March 12, 2007 – Hot News

H-D production estimates fall in wake of resolved strike
As a result of the concluded three-week strike with workers at the company’s York, Penn., facility, Harley-Davidson Motor Corp. says motorcycle production will be short roughly 14,000 units for 2007, a loss of approximately one month’s production.
“While we are pleased to have reached an agreement with our unionized employees in York, a disruption of this magnitude has a significant impact on our business, as well as our suppliers, dealers, employees and our retail customers,” said Tom Bergmann, H-D’s chief financial officer.
H-D has revised its first-quarter guidance to 64,000-66,000 units, down from its previous estimate of 82,000-84,000 units.
For the full year 2007, H-D expects moderate revenue growth and lower margins compared to 2006 and earnings per share (EPS) growth in the range of 4-6 percent for the current year. Also, it expects its EPS growth rate to return to between 11-17 percent in 2008 and 2009.
Workers at H-D’s York, Penn., manufacturing plant approved a new three-year contract, ending the strike that cost the company an estimated $11 million a day.
Frank Larkin, a spokesman for the International Association of Machinists and Aerospace Workers, says the contract, which will raise workers’ pay 12 percent over three years, was approved by more than 80 percent of the members of the union’s Local 175. The agreement also establishes a two-tier wage structure that starts employees hired after the contract’s effective date at a wage rate that is lower than current employees, but equalizes pay by the end of the contract’s term.
On the benefits side, unionized employees will participate in a new health plan that continues to require no employee premium but includes increases in the level of out-of-pocket costs that employees could incur for deductibles and co-pays. Union members will continue to be fully covered by H-D’s traditional non-contributory pension plan. However, for new hires, the agreement reduces the company’s match of optional contributions that employees can make to the contributory portion of the plan.
The agreement also doubles the company’s 401(k) match to 50 percent and provides other compensation and benefit improvements.
Union members voted overwhelmingly to accept the new contract. In total, 83.2 percent of the 2,519 members voting by secret ballot elected to accept the new agreement, (2,097 in favor, 422 opposed). The employees returned to work Feb. 23.
“We are eager to get back to work producing motorcycles again,” said Fred Gates, general manager of H-D’s operations in York.
The strike disrupted H-D’s national production and had ripple effects as far away as Wisconsin, where 440 employees were laid off last week. The company had warned that additional layoffs were possible if the work stoppage in York continued. IAM Local 175 represents about 2,800 production employees at H-D’s facility in York, which produces the company’s Touring and Softail motorcycles and is the company’s largest production operation.
Federal Motorcyclist Advisory Council members appointed
The Secretary of Transportation has named the members of the Motorcyclist Advisory Council to the Federal Highway Administration.
Council members include representatives from a national safety organization (Motorcycle Safety Foundation), the American Motorcyclist Association, the Motorcycle Riders Foundation, the National Association of State Motorcycle State Administrators, ABATE of South Dakota, ABATE of Ohio, Kleinfelder, Inc., (representing highway infrastructure builders), North American Potters Industries (representing the traffic safety systems industry), the Texas Department of Transportation and the Alabama Department of transportation.
The council held its first meeting Oct. 24 in Washington, D.C. Council recommendations to FHWA included raising the awareness of roadway engineers and other traffic designers of the need to incorporate unique motorcycles safety considerations in the design, construction and maintenance and signage processes.
The 2005 transportation reauthorization legislation established the council to advise the secretary on infrastructure issues of concern to motorcyclists, including barrier design, road design, construction and maintenance practices, and the architecture and implementation of intelligent transportation system technologies.
MIC adds 14 new members
The Motorcycle Industry Council board of directors approved 14 new members late last year, bringing membership to a record high of 308.
Here’s a closer look at the new members:

  • Advanced Flow Engineering Inc. manufactures auto air filters and intake systems and is entering the motorcycle market. It joined as a nonvoting member.
  • Bruce Group Racing is a race team that develops race pants and some specialty items.
  • Clark Vitulli provides consulting and coaching services, organizational management, brand management, product launches and company start-ups.
  • DPS Technical Inc. provides technical and consulting services, EPA certification and testing, acoustical training and fuel cleaning products.
  • Eaglerider, Inc. is an adventure rental and motorcycle touring company.
  • Full Throttle Events is a special events production and management company that provides planning, development, on-site management and operations services.
  • Fulmer Helmets is a helmet manufacturer.
  • Maverick Capital is an investment advisor, with clients in the motorcycle industry, that joined MIC as a nonvoting member.
  • Merrick Bank provides finance options to marine, RV and motorcycle retails and joined MIC as a nonvoting member.
  • National Powersports Auctions provides powersports auction and auction-related services for lenders and retailers.
  • Ogden Publications Inc. publishes American Classics consumer magazine and joined MIC as a nonvoting member.
  • Powertrain Electronics provides air-fuel ration analyzers, Whipple superchargers and electronic engine and transmission calibration service.
  • RMA Parts manufactures front and rear motorcycle sprockets.
  • United Motors manufactures scooters, motorcycles and ATVs.
    MIC members elect board of directors
    The Motorcycle Industry Council announced results for the 2007 board of directors election. Don Emde, Don Emde Productions owner and president, and Frank Esposito, Global Motorsport Group vice chairman, were re-elected to the board on the first ballot. The vote was held by mail ballot and Hall & Jones, CPA, tabulated the results.
    A third ballot is being held to elect the third director by plurality from the following candidates: Steve Johnson, Tucker Rocky Distributing; Ted Sands, Performance Machine, Inc.; Sarah Schilke, Hein Gericke/Fairchild Sports; and Tom Seymour, Travelcade/Saddlemen. Results are yet to be released.
    The remaining three elected directors will serve one more year of their two-year term that expires in February 2008. They are Eric Anderson, Scorpion Sports, Inc. vice president; Allan Hurd, Polaris Industries/Victory Motorcycles general manager; and Larry Little, vice president and publisher, Cycle World Magazine.
    The above join the six directors appointed by the motorcycle manufacturer/distributor members who pay market share dues: Mark Pearlstein, American Honda Motor Co., assistant vice president motorcycle division; Mel Harris, American Suzuki Motor Corp., vice president motorcycle and marine division; Roger Hagie, Kawasaki Motors Corp., USA, public affairs director; Selvaraj Narayana, KTM North America vice president; Paolo Timoni, Piaggio Group Americas president and CEO; and Mike Schmitt, Yamaha Motor Corp., USA division manager.
    At the Feb. 16 board meeting in Indianapolis, the board re-elected the following officers for 2007: Little, MIC board chairman, Hagie, MIC board vice chairman, and Harris, MIC board secretary/treasurer. psb
    Send your Hot News items to Editor Neil Pascale at npascale@ehlertpublishing.com

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