Harley-Davidson Unions approve pay freeze, Lipstick back on the HOG

Wall Street likes the salary freeze, slashing hundreds of jobs and assigning large volumes of work to part-time workers. Stock up 2.5% as of 1:40 pm CDT and up over 12% month-to-date. A 7 year wage freeze equates to how many new HOG purchases??

By DINESH RAMDE
The Associated Press
Monday, September 13, 2010

WAUKESHA, Wis. -- Harley-Davidson workers in southeastern Wisconsin approved a labor contract Monday laden with steep concessions after the company threatened to move hundreds of production jobs out of the state.

The proposed deal freezes employees' pay, slashes hundreds of jobs and assigns large volumes of work to part-time workers. Some 1,140 union members who work at the Menomonee Falls plant in suburban Milwaukee voted on the deal, approving it by a 55 to 45 percent margin.

Harley-Davidson Inc. executives had said they would move production out of Wisconsin if the contract were rejected. That would have eliminated about 1,350 jobs.

Union president Mike Masik said the close vote reveals how grudgingly his workers approved the deal.

"It shows people are really getting sick of being threatened," said Masik, the president of the Local 2-209 chapter of the United Steel Workers.

Although the contract runs for seven years starting in April 2012, it doesn't guarantee the company will stay in Wisconsin that whole time, Masik said. It only says the company will stop searching for alternate sites, he said.

The contract includes a one-time lump-sum payment of $12,000, an artifact from a previous grievance settlement. The money goes to all active employees and to laid-off workers who were eligible to be called back.

A number of those laid-off workers voted yes, saying the money was a big factor. "I was laid off, I had no chance of being called back so yeah, I wanted the $12,000," said Greg Kuehn, a 49-year-old machinist who has since found work at a printing company. "If I still worked there, though, I would have voted no."

Some workers who did vote no said they thought the company was bluffing about moving in such a bad economy, while others were angry at being given such a bitter ultimatum.

"It was like, 'Take it or leave it,'" said Mary Dexter, 58, who has worked in a warehouse for almost 10 years. "Well, then, adios. See ya."

Harley workers make motorcycle engines in Milwaukee and windshields and other components in the northern Wisconsin city of Tomahawk. Monday's vote affected Milwaukee workers, while Tomahawk employees were scheduled to vote on a nearly identical contract later in the day.

Harley released a statement saying it appreciated both the outcome of the vote and the members' support of the contract.

"Today's outcome in Milwaukee is a significant step toward creating the competitive, flexible operations that are essential to the company's future," it said. Harley executives are scheduled to decide the next steps Tuesday.

Chief Executive Keith Wandell had urged Wisconsin employees to approve the unpopular contract, which the company called its lone and final offer. He wrote a letter last week telling the workers it was up to them to decide whether they wanted to remain part of Harley's future.

"We are on a course to build a competitive company for the future and a business that is sustainable long term," the letter said. "Nothing can get in the way of this objective."

Some union members consoled each other outside the Waukesha County Exposition Center, where the vote took place, saying Harley was holding the union accountable for its own foolish business decisions. Several said Wandell should take an equal cut in pay, and another said the company that had once been a pillar in Milwaukee has now become a disgrace.

"For Sale" signs hung on about a dozen of the approximate 100 Harley motorcycles parked outside the center.

Union member Greg Voelzke, 52, said he voted against the contract because it included no guarantees the company would stay, even with concessions.

"We came to battle today, not for victory, but to fight another day," said Voelzke, who has worked for Harley-Davidson for 22 years. He said he did not want to support a contract that offered so little.

Gary Walczak, who has driven a Harley truck for 40 years, was more circumspect. Despite the lack of a guarantee, a non-guaranteed job is still better than none, he reasoned.

"That's the whole reason I voted yes, just to keep jobs in Milwaukee," he said.