Harley-Davidson Stays in Wisconsin

September 14, 2010
Bart Madson
By Bart Madson
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Bashing away at the MotoUSA keyboard for nine years now, Madson lends his scribbling and editorial input on everything from bike reviews to industry analysis and motorcycle racing reports.

Harley-Davidson union workers agreed to labor agreements that would keep production operations in Wisconsin.

Unions at Harley-Davidson Wisconsin factories have agreed to seven-year labor agreements that will keep the company’s production operations in The Motor Company’s home state. The new labor contracts, which call for a reduced workforce, will take effect in in April 2012.

A total of 325 unionized jobs will be cut from the company’s workforce at its plants at Menomonee Falls (near Milwaukee) and Tomahawk, Wisconsin. The Menomonee Falls operations, which produce H-D engines and transmissions, are represented by United Steelworkers (USW) Local 2-209 and International Association of Machinists and Aerospace Workers (IAM) Lodge 78. The new agreement will reduce full-time unionized hourly workers at the Milwaukee facilities from 950 to 700, a loss of 250 union jobs. The company’s Tomahawk plant, which produces components like saddlebags and is represented by United Steelworkers Local 460, will reduce its full-time unionized staff by 75 positions, to around 200.

In the stead of lost full-time union positions, H-D will source a part-time workforce as needed. In its press release announcing the new labor agreement Harley-Davidson described the new part-time status: “The production system includes the addition of a “casual” workforce component – unionized employees who work as required, depending on seasonal needs and to provide coverage for vacations and other absences.”

H-D cites the “casual” workforce as critical in streamlining production efficiency and flexibility, saying the seven-year agreements “contain essentially identical provisions except for variances in wage rates and incentives related to contract ratification.” The casual workforce will work at reduced hourly wages, though exact details of the wage rates are unavailable at this time.

Harley-Davidson CEO Keith Wandell
Harley-Davidson CEO Keith Wandell.

Unions at the Wisconsin facilities voted on the new agreement with the understanding that failure to ratify would mean the company’s Wisconsin production would likely move out of state. H-D facilities in Kansas City were the prime candidate for the threatened relocation.

Harley-Davidson expects to save around $50 million a year when the first full year of the new contract takes effect in 2013. In the meantime, the company estimates it will incur $85 million in restructuring charges.

Company President and CEO, Keith Wandell, said of the new agreements: “Change is never easy, and we have asked our employees to make difficult decisions. However, we are pleased to be keeping production operations in our hometown of Milwaukee and in Tomahawk,” Wandell goes on to say. “Together, we are making the necessary changes across our entire company to succeed in a competitive, global marketplace while continuing to meet and exceed the expectations of our customers.”