Tuesday, October 17, 2006

Harley's Ultimatum: Where's the Line?

In conservative ideology, is management ever wrong? Does it ever overstep its bounds?

I'm not asking to be snarky, but to help further the discussion surrounding the Harley union vote yesterday to reject compensation cuts in light of the company's booming profits.

After all, as a liberal, I see a line on the union side. In spite of my strong support for unions, there are times when I think unions should accept cuts (as the Harley union just did in 2003).

For instance, if the Harley company could show that it was financially necessary for the union to accept pay cuts of up to 33 percent for new workers, increases in health benefit costs for all workers, and a decrease in the pension benefit for all workers (and it also wouldn't hurt if the execs could show that they're also accepting cuts), then I would say the union should accept the deal.

And many of the union workers agree with that. According to the Journal Seninel this morning:

Harley workers interviewed after the vote Monday said a highly profitable company - Harley is on track to net more than $1 billion this year - could afford to expand without extracting concessions from current employees and cutting pay for future hires.

"They try to portray themselves as being different from most companies," one woman said. "They're no different. They're greedy. They have the funds to provide what they're going to build."

Her voice rising, the woman also said a firm as profitable as Harley shouldn't be seeking governmental financial help.

"I personally think Harley should be ashamed of themselves even asking the state to kick in on something like this," she said.

Other employees indicated they would accept concessions if Harley were in financial trouble.

"I can understand if it were GM or Ford, who are hurting," one worker said. "They're not hurting by any means."

Does conservative ideology offer a similar line for management? Or when management says, "Jump," should the automatic union and public response be, "How high?'

If there is a line, then it would go a long way toward helping the conversation on this issue if conservative commentators would share it rather than simply blaming the union for supposedly costing the area jobs (see here and here for two examples), as if management didn't have a choice in the matter at all.

Side-Note: Just to be clear, what Harley presented to the union wasn't merely a "concession package," as euphemistically described in the JS, but a set of compensation cuts. And it also wasn't an offer, it was an ultimatum.


Blogger Russ said...

On one hand I can understand why the Harley workers voted no. On the other hand I can also understand why management asked for concessions. They want to reduce costs before they find themselves in a situation like Ford and GM.
In this era of globalization manufacturing wages are falling worldwide. It's common knowledge that Asian manufacturing workers cost only a fraction of American workers. Harley could move jobs to Asia and substantially increase their profits. As I understand it however they are not moving jobs offshore, but they could.
A far more senseable approach would be wage and benefit concessions in exchange for profit sharing that would maintaintain current compansation levels. I think Harley management would be much more receptive to compensation tied to profits.

October 17, 2006  
Blogger Seth Zlotocha said...

I'd be more willing to believe that Harley was simply trying to avoid financial hardship with its ultimatum if it wasn't on track to net $1 billion in profits this year and it didn't just increase profits 18 percent in the last quarter over the same quarter last year.

I think your profit sharing idea is an interesting one -- but, unfortunately, it doesn't seem like Harley is interested in negotiating at all.

October 17, 2006  
Blogger redvest said...

Harley Workers are going to ruin that company. right now harley is between a rock and a hard place financially and interms of future orders for bikes. These idiots are digging their own grave just like the UAW. Stupid. Union's nothing more then a pyramid scheme- enriching the Union cheifs pulling downs hunderd thousand dollar salaries, protecting the losers on the bottom and squeezing the guys in the middle. Moreover, they blindly support democrates whose crazy lefties hate everything about thier jobs. The lefties hate thier jobs, hate thier guns hate the fact that they fish and hunt.

Unions are totally obsolete in modern society, with open book management, corporations are out to hurt thier employees they are there to help. With 4.5% unemployement it's too hard to find replacements...these idiots at Harley are running themselves and the company right out of a future.

But Hurray!!!!

October 18, 2006  
Blogger Seth Zlotocha said...

That's a mouthful of accusations against the union without any evidence to actually back it up, except an ambiguous claim that "right now harley is between a rock and a hard place financially and interms of future orders for bikes."

Recent reports show that Harley's profits in the last quarter are up 18 percent from last year AND they're on target to net $1 billion this year (see citation in post). Those figures don't exactly suggest Harley is "between a rock and a hard place financially."

And, just for the record, the union leadership -- knowing it was going to be the only offer on the table -- did recommend the workers accept the ultimatum. Not exactly a sign that the union leadership is just out to pad its own pockets.

Until you provide actual evidence for your accusations, you're just proving my point that conservative ideology has nothing to say except "How high?" when management yells "Jump."

October 19, 2006  

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