Harley-Davidson orders recall

Harley-Davidson Inc. said it would recall some 308,474 motorcycles worldwide due to problems with the rear brake light switch.

Certain 2009-2012 Touring and Trike models are being recalled because the rear brake light switch may be exposed to excessive heat from the exhaust system.

The excessive heat may cause the switch to not activate the brake lamp or activate the brake lamp when no brake is applied. It may also cause a fluid leak at the brake light switch, Harley-Davidson said in notice to the National Highway and Transportation Safety Administration.

The company is recalling about 250,000 units in the United States and about 50,000 outside. Harley shipped 210,494 motorcycles internationally and shipped an average of 306,000 motorcycles each month from 2000 to 2010.

It expects to record a cost of $10 million to $12 million in the fourth quarter.

"Recalls are common for consumer products," said Craig Kennison, an analyst at Baird Equity Research.

"They happen all the time."

He said the cost to Harley to correct the problem would amount to an earnings hit of about 3 cents per share.

"But with the stock up 2.3 per cent today, it would seem that investors share my view," Kennison said.

The company has issued other smaller recalls in recent years, including one for 142,000 motorcycles in November 2009 for an issue related to fuel tank mounts.

A spokesman noted that Harley-Davidson voluntarily issued the recall to ensure customer safety.

The company's shares rose 3 per cent to $38.74 at midday on the New York Stock Exchange.