Why is Harley-Davidson ceasing production for two weeks... except LiveWires?

"Yesterday, Harley-Davidson, Inc. ("Harley-Davidson") (NYSE:HOG) took the decision to suspend all vehicle assembly and shipments (excluding LiveWire) for a two-week period. This decision, taken out of an abundance of caution, is based on information provided by a third-party supplier to Harley-Davidson late on Tuesday (5/17) concerning a regulatory compliance matter relating to the supplier's component part."

No further information was provided, and the exact “component part” causing the issue hasn’t been named. Whatever it is, it’s a big deal: Harley heard about the problem late Tuesday, ceased production at both of their U.S. plants on Wednesday, and sent out a press release by Thursday.

While speculation is no substitute for factual information, it’s safe to say that Harley’s parts problem could be a major headache amid supply shortages and dealers struggling to find inventory.

The York, Pennsylvania plant handles final assembly of Sportster, Softail, and Touring models, as well as CVO and LiveWire products. Engines and transmissions are built at the Menomonee Falls, Wisconsin facility. Halting both powertrain and final assembly facilities for regulatory compliance, but continuing LiveWire production, suggests potentially faulty emissions equipment. Other outlets have latched on to this idea, especially after Volkswagen’s spectacular Dieselgate blunder, or Harley-Davidson’s past regulatory trouble with engine tuning devices. However, there are plenty of other components common to Harley’s ICE line that are not used in LiveWire products. Problems with ignition coils, fuel injection systems, or various sensors could lead to expensive recalls or even legal action. It would be hasty to assume that the production pause is from emissions equipment, however likely that may be.

Then again, if this situation isn’t emissions-related, why is Harley keeping such a tight lid on the details? The optimist in me sees the “abundance of caution” verbiage as an indication that there may not be any problem at all. Pausing production for a couple weeks to ensure compliance may be preferable to a recall or investigation. And not naming the issue means that the part in question won't make unnecessary headlines if the parts are found to be compliant.

The realist in me suspects that the problem is serious. Building and shipping motorcycles is absolutely crucial to keeping customers, dealers, and shareholders happy in turbulent times. At least LiveWire, still mostly owned by H-D, will soldier on.