Ducati Execs Do the Right Thing

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It’s no secret that the recent worldwide economic downturn has seriously affected motorcycle sales, sending them plunging by a third.  Now here in the United States, it’s become a common thing to see executives at big firms take huge bonuses, even when the company isn’t doing so hot.  The most egregious example of this was when failed insurer AIG took billions of dollars in Federal money for a bailout of the company, then promptly paid off millions and millions in executive bonuses with it.

Apparently, things are different in Italy, where senior executives at Ducati, faced with slumping sales, did the right thing.

Senior executives at Ducati have taken a 10 per cent cut in their pay and will not receive any bonuses because of the decline, while [Ducati CEO] Mr [Gabriele] Del Torchio said he had taken a 20 per cent pay cut.

Let’s leave aside any legalistic or other arguments about whether the executives should be compensated or not.  At the end of the day, when you’re cutting production, and laying off staff, it seems only right that the pain should be shared by everyone else in the company, all the way to the top.

Kudos to Ducati for setting an example of shared sacrifice.

Economic Pain

The global recession just keeps on hurting.  Yamaha Motor Company announced that they have some problems, financially, and they substantially cut their profit forecast for the year.

Yamaha Motor Co., the world’s second- largest motorcycle maker, fell the most in nine months after the company quadrupled its forecast to a full-year loss of 182 billion yen ($1.9 billion).

The company dropped 9.9 percent, or 120 yen, to 1,096 yen at the close on the Tokyo Stock Exchange. Yamaha, based in Iwata City, Japan, had previously forecast a net loss of 42 billion yen. It posted a loss of 74.7 billion yen in the first half.

The motorcycle maker cut its sales forecast by 12 percent as rising unemployment and falling wages reduces demand for Royal Star cruising bikes. Yamaha plans to close three factories in Japan over the next three years. The company cut its forecast for motorcycle sales in North America this year by 35 percent and lowered its prediction for European sales by 8 percent.

On top of the news from Yamaha, Honda also released some bad news today.

Honda Motor Co.’s domestic production of motorcycles is expected to fall 40 per cent on the year in fiscal 2009 as a result of stalled demand in Japan and delayed inventory adjustments overseas.

Honda’s Kumamoto plant, now its sole domestic manufacturing base for motorcycles, plans to produce 181,000 units this fiscal year, compared with slightly more than 300,000 units in fiscal 2008. The fiscal 2009 figure is also less than half of the facility’s annual output capacity of 460,000 units.

About 50 per cent of the motorcycles manufactured at the Kumamoto plant are for the domestic market, while 90 per cent of the units shipped overseas are for the North American and European markets. Owing to the global economic downturn, overseas and domestic demand has dropped sharply since last autumn, with midsize and large motorcycles among the hardest hit.

It’s a tough time to be in the pleasure/recreational vehicle business.

Honda Ends US Motorcycle Production

For the first time in 30 years, Honda motorcycles are no longer produced in the United States.  The Marysville, Ohio plant opened by Honda in 1979 has shut its doors.  All Honda motorcycles for the US market will now be imported from Japan.  Honda blames the closure on the global economic recession, and the tighter credit environment which has stifled demand for cars and motorcycles.