Friday, November 12, 2010
Harley "the bully" Davidson will not pursue nor accept incentives from Missouri
By Mike Hendricks
The Kansas City Star
No one likes a bully. Hence, the folks who run Harley-Davidson aren’t getting a whole lot of love these days.
To cut costs, the Milwaukee-based motorcycle maker has been whipsawing its work force — and communities such as ours where Harley factories are located — to cut costs.
But in one of those moves you least expect, Harley said Thursday that it would not seek nor accept corporate welfare as a reward for keeping its Kansas City plant in operation.
“We have advised the (Missouri Department of Economic Development) and the governor’s office that we don’t intend to pursue nor accept incentives,” Harley-Davidson spokesman Bob Klein told me.
That was news I wasn’t expecting and had to throw out a column written on the presumption Harley would be asking for corporate welfare.
That is how many companies roll these days. Also, it’s been the pattern for Harley-Davidson since beginning a restructuring effort that has damaged its all-American image.
It began last year, when Harley proclaimed as inefficient its York, Pa., plant and the union work force assigned to it. Under threat that their jobs might move to Kansas City, York workers agreed to a seven-year wage freeze, job cuts and a new class of part-time workers.
Then it was Milwaukee’s turn. Workers approved concessions there, also under threat of their jobs moving to Kansas City.
Now it has come full circle, with Kansas City’s work force being challenged to fix “competitive gaps” or their jobs will move to York.
I don’t pretend to know whether Harley CEO Keith Wandell is being cynically opportunistic, or simply making moves necessary for the company’s success. Probably both. What’s clear is that playing hardball has been swell for Harley’s bottom line. Third-quarter profits were $94 million.
And as the company last week began strong-arming its Kansas City work force, there was heavy speculation that another shakedown was in the works — this one involving Missouri taxpayers.
In Pennsylvania and Wisconsin, new union contracts were followed by gifts of corporate welfare, $15 million and $25 million, respectively.
State and local officials here were expecting a similar conversation.
“It’s all focused on what their cost structures are,” said Pete Fullerton, director of economic development in Platte County, which landed the Harley plant a dozen years ago thanks, in part, to tax breaks.
Spokesman Klein acknowledged “very preliminary” discussions recently with state and local officials. But Harley now will focus solely on getting the changes it wants out of its work force.
Harley said Thursday it was refusing Wisconsin’s $25 million in tax breaks, but only because the company decided it would not qualify.
Harley won’t easily lose its bully image. But this could help.
Grandpa: See more on Harley's pass on $25 million from Wisconsin