It was reported a few days ago that the American motorcycle manufacturer; Harley Davidson are having to shut down their assembly plant in York PA due to supply chains issues, however now it has been revealed that it is indeed a quality rather than quantity issue.
The quality in question apparently is to do with brake hoses and the company that supplies them. Proterial Cable America makes all sorts of products for the US market and one of those is brake hoses. The company is referred to as a Tier 2 supplier. In other words, they do not directly supply Harley Davidson in this case, but rather supply the company (a Tier 1 supplier) who in turn add these components to other components which are then delivered directly to the end manufacturer.
Harley Davidson had just the very day before launched the much anticipated mid year CVO models for 2023 being the CVO Road Glide and CVO Street Glide. Many observers had assumed that production of these bikes would be immediately affected also, however the company have rejected that in a statement released earlier.
“Harley Davidson was recently notified of a potential quality issue relating to brake hose assemblies provided by a tier-2 supplier, Proterial Cable America (“PCA”), a portfolio company of Bain Capital, to the Company’s tier-1 brake system suppliers. The recently launched 2023 CVO Road Glide and Street Glide motorcycles do not utilize these brake hose assemblies.
Following this notification, Harley-Davidson will be running limited motorcycle manufacturing operations at its York facility. This is a new supplier quality issue, separate from the matter that caused the production suspension in May 2022.
Based on the latest information provided by PCA, the Company now anticipates resuming full motorcycle manufacturing operations at its York facility on June 26, 2023. The Company does not expect its international production to be meaningfully impacted”
Jochen Zeitz, Chairman, President and CEO, Harley-Davidson: “While retail sales have improved in the quarter, as we had expected, we have a strong inventory position in the network to help us navigate through this situation – our teams are working very hard to minimize the impact on the business.”
So whilst the company have closed down the plant twice now in the last year, it would appear that the supply of bikes to meet the demand should largely be unaffected. Could this be to a reduced demand that is being masked by the inflated stock levels or is this the kind of contingency that a company as large as they would have planned for?
Recently other observers have questioned whether the shut down of the plant is due to other issues too. Over produced bikes that are just not selling in the numbers that they had expected causing bottle neck congestion. Others are looking at the many supply chain tiers with problems there that are also affecting other manufacturers such as Suzuki in Pakistan which has repeatedly had to close both car and bike plants there too. Finally the USA is in the mid of port authority strikes which is causing a backlog of shipping containers being unloaded and passing through customs.
Of course all of these things and more could be contributing factors however the statement would indicate a very particular problem has caused the current shutdown and not related to the previous shutdown or indeed any other potential cause.
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