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York County wins 450 jobs as Harley-Davidson moves Kansas City work to Springettsbury

Written by Abbey Zelko and Rick Barrett/The York Daily Record | Jan 30, 2018 6:44 PM
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Scott Whitfield rode up from Germantown, Maryland, for the Harley-Davidson open house on Thursday. (Photo: Jason Plotkin, York Daily Record)

(York) -- Harley-Davidson has some good news for York County.

The company will bring about 450 full-time, casual and contractor positions to Springettsbury Township over the next year and a half as it shifts all of its Kansas City, Mo., production to its Springettsbury Township plant.

But that is bad news for Kansas City as the company will close its plant there in mid- to late 2019, eliminating about 800 jobs.

This consolidation of manufacturing operations comes as Harley sales fell sharply in 2017, the Milwaukee Journal Sentinel reported.

This is a remarkable shift for York County.

In August 2016, the company eliminated 117 Springettsbury Township positions.

And in April 2017, Harley reported it would cut 118 jobs in Springettsbury Township and moving them to Kansas City, where it consolidated production of its Softail motorcycles.

Currently, Harley has about 930 employees in Springettsbury Township, down from about 2,000 hourly workers in 2009.

Plans are underway to expand the York County plant, which will produce all Harley models, including the Softail, Sportster and Street motorcycles currently made in Kansas City, according to spokeswoman Bernadette Lauer. Construction will begin this year.

More details about the expansion will be shared at a later time, she said.

Hiring will begin mid-year through the next 17 months. The plant will continue to do the same work it does now -- fabrication, paint and assembly, Lauer said.

Harley expects restructuring and other consolidation costs of $170 million to $200 million over the next two years.

It expects ongoing annual cash savings of $65 million to $75 million after 2020.

"The decision to consolidate our final assembly plants was made after very careful consideration of our manufacturing footprint and the appropriate capacity given the current business environment. Our Kansas City assembly operations will leave a legacy of safety, quality, collaboration and manufacturing leadership," said Matt Levatich, president and CEO.

Levatich did not make any mention of the company's Wisconsin operations, including its large manufacturing plant in Menomonee Falls and a smaller plant in Tomahawk. 

The announcement came as a "complete surprise" to employees in Kansas City, the majority of whom are represented by one of two unions, the Kansas City Star reported.

The international president of the Machinists Union, which represents 572 members at the affected Harley-Davidson and Syncreon plants in Kansas City, said in a statement that Harley's executive leadership team is letting the company's foundation crumble.

"Hundreds of working families are now wondering what their future holds because of this self-proclaimed American icon's insistence on shipping our jobs to Asia and South America," Robert Martinez Jr. said. "I'm sick of seeing our jobs disappear or turn into part-time work. We hope investors and policy-makers join our call to finally bring our jobs home."

A spokesperson for Harley-Davidson, Michael Pflughoeft, said in a statement that it's "simply not true" that jobs are being shipped overseas to Asia and South America. Pflughoeft said that jobs were being moved from one U.S. factory to another. 

"Yes, we're closing KC, but adding jobs at York," Pflughoeft said. "We're committed to US manufacturing and growing riders today and in the future."

Harley and other makers of cruiser and touring motorcycles have seen their sales tumble as the economy has weakened in some areas and interest in motorcycling, overall, hasn't been as strong.

Harley-Davidson worldwide retail motorcycle sales fell 6.7% in 2017 compared to 2016. The company's U.S. sales fell 8.5% and international sales were down 3.9%.

"For years, the North American heavyweight motorcycle industry grew at double-digit rates due to low interest rates, a strong economy, a rising stock market and ... the baby boomers. However in recent years, and going forward, we expect a much slower growth pattern for the U.S. motorcycle industry," said analyst Robin Diedrich with Edward Jones Co.

"As safety becomes a concern for aging baby boomers, domestic sales for the heavyweight motorcycle industry should slow. We expect certain international markets, particularly in Asia and South America, to have higher growth rates in heavyweight motorcycles than the U.S.," Diedrich said.

Harley's foreign competitors have benefited from a strong U.S. dollar, as their overseas operations have made it more profitable to sell bikes in the U.S. at lower prices.

In some cases, Diedrich said, prices of Japanese motorcycles have come down 25% and discounts ranged up to $3,000 per bike.

"Harley is seeing significant pricing pressure, hurting profitability and sales," she said.

This story comes to us through a partnership between WITF and The York Daily Record

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