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Harley-Davidson to build U.S. Engine
Plant
Harley-Davidson Motor Company will
move forward with plans to build an additional U.S. manufacturing
and assembly plant outside of Wisconsin for expanded production
of Big Twin motorcycle engines and transmissions, in support
of the Company's future needs.
The announcement follows an Oct. 16 vote by members of Harley-Davidson's
largest Milwaukee union, the United Steelworkers (USW), not to
accept a plan that would have expanded capacity in Milwaukee,
tied to cost reductions and improved manufacturing flexibility.
The Company said that the jobs of current Milwaukee production
workers are not at risk in the plan to build a new plant elsewhere
in the U.S.
In keeping with its normal practice, Harley-Davidson had advised
its international and local unions of the need to add capacity
and to do so in a way that would significantly reduce future
costs and improve flexibility. The USW subsequently asked the
Company to identify the specific wage, benefit and work rule
changes that would be needed to keep the expansion in Milwaukee,
so that it could consider whether to seek the additional work.
Among other things, those wage and benefit changes would have
included a reduced wage rate for new union workforce hires, and
migrating union employees to a health care plan that achieves
cost savings while still providing a premium level of service.
"We're disappointed with the vote but we need to address
capacity, cost and flexibility in tandem," said Rod Copes,
Vice President and General Manager of Harley-Davidson's Pilgrim
Road Powertrain Operations in Menomonee Falls. "The proposal
the union voted on would have made expansion here comparable
to what we can achieve in a new unionized plant in some other
part of the U.S."
"Harley-Davidson is very successful today and all of us
want to keep it that way. That means being good stewards and
actively managing costs across the entire organization that could
be detrimental to our business over the long term if we don't
start to control them now," said Copes.
The Company and representatives from the international unions
will now work together to find the best possible U.S. location
for the new engine and transmission plant.
In the last 10 years, the Company's annual shipments of models
containing Big Twin engines have nearly tripled. The last significant
investment in V-Twin production in the Milwaukee area was $175
million between 2004 and 2006. In July 2006, Harley-Davidson
introduced the newest generation Big Twin engine - the Twin Cam
96 - to enthusiastic consumer and dealer response.
The Company currently has powertrain manufacturing operations
at Wauwatosa, and Menomonee Falls, Wis. and Kansas City, Mo.;
final assembly operations at York, Pa. and Kansas City Mo.; and
components manufacturing at Tomahawk, Wis.
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