Union workers at Harley-Davidson’s Kansas City plant on Monday approved a new labor agreement that will help the company implement a new production system.
The new labor agreement is for seven years and replaces one that was set to expire in July 2012.
The Kansas City plant has 685 full-time hourly unionized employees but will probably be reduced to 540 positions. The company expects to add 145 flexible positions that will be filled by union members, but they will work only as required to cover increased production or to fill in for other employees on vacations and other absences.
The motorcycle company had said that without a revamped contract, the Kansas City operation could be moved to a plant in York, Pa. Negotiators reached the agreement last week, and the rank and file voted on it Monday.
The agreement includes concessions that Harley has said were necessary to keep the work here and are similar to what the company has already won at plants in Milwaukee and Tomahawk, Wis.
The concessions at the Kansas City facility are expected to provide $15 million in annual savings when fully implemented.
“Together with our unions, Harley-Davidson is making the necessary changes across all our production facilities to succeed in a competitive, global marketplace,” said Keith Wandell, president and chief executive of Harley-Davidson Inc. “I want to thank our employees at Kansas City for their participation in this journey.”
The agreement with employees represented by the International Association of Machinists Local 176 and the United Steelworkers Local 760 takes effect Aug. 1, and will be implemented in phases.
Union officials could not be reached for comment Monday.
When the negotiations began Jan. 26, officials for Machinists Local 176 said the company was seeking about $25 million in annual cost savings at the Kansas City plant.
Local 176 represents most of the plant’s union workers, but Steelworkers Local 760 members also work there.
Harley said Monday that the new contract will give it more flexibility to handle seasonal changes in demand for its motorcycles and more ability to vary the product mix to handle requests for customization of motorcycles.
The 358,000-square-foot Harley plant near Kansas City International Airport was built in 1998 and produces the Sportster, Dyna and VRSC families of motorcycles.
Harley lost $46.8 million in the fourth quarter last year but for all of 2010 posted a profit of $146.5 million.
To reach Steve Everly, call 816-234-4455 or send e-mail to severly@kcstar.com.