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Under the terms of the new labor agreement, the factorys workforce will be reduced to 1,000 hourly employees, down from the approximately 1,950 worker who currently at the plant. The new agreement along with other cost-cutting measures convinced Harley-Davidson s board of directors to remain in Pennsylvania instead of accepting an invitation to move its operations to Kentucky.

A restructured York operation will enable the plant to be competitive and sustainable for the future, and the new labor agreement is critical to making that happen, says Keith Wandell, president and chief executive officer of Harley-Davidson, Inc. On behalf of the Company, I want to thank the employees at York for their vote to make the changes necessary to create a more flexible and efficient operation, and we look forward to moving ahead together to achieve that goal.

With a reduced staff, the York facility will focus on motorcycle assembly, metal fabrication and painting.

The 1,000 workers that will remain will consist of 700-800 full-time unionized production and maintenance employees and from 200-300 unionized casual employees who will be called in as needed depending on seasonal production and volume needs as well as to cover for vacations and other absences. The number of salaried employees will be reduced to about 150 from 270.

Harley-Davidson predicts the restructuring will lead to savings of $100 million per year by 2012. The restructuring is expected to cost $200 million, on top of $90 million in capital expenditures.

The Commonwealth of Pennsylvania has committed $15 million in incentives to convince Harley-Davidson to stay in York.

I want to acknowledge and thank Pennsylvania Gov. Rendell and his team for their support of the changes we are embarking on at York. They have been terrific to work with throughout our decision-making process, says Wandell. We also thank Kentucky Gov. Beshear and his team for their tremendous efforts, as well as the many Kentucky state and local officials who have been so helpful and gracious and who have devoted significant time and attention to our possible relocation.

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