Labor unions end partnership agreement with Harley-Davidson

Two labor unions that represent most of the production employees at Harley-Davidson Inc. say they’ve terminated an agreement with the company that had fostered collaboration and joint decisions on a wide range of issues.

The United Steelworkers and the International Association of Machinists and Aerospace Workers say ending the agreement, which was in place for 22 years, sends a message that relations with Milwaukee-based Harley have soured.

“It has become apparent to me that for the last seven years Harley-Davidson has been, and continues to, systematically dismantle its hourly workforce through various means,” said Robert Martinez Jr., president of the International Association of Machinists and Aerospace Workers.

Employees are still covered under the current union contracts, and nothing in those contracts has changed, yet the written collaboration agreement was important, according to Martinez.

“It worked well for many years. But Harley-Davidson has changed their direction on the way they’ve communicated with, and dealt with, our leadership teams in the plants,” he said.

"Harley would just unilaterally make decisions on what they were going to do," without the unions' endorsement, he added.

Harley-Davidson spokeswoman Patricia Sweeney said the unions' decision to pull out of the agreement won't change the company's approach to dealing with workplace issues.

"We will continue to work very closely with (the unions) to resolve issues, to address challenges, and to make improvements that are really important in helping move the business forward. And just as importantly we remain committed to working with the international union leadership as well," Sweeney said.

In May, Harley-Davidson upset the unions when it announced plans to operate a motorcycle assembly plant in Thailand.

The company said the plant, scheduled to open in 2018, wouldn’t result in any U.S. job losses and that it would assemble bikes from components produced at U.S. facilities.

However, union officials argued it would take work from the United States and that it was one of multiple steps the company had taken to weaken its unionized workforce.

"Building motorcycles abroad is a slap in the face to every one of our members. We find it appalling that the company continues to dismantle what we built up for all these years," Martinez said.

The Thailand plant is necessary, Sweeney said, as Asia is one of Harley's fastest-growing markets and the Thailand tariff on motorcycles assembled in the U.S. is about 60%.

The growth overseas comes as the U.S. motorcycle market has been in sharp decline, and analysts say the outlook isn't very promising.

"We have been working very hard to reverse the declining trend, but we have also had to make difficult adjustments that impact many employees in the U.S.," Sweeney said about layoffs and furloughs at the plants here.

Union officials cited job losses and the use of seasonal, temporary employees in the motorcycle factories as two of their top concerns.

“When we had 2,000 members in York, Pa., in 2010, and today there are only 600, there’s a problem,” Martinez said.

Temporary furloughs are expected at the plants this fall, including the Menomonee Falls factory that employs about 1,000 production workers. The company also is eliminating about 180 production jobs, with the Menomonee Falls and Kansas City locations expected to be hit the hardest.

"Certainly it's been tough on our union employees, given the number of layoffs that we've had and down days. And we recognize that has had a significant personal and financial impact on them," Sweeney said.

The company needs to grow its way out of the slump, according to Sweeney.

"We believe that if we can bring new riders into the sport, here in the U.S. and internationally, that is going to result in company growth. And that growth is the only path to reverse the conditions we have been facing over the last couple of years," she said.

Union leaders said they met with Harley-Davidson CEO Matt Levatich on Monday.

Levatich agreed to work with them to resolve staffing issues, according to the unions.

"I guess we will just have to wait and see what happens and what he means," said Steelworkers spokesman Wayne Ranick.

"Things aren't working like they have in the past. ... This partnership has broken down," Ranick said.

Until now, union leaders said, the partnership was helpful in settling workplace issues that otherwise could have escalated.

"The intent was to be interactive, and not just in solving problems but also in things like production improvements and to really encourage people to step up and talk about how to make things better," Ranick said.

The unions say they’re willing to reinstate the agreement if the company addresses issues such as job security.

"Both unions strongly believe that seniority has to count for something when it comes to job security, instead of leaving it to management discretion alone," Martinez said.

The use of temporary, seasonal employees also needs to be resolved, according to union leaders.

"There is no way I will put this agreement back in place until then," Martinez said.