Harley Stays Cuts Costs

December 10, 2009

All Posts, News

Welcome to the brave, new world of post-industrial America.

Last week the union that represents workers at the Harley-Davidson plant in York, Pennsylvania, the International Association of Machinists and Aerospace Workers Local 175, tentatively approved a new labor contract that will cut the plant’s workforce in half, reduce average wages and cut medical benefits. Pennsylvania’s Governor, a man named Ed Rendell, bribed the last, major, American motorcycle manufacturer a reported $15 million to stay put.

The York plant is Harley’s largest factory. As part of the agreement with the Commonwealth of Pennsylvania, Harley has promised to spend $90 million in capital improvements.

The Deal

At least a thousand workers can expect to be layed-off. A clause in the new contract specifies that employees with five or more years seniority will be paid severance in the amount of four days wages for every year on the job. The maximum severance check will amount to 24 weeks pay.

The new agreement will take effect on February 2, 2010 and remain in force until February 2, 2017.

Current Harley employees will earn between $24.10 an hour and $29.01 an hour for the duration of the contract. New Employees hired after February 2, 2010 will make either $19.28 or $20.84 an hour. The low end of the wage scale works out to about $40,000 per year for a typical family before taxes and deductions or, if the family is shrewd, about $30,000 a year after deductions.

Starting in February, up to 23 percent of all the hours worked at the plant can be assigned to “Casual Employees.” Pay for Casual Employees ranges from $16.75 an hour to $23.30 an hour. The 58-page contract specifically states that “Casual Employees are expressly excluded from all Harley-Davidson Retirement and Benefit Plans. They will receive an hourly wage, but they will not be entitled to any benefits of any kind….”

The Winners

Harley spokesman Bob Klein said the point of the agreement is “to allow York to resize and become more flexible and more cost-competitive and efficient, all of which is key to a sustainable future.”

Two months ago, Harley boss of all bosses Keith Wandell, told financial analysts that “restructuring” the York plant was one of the steps the company was taking to save between $120 million to $150 million in production costs.

Harley-Davidson sales peaked in 2006. The next year company President James L. Ziemer made $4,447,713. The next year, after sales began to drop, Ziemer made $5,560,650. Wandell replaced Ziemer on May 1st. So far this year Wandell has earned $7,182,027 in total compensation – which is about what 200 jobs at the York plant will cost.

The Sermon

The brave, new post-industrial America is a consumer paradise for investors, executives, professional athletes, celebrities, real estate tycoons, politicians, professionals, bureaucrats, prison guards and a thousand kinds of cops.

The new and improved America is a little less like paradise for all the servants, nannies, gardeners, security guards, nurses and waiters who hold down most of the new and improved American jobs.

The agricultural and industrial jobs that defined the old America for more than 200 years are now mostly gone. Agriculture and manufacturing are now routinely outsourced. Even customer service and some professional jobs like computer programming are increasingly outsourced. The union negotiators in York were obviously happy to save any jobs they could.

, , , , , , , , , , ,

14 Responses to “Harley Stays Cuts Costs”

  1. Dan Waldron Says:

    A friend of mine just emailed me one of your articles from a while back. I read that one a few more. Really enjoy your blog. Thanks

  2. JAMES Says:

    GO FIGURE, managent stays on top as employees lose ground.

  3. Vacuus Cura Says:

    I’m not nearly as concerned with salaries in private industry, as I am with salaries that are stolen from my wages:


  4. sled tramp Says:

    “Everybody gets the same amount of ice.The rich get theirs in summer and the poor get theirs in winter”.
    Mark Twain

  5. Mikonos Says:

    Don’t want to defend the company but at least they’re maintaining a presence. BTW, they source a lot of parts in Asia right now although they have continued to build engines and do final assembly in US. It’s very tough given that labor markets have become global and the Asians and Indians are (currently) willing to work for a lot less.

    Now, that stated, my observations having been involved in some of these on-shore/off-shore decisions is that you can save a couple of bucks on labor in China or professional services in India but the cultural, time difference, logistics issues are a big deal. And, more importantly, the prices in those countries have gone way up as demand has increased.

    So companies like GE that outsourced a lot of engineering to India have turned around and brought it back to the US. Ditto for China, a lot of the savings are illusory and product quality issues are not worth sacrificing your brand for…so more of that stuff coming back.

    In an emerging world of computers and automation the labor bennies in China/Asia are becoming increasingly irrelevant.

    Now, the “flip side” of all this is that American companies can sell there products overseas so that mitigates some of the pain. HD sells a lot of bikes in Europe and Asia.

    The US is still 25% of the global economy and we are largely responsible for global innovation and intellectual property development (must give some credit to the Europeans for this as well). As long as we control that we control our destiny.

  6. fayettenam hoe Says:

    i wish i could make 17,000 dollars a day, and i wounder why others sell drugs, if i ever got rich, the last thing i would do is buy a new Harley, maybe old davidson got shot in the back of the head, that company lost me years ago, they forgot about the future, even my dumbass grew up on bicycles and vespas and the dirt and rash from collidiing with other motor vehicles, the whore that follows, confirms, that Harley is all about $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ –7,182,o27–for one person is not enough, even the other CEO’s must have gotten a taste of it. its not the way to drive a motor bike company and those who follow it into the ground, out of touch, like most rich fucks, a company that lost touch and fondeled their life away with chrome and over compensation, the hoe’s can’t be that expensive, Harley, what happened to the davidson?

  7. fayettenam hoe Says:

    if the Harley co. CEO’s really cared about their riders, the would work for tires and oil, or at least try to move an antiquated company further into the past where people moved forward, usa?, was invented, now i speak, no tme to fall behind a company that keeps killing its past

  8. fayettenam hoe Says:

    i saw a harley when it ment more, that old bike pulled a truck out of a ditch, pulled started the old tractor and helped bounce my son out the womans crotch, but for some reason MR.CEO corporate whore president of an antiquated company needs more money than all of his emplotees put together, i’m sure he will find a chinese following, America is in the rear view mirror, one day prisons will burst, and Harley forgot their roots, cool won’t get you down the road, the whore is not what we want,chrome will be the first casuality of curb appeal. and blood will never be the same, new harleys ar’nt even worth stealing, a paper bag has more to offer, even if its empty

  9. sled tramp Says:

    fayettenam hoe,
    Ain’t THAT the fuckin’ truth. Keep writin’…we can use a prophet around here….

  10. Softail09 Says:

    Hey Rebel thanks for the Info always logging on to check what’s good in the outlaw world

  11. fayettenam hoe Says:

    mmmm, profit

  12. sled tramp Says:

    Harley-Davidson, the motorcycle maker, reported a fourth-quarter loss Friday, its first quarterly shortfall in 16 years, hurt by restructuring costs and the sluggish economy. Harley-Davidson has come under pressure over the last year as the tight credit markets and the weak economy led consumers to shun purchases of its high-end, heavyweight motorcycles. The company has been reorganizing its business through layoffs, factory closures and closing or selling unwanted brands. Harley said shipments of its bikes to dealers in 2009 fell 27 percent, to 223,023. For 2010, Harley said it expects shipments to fall another 5 to 10 percent to 201,000 to 212,000 motorcycles. Harley-Davidson said it lost $218.7 million, or 94 cents a share, during the fourth quarter. That marks its first three-month loss since the fourth quarter of 1993 and contrasts with a profit of $77.8 million, or 34 cents a share, a year ago. Revenue tumbled 40 percent, to $764.5 million from $1.28 billion a year ago.

  13. sled tramp Says:

    Despite being ungodly expensive,I had to have one of these.I feel a strong obligation to loudly proclaim my uppity attitude to complete strangers at every opportunity.


  14. DocB Says:

    Thanks Sled… explored the site……. cool

Leave a Reply