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“The effects of COVID-19 on economies around the world have been swift and unprecedented," acting Harly-Davidson president and CEO Jochen Zeitz said in a press release. "It is essential for us to respond quickly, adapt and position the company to manage near-term challenges while preparing to reenergize the business for the recovery and beyond.”
The company will cut salaries for the majority of Harley-Davidson employees in the United States by 10 to 20 percent with no merit increases for 2020. Executive leadership's salaries will be cut by 30 percent.
Zeitz added that both he and Harley-Davidson's board of directors will also forgo their salaries and any cash compensation.
The company noted that the majority of its global production employees have been temporarily laid off but assured that their medical benefits remain intact.
“We understand that navigating this new reality has a real impact on our employees,” added Zeitz. “Their dedication to Harley-Davidson is never taken for granted, and we thank them for supporting one another and rallying together as we manage the profound impact of COVID-19.”
The salary reductions would be reassessed at the end of the second quarter as the company continues to closely monitor business conditions, according to the release.
Harley-Davidson will release its first-quarter 2020 financial results on April 28 when investors will learn how much of an impact the coronavirus has had on the company's sales.
The news comes as the motorcycle company has suffered a decline in sales in recent years. In 2019, revenue fell 7 percent year-over-year to $1.07 billion, according to the company's fourth- quarter earnings report.
Shares of Harley-Davidson dropped 6 percent on the news during Wednesday's trading session. Harley-Davidson stock closed at $18.43 per share, down more than 4 percent.