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Harley-Davidson, union settle labor dispute

February 23, 2007
Filed under Features

Workers at Harley-Davidson’s York, Penn., manufacturing plant approved a new three-year contract, ending a three-week strike that cost the company an estimated $11 million a day.

Frank Larkin, a spokesman for the International Association of Machinists and Aerospace Workers, says the contract, which will raise workers’ pay 12 percent over three years, was approved by more than 80 percent of the members of the union’s Local 175. The agreement also establishes a two-tier wage structure, which starts employees hired after the contract’s effective date at a wage rate lower than current employees, but equalizes pay by the end of the contract’s term.

On the benefits side, unionized employees will participate in a new health plan that continues to require no employee premium, but includes increases in the level of out-of-pocket costs that employees could incur for deductibles and co-pays. Union members will continue to be fully covered by the company’s traditional non-contributory pension plan. However, for new hires, the agreement reduces the company’s match of optional contributions that employees can make to the contributory portion of the plan. The agreement also doubles the company’s 401(k) match to 50 percent and provides other compensation and benefit improvements.

Union members voted overwhelmingly to accept the new contract. In total, 83.2 percent of the 2,519 members voting by secret ballot elected to accept the new agreement, (2,097 in favor, 422 opposed). The employees will start returning to work today.

“We are eager to get back to work producing motorcycles again,” said Fred Gates, general manager of H-D’s York operations.

The strike disrupted H-D’s national production and had ripple effects as far away as Wisconsin, where 440 employees were laid off last week. The company had warned that additional layoffs were possible if the work stoppage in York continued. IAM Local 175 represents about 2,800 production employees at H-D’s facility in York, which produces the company’s Touring and Softail motorcycles and is the company’s largest production operation.

The company stated it expects to release information on the business impact of the strike early next week.

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