An Editorial in the Feb. 27 Tomahawk Leader:
There’s no doubt that a lot of Harley-Davidson employees and their families are breathing a sigh of relief that the York, Penn., plant’s strike has ended, laid-off employees are called back and production is starting again.
On Jan. 31, 2,722 members of the International Association of Machinists and Aerospace Workers (IAM) Local 175 union in York rejected a contract with the company. Ninety-eight percent then voted to strike
Feb. 1. The contract had several concerns: Annual wage increases would have been contingent upon workers paying more for health care; new hires would have earned considerably less; and retirement benefits would have been cut.
In a ripple effect, more than 240 Tomahawk Harley-Davidson employees were laid off for the last two weeks while other plants around Wisconsin also experienced layoffs and a decrease in production as they waited for York to settle.
Harley-Davidson was established in 1903 and today has more than 9,600 employees worldwide and operates seven U.S. production facilities. The legendary motorcycle company has become a U.S. Fortune 500 company and, for the last 20 consecutive years, enjoyed year after year of record growth and profit. Last year, Harley-Davidson reported $5.8 billion in revenue and an increase in profits by $1.04 billion from 2004, an 8.7 percent increase. The company returned significant value to shareholders, with 19.3 million shares repurchased at a cost of $1.6 billion in 2006.
The motorcycle-maker was not always so successful, however. As tenured employees – from plants in Tomahawk to York and beyond – will tell you, it was a joint effort between Harley-Davidson and its workers that pulled the company through tougher times in the early 1980s.
“I remember back in the 80’s when the company was struggling to stay in business they told us that if we took some concessions to help them out they would take care of us when times got better,” said a 36-year Tomahawk operations employee on IAM’s web site. “I didn’t know that this is what they meant by taking care of us,” he added of the then-proposed contract.
The flip side of the coin has some in the industry worried that the smooth ride Harley has been enjoying won’t always be there. There are skeptics of Harley’s current growth plans, wondering what will happen as baby boomer customers continue to age. Others don’t want Harley to experience the same downfall that hit some of the ill-prepared in the auto industry.
Fred Gates, general manager of Harley-Davidson's York operations, said, "The proposed contract was structured to help manage future costs that could be detrimental to our business over the long term."
Had Harley-Davidson not pulled down millions in profits during the last two decades, perhaps employees would be more willing to accept cuts and concessions. But that isn’t the case. Huge profits and large stock options going to top executives leave the 40-hour-a-week employee working hard on the assembly line wondering about the balance and “potential, future costs.” Tenured, unionized employees like one 36-year Tomahawk Operations veteran employee just saw it as an effort to “take away the benefits that our unions have worked hard to earn.”
A settlement has been reached, and many of the concessions asked of employees seem to have been put on hold. Time will be the test. In the meantime, we’ll join our community in celebrating that hundreds are back at work. That, we know, is a very good thing.