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Harley Sees Loss, Sales Slump
Kelsey Swanekamp, 01.22.10, 10:30 AM EST

The motorcycle giant was hit hard by the economy, but expects to bounce back by cutting costs.

Difficult roads lie ahead for Harley-Davidson, which reported a wider than expected loss for the fourth quarter on Friday.

Falling motorcycle sales and restructuring costs brought the company to a $147.2 million loss for the quarter. Including discontinued operations, Harley-Davidson ( HOG – news – people ) lost $218.7 million. As the difficult economy kept wallets closed and credit short, sales in the U.S. dropped by 27.9%.

The company recently announced that it would introduce a dozen of its motorcycles to the Indian market. International sales dropped by only 10.3% during the fourth quarter, far less than sales in the U.S.

The motorcycle giant plans to reorganize its York, Pa. manufacturing plant to focus on motorcycle assembly, metal fabrication and paint, having reached a seven-year labor agreement in December. It also consolidated three vehicle test facilities into a single site in Arizona. The company expects that the restructuring will streamline operations and provide essential cost savings on the manufacturing end of the business.

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