Harley-Davidson workers in Wisconsin voted Monday by a relatively narrow margin to accept an extraordinarily painful package of concessions in order to prevent the Milwaukee-based motorcycle manufacturer from roaring off with some 1,400 jobs. Concessions include a seven-year wage freeze coupled with job losses and a host of other cutbacks reducing benefits.
The new contract will sap local purchasing power and exert a downward pull on wages in the economically-struggling Milwaukee area — but area media tended to portray the workers’ concessions as if they were part of a painful medical operation necessary for the company’s survival.
Harley’s survival, however, was never in peril, contrary to the alarmism conveyed by the gullible local media. They never closely examined Harley’s demands on the workers.
Far from being on its deathbed, Harley has earned $104 million in profits thus far in 2010. It was recently the focus of a New York Times article noting how many corporations have managed to enjoy healthy profits despite the enduring economic downturn. This corporate strategy has produced strong profits while holding down hiring and prolonging the recession.
Much of the media attention was devoted to the fact that Harley suffered $54 million in losses in 2009, but that was “a strategic choice resulting from a $126 million write-down for discontinued operation,” pointed out Jack Norman of the Institute for Wisconsin’s Future. Before 2009, Harley’s balance sheet showed 15 consecutive years of at least $100 million in profits.
BONUSES FOR CEO
Moreover, Harley was healthy enough to provide massive bonuses to its CEO, Norman noted. Harley paid out “over $15 million in bonuses the past two years to the CEO of a company that cries ‘crisis’ to justify lower wages and benefits for production workers.”
The new contract means losses of at least 200 workers from its Milwaukee suburban plants and another 75 from its plant in Tomahawk, Wis., located in the state’s north-central region. However, union leaders reportedly warned their members that the job losses could run even higher.
The corporation’s position was intractable from the start: the workers must accept job losses and $54 million in concessions, or Harley would relocate production jobs.
One veteran labor observer told Working In These Times that the seven-year wage freeze will shut workers out of Harley’s gains when the economy eventually picks up. The corporation claims that it will increase wages if individual plants meets productivity goals, but union members remain skeptical.
“The big sticking point for many workers is that if the company starts going gangbusters, there is no way for the workers to recapture their share of the gains,” he stated. “The workers had no question about the need to make some sacrifices, but there is no clear way for them to get their fair share of the profits.”
The community as a whole will suffer from the loss of purchasing power and a further downward drag on wages, noted Michael Rosen, an economist at Milwaukee Area Technical College and the president of American Federation of Teachers Local 212:
Now when good times return, and Harley makes even greater profits, the Milwaukee community will suffer…
The workers are between a rock and a hard place. If they vote ‘no’ on the contract, they get blamed for Harley-Davidson leaving. And if they say ‘yes’ to it, they are essentially participating in undermining family-supporting jobs in the community.
CONTINGENT WORKERS AT HALF PAY, UNREPRESENTED
One of the contract’s provisions that was most difficult to swallow was the company’s demand that it be allowed to bring in up to 200 contingent workers who would not be represented by any union and would be paid only $16 to $17 an hour, a bit more than half the $30.50 hourly average wage. (In previous pieces on the Harley negotiations, I previously reported incorrect information on wages, drawn from the usually reliable CEO PayWatch website.)
Members of the United Steelworkers Local 2-209, Machinists Lodge 78, reluctantly accepted what IAM assistant director Scott Parr called a “miserable agreement.” The Steelworkers vote in the Milwaukee area was 607 to 519, and 218 to 80 in Tomahawk. The IAM vote was not announced as of late Monday evening.
SAME GAME PLAN
Harley followed much the same game plan as Mercury Marine did last year in Fond du Lac. It created a media storm with reports of financial crisis and followed it up with threats of closing the local plant and cutting more than 1,000 jobs.
With local media wholeheartedly buying the company’s story without examining it, the workers faced enormous pressure to accept a vast set of regressive changes in their pay and other contract provisions. To seal the deal, the state of Wisconsin chipped in some subsidies despite Mercury Marine’s record of avoiding state corporate income taxes.
Similarly, the state is presenting Harley with what Democratic Gov. Jim Doyle called a “very competitive package.” Blackmail of this kind produces easy victories for Corporate America when labor lacks an effective strategy to win the public over to its side against corporate greed.
LABOR NEEDS MEDIA STRATEGY TO BUILD COMMUNITY ALLIES
While the unions at Harley were earnestly working to come up with the best possible agreement and avoiding the news media, the corporation was busy using it to manipulate the public in favor of massive concessions to “save Harley.”
Until labor develops pro-active coalition-building and media strategies against plant closings long before they are threatened, corporations will keep on securing unjustifiable concessions.
Companies like Mercury Marine and Harley are arrogant bullies who will continue keep the full-court pressure on until we force them to stop by exposing their greed to the public.