Harley-Davidson is closing its cast wheel and hub producing subsidiary New Castalloy, deciding to outsource production to third-party suppliers.
Based in Adelaide, Australia, New Castalloy produces about 1,450 wheels and 500 wheel hubs per day for Harley-Davidson. That work will be transferred to outside suppliers by the middle of 2013.
Harley-Davidson expects to save about $9 million annually by 2014. Closing New Castalloy will however require a cost of about $30 million, including $10 million in 2011 and $20 million in 2012. New Castalloy employs 212 workers, including 29 contract workers.
According to Harley-Davidson, the decision to close New Castalloy is part of a continuing strategy to focus in-house production on metal fabrication for fuel tanks, fenders and frames, powertrain production, final assembly and painting. Everything else can be outsourced to suppliers.
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