Sen. Casey goes to bat for Harley
CHRISTINA KAUFFMAN The York Dispatch
Updated: 01/19/2009 10:48:26 AM EST


Sen. Bob Casey Jr. has asked a federal agency to find Harley-Davidson eligible for funds handed out under a federal bailout for financial institutions.
Casey, D-Pa., wrote a Jan. 16 letter to Federal Deposit Insurance Corp. chairman Sheila Blair, saying Harley-Davidson recently inquired whether its financing company and subsidiaries -- Harley-Davidson Credit Corp. and Eaglemark Savings Bank -- are eligible for the Temporary Liquidity Guarantee Program, or TLGP.

Casey said he supports Harley's request for eligibility and wants the FDIC to make a decision on the company's eligibility by Tuesday.

"Without access to TLGP, Harley-Davidson may be forced to make tough decisions that will impact workers in Pennsylvania, jeopardize the local economy ... and negatively impact the state economy," Casey wrote in the letter.

Everything possible: Reached for comment on Friday, Casey said he wants to do everything possible to make sure Harley's financial arm has access to help if it's eligible.

He said the problem with the economy is related to credit, and Harley's participation in the program would allow more people to get Harley loans to buy motorcycles.

"Without the determination (of eligibility) made, it puts their financing company in a much more precarious situation," he said.

In October, in an attempt to improve confidence in the banking sector and to improve liquidity for banks, the FDIC started the program to guarantee newly issued unsecured debt of qualifying institutions and guarantee certain noninterest-bearing accounts.
Guarantee debt: Harley spokesman Bob Klein said the program would guarantee unsecured corporate debt against default; Harley would only get federal funds if a customer defaulted on his or her motorcycle loan.

Klein said the TLGP is one of several options that Harley-Davidson's financial arm is pursuing "to ensure continued funding of its lending activities" in a challenging economic environment. Lower consumer confidence has affected the motorcycle industry, he said.

The Wisconsin-based company told elected officials in Pennsylvania and Wisconsin about its plans to seek inclusion in the program, Klein said. The company appreciates Casey's support, he said.

Stock downgraded: Harley's Springettsbury Township plant employs 2,866 workers and supports another 1,500 jobs at Harley dealerships in Pennsylvania, Casey said.

"It's hard to even calculate the impact that Harley has on York County, the region and the Commonwealth," he said.

In April, the company announced plans to cut 300 jobs from the York plant; those jobs have since been eliminated. In October, a spokesman said the company was still "positioned appropriately" for the faltering economy, despite falling profits reported in the third quarter.

Shares of Harley-Davidson Inc. tumbled earlier this month after an analyst downgraded the motorcycle maker and estimated its fourth-quarter U.S. sales will decline by a percentage in the low to mid-20s.

Raymond James analyst Joseph D. Hovorka reduced his rating on the Milwaukee-based company's stock to "Underperform" from "Market Perform." In a note to clients, he said that a recent dealer survey shows that year-over-year retail sales appear to have softened from the third quarter, when Harley-Davidson reported a 15.5 percent drop in U.S. retail sales.

Hovorka said of the 55 dealers surveyed, nearly two-thirds reported a unit sales decline in the quarter, "the softest reading ever for our survey."

The company is expected to report fourth-quarter results Friday.

-- Reach Christina Kauffman at 505-5436 or ckauffman@yorkdis patch.com.

 

This came from Dealer News:

Harley-Davidson Seeking Federal Bank Bailout FundsPublish date: Jan 19, 2009
Email|Print|ShareDel.icio.usDiggRedditFacebook|Sav e|LicenseHarley–Davidson is hoping to have an answer Tuesday about whether the Federal Deposit Insurance Corp. will designate the company as eligible for federal funding under a bank bailout program.

Sen. Bob Casey, D-Pa., has asked the agency to approve Harley’s request, ideally ahead of the company’s fourth-quarter earnings report due out Friday. H-D employs nearly 3,000 people at its plant in York County, Pa., and another 1,500 work at dealerships in the state.

H-D has asked that Harley-Davidson Credit Corp. and Eaglemark Savings Bank be declared eligible for the Temporary Liquidity Guarantee Program, or TLGP, which guarantees unsecured corporate debt against default. That would cover the bills of Harley-Davidson's internal financial entities if they were unable to pay bills themselves.

Casey told the York Dispatch that without the designation, “it puts their financing company in a much more precarious situation."

Four analysts — Goldman Sachs, Standard & Poor's, RBC and Raymond James — have downgraded Harley shares in as many weeks, and the company’s former HDFS president, Sy Naqvi, left the company early this month. H-D’s stock price has dropped from $80-plus per share in December 2006 to $13.70 today. (Financial markets are closed today in observance of Martin Luther King, Jr. Day.)

Against an industrywide slowdown, analysts expect Harley sales to be down 20 percent for the fourth quarter, and Raymond James analyst Joseph D. Hovorka said in a client note that sales among 55 dealers surveyed were "the softest reading ever for our survey." Sales are expected to slide another 20 percent to 30 percent this year as consumers cut purchases of luxury goods.

— Submitted by Holly Wagner

 

and what is wrong with that? they employe a lot of people here in the us . sure they may buy some thing's oversea's.but it's about the one's here and they have just as much right as any of them bank's or car maker's.look around there is some very tough time's going on and along way from being over.

 

Harley credit and Eagle Mark are way too high on their interest rates as it is... they are as proud of lending the money as they are of selling motorcycles.... they both cost you way to much...

I can't get their motorcycles any where else... but I can the money...

Just more corporate greed if you as me.... Guaranteed loans at the interest rates they charge...*****... thats a win-win situation for them... I need me some of that kind of stuff...

Charlie D.

 

+1. More corporate greed run amok paid for by the taxpayer.

 

Nope, I don’t agree with it. Harley should get nothing! I’m sick of all these companies asking for free money. Harley needs to weather the storm just like all the other companies in the U.S. What’s next, the **** industry is going to ask for a bailout?....wait they already did. The handing out of taxpayer money has to stop.

 

I never said it was wrong or right, I just posted the info. for all to read...

GET IT??

Thank you
Chuck...

 

At the high interest rates I see posted here from time to time, you'd think Harley would have no trouble selling those loans. Investors can't get that high of a return - not even close - almost anywhere else.

The underwriting on those loans must really suck - call them "subprime" if you will. They must have made a huge amount of loans which are lousy on paper. Those loans are "collateralized," meaning each has a bike as collateral.

Both the creditworthiness of the borrowers and the value of the bikes must be in the toilet. Believe me, even I would buy some well secured loans with good borrowers at 15-20% interest today. I can't think of anywhere else to make that high of a return.

If they need to keep selling bikes by making lousy unmarketable loans to stay afloat, they must be in real trouble.

$.02

 

Not a big surprise. I think I am going to ask for a bailout. Everyone else is.

 

I'll see you in that line. What about my bailout money? We are all going to need bail out money when we get done paying to save all these large corporations / bank institutions for their F-ups.