Motorcycle maker Harley-Davidson lays off 440 employees due to strike

MILWAUKEE (AP) - Harley-Davidson Inc. on Monday temporarily laid off 440 employees at plants where key motorcycle parts such as engines and windshields are made as a strike at its largest production plant entered a second week.

Harley said last week that the strike would cause it to miss shipment expectations for the first quarter. The company had expected to ship between 82,000 and 84,000 bikes during the first three months of the year.

Harley declined to provide updated shipment expectations for the first quarter and would not say whether the strike will affect financial guidance for the full year.

Analysts said that although the strike is costing Harley up to $11 million (euro8.5 million) a day in sales, they expect it to be short-lived and have little impact on the company's full-year performance.

Negotiations over a contract proposal will continue Wednesday, but a federal negotiator will not attend. Two federally mediated sessions last week failed to produce a solution.

The company could lay off another 300 workers in the Wisconsin region, said Bob Klein, a spokesman for the motorcycle maker.

Some 2,800 union workers in Pennsylvania have been striking since Feb. 2 at the plant where top-selling, heavyweight Touring and Softail bikes are made. Harley employs about 7,600 people at plants in the U.S.

Union members overwhelmingly rejected the company's three-year contract proposal Jan. 31. It offered annual raises of 4 percent but would have reduced pay rates for new hires, required employees to begin paying part of their health insurance premiums and forced pension concessions.

A message left at union headquarters on Monday was not immediately returned.

The temporary layoffs in Wisconsin were both voluntary and forced, Klein said, though he declined to say how many were forced. He said it is unclear when the employees will return to work at the plants.

"It just depends on how long the strike lasts,'' he said.

Shares of Harley rose 47 cents to close at $68.27 on Monday on the New York Stock Exchange.-AP