Determined to slash manufacturing costs, Harley-Davidson Inc. says its Wisconsin factories could be in jeopardy if belt-tightening measures aren't successful.

Would the iconic company really stop making "Milwaukee Iron" in factories not far from the shed where Bill Harley and Arthur Davidson built their first motorcycles in 1903?


Quote from the article:

Thursday, Harley executives said there were significant "cost gaps" that must be filled at the plants in Menomonee Falls and Tomahawk that, combined, employ more than 1,400 people. Employees were told that Harley wants to slash $54 million a year in costs from its manufacturing here. "Our preference is to keep the production operations in Wisconsin, but as part of due diligence we will also explore alternate U.S. sites" if necessary, company spokesman Bob Klein told the Journal Sentinel. Union officials worry that Harley is following the same strategy it used last year in York, Pa., where about half of the production employees lost their jobs as the result of cost reductions. Under duress, the International Association of Machinists accepted a seven-year contract in York that eliminated nearly 1,000 jobs but kept the York factory from being moved to Kentucky. Since January 2009, Harley has announced the closing of two factories and a distribution center. The company also has announced cuts totaling about 25% of its workforce - at least 2,700 hourly workers and 840 administrative employees. The restructuring has come as sales and profits have plummeted. As recently as 2006, Harley had a profit of $1 billion, compared with a $55 million loss in 2009. In Wisconsin, "We are looking at labor costs and operational flexibility as some of the key areas where cost gaps exist," Klein said. The company's contract with its largest union here, the United Steelworkers, expires March 31, 2012. Management has not asked to reopen the contract, but union members say they could be asked to accept concessions or face plant closures and the loss of work to nonunion plants. "If you look at the York contract, the company went after health care benefits and work rule changes. It was a pretty crappy deal," said Mike Masik, president of Steelworkers Local 2-209 in Milwaukee.

Harley says it must cut $54 million in local manufacturing costs; May leave Milwaukee

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