- The Washington Times - Friday, February 9, 2007

A strike at Harley-Davidson Inc.’s manufacturing and assembly plant in York, Pa., has entered its second week, with no new talks scheduled between management and the workers’ union, the union said yesterday.

Harley-Davidson says the strike at its largest assembly plant will cause it to miss a first-quarter target of shipping as many as 84,000 motorcycles.

As a result of the strike, the company says it has reduced production of engines, transmissions and other components at facilities in Menomonee Falls and Tomahawk, Wis.

Layoffs could begin as soon as Monday at some facilities, the Milwaukee company says.

First-quarter shipments likely will be at least 5,500 short because of the strike, Banc of America Securities analyst Michael Savner wrote in a research note.

The loss in revenue from the strike could cost the company up to $11 million a day, said Tim Conder, a leisure analyst with AG Edwards & Sons.

Almost 2,800 workers at the York facility last week voted to walk off the job Feb. 2 after rejecting a contract offer from the company that would have reduced pay rates for new hires, required employees to pay part of their health insurance premiums and forced pension concessions.

The International Association of Machinists and Aerospace Workers, the union representing the York workers, calls the work-stoppage a “lockout” because it says the company barred employees from entering the plant before the strike was to begin.

Two days of negotiations between the company and the union ended Wednesday with no resolution, union and company spokesmen said.

About 450 nonunion employees in York continue to work, the company says.

The York facility primarily manufactures Harley-Davidson’s Touring and Softail model motorcycles.

Some analysts predict the strike won’t last much longer.

“The strike could continue another two weeks and still allow Harley to make up for lost production later in 2007,” Robin Farley, a New York-based analyst for UBS Securities, wrote yesterday in a note to investors. She estimated quarterly earnings would be reduced by 1 cent a share for each day of the strike.

In November, 1,600 union workers in the Milwaukee area approved contract concessions that Harley-Davidson demanded to proceed with a $120 million plant expansion. Members of United Steelworkers of America initially rejected the proposals, which included lower wages for new employees and a decrease in health insurance, pensions and cost-of-living adjustments for all workers.

Shares of Harley-Davidson fell $1.56, or 2.25 percent, to close at $67.80 on the New York Stock Exchange.

This article was based in part on wire service reports.

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