Harley to Slim Down, Stay

Harley-Davidson Inc. announced last week that it will keep its motorcycle plant in York after considering moving operations to other states to save on costs.

The Milwaukee-based motorcycle manufacturer decided to remain in York after union workers agreed to revised labor contracts and Pennsylvania announced $15 million of incentives to help keep Harley, and its jobs, in the state.

The $15 million will come from the state’s general fund and will help finance capital improvements and training, according to a Harley press release.

To reduce operating expenses, the company will cut its workforce to 1,000 hourly employees from 1,950. Salaried positions will drop to 150 workers from 270. The York plant will then consolidate under one roof and narrow its operations to motorcycle assembly, metal fabrication, and paint.

The changes will generate $100 million of annual operating savings for Harley beginning in 2012. The company will spend nearly $200 million from now until 2012 to finance restructuring costs.

Gov. Edward Rendell courted Harley for months to persuade it to remain in York. While the company will reduce its workforce, its decision to stay will keep a major brand name in the state.

“It’s a good day for Pennsylvania, not a great day, but a good day,” Rendell said last week.

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