Local union presidents say Harley is ‘out of touch’ with Milwaukee, Tomahawk workers

Talks continuing through April 14

Harley-Davidson headquarters
Harley-Davidson Inc.'s headquarters in Milwaukee.

The presidents of two United Steelworker locals that last week rejected contract offers from Harley-Davidson say the company is “out of touch with the workers at the plants in Milwaukee and Tomahawk.”

In a letter posted to the USW Local 2-209 Facebook page, Mark Eilers and Darrin Ernst say the company has made contract negotiations “an economic issue only.”

Harley-Davidson headquarters
Harley-Davidson Inc.’s headquarters in Milwaukee.

Eilers, president of USW Local 2-209, and Ernst, president of USW Local 460, pointed to the use of casual workers, surge production, work being moved out of the plants and the treatment of seniority as other issues the unions would like to address in the next contract.

“A fair contract doesn’t always equate to raises. We are fighting to keep family sustaining jobs with benefits within our communities,” Eilers and Ernst wrote.

Members of the two USW locals voted April 1 to reject a five-year contract offer from Harley, although both sides agreed to extend the current deal through April 14 to continue negotiations.

In a statement following the vote last week, Michelle Kumbier, chief operating officer for Harley-Davidson Motor Co., said the company was “disappointed with the decision.”

Asked about the post, a spokesman for the United Steelworkers pointed to the union’s statement after the vote last week and said talks are continuing through April 14.

Harley said last week its contract offer includes a 14% wage increase over the life of the deal, an average annual increase of 2.8 percent. The average wage for current, regular full-time bargaining unit employees in Milwaukee would be $33 per hour in the Milwaukee area and $25 per hour in Tomahawk in the first year of the contract. The deal also included a $2,250 signing bonus, no changes to health care, two variable incentive plans, pension enhancements for current employees and a retirement incentive for those eligible for retirement.

Companywide, the median total compensation at Harley decreased from $77,958 in 2017 to $74,359 in 2018, according to securities filings.

“A raise would be nice after not having one in 7 years,” Eilers and Ernst wrote in their letter, adding that the pension changes would be beneficial but new employees would not be able to participate.

The duo also says the union is seeking changes to the company’s use of casual or temporary workers. They say some employees have worked in plants as long as seven years at a lower wage with no benefits and “no real path to become a regular full-time employee.”

In an email, Harley spokeswoman Patricia Sweeney said no casual workers have been at any Wisconsin plant for seven years. She added the positions do receive health care benefits and said there is a path to full-time employment, noting 20 had made such a transition at Tomahawk in the last 12 months.

Eilers and Ernst also criticize the use of surge manufacturing, which ramps up production by 50% from January to June with hundreds of casual workers supplementing the regular workforce.

“The result of this production model results in temporary layoffs in the 4th quarter for regular employees, in some years the layoff was weeks long,” the local presidents wrote.

In its securities filings, Harley says the use of surge production, which started in 2013, provides the flexibility to align production and wholesale shipments with retail demand, reducing the impact of seasonality on inventory levels in the U.S. and Canada. The company also says the program allows it to respond to changes in demand for specific models.

“We employ casual workers to enable us to efficiently staff during times of peak motorcycle demand while managing our cost structure to remain globally competitive,” Sweeney said. “This enables us to effectively manage the seasonality of our business and it’s a practice we’ve had in place for the past seven years.”

She said the 2019 surge program included the hiring of 68 casual workers at the company’s Pilgrim Road plant and 37 in Tomahawk. The contract Harley proposed would pay casual workers $17.64 per hour at Pilgrim Road in the first year and $19.28 per hour by the final year of the deal.

In its statement last week about the contract offer, Harley also said it was not proposing any changes to health care benefits for the coming year. Eilers and Ernst, however, said the offer would allow the company to change any part of the health care benefit on an annual basis.

“This creates financial uncertainty for employees as the company has made changes over the term of the current contract,” they wrote. “Any increase in contributions could easily negate any proposed increase in wages.”

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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