Harley-Davidson (NYSE:HOG) announced its new Rewire strategic plan in April 2020, as the COVID-19 pandemic worsened a business already hit by tariffs and slumping sales. The maker of the iconic brand reported motorcycle segment revenue down 8% in 2019, and shipments down 6.4% versus the prior year.
Today, the company said it was overhauling its global business model to become more nimble and focused. CEO Jochen Zeitz said, "We've taken a hard look at our entire setup, our spending, and how work is getting done, to align our operating model, structure, and processes." The streamlined business will result in $42 million in restructuring costs in the current second quarter and 700 total layoffs, most of which will occur in 2020, the company said.
Harley said its Rewire plan will affect all aspects of the business, including commercial operations and corporate functions. Zeitz said the company must move in "new directions," and announced the departure of CFO John Olin, without yet announcing a full-time successor.
Key items of the restructuring plan include focusing on high-impact markets; considering core strengths more with expansion; resetting the product lineup and launches for maximum impact; and reaching full potential with ancillary businesses including parts, accessories, and merchandise.
The overall plan is to streamline its operating model and its organizational and cost structures for higher efficiency, the company said. It will share a comprehensive summary later this month when it reports second-quarter earnings, and said a new strategic plan focusing on 2021-2025 will be unveiled later this year.