Feeds:
Posts
Comments

Posts Tagged ‘Labor Contract’

Humpty Dumpty Prevention Program

Most chief executives are entering 2011 with big decisions to make—especially how to revive sales.

But, some have deeper problems to address.  Facing down “significant cost, efficiency and production flexibility gaps” as well as fierce competition for some, such as Harley-Davidson who last November told Kansas City union officials that it might move operations to Harley’s Springettsbury Township plant if a contract wasn’t ratified by early March.

Well it’s March and their “no blink” management style resulted in the members of the International Association of Machinists and Aerospace Workers Local 176 and United Steelworkers Local 760 not letting “Humpty Dumpty” fall.  They ratified a contract by a vote of 467 to 185 and the new labor agreement takes effect in August.

The “fall prevention program” has been implemented and proven to be an effective tool in the loss of all jobs in Kansas City.  Congrats to Local 176 and Local 760.  The new contract is a 7-year deal that, when implemented, will result in the Kansas City plant having about 540 full-time, hourly unionized employees compared with about 685 today.  Yes, it’s a loss, but it does keep many high-paying manufacturing jobs in Kansas City and brings all H-D plants under one umbrella for production flexibility.  The company stated that the new contract, which will be implemented in phases, will result in about $15M in annual savings starting in 2013.

To all the folks who railed on my public union previous blog post, you see private unions have to adjust to economic conditions.  Unlike the Wisconsin public union members who have protested for days because they have been ask to pare back their benefits, Harley-Davidson has budgetary constraints that can’t be fixed by raising taxes. If we used the public union mentality I suspect they would ask Harley-Davidson to respond by raising prices and demand that motorcycle enthusiasts just pay more for a scooter instead of buying something else?

And if all that wasn’t enough… this item falls into the “what were they were thinking” category… I read that in Minnesota a local pipefitters union has purchased the Hillcrest Golf Club in St. Paul, paying $4.3M – yes, you read that correct at $4.3M – for the private club and vowing to keep it private for at least two years.  That does a lot for the unions  being frugal perception…

Photo courtesy of NYTimes.

All Rights Reserved © Northwest Harley Blog
Advertisements

Read Full Post »

Father Arsenios at the Vatopaidi Monastery

I was reading an article by Michael Lewis’s on the Greek financial crisis which somehow seemed to be framed by a story involving monks?  I was only scanning the article because I just didn’t care that much.  But, I couldn’t figure out the angle, what exactly did the monks do?

Jumping back, I discovered it involved some land swap.  It seems that no one pays taxes in Greece unless they work for a corporation and the country’s economy is even worse than that of the U.S., but in searching for this so-called heinous monk behavior I came across this passage, wherein Father Arsenios points to a sign he had tacked up on one of his cabinets, and translates it from the Greek:

“THE SMART PERSON ACCEPTS. THE IDIOT INSISTS.”

He found the sign on one of his business trips to the Ministry of Tourism.

“This is the secret of success for anywhere in the world, not just the monastery,’ he says, and then goes on to describe pretty much word for word the first rule of improvisational comedy, or for that matter any successful collaborative enterprise. Take whatever is thrown at you and build upon it. ‘Yes…and’ rather than ‘No…but.’ ‘The idiot is bound by his pride,’ he says. ‘It always has to be his way. This is also true of the person who is deceptive or doing things wrong: he always tries to justify himself. A person who is bright in regard to his spiritual life is humble. He accepts what others tell him – criticism, ideas – and he works with them.'”

Eureka!  That’s it! This explains the behavior of workers in USW Local 2-209, USW Local 460, and IAM Lodge 78 who yesterday approved the new Harley-Davidson labor agreement.  Previously, Harley-Davidson management has said that approval of the new agreement would be required for the company to keep jobs in the state and the board confirmed it will keep WI, plants open.

Rather than distance themselves the union and workers leaned in.  Now harmony has ensued and everybody can move forward.  Congrats!

UPDATE: September 14, 2010 (1:15pm PST) — H-D posted a press release HERE on the ratification details of the new 7-year labor agreement.  The company expects to have 325 fewer unionized employees in Milwaukee and the new contract will generate about $50M in annual operating savings in 2013.

Photo courtesy of Father Arsenios and Jonas Fredwall Karlsson.

All Rights Reserved © Northwest Harley Blog

Read Full Post »

The Myth of Fair Value - William Poundstone

It was rather fitting that last week Harley-Davidson workers in Milwaukee got their first look at a proposed labor agreement that would take effect in 2012 at about the same time as President Obama spent Labor Day at Laborfest where he announced a $50 BILLION jobs plan centered around transportation infrastructure including the rehab of 150K miles of road.

Well, I’ve traveled Milwaukee roads (and lived to blog about it!) and I can say they need rehab!  No argument there.  Bring on the new asphalt.

Speaking of jobs, Wisconsin has lost 35,000 manufacturing jobs since Obama took office in January 2009.  A total of 182,000 manufacturing jobs since 2000.  In July 2010 the unemployment rate was 7.8% a couple of points below the national average.  A good job that pays a good wage with health care and provides for a secure retirement even if you’re not rich might sound like simple ideas, but American workers are in dire straits.  There are job cuts and plant closings facing down families and the job cause is more urgent than ever.

This fact has not escaped Harley-Davidson executive management as workers in USW Local 2-209, USW Local 460 and IAM Lodge 78 will vote on a new labor contract Monday, September 13th which would preserve about 1,300 jobs in Milwaukee (PTO) and Tomahawk.  You can read the full 65-page text of the agreement on the Cyril Huze blog HERE.

The key highlights are they plan to institute a 7-year pay freeze, implement salary cuts, create a two-tiered work force, cut a couple hundred positions and use seasonal workers (who would make about half what current full-time employees earn).  According to the Kansas City Journal tier-1 employees would be paid between $30.50 and $34.38 an hour during the first year of the agreement, depending on job classification and tier-2 would earn between $21.96 and $29.87 an hour.  Pretty dam good pay if you’re unemployed!

And now just days before the vote Harley-Davidson CEO, Keith Wandell sent a letter to employees “highlighting his concerns” or what some might call spinning “why you should earn less.”  The letter was made available to JS Online by an employee.  You can read the full text of the letter HERE.  The key highlights are:

  1. An ultimatum — that if the contract is rejected the board will act the following day to authorize the process to relocate the production operations
  2. H-D is restructuring the design process to reduce development time and place a greater focus on “WOW”
  3. H-D is reducing the size of the dealer network
  4. H-D is challenging their suppliers like never before
  5. H-D is aligning all manufacturing operations under a common “production operating system”
  6. H-D is doing everything with fewer people (including salaried h/c) to run leaner at today’s lower volume

There is a Wisconsin metaphor: “You only worry as far as you can milk it.”  The recession favors management as an excuse to slash costs and puts more pressure on workers to agree to the demands.  In addition, the motor companies go-forward business strategy and restructuring is getting some traction.  So, it looks like labor concessions are an insurance policy for the future.

UPDATE: September 14, 2010 — H-D posted a press release HERE on the ratification details of the new 7-year labor agreement.  The company expects to have 325 fewer unionized employees in Milwaukee and the new contract will generate about $50M in annual operating savings in 2013.

Photo courtesy of William Poundstone

All Rights Reserved © Northwest Harley Blog

Read Full Post »

%d bloggers like this: