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HARLEY-DAVIDSON REPORTS PRODUCTION STATUS AT MOTORCYCLE AND RECREATIONAL VEHICLE UNITS

 HARLEY-DAVIDSON REPORTS PRODUCTION STATUS
 AT MOTORCYCLE AND RECREATIONAL VEHICLE UNITS
 MILWAUKEE, Dec. 11 /PRNewswire/ -- Harley-Davidson, Inc. (NYSE: HDI) announced that it had notified its motorcycle dealers today that its production rates had not yet reached the levels the Motorcycle Division had expected to achieve by this time, due to unanticipated transition problems with the recently completed $23 million paint system at its York, Pa. motorcycle manufacturing facility.
 "Because of the slower-than-expected paint system transition, our normal-shift production rates during the fourth quarter have averaged less than previously anticipated, but we've been building additional units through overtime," said Richard F. Teerlink, president and chief executive officer, Harley-Davidson, Inc. "We plan to produce at a 280 unit per day normal-shift rate in January 1992. We expect the complete changeover to the new paint system, with the resulting ramp-up to a 300 unit per day level, later in the first quarter.
 "We're disappointed that the transition from our old to new system is proceeding slower than planned," Teerlink said. "However, we're convinced that the short-term technical problems we've been experiencing have been identified," he said. "Our new paint system is probably the most advanced of its kind, anywhere in the world, so there are no precedents or textbooks for us to follow. While it may be taking longer than anticipated to come completely on line, we are delighted with the superb quality it can produce and we remain convinced that the payback in terms of customer satisfaction and increased manufacturing capacity will be well worth the additional time and effort.
 "We're also pleased," Teerlink said, "that the Motorcycle Division's new Sportster-model assembly line at York is complete and operational." Due to the new paint system, it won't be utilized at expected capacity until sometime in the first quarter 1992.
 Commenting on the company's Holiday Rambler Corporation subsidiary, Teerlink said, "We were clearly a standout at the recreational vehicle industry's most important dealer trade show, held last week in Louisville. We generated a great deal of excitement for our new models, especially the Navigator, our first-ever 'bus-style' motorcoach." The Navigator, along with a new rear-engine, luxury-model Imperial motorhome and three redesigned Aluma-Lites, "sent a clear message to the industry that we're not slowing our commitment to new products that improve quality and customer satisfaction."


Production of the new models is targeted to begin during the second quarter of 1992, he said.
 "Fourth quarter Holiday Rambler recreational vehicle retail sales will exceed last year's fourth quarter," he said, "but dealers told us at the trade show that they remain cautious of the lagging economy and are hesitating to order new units to replace those sold from their lots. This softness dampens our hopes for a near-term turnaround," Teerlink said.
 To bring production in line with current dealer demand and prevent overbuilding of inventories, Holiday Rambler advised its dealers today that it will be shutting down its motorized recreational vehicle operations for two weeks in January. This is in addition to the two week holiday shutdown at the end of the fourth quarter, he said.
 "We are disappointed with the paint system transition problems and softness in the recreational vehicle market," he said. "However, we remain confident in our ability to deliver improved financial performance on a long-term basis. Our balance sheet has never been stronger than it is today."
 Harley-Davidson, Inc., the only American motorcycle manufacturer, produces heavyweight motorcycles and a complete line of motorcycle parts and accessories. Its Holiday Rambler Corporation subsidiary is a leading manufacturer of premium recreational vehicles, specialized commercial vehicles and a diverse range of related products. Harley- Davidson, Inc. is also a manufacturing contractor for a variety of industries, including the U.S. Department of Defense.
 -0- 12/11/91
 /CONTACT: Ken Schmidt (Media), 414-935-4538, or Jim Ziemer (Analysts), 414-935-4750, both for Harley-Davidson/
 (HDI) CO: Harley-Davidson, Inc. ST: Wisconsin IN: AUT SU:


JT -- NY078 -- 1648 12/11/91 17:04 EST
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Date:Dec 11, 1991
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