Harley CEO uses "recession" word to describe woes

By James B. Kelleher

CHICAGO (Reuters) - The top executive of U.S. motorcycle maker Harley-Davidson Inc (HOG.N) raised the prospect on Friday that the U.S. economy is sliding into recession as he talked about his company's disappointing third-quarter results.

Jim Ziemer, chief executive of the Milwaukee-based company, in an interview with Reuters following the release of Harley's latest earnings called the current business climate "tough" as falling house prices have soured consumer sentiment and cut into sales of pricey toys like motorcycles and motorhomes.

"We've got a great product and a great company that up until now has been recession-resistant," Ziemer told Reuters. "But we never said it would be that forever. And at least in the United States we're feeling some of the impact."

Ziemer's comments came on the same day that machinery giant Caterpillar Inc (CAT.N) reported disappointing results and lowered its forecast for full-year earnings, citing, in part, "recessions" in several of its key U.S. end markets, including housing, trucking and non-metals mining.

Harley-Davidson Inc (HOG.N) earlier on Friday said its earnings fell more than 15 percent as a result of what it characterized as "sluggish" sales in the United States, its biggest market.

Ziemer said that in Harley's case, the weakness was "broad based whether we look at the products or the regions."

He said Harley's announcement last month that it was cutting production was a reflection of the more difficult environment it's operating in and the company's commitment to protecting the brand. And he seemed to raise the possibility of additional action if the economy continues to deteriorate.

"As we look forward, we just want to be cautious and very prudent about the way we run the business," he said. "That's why we made the production cuts we did for the back half of this year. And we'll continue to look at what the economy brings us."