Harley-Davidson, the Milwaukee based lifestyle products company, announced yesterday how much its top five executives made last year. The five executives are Keith Wandell, chief executive officer of the motor company; John Olin, the chief financial officer; Matthew Levatich, the chief operating officer; Lawrence Hund who runs Harley’s loan company; and Paul Jones who is the company’s chief lawyer.
Together the five men were paid $15,489,477 last year. Harley, which is famous for its motorcycles, sold 233,117 of them in 2011. That is about two-thirds as many bikes as the company sold in 2006. Executive compensation amounts to $66.45 of the price for any new Harley-Davidson motorcycle.
Harley had a profit of $599.1 million last year. The company makes a profit of about $2,600 on every motorcycle it sells to one of its dealers. The company had a profit of only $146.5 million in 2010. Much of the profit increase is the result of slashing jobs and lowering wages at the company’s manufacturing plants.
The company cut about 1,000 of 1,900 jobs at the company’s venerable York (Pennsylvania) assembly plant. The company has also “outsourced” the manufacture of more components than it used to do. Outsourcing allows the company to “focus on efficiencies and core competencies, including making motorcycle frames and engines, painting and assembling bikes.”
More Changes Ahead
This spring Harley will implement a new “production planning system” that will allow the company to more easily lay-off “casual” workers and reduce production inventory when demand for motorcycles drops. At the same time the company intends to make changes at its plants in Wisconsin to help the company make more money with lower sales.
The report does not speculate about how this increased efficiency will effect the quality of its motorcycles.
Last year Wandell made $7,232,147; Olin made $1,785,030; Levatich made $3,065,869; Hund made $2,398,907; and Jones made $1,007,524. The average Harley “casual” employee makes about $16.80 an hour. Those fulltime Harley workers who are still employed by the company make an average hourly wage of about $30.50. Fulltime workers make a little less than one percent of Wandell’s compensation last year.
In an article published 10 days ago, the Wall Street Journal reported: “Tony Wilson, president of the International Association of Machinists union local in Kansas City, said workers felt little choice other than to accept Harley’s conditions. A Harley spokeswoman said the conditions were part of a transformation needed to make the motorcycle maker more competitive.”