Harley-Davidson Employees Enraged with Layoffs After Tax Cut

The iconic Harley-Davidson surprised thousands of its employees when they announced the layoffs, despite the company expecting huge privileges from the new corporate tax law.

The Sudden Layoffs

Last January 2018, the Harley-Davidson company plant in Kansas told its 800 employees that the plant will shut down next year. The management decided to shift the operations to their motorcycle manufacturer’s facility in York, Pennsylvania. This move puts around 800 employees at risk of losing their jobs and source of livelihood.

Tim, who has worked for the company for 17 years, was sure that he would spend the rest of his life until his retirement day working in Kansas. That all ended when the company delivered the bad news.

Tim Primeaux also revealed how he was disappointed with the sudden layoffs when they did everything the company asked them to do, especially since Harley-Davidson is expected to enjoy the huge benefits they get from the newly passed corporate tax cut which lessens tax from the previous 35%, down to 21%.

As if on cue, the company announced a few days later a dividend increase as well as a stock buyback plan as part of its rewards to their shareholders. The company repurchased 15 million of its shares, with its value amounting to $700 million. However, the company stated that the stock buyback, as well as the dividend increase, are unrelated to the tax saving.

House Speaker Paul Ryan went to Wisconsin last September to visit a Harley plant and stated that American companies like Harley-Davidson will gain a better footing and increase their competency in the global economy due to the tax cut. Their increased profits will also help keep jobs in America

Since then, Harley-Davidson’s employees have been wondering if the said tax cut will help boost their benefits. But they were taken aback when they announced the plant’s closure. Primeaux recalled how he could see the shock on everybody’s faces. It was like they were having a bad dream, and they’re still stuck in it.

Harley-Davidson’s Expansion

Only 10 companies in the S&P revealed they planned to give a portion of their tax savings to boost their employees’ pay, according to a recent CNBC survey.

Meanwhile, Michael Pflughoeft, the spokesman for Harley-Davidson, defended the company’s tough decision. He stated the closing had something to do with the plant’s declining sales vs. the cost they paid to keep their company. It was not an easy decision for the management to come up with such a tough decision.

However, he revealed that they had to do it to solve the company’s excess capacity in the US. Pflughoeft also addressed the employees’ assumptions that their shutdown has something to do with the Bangkok branch.Some say that the closing was to divert the funds of the employees’ pay to establishing the overseas plant. But the spokesman clarified that while it’s true that the company plans to build a new plant in Thailand, the layoff decision is separate and unrelated to their future expansion plans.

The Employees’ Disappointments

However, the employees from other branches fear that the Kansas layoff is just the beginning for the company. A Machine repairman named Rick Pence claimed that they are sending jobs overseas due to the cheaper pay. He recalled how he felt like he won the lottery when he got hired, but now it’s turning into a nightmare. Meanwhile, the union president at Harley, Kevin Amos, asked the company multiple times in the past what it would do to keep their branch in Missouri.

He also emphasized the workers were already doing everything in their power to keep the company there. Amos said they thought the matter was already settled, but clearly, it wasn’t. Primeaux also said that if he could, he wanted to deliver a message to the CEO Matthew Levatich, pleading him to keep the factory in Kansas City for the future of his three girls. He also added that his daughters plan to follow his footsteps and work in the company since it’s a great place to work. He’s still having a hard time accepting their fate especially since he’s set to retire next year.