Union workers at the York, Pennsylvania final assembly plant for Harley Davidson went on strike after negotiators failed to reach an agreement both sides could live with. Production of Touring and Softail motorcycles has been suspended.
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.
The union refused to accept the two tier wage system and also felt they could not agree to contributing to their health care premiums …
I do not understand the union’s reasoning here. Practically everyone contributes to their own health care these days which is one of the most rapidly rising costs associated with any business. If they look at the U.S. automakers, one of the primary reasons their fixed costs have been so high, keeping them uncompetitive when compared to Japan is the cost of health care. This is not the 1960s and bargaining as though it is seems to be extremely short sighted.
I’ve also noticed a lot of advertising from dealers looking to move bikes, the over retail pricing is a thing of the past and there are more than a few bikes sitting around unsold. A strike helps clear the backlog. If dealers can spend less on advertising because the bikes become just a bit more scarce and they can hold the line on prices instead of offering discounts, dealers make more money.
The company also offered to double 401k contributions, which is a nice pay raise for anyone thinking about retiring some day.
Did the union think this through?
Link: Harley Davidson Press Release
Link: Union website
F451 says
One only need look at the UAW to see where Harley-Davidson is heading…
Mayakovski says
Time to start manufacturing overseas.
Oh wait, they already do that.
Vicki says
My husband has worked for the company for the last 28 years, and has been through the good and the bad times. The company has recorded over 20 record quarters . When the company fell on hard times, the EMPLOYEES gave concessions, offered ideas, and helped make this company what it is today. All they are asking in return is to not loose anything that they have worked so hard for. What is not being reported to the public, is the full picture.
Harley bought back over 990 million in stock, and they still cleared 1 BILLION in profit. The top CEO’s cashed in almost 1 billion dollars in stock options as well. SO ARE THE EMPLOYEES REALLY ASKING FOR TOO MUCH?
F451 says
Vicki,
Having been in Teamsters prior to finishing my college degrees, I can say that unions do little to develop their members, and in many ways lead them astray for the good things their members do—as you have pointed out. Since we are now in a global economy, like it or not, and a capitalist one where the almighty dollar rules, unions, and their workers no longer stand a chance. Yes, the execs pocketed record money, but quite honestly they could give a damn about their employees as I learned when I too became an exec. You’ll know a good exec from a bad one when you see how honest and how much disclosure they reveal to all their employees. A good exec will also share the wealth versus selling you a piece of the pie you’ll never get to eat.
Richard says
I think it’s obvious whose kool-aid the kneeslider has been drinking.
kneeslider says
Richard, I guess you were being witty, but which of the specifics of this strike am I mistaken about or uninformed about? I am always ready to learn but your comment does not inform or explain. Be specific because many other readers can learn, too. Besides, I didn’t attack anyone here, I really do not understand the union’s reasoning. Re-read the post above and correct me where I was wrong or inform everyone about what was missed.
Richard says
Kneeslider,
When I referred to whose kool-aid you were drinking, I thought it was obvious that I meant you were taking the Company’s side. One of the main points you failed to consider was that “The **workers** at the motorcycle maker’s York, Pennsylvania, plant **voted overwhelmingly** Wednesday to reject a proposed new **contract that called for lower wages and benefits** for new workers and forced all union-represented workers to **pay more for health insurance**.” (quote from CNNMoney.com)
This isn’t a case of “the Union” making outrageous demands that the employees don’t support. It doesn’t matter that other people have to pay a portion of their health insurance; what matters to the HD workers is that their income will decrease or their expenses will increase. While top management is raking in the dough, the company wants to reduce the workers’ income.
And you seem to have ignored the implications of this: “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.” In other words, 1/2 of the “wage increase” would be paid for by the employees themselves, through the increased employee costs or reduced benefits of the salaried health care plan being forced upon them.
Next, there is the problem of trying to compare HD’s situation to that of the US automakers. HD does not compete with Japanese motorcycle manufacturers for price/components/labor costs/quality/etc. HD competes for mind-set only. HD sells a mythology, and the actual motorcycles are just one component of that mythology. HD makes far more money licensing and selling clothing and knick-knacks to the non-riding public who would like to pretend to be a part of the HD myth.
Then comes this paragraph, which appears to contradict itself in several ways:
“I’ve also noticed a lot of advertising from dealers looking to move bikes, the over retail pricing is a thing of the past and there are more than a few bikes sitting around unsold. A strike helps clear the backlog. If dealers can spend less on advertising because the bikes become just a bit more scarce and they can hold the line on prices instead of offering discounts, dealers make more money.”
A strike clears the backlog, so is it a good thing? (for who?) If “more than a few bikes are sitting around unsold”, then … “dealers make more money”? You seem to be saying that if they spend less on advertising and sell fewer bikes for less money per bike, they will somehow end up making more profit!
Finally, reducing the pay for new workers from $20.78 to $18.25 per hour in the “two-tier [salary] structure” means that company morale will be seriously damaged by creating two classes of workers: those on the old structure, who see themselves as higher quality employees, and those on the new, lower-pay structure, who are looked down upon by the “high quality employees” and who will resent being paid less money for what they see as the same work. This will not be good for the workers or for the company.
I don’t really know what you meant by saying, “This is not the 1960s and bargaining as though it is seems to be extremely short sighted,” but it sounds just like something from the mouth of that prevaricating drug-abusing blowhard, Rush Limbaugh. So, maybe it’s his kool-aid you’ve been drinking?
I hope this explains some of the reasoning behind my kool-aid comment. But, please don’t take it as an insult to you or to anyone else. At the time I wrote it, I had intended to comment on the specifics of your article, but before I had a chance to construct my reply, I had to rush out the door. So I just banged out a quick one-liner.
hoyt says
It is laughable that our society feeds the CEO mystique….they are NOT that disproportionately more important than the line employee working with the good or service that drives revenue.
Some unions need their heads examined but investors need to wise up even more….absurd situations like Eddie Bauer’s will hopefully spearhead market-driven reform in CEO compensation packages.
This guy gets $10 million as a severance package while the company declined under his watch? Sounds like he didn’t do his job, so his should be “written up” and eventually fired. You know the game — companies will get rid of any employee if they really want….write them up a couple of times, put them on “probation” and any little thing contrary to your “plan for improvement”, you’re gone.
$10 mil ? – that would pay for a lot of health care.
http://seattlepi.nwsource.com/business/297650_eddiebauer29.html
Blaine says
Hi there. I have been spit at, given the finger, had one of my sidecars used as a trash can, had one of my bikes keyed, all by Harley Riders. The company has fostered this type of attitude in their customers for many years. I hope they go out of business.
kneeslider says
A view from the York, PA local newspaper
TriumphGuy says
Can we discuss the consequences of a labor dispute within HD without all the inflammatory rhetoric? Distracted drivers have made motorcycling more of a bloodsport these days without the addition of slash-and-burn blogging. I see enough of this stuff slathered all over the backs of hybrid cars, VWs, and Volvos anytime I ride near a big city. Also, brand loyalty/lunacy cuts both ways. I have had experiences similar to Blaine’s, but also have run into packs of young-and-stupids all on the latest race grade machines as well.