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?