There was no much doubt that Harley would win concessions from workers at its Kansas City Plant. A couple of hours ago, this Monday February 28, 2011, Harley-Davidson officially confirmed that following a vote by the plant’s unionized employees ratifying a new seven-year labor, it will move forward with the implementation of a new production system at its Kansas City, Mo. vehicle operations. The new operating structure includes the use of flexible workers — unionized employees – who work as required, depending on seasonal and other volume needs and will provide coverage for vacations and other absences. Harley-Davidson expects 540 full-time hourly unionized employees at the Kansas City facility, compared to about 685 today.
Harley-Davidson’s new production system is expected to provide greater flexibility for seasonal and other volume-related production changes, an enhanced ability to vary product mix in line with customer preferences including the customization of motorcycles at the factory, and greater production efficiency overall. Similar agreements were ratified by employees at the Company’s operations in York, Pa. in December 2009 and in Milwaukee and Tomahawk, Wis. in September 2010. The changes at Kansas City are expected to generate annual operating savings of approximately $15 million in 2013, the first full year in which the agreement is fully implemented. The Company expects to incur approximately $15 million in additional restructuring charges through 2012 related to the changes at Kansas City.
“Together with our unions, Harley-Davidson is making the necessary changes across all our production facilities to succeed in a competitive, global marketplace,” said Keith Wandell, President and Chief Executive Officer of Harley-Davidson, Inc. “The Company is well on its way to building a world-class, sustainable, lean operating structure and I want to thank our employees at Kansas City for their participation in this journey. The ratification of the new contract will help ensure that we can continue to meet and exceed the expectations of our customers.”