Harley Davidson Strikes @ 12:01 AM Tonight!

…ummm…errr…its tomorrow really, but its tonight.  Damnit - 12:01AM on 2Feb2007.  Now its settled.

I am sorry, but I have no sympathy here.  A 4% wage increase GUARANTEED without some sort of performance evaluation is a golden parachute as far as I am concerned for an employee of a big company.  This is the average increase for us white collar folks on non-promotion years given a good review.

As far as benefits are concerned, I am amused to read that the major sticking point was that they had to convert to the ’salaried’ employees health car plan.  Two things scream short-sightedness:

  1. The fact that the increase in the 401k matching contribution seemed to have been ignored (granted, no amounts are given below for any part of the contract).
  2. The company’s solvency.  How’s that big company free health care for all union employees working for GM?  Ford?  Some people would rather have no job at $1/hour more on paper or in principle, than actually work.

HD has always used the union as a bragging right to their customer base.  While it seems to work, its gonna be a likely and costly eye-opener.

HD strikes tonight at 12:01am!

The following release is from Harley-Davidson: York, Pa., February 1, 2007 — Harley-Davidson Motor Company expressed disappointment at the union vote yesterday that rejected a proposed new collective bargaining agreement for employees and authorized a strike at its final assembly operations in York, Pa. A strike at the facility is expected to occur as early as 12:01 a.m. February 2, when the current contract expires.As a result of the pending strike, production of Touring and Softail motorcycles at Harley-Davidson’s operations in York has been suspended.

“We are obviously disappointed by the union’s decision,” said Fred Gates, General Manager of Harley-Davidson’s operations in York. “The proposed contract was structured to help manage future costs that could be detrimental to our business over the long term,” Gates said. “While Harley-Davidson is a strong company today, we don’t want to find ourselves in ten years in the same position that the Detroit auto industry is in now.”

The proposed contract provided for a four percent wage increase in each of the three contract years. Two percent of the increase was dependent on the union accepting the Company’s salaried health care plan or another plan that would save the Company an equal amount of money. The Company’s union employees in York currently pay no premium for health insurance coverage and minimal out of pocket costs. The proposal would have doubled the Company’s 401(k) contribution match and would have provided a special monthly retirement supplement for certain employees who retire during the contract period. The proposal also would have instituted a second-tier wage and benefit plan for new employees hired after February 2, 2007. For example, under the two-tier structure, new assembly worker hires would have earned $18.25 per hour in the first year of the contract, compared to $20.78 per hour for current assembly workers in the first year of the contract.

Harley-Davidson production employees in York are represented by International Association of Machinists and Aerospace Workers (IAM) Local 175.

Harley-Davidson, Inc. is the parent company for the group of companies doing business as Harley-Davidson Motor Company, Buell Motorcycle Company and Harley-Davidson Financial Services, Inc. Harley-Davidson Motor Company, the only major U.S.-based motorcycle manufacturer, produces heavyweight motorcycles and offers a complete line of motorcycle parts, accessories, apparel, and general merchandise. Buell Motorcycle Company produces sport motorcycles in addition to motorcycle parts, accessories and apparel. Harley-Davidson Financial Services, Inc. provides wholesale and retail financing and insurance programs to Harley-Davidson dealers and customers.

17 Comments

Angrybob, first of all how can you compare Harley Davidson to Ford or GM? Both of those companies have had in the area of 250,000 employees. Where as Harley has 10,000 worldwide!! Harley will never be a GM or Ford. They are also in the midst of losing 12.5 Billion dollars this year. Unions with them did take concessions and where did it get them. They’re still out of a job. I’m proud to see Local 175 stick up for themselves to a company that has a net income of 1.04 billion after the all expense paid health care and wage packages. OH I’M SORRY THE CEO, CFO, ETC. STILL GOT THEIR 25 MILLION + WAGE OUT OF THAT AS WELL.

Comment by hdcapitol | February 1st, 2007 11:19 pm | Permalink

Unions served a very practical and necessary function when monopolies and unscrupulous employers truly abused their workforces. But in this day of free market economies and plenty of career choice, they only serve to undermine successful companies with their greed. In fact, often, union expenses (ie … dues) alone put undue financial stress on fair and equitable employers. The president of GM recently said that $1000 of every new car goes to employee healthcare!

I understand that Harley employees want the company to share their record profits, but the first people that need to be compensated, are the stockholders (those who invested in the company, especially before it became the present day phenomenon). After that, maybe more investment in modernization, R&D and “new projects”. The Harley bubble may never burst, but I wouldn’t bet on it, there are a bunch of youngsters with no interest in Harley-Davidson who will be middle-aged disposable income spenders someday.

I’ve never had a 4% raise in my entire life! I had to change jobs to get a “raise”.

Take your 4%, be glad you have a job and shut up! Or go get a new job.

Rhino

Comment by Anonymous | February 1st, 2007 11:21 pm | Permalink

Secondly, why don’t we get the real picture from the market place. I believe that Harley is in a bad place with bikes all over the place that dealers are having a hard time selling. So they don’t deal with the unions and allow them to stike so they can have a fall guy. When their profits aren’t at the expected levels for the first quarter of 2007, they will blame the York strike for the diaster when they should be blaming their executives that only saw $$$$$$ signs for their own pocket books.

Comment by hdcapitol | February 1st, 2007 11:26 pm | Permalink

Rhino, Who do you think got the good wages and healthcare that everyone working today has? It wasn’t the companies giving it freely. It was the UNIONS that stood up. And you can thank them for your wage. Oh and do you also drive a forgein car? And america wonders why we are losing good jobs and benefits when most americans don’t even support their own countries products and services.

Comment by hdcapitol | February 1st, 2007 11:32 pm | Permalink

Rhino, Harley is only giving us a 2% raise the contract states 4 the first year but they want 2.7 back in healthcare which nets a 1.7 next year again they will give us 4% but they want 3.9 back which nets us .1 meanwhile the corp. exec. get millions and not just a couple

Comment by Bill | February 1st, 2007 11:59 pm | Permalink

Some people who have made comments here do not know the details to the contract purposed to us. Yeah, they wanted us to pay a portion to are health care but, under the new contract there was no cap on how much. So the initial cost to the workers might be 1.7% it will go up every year after and it could also be changed at any given time by the company as they see fit. If their was a cap it would make sense. This health care cost put against are 4% yearly raise increase would be completly eliminate any raise in only two years. The icing on the cake in the new contract is all new employees would start at three dollars less than current employees for doing the exact same job as current employees do. This would cause some serious tension on the assembly line any one who works on one knows that tensions do flare and this would be a catalyst for disaster considering all new employees also would not be eligable to contribute to the current retirement pension plan this money is for current employees well being when they decide to retire. The bottom line is anyone who wants to belittle the striking union workers should get the facts before doing so because there was deffinitly a hidden agenda in the new contract. My question is why when Harley has posted a record quarter for the past TEN years!!! Has Ford or GM done this uhhh NO!! Don’t compare apples to oranges!!!

Comment by know the facts | February 2nd, 2007 9:56 am | Permalink

Interesting stuff above with some of the details have been filled in. I’m not one to sugarcoat things, so I’ll let it be known that I’m no fan of the union in today’s workforce.

My background is in automotive engineering which is why I can, with a great deal of knowledge, draw comparisons out to GM & Ford. The size of the company does not matter when it comes to paying legacy premiums to people who are no longer producing for a company. It is this legacy cost as well as labor costs that are killing the Big 3.

While we all want to make as much as possible, one also has to consider the specialty of the work. I have been on many automotive assembly lines and other areas of repetitive work. Yes it takes training and its skilled labor to degree, but the system of merit has been totally removed from the pay equation. Rather than performance, its seniority upon which priveledge is based. A good performing worker is given the same raise per the contract as a poor performing worker. It’s simply a socialist system and I think it sucks.

Second, the days of ‘free’ health care are over. Get used to it. My company just went from free health care for me and my family to a premium of $60 per pay period (in my case). Does it suck? Sure. Did I consider any ‘action’ against the company and/or management? Not at all. When you love your job, the little stuff simply doesn’t matter. If it becomes big enough, its time to quit and work somewhere else.

I ask a simple question: If management treats you soooo bad, why would you want to work for tha company? My guess at the answer: because you probably can’t make the same kind of ca$h anywhere else in York. Ask yourself a question - are you working at HD for the cash or for the company/brand/legacy? If its the former, then strike away and go for the cash regardless of the long term solvency. If the answer is the latter, you may want to consider that your job being there in ten years is better than a couple bucks now. Healthcare costs are going up every year. Yet if they are free to you, the company is paying more out every year with non-equivalent incoming profits.

I understand that HD has had an excellent run the past couple of years, by think back to the late 70’s. What if that happens again? What are you going to do when the baby-boomers expire (HD’s main demographic)? Where does al the development money come from? That’s right, whether you are testing in Naples FL or in Mesa AZ or designing in Milwaukee, the design and development of new bikes costs money.  How was the VR1000 Superbike project funded?

BTW - is HD making more money on bikes or accessories (t-shirts, exhaust systems, leather jackets, etc.)…I know the answer. Accessories revenues (not made in York) have been growing at a rate about twice as fast as motorcycle revenues. Apparel revenues have grown three times as fast as motorcycle revenues. Should those divisions get more of the pie than those in York?

Third is this whole notion of being American made. Who supplies the front forks and rear shocks for HD and Buell - that would be a Japanese company called Showa. Who supplies the carbs - that would be Keihin another Japanese company. God knows there are Denso electronic parts too. Get my drift? Honda, Toyota, and Nissan are building mfg plants right here in the good ole USA and the Big three are putting them in Mexico - hmmmm. Chrysler / Dodge is a German company in the end. There money, just like the Japanese auto makers goes out of the country ultimately.

New employees will make less? BFD. The everyone is equal approach works well in France and Germany (if you consider about 12% unemployment working well). Life in the US is about inequity. If a new employee simply cannot handle the differences in the new vs. old employee pay/benefits/retirement, then he or she can continue job hunting.

Look, the health care costs are growing and any add’l cash out of your (our) pockets sucks. I feel your pain as I have just started kicking in about $130 every month for mine since January. I refuse to let that amount of money get in the way of a career and my career path. I am taking a long term approach that will keep the company profitable which will keep me employed. Why? Its very simple - we are a team, my company and me. We work much better as team members versus adversaries. There is give and take with every day.

If the expenses get too much to incur, its time to leave. It’s that simple. I do not ant to work for company or organization that I feel the necessity to strike or the ‘US vs. Them’ wisdom. It’s not good for anyone.

ps - what was the 401k matching increase proposed?

EDIT - I made a typo and put $60 per month vs. $60 per pay period.

Comment by angrybob | February 2nd, 2007 9:14 pm | Permalink

Well put Bob!
I am in the Aerospace Industry, Non-Union. We got 3% increase this year and 3.3% last year. Being a supervisor, I have a 3% budget to work with. If I give a high performer more than 3%, I have to take it from a lower performer.
I am now paying $92 biweekly for healthcare benfits. Not too long ago it was $35. But that’s life, you take it or leave it. From what I hear, we still have some of the better benefits in the area!
We have matching 401K up to 3%. We can contribute more.
We also have stock options with a 15% discount. You contribute for 6 months, then they purchase at the lower price of the start or end or the period.
I love my job though. Even with the ever increasing pressure to decrease customer lead times, reduce costs for long term aggreements, and the cyclical workload, I don’t want to even think about working elsewhere!

Comment by mcstanger | February 3rd, 2007 7:28 am | Permalink

While I recognize the incredibly valuable contributions of unions, especially in the past when industrialized business was first forming, I’m not about to agree that unions are always “right” or “reasonable”. Unions have physically and mentally abused people who crossed picket lines, extorted and embezzeled money from workers and run viable and fair businesses into the ground. The vision of the union as protector and savior is at best, flawed and short-sighted.

We have a bad expectation in this country …. that we deserve a raise every year. This is not realistic or beneficial. Can you say inflation! Not to mention difficulty competing in a world economy. Pay needs to be merit based, not a result of years of service or loyalty to a union. If a worker is just going through the motions and not actively seeking to better himself or make the company more profitable, he/she deserves no increase!

As a matter of fact, I drive a Chevy van (not a “foreign car”), not because I’m patriotic, but because it’s a practical, well priced form of transportation that the foreign companies don’t offer. Besides, there is no longer such a thing as products “made in the USA”! Get your head out of the sand a realize we get our various raw materials as well as the vast majority of our vehicle sub-assemblies from all over the world. If we think we can sit safely on top of a global economy in isolation, you’re ignorant.

My solution to executives making huge profits is simple, the higher up you are in the company, the more your salary should be based on profits alone. The company president should only make money if the company does (100% profit based salary) and “golden parachutes” should be eliminated entirely.

I’m not saying there’s no place for unions, I hope they continue to champion worker’s right well into the future. But to assume they are to be followed blindly without questioning their motives is to encourage abuse. Dissention and diversity of opinion should always considered in any disagreement. Gather your own information and form your own opinion, don’t blindly follow someone you says they are looking out for your best interests …… because often they are looking out only for themselves.

Rhino

Comment by Anonymous | February 3rd, 2007 7:34 am | Permalink

This is still a motorcycle blog right? Wow!!! I thought I had sighned on to an Accountants of America. Harley is were its because like Ducati you can’t fly on just your name you have to reach out to more than one type of consumer to survive in todays market. It dosen’t matter what you do when a sink is shipping the rats show themselves first.

Comment by JJ Rider | February 3rd, 2007 7:46 pm | Permalink

Did you just say “sink is shipping”? :D

Comment by angrybob | February 3rd, 2007 9:00 pm | Permalink

Just making sure someone is reading.

Comment by JJ Rider | February 3rd, 2007 10:20 pm | Permalink

I think that the Harley employees have such a gravy train going that they are reluctant to let it go!
I was considering buying an electaglide, but now am having second thoughts. The bikes are dated.
It seems to me that Harley has stood by it’s employees that stayed with them through the bad times.
As far as whether a new employee makes as much as I do, I think that senority should have it’s privleges. Is this not an ideal that unions have fought for in the past?
Both my wife and I work for a large hospital organization. We both pay a portion of our health insuance and pay coopay’s. And only get .50 on the dollar for our 401c’s.
Wake up Union or you will do what AMF almost did and kill the the goose that laid the golden egg!
It seems to me that the union members are spoiled brats and need to realize that there is no support for their strike outside of their own narrow community;

Comment by rick copley | February 7th, 2007 6:12 pm | Permalink

Long Live The Unions!

Comment by Jasonious | February 8th, 2007 1:18 am | Permalink

im sorry to tell everyone who says we are greedy but american corps are taking and taking but we accept this why some people say this is good get a life we are trying to stand up for everyone that has a dream. dont tell me that we are wrong because u r afraid to stand up

Comment by not afraid to stand up | February 8th, 2007 1:59 am | Permalink

The motor co. will do anything to manipulate the market place,but using there employees to create a shortage is pretty low,the showrooms nationwide sit full of unsold bikes an the used market is flooded with low mile chromed up motorcycles owned by trend following wanta be bike riders.i say its payback time for the motor co. an this strike will only delay the downfall thats coming….on the bright side there will be plenty of good low milage “CHEAP” harleys to ride for years to come for the folks that know what there made for “TO RIDE” go to e-bay an click on the left side screen under completed auctions an see what there selling for when a dealer don’t have his B/S mouth running the sale,i love it!!!….see ya on the road (: donnie/music city

Comment by don morris | February 9th, 2007 7:02 am | Permalink

To “Not afraid to stand up”

Good for you. I hope you’re not afraid to help the rest of the people you’re affecting to “stand up” as well. Take a look around your shop, how many guys are getting over payed for what they’re doing? And how many getting under payed?

Just like Chrysler, paying people $20-30/hr to put rivets into a fender is going to cause problems. The unions are greedy, the motor company is greedy, and the workers are greedy. Only it’s the workers who are paying the price by following the unions blindly instead of working for a wage they deserve.

That’s a big problem with unions. The qualified guys will be suplementing the the unqualified and sacrificing thier own pay so the ‘rivet installers’ can get a decent wage. Not only that, it’s hard to get rid of any “dead weight” or “slackers” that cost the company money.

Comment by Matt | February 15th, 2007 3:34 pm | Permalink

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