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Posts Tagged ‘Concessions’

Way back in 2009 I posted a blog about H-D’s restructuring and management looking at moving from the York, Penn. plant due to inefficiencies, cost structure and a major problem with absenteeism.

At the time H-D was looking at four other possible sites including moving operations to the Kansas City facility.  I even wrote a tongue-n-cheek letter to CEO, Keith Wandell stating Oregon was open for business if they wanted to consider the west coast for relocation.  Concessions were made to keep the plant in York, changes in work culture and a new attendance policy were negotiated as part of a multi-year restructuring deal and the York plant continues on.

Then earlier this year I posted about H-D management giving it’s Milwaukee workers an ultimatum… approve a new labor agreement or risk losing/moving jobs out of Milwaukee (PTO and Tomahawk) to the Kansas City plant or to another state.  Ratification of a new labor agreement occurred on September 14, 2010 which meant fewer employees and a whole host of other changes to generate about $50M in annual operating savings.

And speaking of Kansas City, Harley-Davidson management has told its KC plant employees this week that they must accept wage and other concessions or the plant could be closed or move.  The company stated the plant would be merged with one in York, Penn.  The company said: “that recent internal studies show significant cost, efficiency and production flexibility gaps in the Kansas City operations,” which must be addressed.

Talk about déjà vu… all over again!

Is it about the “Art of Negotiation” or is management truly committed to closing the Kansas City plant?  Probably a little of both, as we’ve seen in the past the recession favors management and puts more pressure on workers to agree to the demands.  In fact, in each of the previous cases the company has obtained nearly all the concessions ask.

Adding to the KC efficiency insult was the company statement of how it would make a final decision in Q1, 2011.  Gives the workers something to think about over the holidays.  Just stay classy H-D!

Photo courtesy of web.

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The WAIT is over.

Sometimes, fame comes to York.  The famous author, John Grisham wrote about York, PA in “The Associate” as it was the main characters hometown.  In fact, many of its residents have gone on to fame.

But, in the case of Harley-Davidson the bleak economy means financial fame in York.

It’s been a rough year for the factory tour capital of the world.  After a reduction of over 600 employees earlier this year the company announced today it will keep its operations in York, after ratifying a new labor agreement with IAMAW which involves nearly a 50% cut in jobs.  Under the new agreement structure, the plant will have about 1,000 hourly workers reduced from the current level of 1,950. Of the 1,000 workers, 700-800 will be full-time unionized workers and about 200-300 will be unionized “casual” staff, who work according to seasonal demand and as managers deem.

H-D expects to have about 150 salaried employees, or a little more than half of the current number.  The company will invest about $90 million in the restructuring of the plant and expects about $200 million in restructuring charges tied to the plant into 2012.  The restructuring is expected to generate about $100 million in annual operating savings compared with the current structure.

Many claimed that H-D employees were out-of-touch with the ‘real’ work world.  But, being faced with the prospect of operations moving to Kentucky they voted to cut their workforce, change their work rules to allow managers to shift workers around to various tasks in the plant and agreed that new hires will earn significantly less.

Sure it’s a positive note in a sea of bad news, but isn’t that just the point, the plethora of bad news?  The companies statement can be read in full HERE.

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International Association of Machinists and Aerospace Workers

The York Daily Record reported that union workers at the Harley-Davidson Springettsbury Township operations got their first look at a proposed contract that if approved will stop the motor company from relocating the York Vehicle Operations to an alternative site in Kentucky.

You can read the detailed contract highlights HERE.  Briefly, it’s a 58 page document that covers the next 7 years.  H-D will commit to investing up to $90 million to restructure the operations and stop efforts to relocate to Kentucky.  For those workers who lose their job as part of the restructuring there are a number of alternatives from lump-sum payout to volunteering for the reduction and receiving benefits if they lose their job.  Workers received copies of the contract today at the Toyota Arena where members met. They will vote to ratify or turn down the deal on December 2nd.  The company has until December 12th to approve.

Reading the “tea leaves,” I anticipate the International Association of Machinists and Aerospace Workers (District 98) will ratify the new contract.  Do they have any other choice?  The company has worked all angles during this down economy to their advantage and will obtain significant concessions from the workers who need a job.

UPDATE: December 3, 2009 — H-D announced the union ratified the 7 year labor agreement.

Photo courtesy of IAMAW

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