A month ago, factory workers at Harley-Davidson's York, PA plant were worried that they might lose their jobs. Harley had just announced that it was considering moving the plant to Shelbyville, KY (east of Louisville, KY). Now, however, Harley-Davidson has announced that it will keep its plant in York after all.
Factory workers themselves were a big part of the decision to stay in York. On December 2, Machinists Union Local 98 approved a 7-year contract that would support a restructuring plan for the plant. According to Keith Wandell, the president and chief executive officer of Harley Davidson, the restructuring will make it possible for Harley to remain competitive at its York location. "The new labor agreement is critical to making that happen," Wandell commented. "I want to thank the employees at York for their vote to make the changes necessary to create a more flexible and efficient operation."
Harley-Davidson had been negotiating with the machinists' union since May. The union agreed to cut the work force at the York plant almost in half, from 1,950 to 1,000, with up to 300 temporary union workers to be hired as needed. Salaried jobs, too, are to be cut in half, dropping from 270 to around 150. Meanwhile, two factories that make touring motorcycles at the plant will be consolidated into one. Harley-Davidson expects these cuts to save the company $100 million by 2012. Some of the money will be reinvested in the York facility, which is due for certain upgrades.
The state of Pennsylvania played a role in keeping the Harley plant in York as well. The state offered Harley-Davidson $15 million in tax incentives to keep the plant where it is.
Kentucky Governor Steve Beshear said that he was disappointed but not surprised by the decision. In a press release, Beshear remarked, "The fact that Kentucky was Harley-Davidson's number one choice if the company had decided to move, bodes well for our future success." In the process leading up to the decision to keep its York plant, Harley-Davidson considered moving to Shelbyville, Indiana and Murfeesboro, Tennessee as well.
Kentucky state senator Gary Tapp, of Shelby County, was even more disappointed. "The people here at the local level in Shelby County and the state did everything they could," he said, "to make this an attractive place for Harley to become their home, but unfortunately, they didn't see it that way."