Dealer News re MoCo

[Limey_Dave]

Harley-Davidson Seeking Federal Bank Bailout Funds - Dealernews


H-D To Cut Jobs, Shipments; Q4 Sales Down 19.6 Percent - Dealernews

[JR-Harley]

Here is a little update via the BBC.

Motorcycle firm Harley-Davidson has secured a $600m (£418m) cash injection, including $300m from billionaire investor Warren Buffett.


BBC NEWS | Business | Harley-Davidson gains $600m boost


The prices have been taken down off the UK site suspect a price increase?

Just taken the whole of their website down, something is on.

[Tony Cross]

Thanks for posting that.

[the_french_owl]

Harley-Davidson Inc. (HOG) issued $600 million in senior unsecured notes on Tuesday, getting more financing for its struggling lending arm from, among others, Warren Buffett.
Shares of the iconic motorcycle company jumped on Tuesday, rising 13% to $ 13.40 in recent trading, after earlier spiking as much as 23%. The shares have lost nearly three-quarters of their value from their 52-week high in April.
Much of the stock decline can be tied to the company’s large amounts of debt coming due in the first half of the year. While Tuesday’s fund raising won’t be put toward paying the debt, the company and analysts believe its actions showed it has a greater chance of reaching a new agreement with lenders before that debt comes due.
The company, whose sales have been battered as consumers have cut back on major discretionary purchases, said the debt would go to help increase lending activities at its Harley-Davidson Financial Services company, which makes loans to both dealers and consumers.
Davis Selected Advisers LP, the company’s largest shareholder, and Buffett’s Berkshire Hathaway Inc. (BRKB) each bought $300 million worth of the notes.
The notes will be due in 2014 and will carry a 15% interest rate per year. The company said the high interest rate was because of the difficult credit markets.
Many of the recent concerns about Harley-Davidson shares have come from a $500 million credit line that expires at the end of March, as well as another $950 million due in July.
FTN Midwest analyst James Hardiman said the appearance that Harley is able to raise $600 million alleviates some of the fears it won’t be able to pay off that $500 million, even if the funds don’t get used directly on the debt.
“The ability to get $600 million is certainly positive,” Hardiman said. “In addition to that, any time Warren Buffett and Berkshire invest in something, people say let me take another look at that stock.”
Harley-Davidson spokesman Bob Klein said that the company wasn’t using the funds raised with this offering - or any of the billions it is hoping to raise for the financing arm - to pay off that line of credit.
“We are exploring ways to increase and extend that,” Klein said. “We are working on that, and we believe that the fact that we were able to complete a transaction, we believe that speaks to the underlying ability to do that.”
Last week, Fitch Ratings warned it could lower its credit ratings on Harley- Davidson because of the debt and the demand problems, and Standard & Poor’s had already cut the company two notches.
Late Monday, the company said in a filing with the Securities and Exchange Commission that it was amending its risk factors list, the potential concerns investors should consider before buying the stock, which it is required to do before issuing new offers. It said it was seeing increasing problems for sales in 2009, which were being heightened by the credit crisis.
The company said the slowing economy was making it difficult to sell motorcycles and that the credit markets were making the situation even worse.
Harley-Davidson said the debt offering is part of a three-prong strategy under which it is attempting to address the current environment. The strategy focuses on stimulating consumer demand by investing in the lucrative Harley-Davidson brand, aligning the company’s cost structure and securing additional funding for the lending arm.
The company said in late January that the financing arm had $1 billion in unmet cash flow needs for 2009 and that it was looking to borrow unsecured debt or tap into federal funds to help increase lending for consumers, and drive sales.
Hardiman said the company remains in a solid position to rebound when the market eventually returns to discretionary spending.
“We’ve been saying for a while that when the time comes, Harley is going to be extremely well positioned to take advantage,” he said. “But when Warren speaks, it gives it more credibility.”



Warren Buffett poses on a motorcycle. Berkshire owns Geico Insurance

Patrick

[BaZa®]

Sad days for dealers here and abroad.

Hope you're coping Phil?

[Phil]

A wise move, or a desperation play?

Borrowing six hundred million to prop up the financial services division at fifteen percent per annum means you have to lend it back to the consumer at how much to make a profit? These days that is a staggering return! Smart move for Buffett, a win win. Either he makes a shed load of money, or he ends up owning a very large chunk of Harley Davidson.

They are complaining about not selling bikes, however thay are wanting eight point nine percent interest for tier one credit!! I have seen very well heeled customers bust out laughing & walk out of the store. They can walk down the street & buy a Honda at four percent.

We are supposed to be pushing the `Dark Customs`. You`ve seen the ads; Generation Y, skateboard in hand, tats & mohawk.

Guess what the chances are of approving funding for one of these young target generation Y`ers to buy one with Harley financial?.......Slim to none! Buells are the same.

What they need to do is take a long look at their lending practices. If we do not start moving more product, all the Poo-Bahs pushing pencils at Harley will be out of work.............................And so will we.

[Phil]

Originally Posted by BaZa ®

Sad days for dealers here and abroad.

Hope you're coping Phil?

We`ll see Baz, thanks for asking.

December was a complete disaster, we lost over half a million Dollars gross on new bike sales alone across all of our Dealerships!

Things rallied in Jan. Four months like December would have put us out of business.

We have laid off a third of our staff, cut hours & days to save money. We are far from being out of the woods.

[Big_john]

Bike sales not scooter sales in Spain down 60% in the last 6 months