Harley-Davidson said Tuesday it’s recalling about 238,300 motorcycles, worldwide, for a clutch problem — the fourth recall for a clutch issue in five years.
The voluntary safety recall includes all model-year 2017 and 2018 Touring, Trike and CVO Touring models, as well as some 2017 Softails.
Harley says the recall will cost it about $35 million in the current fiscal quarter.
“We, along with our dealers, are committed to addressing this issue. The safety of our riders is our highest priority,” Chief Financial Officer John Olin said during a conference call with analysts.
Separately Tuesday, Harley said its U.S. motorcycle sales continued to fall in its most recent quarter, but overall profit jumped.
In 2016, Harley recalled more than 27,000 bikes, approximately 14 models, for a problem with a clutch master cylinder.
A year earlier, the company recalled nearly 46,000 of certain 2014 and 2015 Electra Glide, Street Glide, Ultra Limited, Road Glide and Road King bikes. There were 27 crashes, and four minor injuries, associated with that clutch problem, according to news reports then.
In 2013, Harley recalled approximately 25,000 motorcycles for a clutch related problem.
Source USA Today
By Peter Eavis
Harley-Davidson on Tuesday reported a surprisingly large decline in United States motorcycle sales.
The company and its executives spent much time discussing the hit. Curiously, though, there was no mention of President Trump’s attacks on the company and what role they might have played in the poor sales.
Harley-Davidson’s situation highlights the predicament faced by companies targeted by Mr. Trump. His administration’s trade policies are hitting the businesses of many companies. If executives respond, they risk provoking a public rebuke from Mr. Trump that may reduce demand for their companies’ products. But if his comments could be affecting their businesses, investors expect some details.
Harley-Davidson announced at the end of June that it was shifting some of its production out of the United States to avoid retaliatory tariffs that the European Union had imposed. After the announcement, Mr. Trump criticized the company several times on Twitter, and said he supported a boycott of its products.
“There was an inexplicable acceleration in the magnitude of the decline in U.S. retail sales,” said Rommel Dionisio, an analyst at Aegis Capital. “In a fairly strong economy, it took many investors by surprise.”
The sharp slowdown may have had little to with Mr. Trump’s comments. Going into the third quarter, Harley-Davidson already faced a long-term decline in demand for its motorcycles in the United States as well as a glut of attractively priced used vehicles. Senior Harley-Davidson executives discussed such challenges on a conference call on Tuesday, but they said nothing about the possible effect of Mr. Trump’s attacks.
“We have no evidence to suggest that trade and tariff issues impacted customer intent to purchase,” Patricia Sweeney, a company spokeswoman, said in an emailed statement after the conference call.
Harley-Davidson’s reticence about Mr. Trump’s comments may shield it from further criticism. But public companies are required to give shareholders a timely and relatively detailed assessment of any significant forces affecting their financial results. Staying silent about the possible harm done by Mr. Trump’s attacks may seem to be a wise public relations move, but it could also keep important information from investors.
Some analysts said they saw no evidence that Mr. Trump’s tweets had a meaningful effect on Harley-Davidson’s third-quarter results.
Felicia Hendrix, an analyst at Barclays, said that the quarter’s sales were mostly in line with recent trends, and that September’s sales were quite strong. Customers, she said, had held back on purchases early in the quarter in anticipation of the release of new products later in the period.
“None of our dealer checks would indicate that there was any fallout from the Trump comments this summer or that they felt that customers were boycotting their stores,” Ms. Hendrix wrote in an email.
Mr. Trump’s criticism may also have made Harley-Davidson’s products more attractive to customers who don’t support him.
“This is a pretty divided nation,” said Jaime Katz, an analyst at Morningstar, “so for every customer that supports Trump’s boycott, there is probably one who doesn’t support it.”
Still, Harley-Davidson’s appeal to older blue-collar American men, a group that has lent solid support to Mr. Trump, most likely meant his calls for a boycott fell on receptive ears.
“I believe it was a temporary factor in the industry in impacting U.S. sales of Harley-Davidson motorcycles,” said Mr. Dionisio, the Aegis Capital analyst.