Harley-Davidson is considering relocating its 2,300-worker motorcycle plant from York County, Pa., to Shelbyville to save money, company spokesman Bob Klein said Thursday.
Harley-Davidson is also considering Murfreesboro, Tenn., Kansas City, Kansas and Shelbyville, Ind., southeast of Indianapolis, Klein said.
The cost of managing an antiquated 235-acre site with 42 buildings, as well as unwieldy work rules, low productivity and problems with absenteeism have gotten too high, Klein said.
“We are very focused on making the tough decisions relative to the York operations,” Klein said.
While Harley-Davidson sales have declined along with the recession, Klein added “the fundamentals of the brand are strong” and the company is focused on strengthening the operation.
Threats to relocate from the historic Pennsylvania location amount to sabre-rattling as the plant's 2,035-person union work force approaches the expiration of a three-year labor agreement in February, said Tom Santone, business representative of Local Lodge 175 of the Machinist's union.
“There is no doubt the company is structuring itself for these upcoming negotiations,” Santone said. “It all leads to that. We are trying to see what we can do to restructure to keep the company here.”
Union workers assemble Harley-Davidson Softail and touring motorcycles in two plants in York County and earn roughly $23 per hour. A two-tier wage system, with lower earnings for entry level employees was instituted in the wake of a two-week strike at the York plants in 2007.
Pennsylvania is assembling a package of economic incentives, including $15 million to renovate the York plant, and funding for worker training, Michael Smith, a spokesman for Pennsylvania Gov. Ed Rendell, said in an interview Thursday.
“This is going to require everyone's cooperation,” Smith said of efforts to save the York region's largest employer. A labor management committee has been working on cost-cutting strategies since May, when Harley-Davidson first announced it was considering relocation, company and union officials said.
In talks with Pennsylvania officials, Harley managers have said “they are considering leaving Pennsylvania because of high operating costs and inefficiencies that are too great to make the company competitive,” Theresa Elliott, a spokesperson for the Pa. Dept. of Community and Economic Development said in an interview Thursday.
Harley Davidson currently operates a factory in Kansas City. Two engine and transmission facilities near company headquarters in Milwaukee, Wisc., are being consolidated into one, Klein added.
Libby Adams, executive director of the Shelby County Industrial Foundation, the county's economic development agency, declined to comment.
Reporter Jere Downs can be reached at (502) 582-4669.