 million.