Harley-Davidson to Purchase Cast Wheel Supplier

Castalloy acquired as a "sourcing" strategy

August 29, 2006 -- Harley-Davidson Inc. reports it agreed to buy a majority stake in the Australian company Castalloy, a supplier of cast wheels and hubs for Harley’s motorcycles. No purchase price was announced.

An Australian holding company is being established, New Castalloy, which will continue operations with about 300 employees near Adelaide at North Plympton. Castalloy is a part of Ion Automotive Ltd., which has been in voluntary bankruptcy since late 2004.

"We would not be able to make this announcement today had it not been for the professionalism of the Ion administrator, McGrathNicol, and the strong support of the South Australian government,” stated Harley-Davidson v.p. of Materials Management Matt Levatich. “All parties worked diligently toward a solution that positions our business for ongoing success. As part of the transaction, the government will be purchasing the land at the North Plympton site and leasing it to New Castalloy, and this was a critical part of our decision to invest in South Australia."

Milwaukee-based Harley-Davidson expects to close the transaction, which is contingent on the completion of certain arrangements and obtaining operating licenses, in late September.

The company named Donald M. Gogan as managing director of New Castalloy. He joined Harley-Davidson in 1992 and has held various leadership positions, most recently as a director of strategic planning. Previously, he headed up manufacturing lead at Harleys largest motorcycle manufacturing and assembly operation in York, PA.

"Castalloy has been a valued supplier to Harley-Davidson for more than two decades," said Levatich. "We carefully assessed our sourcing options for this critical motorcycle component going forward, and Castalloy demonstrated unique capabilities. Their outstanding track record for quality, cost and delivery, along with the opportunity to further integrate this component area into our business, made them the clear and obvious choice," Levatich said.

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