Our View: Harley a microcosm of labor pains
This eas found on: wausaudailyherald.com
As if we needed another reminder about the role that Harley-Davidson Inc. plays in the state's economy -- and in many ways its culture, too -- this weekend, thousands of Harley riders from all over the nation rumbled their way across northern Wisconsin for Tomahawk's annual Fall Ride.
Just days before, the company's employee unions in Milwaukee and Tomahawk ratified new seven-year labor agreements, to take effect in April 2012 after current contracts expire. And the company, which had been making noises about possibly relocating outside of Wisconsin, announced soon after the votes that it will stay here.
That's good news for Wisconsin's economy. But it's worth noting that it came at a significant price -- for all involved. Harley-Davidson is restructuring not just the workers' contracts but its company, with plans to cut about 250 jobs in Milwaukee and 75 of the 275 full-time union jobs in Tomahawk.
The state Department of Commerce, too, shelled out a significant amount of aid and incentives to keep the company here. By keeping jobs in Wisconsin, that's clearly tax money well-spent. But it's not cost-free.
This is not a situation where there is a simple good guy or bad guy. Harley is under intense pressure as a result of the recession, last year reporting a $55 million loss, mostly the result of a finance arm in the company that was thrown into disarray by the recession. Retail motorcycle sales have fallen precipitously in the U.S. this year. But the company also reported profits of $71.2 million in the second quarter of this year.
This has led some to conclude that the company's claims that it could go under were overblown. At the same time, though, with sales falling, it is the company's job to look to its long-term health.
According to reports, the weighted average wage for unions under the agreement would be a respectable $24.73 an hour. These are exactly the sort of good-paying manufacturing jobs that are manifestly in decline -- and which remain vital to our economy.
It is a difficult reality that in order for these jobs to continue to exist, the companies that created them will need to be flexible, and will need to undergo some amount of restructuring.
To their credit, Harley's employees seem sanguine about these realities. In Tomahawk, workers approved the new contract by a nearly 3-to-1 margin. Local union president Frank Garrou said his view of the jobs is "once they're gone, they're gone."
This might not be true forever -- job growth can come from unexpected places -- but the long-term trajectory of U.S. manufacturing jobs is unmistakable. It makes the stakes of negotiations like these dizzyingly high, and we likely haven't seen the last of them.