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Harley CEO Urges Wis. Workers To Accept Concessions

Mon, 09/13/2010 - 4:43am
Dinesh Ramde, Associated Press Writer

MILWAUKEE (AP) — The chief executive of Harley-Davidson Inc. has urged Wisconsin employees to approve an unpopular labor contract Monday, telling them the motorcycle company is prepared to move on without them if they turn it down.

CEO Keith Wandell wrote a letter last week telling the workers it's up to them to decide whether they want to remain part of Harley's future.

"We are on a course to build a competitive company for the future and a business that is sustainable long term," the letter said. "Nothing can get in the way of this objective."

The workers, who make motorcycle engines in Milwaukee and windshields and other components in the northern Wisconsin city of Tomahawk, were scheduled to vote on the proposed contract Monday. The results should be available by the evening.

The seven-year deal would freeze their pay, slash hundreds of jobs and assign large volumes of work to part-time workers. If the employees reject the deal, Harley has said it will move its Wisconsin operations to another state, leaving about 1,350 employees here out of work.

The company says labor costs in Wisconsin are so high that it's only feasible to keep the plants open if workers agree to concessions.

Tom Koltz, who has worked at the company for 22 years, doesn't buy that explanation. The 56-year-old from Cudahy acknowledges the tough economic climate, but he said Harley is turning its back on longtime loyal workers.

The company could have asked the union to help work out a fair compromise, he said. Instead, Harley is "putting the squeeze on us," said Koltz, a product-development mechanic. "This is a downright attempt to crush the union."

A number of items in the proposed contract — which the company called its lone and final offer — could give workers pause.

At least 200 jobs would be slashed in Milwaukee and about 75 jobs could be cut in Tomahawk. The company could then bring in temporary, or "casual," workers, to work at about half the hourly rate and with almost no benefits. Where a full-time production technician would make $30.50 per hour, a comparable casual worker would make $16.80 per hour.

Most long-term workers also will be subject to a seven-year wage freeze, although there are provisions for tentative raises in the final two years.

Even though workers may be disappointed by the contract, Harley's three unions have encouraged them to approve it, perhaps because they have little leverage.

Harley made no secret of the fact that it's been scouting out replacement facilities in other states. Harley spokesman Bob Klein has declined to say which sites — or how many — were under consideration. But after union officials revealed Kansas City, Mo., was a possibility, Klein confirmed it was one option.

Klein said depending on how the votes turn out, the company will announce its final decision Tuesday.

Even if Harley moves one or both of its production facilities out of Wisconsin, its headquarters will stay in Milwaukee. That would be little consolation to displaced workers — and to the city of Milwaukee, which has embraced Harley-Davidson since its founders built their first motorcycle here 107 years ago.

This isn't the first time Harley has tried to extract steep concessions from workers. In December, the company and the union at its main motorcycle plant in York, Pa., agreed to a cost-cutting contract that involved layoffs for about half the company's unionized work force there.

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