In common folklore, nothing epitomizes the American Ideal of personal freedom like the Harley-Davidson motorcycle. Think Easy Rider (ask your grandparents, kiddies!) or The Wild Ones (ask your great-grandparents, kiddies!) Get your motor runnin’ and head out on the highway! But recent actions by the management threaten to pen up the free ranging, open road Hog once and for all.
Just today, H-D workers in Milwaukee were made an offer they didn’t dare refuse, one which they know is only delaying the inevitable. Company management will publicly admit only to seeking to eliminate 200 jobs in the Milwaukee area, but union officials expect losses to eventually take about half of the 1100 Wisconsin jobs. This Hobson’s Choice is preferred over losing all work to outsourcing and to Harley’s favorite-son facility in Kansas City.
The Milwaukee staff know this is likely from the experience of their compatriots who once worked at Harley’s plant in York, PA, where in 2009 they were forced to accept an offer they didn’t dare refuse rather than lose their entire facility to a proposed new site in Shelbyville, KY. The decimation whittled down a workforce of 1900 to “around 800″.
Harley expects to save something like $100 million with this move in York. But one has to wonder if the $15 million pledged for worker “retraining” to Harley by the Commonwealth of Pennsylvania was worth the investment, as those terminated will be eligible for unemployment once the $12,000 in severance pay runs out. Those about to become unemployed in Milwaukee will get even less. Harley isn’t having a very good year, you know! Their projected earnings for 2010 are only about $100 million, and executive bonuses won’t be very big unless the line workers make sacrifices on their behalf.
So why did I call Harley’s Kansas City facility the favorite-son? Back in 2007, Harley gave those workers a fairly decent contract which contained raises and no monthly premiums on health care. But that contract runs out just about the time that the Milwaukee and York contracts go into effect, and I fully expect that the KC Krewe won’t be booking the Sunshine Band to celebrate Harley’s “generosity” in the next contract. As one reader opined in a recent article on the Milwaukee surrender, “I heard rumor KC work is going to York !Its not the union workers fault, even they made $10 hr. the bikes will cost the same !”
True Harley aficionados still recall with disdain the “AMF” period, which followed the company’s 1983 rescue by Ronald Reagan exercising his nascent “unitary executive” power and imposing by fiat a steep tariff on imported Japanese motorcycles. Those over at the Cato Institute were hardly effusive about this move back then, disdainfully dismissing Harley’s management at that time for seeking governmental rescue instead of dealing with their “own entrepreneurial deficiencies” and “a crushing debt problem”. Sheldon L. Richman, writing for The Mises Institute’s Free Market monthly in May 1988, called Reagan “the most protectionist president since Herbert Hoover” in allowing protection to what was then – and may still be – a failing industry. Harley’s recent activities caused one such aficionado to lament, “…the company is once again being run by corporate types…It’s hard to believe they could make the same mistakes AMF did, but they have.”
And over 2000 Harley employees will now pay for these mistakes with their jobs. You have to wonder if Reagan’s intercession was worth the effort. At least in 1984 there were still other jobs to be had.
It’s a Harley tradition to expect the workers to take the fall for management error, you know! Many lost jobs when Harley opened a plant in Manaus, Brazil in 1998, and more will again as Harley seeks to open a facility in India.
One has to question the wisdom of this latest move, for with Indian tariffs and taxes, Harley’s “most affordable” product would still cost 700,000 rupees (roughly $15,000 – twice the US price). Harley is currently planning a total of 5 dealerships in India, a nation whose per capita income is about $1,000 a year (World Bank figure). That cannot justify the expense of building a new production facility even if American workers cover much of the cost through lost jobs. One has to expect that the plan is to import the finished product to the US, just as they did the XR-1200 prior to 2008.
One also has to question the wisdom of the unions in accepting this contract despite the current economy. All the give-backs and other concessions given are not likely to prevent further job losses: “Harley-Davidson Inc. could eliminate hundreds of jobs at its engine factory in Menomonee Falls, Wis., even if union workers ratify a seven-year labor agreement meant to keep the work in the Milwaukee area.” Better to hang together than to hang separately.
No more Easy Riding now. As one affected resident of Tomahawk, WI put it, “It’s not just people losing their jobs. It’s a trickle affect. … all the good things Harley does for the community are going to be gone. …so how do you take away someone’s leg?”
It’s not so hard to imagine – especially if there is a buck in it for someone. It’s the American Way!