Harley-Davidson, Inc. HOG recently announced that it is implementing a number of actions to boost the firm’s cash position in the face of the rising uncertainties due to the coronavirus crisis.
The company has enforced a variety of measures, including a substantial reduction in all non-essential spending, a company-wide hiring freeze, staffing-level adjustments and no merit increments for 2020, in a bid to minimize costs during this period of reduced business.
Compensation reductions include 30% salary cuts for executive leadership and 10-20% pay cut for U.S.-based salaried employees. The CEO and board of directors will forgo their entire salary compensations to lower costs amid coronavirus outbreak.
The majority of the company’s global production employees are currently on a temporary layoff. Nevertheless, medical benefits remain unchanged for all employees worldwide.
Further, these cost-cutting measures will be reassessed at the end of second-quarter 2020, as the firm continues to closely track the market conditions.
Moreover, in March, Harley-Davidson temporarily suspended the majority of production at its U.S. manufacturing facilities, starting Mar 18, to protect employee health and further bolster the coronavirus-containment efforts. The affected facilities include York Vehicle Operations in Pennsylvania, and Tomahawk Operations and Pilgrim Road Powertrain Operations in Wisconsin.
Harley-Davidson currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
The coronavirus pandemic has become a concern for other global auto biggies as well, including Tesla TSLA, Honda Motor HMC, Toyota Motor TM, Volkswagen AG, Goodyear Tire, Nissan and Hyundai Motor. Several automakers have closed their factories and suspended production, while the others plan to change manufacturing processes and cut production levels in their plants, in line with the nationwide campaign addressing the crisis. The pandemic has not only dented consumer sentiment and thwarted vehicle demand but also distorted the supply-chain balance globally.
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