Independent Student Newspaper Since 1969

The Badger Herald

Independent Student Newspaper Since 1969

The Badger Herald

Independent Student Newspaper Since 1969

The Badger Herald

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Harley-Davidson hogs the profits, milks a tax credit

An 800 pound metal hog between your legs, though probably thrilling, isn’t practical for the average American during a time of recession. Milwaukee based motorcycle company, Harley-Davidson, is realizing this, and the 20% decrease in revenue they saw during the first quarter of this year proves it. Due to declining sales and competition from other motorcycle companies, Harley executives said that if the company could not cut $50 million in costs, operations would move elsewhere, a potentially staggering blow to Wisconsin.

With bikes ranging in price from $8,000 to $35,000, a Harley falls into the category of luxury. Like many other industries in this category that are fighting the uphill battle to be successful in a struggling economy, Harley had to assess its business situation and find a solution. Unfortunately, it appears that the employees of Wisconsin’s Harley Davidson factories are the ones that will have to shoulder the burden.

What if your employer told you that, in order to keep your job, you must agree to lower wages and fewer hours or the company would relocate to a different state entirely? This was the situation presented to Harley Davidson workers in Menomonee Falls and Tomahawk. If the company could not decrease its operation costs, then Wisconsin could say goodbye to an industry that has been thriving here since 1903. Sounds like an extreme ultimatum to me.

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To keep Harley in the state, the company agreed to a new seven-year labor agreement in which 1,350 workers will retain their jobs, but approximately 300 will be let go. The remaining employed will have to settle for lower wages and fewer benefits. I guess in this economy a lower paying job is better than no job at all.

The intriguing part of this whole situation is that Harley seems to be milking their economic struggles for all that they’re worth at the expense of their employees. Although they are claiming they desperately need to cut costs due to first quarter losses, in a press release distributed by Harley-Davidson in July, the company reported that during the second quarter of this year their motorcycle revenue was $831.6 million, a 2.8% increase from the same time a year before.

There are several things to consider here. Fact: The demand for motorcycles in this country is not booming. Fact: Harley-Davidson struggled financially over the past year. Fact: So did everybody else. Fact: It is a low move to play on the loyalty and financial desperation of your employees, who would rather take a cut in pay than lose their jobs entirely.

Talk about playing hard ball. While I cannot argue with the fact that keeping Harley in Wisconsin will keep hundreds of people in work and that it is a significant industry in this state, I find it hard to swallow that such an iconic company would strong-arm its employees into settling for less than what they deserve. Although the company is being faced with a gloomy sales outlook, hurting employees is not the way to fix the bottom line.

To top it all off, Governor Doyle said that it would offer the company, “a strong $25 million incentive package to stay in Wisconsin.” It seems that by threatening to leave the state, executives of Harley-Davidson strategically placed themselves into a position of power and finagled $25 million in tax credits and a decrease in monies paid to the people who keep the company going. For all we know, the threat was unsubstantiated, a mere bluff in the game that is big business. Let us hope that this isn’t the case and that Harley-Davison stays true to its Wisconsin roots. The company’s employees deserve it.

Chelsea Lawliss ([email protected]) is a junior majoring in journalism and political science.

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