Harley-Davidson management said in a press release that the union made the right decision.
“Change is never easy, and we have asked our employees to make difficult decisions. However, we are pleased to be keeping production operations in our hometown of Milwaukee and in Tomahawk,” said Keith Wandell, President and Chief Executive Officer. “Together, we are making the necessary changes across our entire company to succeed in a competitive, global marketplace while continuing to meet and exceed the expectations of our customers.”
Harley officials said that even with the concessions the Unions were forced to give up, their members still are earning pay and benefits that are "some of the best in the area."
Some 1,140 union members from a suburban Milwaukee plant voted, approving the contract by a 55 to 45 percent margin.
Mike Masik, president of the local chapter of the United Steel Workers, said the close vote reveals how unhappy workers were about the deal.
"It shows people are really getting sick of being threatened," he said
However, in northern Wisconsin, the 293 workers at the Tomahawk plant approved the contract by a broader margin of 73 to 27 percent.
The Associated Press reported that the Milwaukee contract ratification may have been swayed by the company's inclusion of a one-time lump-sum payment of $12,000, to all active employees and to laid-off workers who were eligible to be called back.
"I was laid off, I had no chance of being called back so yeah, I wanted the $12,000," said Greg Kuehn, 49, a machinist who has since taken a job a printing company. "If I still worked there, though, I would have voted no."
While the vote guarantees that the company will stop looking for alternate sites to relocate its production, the contract does not stipulate that Harley must remain in Milwaukee for the entire 7 year deal.
Observers say it's unlikely that with this new contract, Harley-Davidson would move out of Wisconsin during the contract term.
The new contract allows Harley to slash the workforce by up to 50% and to use seasonal "non-union" workers to fill in and meet demand. Those workers will be paid considerably less for doing essentially the same work as the union workers.
Based on the new ratified labor agreements, Harley-Davidson expects to have about 700 full-time hourly unionized employees in its Milwaukee-area facilities when the contracts are implemented in 2012, about 250 fewer than would be required under the existing contract. In Tomahawk, the number of full-time hourly unionized workforce will reach 200 when the contract is implemented, about 75 fewer than would be required under the current contract. Harley also expects its Wisconsin production workforce to include 150 to 250 casual employees on an annualized basis to cover seasonal volume spikes, vacations and other absences as the new labor agreements are implemented.
Harley says the new contracts are expected to generate about $50 million in annual operating savings in 2013, the first full year of the agreements.