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Harley's cuts spark Wisconsin political debate
Published April 29, 2010 - BizTimes Daily
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Harley Davidson Inc.'s announcement that it will cut costs and possibly jobs at its Wisconsin operations quickly became an issue in the state's gubernatorial race today.
The Milwaukee-based company said it is seeking additional cost savings at its facilities on Pilgrim Road in Menomonee Falls and in Tomahawk in northern Wisconsin.
The company held meetings with employees at its powertrain facilities in Milwaukee and Menomonee Falls and in Tomahawk today, and told workers that the firm needs to reduce labor costs and improve operational flexibility, said company spokesman Bob Klein.
"Earlier this year, we began a competitive gap analysis of the Pilgrim Road and Tomahawk facilities," Klein said. "We've identified gaps in the competitiveness of the operations that we need to address to go forward to create a cost-competitive and flexible structure across all of our operations."
Harley Davidson is consolidating its Capitol Drive powertrain manufacturing facility into its Pilgrim Road plant. The two facilities now have more than 1,300 employees. There will be workforce reductions because of the consolidation, Klein said.
Harley’s injection molding facility in Tomahawk employs about 375 workers.
The company has not yet determined if it will seek to eliminate jobs, ask its unionized workforce for wage concessions or both. Harley-Davidson wants to maintain its operations in Wisconsin, Klein said, but will likely begin talks with other states.
“Our preference is to find a way to close these gaps. We want to keep our operations in Wisconsin,” Klein said. “But we will explore other U.S. sites, should we be unable to achieve other workable solutions to keep those here.”
Harley Davidson expects to have a final determination on its cost savings strategy by this fall, Klein said.
“We’re just starting to have conversations with our employees on how this might pan out,” he said.
Three of the candidates in Wisconsin’s gubernatorial race wasted no time today in releasing statements about the potential of job losses at Harley Davidson.
“I want to reassure Harley and ask that they please wait on making a decision - because as governor, my highest priority will be keeping good jobs like those at Harley right here in Wisconsin and creating new jobs across the state,” said Republican candidate Mark Neumann.
Milwaukee Mayor and Democratic candidate Tom Barrett commended Harley’s early communications with its employees about the potential changes and also pledged to work with the company to keep jobs in Wisconsin.
“Working with the company’s management and employees, I will do everything I can to ensure Harley Davidson remains a proud Wisconsin company for generations to come,” Barrett said.
Milwaukee County Executive and Republican candidate Scott Walker criticized outgoing Gov. Jim Doyle and Barrett.
"As governor, I will fight to lower the cost of doing business so we can bring 250,000 jobs to Wisconsin," Walker said. "Jim Doyle and Tom Barrett want to give tax breaks to Spanish manufacturers at the same time their failed policies are driving jobs and employers out of the state."
Some Republican legislature blamed Harley's announcement on a combined reporting law that was approved by state Democrats in 2009.
“We could see the writing on the wall last year when the Democrats raised taxes and fees by nearly $5 billion. One of those measures socked Harley with a $22.5 million tax increase,” said Sen. Scott Fitzgerald (R-Juneau). “At a time of recession when businesses are struggling to stay afloat and keep their employees, the last thing that government should be doing is layering on burdensome taxes and regulations. It’s a job-killing recipe. The results are being clearly demonstrated today.”
State Rep. Leah Vukmir (R-Wauwatosa) today called for a special session of the legislature to repeal the state's combined reporting tax.
"There can no longer be any doubt that the Democrat’s combined reporting tax has created a significant burden on Harley Davidson and other Wisconsin employers. Shortly after this tax was passed in 2009, Harley Davidson was forced to pay the state an additional $22.5 million in taxes and lay off another 400 employees," Vukmir said. "Today, Harley executives made it clear that they need to reduce their Wisconsin operating costs or they may be forced to shut down even more of their operations here. The legislature must act now to eliminate this job-killing tax or we run the risk of permanently losing even more jobs and a company that made Milwaukee famous."
