Harley-Davidson to close Kansas City assembly plant in 2019

Harley-Davidson to close KC plant, report says
Posted at 7:06 AM, Jan 30, 2018
and last updated 2018-01-30 19:34:03-05

KANSAS CITY, Mo. — Harley-Davidson plans to close the Kansas City motorcycle assembly plant in 2019. 

According to Harley-Davidson’s full-year 2017 results report, the company plans to improve manufacturing operations and cost structure by commencing a "multi-year manufacturing optimization initiative" anchored by the consolidation of its motorcycle assembly plant in Kansas City, Missouri into its plant in York, Pennsylvania. 

Harley-Davidson President and CEO Matt Levatich said on a conference call Tuesday morning the company is shifting its mindset from "we build motorcycles" to "we build riders." He also said they expect approximately 800 jobs will be eliminated with the closure of the Kansas City plant, and 450 jobs will be added in York by 2019. 

This could seriously affect manufacturing job growth Kansas City has seen recently. Currently, the metro has about 78,000 jobs in manufacturing and has added 5,000 in the past five years, according to MARC.

MARC senior researcher Jeff Pinkerton said Kansas City could feel twice the impact because of the multiplier effect.

"Through the economy, we will probably lose the same number of jobs directly lost by Harley Davidson," said Pinkerton.

Rick Worth sits on the board of Harley Davidson dealers.

"We've always been real proud of our plant we hate to see it go," said Worth.

But it's not all bad news. The Department of Economic Development said in its jobs report that 7,200 manufacturing jobs were added in Missouri between December 2016 and December 2017.

Of course, the Harley Davidson closure and soon to close ConAgra Plant in Trenton are not included in that picture.

"The decision to consolidate our final assembly plants was made after very careful consideration of our manufacturing footprint and the appropriate capacity given the current business environment. Our Kansas City assembly operations will leave a legacy of safety, quality, collaboration and manufacturing leadership," said Levatich in the report. 

The report says Harley-Davidson expects to incur restructuring and other consolidation costs of $170 to $200 million and capital investment of about $75 million over the next two years and expects ongoing annual cash savings of $65 to $75 million after 2020. 

The manufacturing jobs were seeing a rebound in Kansas City in Missouri, the number is nowhere near its peak in the 70s. Statistics from the Bureau of Labor show US manufacturing jobs peaked in 1979 at nearly 20,000,000 jobs. In 2012 there were about 12 million manufacturing jobs in the US, which showed a growth rate of over 4 percent. In the past year manufacturing jobs in the US have grown just over .6 percent.

Worth said Harley Davidson plans to produce the same number of bikes, just all of them out of its Pennsylvania plant.

"With new tech and automation, fewer people are building more motorcycles and it takes less room. We knew consolidation could be on the horizon," said Worth.

Worth said the obvious impact was to the families affected, but he also said there is an emotional loss for Kansas City. The KC plant has produced roadsters and sportsters for longer than two decades.

Pinkerton would like to see the city rebounds, with other plants picking up Harley Davidson's employees.

"If there is a community that can absorb this loss… It is Kansas City given that our manufacturing growth has been pretty strong recently," said Pinkerton.

Harley-Davidson sent 41 Action News the following statement: 

As we continue to improve our cost structure and maintain world-class manufacturing operations, we are launching a significant, multi-year manufacturing optimization initiative that is anchored in the consolidation of our Kansas City, Mo. final assembly operations into our York, Pa. final assembly plant.

This decision was made after very careful consideration of our manufacturing footprint and the appropriate capacity given the current business environment. We are constantly evaluating capacity and our current U.S. capacity exceeds U.S. demand. Approximately 800 full-time, causal and contract positions will be impacted at the Kansas City plant. Layoffs are expected to begin mid-year and the facility will close in the third quarter of 2019. We anticipate an increase of approximately 450 full-time, casual and contractor positions will be added at our York facility, which will be expanded to support additional production.

This was a decision we did not take lightly. The Kansas City plant has been assembling Harley-Davidson motorcycles since 1997, and our employees will leave a great legacy of quality, pride and manufacturing leadership. We are grateful to them and the Kansas City community for their many years of support and their service to our dealers and our riders.