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Harley-Davidson to shut down KC plant for 14 weeks, cut 400 jobs

Harley-Davidson Inc. said Thursday it is cutting 1,000 more employees, incuding 400 in Kansas City, and lowering its motorcycle shipment guidance as quarterly earnings continued to fall due to weaker sales.

The Kansas City plant, which cut 150 jobs earlier this year, will eliminate 400 positions, reducing the hourly workforce in half, according to union officials.

The Kansas City plant will also be down for 14 weeks, including the entire fourth quarter.

From the company's quarterly report released this morning:

Powertrain Consolidation Accelerated. Production shutdowns and line rate adjustments will be implemented at Harley-Davidson powertrain operations in Menomonee Falls and Wauwatosa, Wis., and at motorcycle assembly operations in York, Pa. and Kansas City, Mo., to achieve the newly-announced unit volume reduction. As a result of the volume reduction and production shutdowns, the Company expects to accelerate and substantially complete the planned consolidation of the powertrain operations by mid-2010.

Sportster® and V-Rod® motorcycle final assembly operations and V-Rod motorcycle powertrain production in Kansas City, and production of Sportster motorcycle powertrains in Wauwatosa will be shut down for approximately 14 weeks in 2009, including the entire fourth quarter. The Company anticipates that other production operations will be shut down for a total of approximately five weeks over the rest of 2009.

On a combined basis, Harley-Davidson now expects the volume reductions and restructuring activities to result in one-time charges of approximately $160 million to $190 million over the course of 2009 and 2010, an increase of $40 million from earlier estimates, including $50.0 million incurred during the first half of 2009. The Company now estimates ongoing annual savings of approximately $140 million to $150 million, or $70 million greater than previously estimated, upon completion of the announced restructuring.

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