Deutsche Bank Reiterates Hold Rating on Harley-Davidson (HOG)

Deutsche Bank is out with a research report this morning, where it reiterates its Hold rating on Harley-Davidson Inc. HOG; it has a $33.50 price target on the stock. The DB analysts cited the company’s recent agreement with United Steelworkers leadership for a new collective bargaining agreement. The proposed agreement will be put to a vote by the rank and file during the week of Sept. 13, and assuming approval, would take effect in April, 2012 The analyst believe that, while few details have been disclosed, HOG had been targeting a number of cost savings measures, including a significant shift toward casual (i.e. temporary) workers, elimination of restrictive work rules, and outsourcing of non-core functions. From a headcount perspective, they believe that HOG's Wisconsin operations are roughly 50% the size of HOG's York, PA operations. Based on this, they suspect that this CBA could contribute $50 MM per year of direct cost savings starting in 2012.