Possible Harley Strike


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.

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George Obradovich
George Obradovich

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