One month ago, I criticized Citigroup (NYSE: C) for its decision to upgrade Harley-Davidson (NYSE: HOG). Despite predicting that Harley would see its third-quarter sales drop 25%, Citi argued that Harley “turned a corner” in Q3, and that the business was now improving. But was the banker right?

Maybe yes
In a couple of respects, yes, the banker was right on the money. In one move to turn the proverbial corner, Harley promised to cease production of Buell motorcycles and sell off its MV Agusta subsidiary. Freed of these distractions, management will be “focusing on the Harley-Davidson brand” and trying to get it moving in the right direction.

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TALLADEGA, Ala. (AP) — Harley-Davidson Inc. says it is shutting down its test facility at the Talladega Airport, eliminating about 100 jobs there.

The motorcycle company says it’s consolidating its test operations from Talladega, Naples, Fla., and Mesa, Ariz. to the Arizona Proving Grounds in Yucca, Ariz.

Pat Sweeney, a spokesman for Harley-Davidson, could not provide a date when the facility would close, but did say it would be sometime next year.

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Harley-Davidson Inc. said Thursday that its third-quarter profit slid 84 percent on fewer motorcycle shipments and recession-related difficulties in getting loans for its customers.

The motorcycle manufacturer also plans to stop making Buell motorcycle products and will sell its MV Agusta division.

Its shares fell 76 cents, or 2.9 percent, to $25.50 in electronic premarket trading.

Harley-Davidson — which has implemented production and job cuts this year — earned $26.5 million, or 11 cents per share, for the period ended Sept. 27. That’s down from $166.5 million, or 71 cents per share, a year ago.

Sales dropped 21 percent to $1.12 billion from $1.42 billion, but its retail motorcycle sales decline of 21.3 percent was not as steep as the previous quarter’s 30.1 percent dropoff.

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