Harley-Davidson Shuts Down Plant After Workers OK Strike

Harley-Davidson Inc. (HOG) shut down production at its largest manufacturing plant Thursday, a day after its unionized workers rejected the company's contract offer and authorized a strike.

"We are obviously disappointed by the union's decision," Fred Gates, general manager of Harley-Davidson's York operations, said in a statement. "The proposed contract was structured to help manage future costs that could be detrimental to our business over the long term."

The statement also announced the suspension of production of the company's Touring and Softail motorcycles.

Officials at the International Association of Machinists and Aerospace Workers Local 175 did not immediately return a telephone message seeking comment Thursday. A strike is expected to begin as early as 12:01 a.m. Friday if a new deal cannot be reached by then, when the contract expires.

The company said its proposal included annual wage increases of 4 percent over three years. But part of the increase depended on the union agreeing to contribute toward health insurance coverage; unionized employees currently pay no premium. It also would have doubled the company's 401(k) retirement plan contributions and created a two-tier wage system under which new hires would be paid less than current ones.

The facility employs more than 3,200 union and nonunion workers.