Harley Davidson Plant Closes Due to Strike

Well it happened, and now the waiting game is on.  Who wins in a strike?  I venture to say NOBODY.  I wonder where all those profits will go if they are not selling motorcycles?  I wonder what the ‘collective bargaining’ will target next year?  I wonder if there will be any good will between management and labor - doubt it.

I’ve copied an article that gives an update to the strike.  I have to ask (again) if the workers are there for as much cash as they can squeeze out of HD or are they there because they want to be part of HD?  It seems to be the former (see text in bold below).  I happen to believe in the product my company produces and take self-pride in attaching my name to the brand. 

I still don’t know the amount in the contract, but doubling the 401k contributions is not a bad long term financial gain. 

I am also a little amused by the comment of “second-rate people” simply because they make slightly less in an hourly wage.  That thought process, if genuine, is based on a lifetime without competition or merit in the workplace.  Call me complex, but I think there is more to the quality of the labor than the hourly wage one makes. 

After all those case studies I had to do in graduate school, seeing the employees attitudes that put themselves over the end product, makes me wonder if Harley Davidson really does make a quality product.  Maybe they are so damn expensive becaue they have to be to cover their costs and their asses.

(YORK, Pa.) — Union workers began a strike Friday at Harley-Davidson Inc.’s largest manufacturing plant, with small groups quietly picketing each entrance of the York facility.

In anticipation of the strike, the company shut down production at the plant on Thursday.

More than 50 workers gathered as the strike began at midnight, said Tom Boger, a union representative for the International Association of Machinists and Aerospace Workers Local 175.

Boger said the company installed cement barricades to block access to all gates, even empty parking lots.

The strike came two days after unionized workers rejected the company’s contract offer and authorized a walkout. “We are obviously disappointed by the union’s decision,” Fred Gates, general manager of Harley-Davidson’s York operations, said in a statement Thursday. “The proposed contract was structured to help manage future costs that could be detrimental to our business over the long term.”

But union members said they felt the contract represented a step backward because it contained a two-tier wage system they said would penalize new hires. It also contained a requirement for employees to contribute toward health insurance premiums and pension concessions, they said.

Nevin Bechtel, 59, who works in the plant’s painting department, said the two-tier wage system would hurt morale. “We’ll still keep building first-rate bikes, but when the second-rate people take over, what are we going to build then? Second-rate bikes?” Bechtel said. “There’s no sense in doing this if we’re not going to stick together,” Bechtel said. “If we regress now, we’ve lost everything we’re struggling for, and the company will think they’ve won.”

Russell Aldinger, 46, a mechanical assembler who said he had worked at the plant for 10 years, also objected to demands for concessions. “This company is very profitable, and for us to have to take concessions when we were earning the money that we were … I feel it’s ridiculous,” Aldinger said.

In the statement closing the plant, the company announced the suspension of production of the company’s Touring and Softail motorcycles.

The company said its proposal included annual wage increases of 4 percent over three years. But part of the increase depended on the union agreeing to contribute toward health insurance coverage. Unionized employees currently pay no premium. It also would have doubled the company’s 401(k) retirement plan contributions.

Boger said the union was prepared to return to negotiations. “We’ll wait for the company to call us,” he said.

The facility employs more than 3,200 union and nonunion workers.

22 Comments

[…] Original post by angrybob […]

I don’t see where it’s a big deal to lower the first year pay, I mean hell if I worked there I’d want the new people to be paid more on merit, than the simple fact that they were part of the union.

Comment by Motorcycle Guy | February 4th, 2007 7:08 am | Permalink

Well i get feeling from your take on the strike that these boys are trying to bleed poor Mr. Davidson dry lol. You must come from upper mangement were all the greedy people live thinking up ideas to line their pockets from the sweat that made them rich. Very unamerican of you in these times of unrest in the country. Harley has made record profits with sales of motorcycles, why should,nt they treat their employees good. All comes down to the working man getting the shortend of the stick again. Solidarity all the way Brothers.

Comment by Strike if Provoked | February 4th, 2007 8:08 am | Permalink

Something to consider for those of you ‘brothers’:

How did that strike work for Northwest Airlines?

How did that ten-year strike work for the Detroit Free Press workers?

I would call a starting wage of $18-$20 per hour + benefits a mighty fine treatment of its employees since you’re asking.

Could someone please explain (with numbers) the ‘hardship’ that is unacceptable in the Harley Davidson contract?

Comment by angrybob | February 4th, 2007 8:16 am | Permalink

Strike If PROVOKED! I’d say that $18 to $20 bucks an hour With Benifits is just chump change for Mr Harley. almost like feeding poor pigeons leftover bread. Another Eron. Can’t even live comfortable with family of four on that kind of money. Give me a BREAK!

Comment by Strike if Provoked | February 4th, 2007 8:42 am | Permalink

We’ll simply have to agree to disagree at this point. I have never considered an entry level position anywhere to be rich enough to ‘live comfortable’ with a family of four. Entry level (18-20 year olds?) is not supposed to sustain a family of four in my world.

I’m also judged monetarily for my personal performance. If its below expectation, I get little or no raise and/or fired. That is the way competition works. I have to ask what have you personally done for your company in the last ‘X’ amount of years to improve it? Spinning the same bolt does not count as an improvement.

Where can the folks of York, PA go locally to make the wages the currently make? Probably not a lot of choices. On the other hand, PA has been hit with higher than average unemployment. The company could fill spots with replacement workers at the snap of the finger. I think some reflection form the HD employyes is in order on this point alone.

I keep going back to the ‘who wins’ question. I have personally made those very same decisions at the beginning of 2007. I guess my loyalty to my company and my family (keeping an uninterrupted income) outwiegh the small stuff.

Anyway, I can appreciate your perspective even though I 100% disagree. Thanks for the responses.

Comment by angrybob | February 4th, 2007 9:12 am | Permalink

AB,

I think some people feel that HD is making allot of money.

From HD website on the 2006 company performance:

From HD - Invester relations website.

Link to HD Investor Website Article
January 18, 2007: Harley-Davidson Reports Revenue And Earnings Growth For 2006 at

Harley-Davidson Reports Revenue And Earnings Growth For 2006
Annual Worldwide Retail Sales Increase 8.5 Percent

Milwaukee, Wis., January 18, 2007 — Harley-Davidson, Inc. (NYSE: HOG) today announced its results for the fourth quarter and year ended December 31, 2006. Revenue for the quarter was $1.50 billion compared to $1.34 billion in the year-ago quarter, an 11.9 percent increase. Net income for the quarter was $252.4 million compared to $230.0 million, an increase of 9.7 percent over the fourth quarter of 2005. Fourth quarter diluted earnings per share (EPS) were $0.97, a 15.5 percent increase compared to last year’s $0.84.

Revenue for the full year was $5.80 billion, compared with $5.34 billion in 2005, an 8.6 percent increase. Wholesale shipments of Harley-Davidson® motorcycles were 349,196 units for the year, a 6.1 percent increase compared to 2005. Net income for the year was $1.04 billion, an 8.7 percent increase versus last year’s $959.6 million. Diluted EPS for the full year were $3.93, a 15.2 percent increase compared with $3.41 in 2005.

HD 2006 Info Box

When you are a worker for a company that is making more money, and then the leadership requests you to pay more for medical insurance and provide a 4% pay increase per year over 3 years. The kicker is 2% of half of that pay increase was only available if the union accepted transfer of some of the medical cost to the workers. I hear the words “Cost Sharing” with that. HD own Press Release says that half of the 4% pay increase would be offset by the reduced medical costs. I take this as HD offering only a 2% pay increase per year for 3 years.

From HD - Invester relations website.

Link to HD Investor Website Article
February 1, 2007: Harley-Davidson Disappointed With Union Vote.


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.

The staring pay is $18.25 and hour. If working a standard 40hr work week (2080hrs a year), the starting income is : $37,960/year. The current workers get $43,222/year. This is not bad money.

But the CEO James L. Ziemer in 2005 received
$623,908 In Salary, $598,623 in Bonus, $33,514 Latest FY other short-term comp., $635,288 Latest FY other long-term comp., For a grand total of $1,891,333. This is not counting the 372,209 shares of stock with a market value of $5,218,533 in December 2005. 2006 Salary, Bonus and Stock options should be interesting

Link to Forbes info sheet

From the workers side, they seem to not be getting the best deal. I am 100% positive that the CEO does more to create value and long term health for the company. But at the same time, the CEO can not build all the motorcycles by himself.

Comment by gothicbeaST | February 4th, 2007 1:03 pm | Permalink

Well as i see things from “My Point Of View” this is a really very bad time to for “Mr Harley” to start trying to cut back on employees benifits when the profits are riseing. He should be giving big bonus checks and telling everyone what a splended job their doing. I worked for 35yrs for Burnham & Morrill, one of the biggest baked bean producers until “Mr BUSH” nudged in the picture lol. Here’s how big companyies work, first they lead union workers into thinking we have to start working togeather to benifit everyone. So now we setup team type meetings to come up with cost saveing ideas. First year WOW! 5 million we saved the company the first year, what do we get for all the hard work, a big BBQ with all the fixings. I was one of the persons on those teams thinkingup big ideas to save money. We had deaf person who wanted to be included and i interperted for him at no charge to the company, because they were to cheap to hire anyone. I think those bolt turning guys you refer to have come up with many a good idea to help Mr Harley get to were he is right now. These bolt turning guys are a big investment, not some of the street guys u seem to portry them as. “Strike if Provoked”

Comment by Strike if Provoked | February 4th, 2007 4:06 pm | Permalink

Well it seems there is something we can agree to - bonuses are the best way to compensate based on company performance year-to-year. If people want wage hikes because the profits are high, then are they willing to take pay cuts when profits are down? Not likely. But it is popular rhetoric for CEO’s.

Comment by angrybob | February 4th, 2007 6:13 pm | Permalink

AB…
I am very happy with converting to a base pay system with a set bonus. Just like a CEO, I would like to know UP FRONT what goals I must achieve and what the PAYOUT would be when I achieve those goals. In addition they should publish all the workers bonuses, goals and what % of achievement of those goals.
Many Bonus systems at companies are hidden to the worker. At the beginning of the year, you are told to achieve your goals and you may get a bonus. The Bonus is never spelled out to you in detail. No method of calculation based on performance, company profit, etc. is ever spelled out in writing or verbally.
When the playing field is level, I am happy to join in :)

Comment by gothicbeaST | February 4th, 2007 10:20 pm | Permalink

In response to motorcycleguy, this is not the first year wage for new employees. This would be the base rate for all employees hired under this agreement for as long as they would be employed. The only increase would be 2%, if this is the agreement. But they would lose if the company’s acutuary say a TREND that increased health care costs would need to be addressed. By the end of this agreement that could shrink to .1% if they follow trends. The company is basing their proposal on trends. Wasn’t the whole legend of Harley based on being the trend setter? How come they are only releasing hourly wages and not their wages, bonuses, etc. If they want to appear fair, shouldn’t they give their information, too?

Comment by golden3 | February 5th, 2007 8:19 am | Permalink

What has happened to this country in the last 7 years or so? When does the corporate greed stop? How much did the C.E.O. of this company make in bonuses? Why can’t Management/Labor negotiate? Thank you President Bush! What’s next: Harley Davidson going to be built in Mexico?
As I see it, we will not survive with this foriegn trade B.S. How does the American compete when our competition makes 5% of our wages with NO health care. If we don’t get honest People in Government, We as Americans are going to go down the tube, AND FAST! Do you really believe this war in Irac is really about terrorists? CMMON People, George & Dick have a serious interest in the oil. Our troops are fighting for their personal agenda. As I support our troops, The best thing is to get them home. George/Dick should fight this war, they started it, now they should finish it! Health Care ya say? Look at how much the rates have increased over these years. Naturally these companies contribute to the republican party. Who pays the bill, but us! One can only hope evil people (greedy slobs) get was deserved. I always believe, “WHAT COMES AROUND GOES AROUND” People, as you fight for what’s right, the best stratagy to this mission for victory is to vote sensibly on Nov-7th. This is the real reason for the unfortinate chain of events we face as Americans at work. STAND TALL, STAND PROUD, Harley Davidson is the only American Icon left in this country. Build this non-union, and it is time to boycot the product. H.D. WAKE UP! and take care of those who take care of you!!!!!!! Believe me, you will suffer if you don’t.

Comment by Tony | February 5th, 2007 7:43 pm | Permalink

Did you now that the cost of a Harley Davidson is approximately double that of the competition.

So if the competition can sell knock-offs at half the price, why is everyone buying a Harley?

My opinion is that Harley sells a high quality product but more to the point they are addressing a market of baby boomers who want to ride the dream machine and don’t care how much it costs to do so.

The key question is how long can this trend last?

I believe that the Harley demand is currently in its peak & will steadily decline over the next ten years. As the baby boomers are replaced by the X-Generation the shear change in demographics [reduction in numbers] will put price & demand pressures on the Harley product at the same time that the current Harley work force will be retiring to happy pension land. Costs will be rising while profits will be falling.

Who cares you ask ?

The people that currently work for The Harley Davidson Motorcycle Company, who expect to rely on the pension plan & post retirement health care benefits, need to be concerned.

I’m sure that the last thing you will want to hear, after you have worked hard all your life and have finally reached retirement, is that the company is in financial trouble and they need to reduce your pension payout plus shift more health care benefit costs to you after you have adjusted yourself to a fixed income.

Don’t fool yourselves pension default has happened, is happening and will happen in the future.

From everything I’ve read to date the company is trying to address the future high cost of a retirement workforce while they are financially healthy & have options.

This is the prudent thing to do and a must thing to do for all concerned.

Just ask GM or Ford or Chrysler who are already there how much of their current revenue goes into financing underfunded pension plans or the high cost of health care for retirees.

The way I see it, if you are going to rely on the company pension plan after you retire you will eventually need share more of the burden, either now or later. I would pick now while I can make the necessary financial adjustments.

I’ve been waiting about 30 years to be able to buy my Harley, I guess I can wait a few more months, while you all sort this mess out.

Comment by Harley Customer | February 5th, 2007 10:04 pm | Permalink

Tony - Thank you for you injection of humor into these comments. I can appreciate a good laugh every now and then and I almost spit my water on my monitor - IT’S BUSH’S FAULT!

That’s good stuff.

Thanks again.

Comment by angrybob | February 6th, 2007 8:58 pm | Permalink

Tony - this is going to hurt, but click (or copy) the link below anyway:

http://www.extrememortman.com/wp-content/uploads/2006/08/Bush%20on%20H arley%20from%20motorcyclebloggers.jpg

Comment by angrybob | February 6th, 2007 9:04 pm | Permalink

So I just kinda skimmed all this….but if I got it right the war in Iraq is to find Harleys in the bush??? I don’t get it. Oh well COLTS WON THE SUPERBOWL!!! WHOOO HOOO!

Comment by JJ Rider | February 6th, 2007 9:58 pm | Permalink

I say congradulations to the HD employees on strike. Because of them complaining about a small increase in health benefits, countless other people are being laidoff at other companies that make products for Harley. I don’t know if anyone knows, but Harley does not make their motorcycles by themselves completely. A majority of the aluminum engine components are made by several aluminum factories in the US. Due to the strike, Harley has stopped ordering these parts. At some plants, (namely the one I work at) Harley is about 20-30% of our business. So about 60 of my fellow workers, friends, and fellow americans are now OUT OF A JOB! Uh, and this whole time I was under the impression that unions were formed to help protect american jobs. Thanks to the union workers at Harley, an ENTIRE plant that helps support a middle sized town in Missouri, has nearly halved their staff and may close down completely if the strike progresses too long. I am in complete awe that an organization that was initially formed to help is now the reason why jobs are being lost in a second, why companies are being forced to go overseas to provide the same product at a lower cost that is being demanded by the public! And the people blame Bush for this! Ha, wake up, the reason there are not any good jobs left is because the average joe is either to lazy to work for a decent wage, or they think they are underpaid for a job that they are really already being overpaid for.

Comment by T. Strain | February 12th, 2007 11:22 pm | Permalink

[…] I was perusing the comments from the two Harley Davidson articles I posted here and here, the last one from “T. Strain” was so well written that it deserved some […]

[…] I was perusing the comments from the two Harley Davidson articles I posted here and here, the last one from “T. Strain” was so well written that it deserved some […]

So should I sell my 2003 FXD while someone still wants it?

Comment by Anonymous | February 19th, 2007 6:35 pm | Permalink

What year did employees buy out Harley Davidson?

Was Harley Davidson ever sold to the Japanese?

Comment by Anonymous | April 27th, 2007 10:02 am | Permalink

This is a conspiracy between HD Mgmt. and the Union. Motorcycle sales have declined greatly over the past six months and manufactures have a surplus inventory. This is the easiest way to reduce it. Sales will be even worse next year as the nations economy worsens. Motorcycles have become big men’s toys and when Harley Davidson thinks they can sell one for 35K it’s rediculous. I have rode MC’s for over 60 years and have visited the York, Pa. plant a few years ago and employees were unhappy then and talking strike. It appears things never change and if you think $20 p/hr. is good pay, see how many Harley’s you can buy with it and still feed your family.

Comment by Anonymous | September 10th, 2007 1:00 pm | Permalink

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Live Comment Preview

Comment by Somebody

Powered by WordPress 2.3.1    Rendered in 15 queries and 1.024 seconds.    CleanBreeze Theme   
   

Bad Behavior has blocked 1436 access attempts in the last 7 days.