Case Study: Harley Davidson Give and Take
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The typical view of labor-management relations is that interactions are heated. However, many unions and management teams work together effectively. One example is Harley-Davidson, which had to recently reduce costs in its York factory because of recessionary pressures. The plant was antiquated, labor costs were high, and there was inflexibility in employee movement across many different job classifications. Instead of simply closing the plant, Harley was encouraged to renegotiate with the union workers.
In the terms of the new agreement, approximately half of the jobs in the plant were cut, and the number of job classifications was cut from 60 to 5. Newly hired employees would also start at lower wages than the current workers, and some of the workers who had retained their jobs would take pay cuts. Further, Harley and the state of Pennsylvania agreed to update the York plant, and the factory would be the first to staff new jobs when the economy recovers. Some experts believe that this deal was too one-sided in favor of Harley’s interests.
Answer These Case Questions:
1. Do you think the Harley deal was too one-sided? Why or why not?
2. Do you think that it is appropriate for a government entity (such as the state of Pennsylvania) to take an active role in union-management negotiations? Why or why not?
3. In what ways could the new agreement have been improved to be viewed as more just and fair?