H-D leaving Milwaukee?

[bmh]

Yeah, but it's a lot cheaper to build a new Wally World than a motorcycle production factory. Who are they kidding? Look at the balance sheets, they ain't got hundreds of millions to do something like that and if you were a bank would you lend it to them right now? But you are right about one thing it's the same game. Maybe I'll call my local tax collector and tell them if they don't reduce my taxes I'm gonna move. Think it'll work for me too?

[Rubone]

Maybe I'll call my local tax collector and tell them if they don't reduce my taxes I'm gonna move. Think it'll work for me too?

It might, how many employees do you have and what are your gross receipts?
Robbie

[Lonnie]

The state and local incentives are put in place as part of a coordinated plan to lure in a specific company to a specific area, i.e. county or city. Numerous studies have been conducted examining the long-term effects on the area tax base which indicate that they have, in many cases, a negative impact - in other words the give-aways with their loss in tax revenue do not account for the shortfalls in revenue generated by the business. That being said, the businesses use the incentives to offset the costs incurred in the relocation. Keep in mind that the costs to the company can be used to offset gains the company may have - it is not like the money is spent and is a 100% loss to the company. That's what the accountants do, incorporate those expenses as an offset to earnings.

The irony is that companies that have been in an area and who never received these kinds of incentives or whose tax breaks may have long ago expired often have a difficult time getting the incentives to stay that other companies are getting to come.

Also, keep in mind that in many cases the mature industries, such as auto, tire, etc., including H-D, have a long-term employee base with high wages and expensive health care costs and some even have retiree heatth benefits to pay for. This overhead drives up their costs to such an extent that they have no choice but to either move or cut the pay and benefits of their employees with the intent to, in some cases, cut those costs in half.

As an example, my late brother-in-law was employed by Continental Tire in Charlotte for over 22 years. He was making somewhere in the neighborhood of $26 - $28 per hour as a mechanic and was represented by the Steelworkers Union. Continental went to the union about four years ago and told them they had to agree to take a pay and benefits cut or they would move the machinery out and close the plant. My brother-in-law would have been cut to about $14 - $16 per hour. The union would not put it up to a vote and just said no, thinking management was bluffing. They were not. Some of the equipment went to a plant in Kansas, I believe, that agreed to the concessions, the rest to South America. The plant is now closed.

The problem is that H-D cannot compete in the smaller market (due to both the recession and their aging customer base - us baby boomers) with its competition nipping at its heels. If it is to survive, it must have concessions.

[Rubone]

So, I am a little confused here. If the current government helps a company out to prevent failure , that is some form of Marxism, Socialism, or Communism, depending on which ism you subscribe to. But if a state does it that is merely an incentive or a concession. Now does that change if the state has a Black governor? Or does revisionist history and spin only go so far!
Just wondering!
Robbie

[Chris Haynes]

It might, how many employees do you have and what are your gross receipts?
Robbie

My tax assessor was unhappy when I made them re-access my house and land because it was no longer worth the figure that had to access me on. I got back $700.00 from them.

[Rollo]

HD leaving Milwaukee

I have a very close friend who has worked for HD for 20 years and have heard all the rumours regarding various shake ups, dealer closings etc. He has worked in Milwaukee in a number of techinical capacities and at both the Talledega and Phoenix test facilities. They did shut down Talledega and moved all of that to Phoenix.They did renegotiate the union contract at the York Plant due to an audit that showed unit costs there to be way out of line compared to the other facilities and were prepared to move South if they could not get the union concessions. They also found some "irregularities" with shipping and accounting for produced motorcycles and consolidated some of the operations in 43 buildings down to one main unit. PA Gov. Ed Rendell saw what that would mean to PA and worked with HD and the union to get an agreement. I was also recently with some guys from Pilgrim Rd plant and they are streamlining things there and the other plants in Wisconsin. None of the Junuea Ave. staff are union so they aren't an issue as are most of the design staff and technical staff. HDFS is in trouble and has been and they are trying to figure out what to do there. I would assume more changes are in the works as they try to get lean enough to survive but they are planning on leaving the HQ in Milwaukee and concentracting on what to do with HDFS and the actual manfacturing operations. Right now I think they are satified with the union deals they have negotiated but will cut production to meet demand and not have stock sitting.

Rollo
AMCA #12766