Harley-Davidson is cutting production by up 13% in 2009

Motorcycle firm Harley-Davidson has secured a $600m (£418m) cash injection, including $300m from billionaire investor Warren Buffett.

The funds will help the iconic US firm improve its cash base, after losses in its financing arm saw it post a 58% fall in profit for October to December.

The other $300m comes from investment group Davis Selected Advisers (DSA), Harley-Davidson's biggest shareholder.

Harley-Davidson announced last month that it is cutting 1,100 jobs.

This represents more than 12% of its workforce. It is also trimming production by up to 13% this year.

Generous interest

The announcement of the fresh investment saw shares in the Milwaukee-based company rise as much as 23%.

Mr Buffett's Berkshire Hathaway company and DSA will be paid an annual interest of 15% for their investment.

It is just the latest big investment made by Mr Buffett, 78, as the US economic downturn has worsened.

Towards the end of last year he bought $5bn of shares in US bank Goldman Sachs, which also needed additional funds to improve its finances.

"Harley's finance arm needs capital in a highly constrained credit environment," said Ed Aaron, an analyst at RBC Capital Markets.

"We knew capital would be available at a price."





