Harley Davidson to drop New Castalloy

MILWAUKEE, Dec. 8 (UPI) -- U.S. motorcycle maker Harley-Davidson Inc. said it would close down Australian subsidiary New Castalloy, which supplies the firm with wheels and wheel hubs.

"The company's decision on wheel production follows a review of the long-term fit and competitiveness of the New Castalloy business with our strategy and was not made lightly," said Matt Levatich, Harley's president and chief operating officer, the Milwaukee Journal Sentinel reported Thursday.

"New Castalloy has been a valued part of the Harley-Davidson team. We appreciate the many significant contributions of New Castalloy's employees over the years," Levatich said.

By using other suppliers, however, Harley-Davidson said it expects to save about $9 million per year, starting in 2014.

The move, part of a larger restructuring plan, will cost the firm about $30 million in one-time charges.

Overall, Harley-Davidson expects a restructuring plan begun in 2009 would save as much as $335 million per year with one-time charges totaling a possible $525 million.

The Journal Sentinel said 212 workers are employed at the the firm's Australian subsidiary, which was purchased in 2006.