Harley-Davidson has announced that its employees have agreed to a new labor agreement with the company. The workers who work for Harley-Davidson’s motorcycle assembly operations are represented by International Association of Machinists and Aerospace Workers (IAM) Local 175.
The new agreement covers as much as 970 employees at the Harley-Davidson manufacturing operations in York, Pa. Moreover, the said agreement will succeed the current agreement originally set to expire on February 2017. The new agreement will be made effective on February 1, 2016 until October 15, 2022. Meanwhile, Harley-Davidson seems to be satisfied with the new agreement.
According to Harley-Davidson Senior Vice President for Motor Company Product and Operations Michelle Kumbier, “We believe the new contract is competitive while continuing to provide a stable production environment as we focus on managing the business for long-term success.” The said new agreement includes wage increases during each year of the contract while maintaining Harley-Davidson’s flexible manufacturing model.
Last month, the company reported that its sales for dealer new motorcycles had been down by 1.4 percent during the third quarter. In response, Harley-Davidson said it will be “reallocating existing spending.” This includes making some organizational restructuring, which will lead to some employee separation. For this, the company had been expecting to incur a one-time expense amounting to around $30 to $35 million during the fourth quarter of this year.
Meanwhile, Harley-Davidson plans to increase its investment in customer-facing marketing by as much as 65 percent next year. At the same time, 35-percent more investment will also be allotted to new product development. This will mean that the company will have as much as $70 million increase in investments compared to this year.