Harley-Davidson profit drops sharply as company moves ahead with plans to close Kansas City plant

Hurt by a continued slide in motorcycle sales, Harley-Davidson Inc.’s recent-quarter profit plummeted, the company said Tuesday, adding that it’s planning to close its assembly plant in Kansas City, Mo., resulting in the loss of 800 jobs there.

Snap On could be in trouble as well, they are increasingly reliant on their loan programs for a decreasing auto tech labor force for its profits.

The Monkey Wrench in Snap-on’s Strategy

Shares of Snap-on have tooled along nicely for years, rising 130% since 2012 to $181, handily topping the broad market’s 99% gain during the same period. The joyride, however, might be over relatively soon.

The advance in the stock (ticker: SNA) of this well-known maker of high-quality automotive tools, diagnostic equipment and software has come courtesy of earnings that nearly doubled to $9.20 a share in 2016 from $4.71 in 2011. But potential headwinds could cause Snap-on to miss consensus earnings-per-share expectations this year, denting its hot stock performance.

With about 4,900 franchisees and a $10 billion stock-market value, the Kenosha, Wis., company is its industry’s biggest player. Its Snap-on in-house financing arm has boosted sales at a faster clip than otherwise might have been the case, given the decelerating growth in the number of U.S. auto mechanics over the past two years. Some 70% of Snap-on’s revenue comes from the domestic market.

Consequently, results from financing have become crucial; they generated 27% of operating profit in last year’s third quarter—the biggest percentage ever—versus just 4.3% in 2010. (Fourth-quarter and full-year numbers won’t be reported until Feb. 8.) The problem is that an increasing number of borrowers are falling behind on their payments.