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Harley Workers Authorize Strike At Key Plant

Reuters
Thursday, 1 Feb 2007 | 12:22 PM ET

Workers at Harley-Davidson's largest assembly plant have rejected a proposed contract and authorized a strike that could begin early on Friday.

The workers at the motorcycle maker's York, Pennsylvania, plant voted overwhelmingly on Wednesday to reject a proposed new contract that called for lower wages and benefits for new workers and forced all union-represented workers to pay more for health insurance.

The York workers, who are represented by the International Association of Machinists and Aerospace Workers Local 175, also voted to authorize a strike beginning a minute after midnight, when the current contract expires.

In a statement released on Thursday that acknowledged the vote, Harley said it was disappointed by the development. It said the contract concessions were necessary to help the
company, which is currently enjoying growing sales and profits, avoid finding itself "in the same position that the Detroit auto industry is in now" 10 years down the road.

The stakes are potentially high. In a note to investors, Tim Conder, an analyst at A.G. Edwards & Sons, pointed out that the two bikes that come out of York are Harley's highest margin products and account for about 60% of all the units it makes.

But Conder said he was optimistic that the issues would be "quickly resolved," and a strike averted, citing Harley's long history of "extremely good company/labor relations."

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