Harley Davidson Readies New Production System in Kansas

Following a vote by the plant's unionized employees ratifying a new seven-year labor agreement, Harley-Davidson announced today it is to implement a new production system at its Kansas City, Mo. vehicle operations. The new labor agreement takes effect August 1, 2011 and will be implemented in multiple phases.

The compensation and benefits component generally takes effect starting in August 2012, after the current contract was originally set to expire.

The new Harley-Davidson Operating System is expected to provide greater flexibility for seasonal and other volume-related production changes, an enhanced ability to vary product mix in line with customer preferences including the customization of motorcycles at the factory, and greater production efficiency overall.

The operating structure includes the use of flexible workers -- unionized employees who work as required, depending on seasonal and other volume needs and to provide coverage for vacations and other absences.

The company expects to have about 540 full-time hourly unionized employees at the Kansas City facility, compared to about 685 today.

"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 CEO of Harley-Davidson, Inc. "The Company is well on its way to building a world-class, sustainable, lean operating structure and I want to thank our employees at Kansas City for their participation in this journey. The ratification of the new contract will help ensure that we can continue to meet and exceed the expectations of our customers."

Similar agreements were ratified by employees at the company's operations in York, Pa. in December 2009 and in Milwaukee and Tomahawk, Wi. in September 2010.