Harley-Davidson’s New Castalloy Adelaide factory to stay open
Australia – The number one maker of cruiser bikes, Harley-Davidson, has reversed it’s decision to close Adelaide Australia’s New Castalloy wheel manufacturing facility thereby saving 110 jobs, although approximately 90 employees were let go in the restructure.
Harley-Davidson inked a renewed four year lease on the plant and workers have accepted a proposed four year wage outline thereby guaranteeing their future. It was last year that the company announced it would shut down New Castally after acquiring the Australian wheel manufacturer in 2006. At the time they cited financial restructuring and new outsourcing plans for wheels. Before restructuring, New Castalloy used to manufacture around 1450 wheels and 500 wheel hubs per day for Harley-Davidson.
The workers in Harley-Davidson’s plant agreed to sign a 4-year Enterprise Agreement, “preserving all conditions, including improved redundancy and shift penalty entitlements and guaranteed annual wage rises of 3.25 per cent,” as Australian Workers’ Union SA branch president Peter Lamps declared.
The state government owns the land that the factory is built on and was instrumental in securing the commitment of all parties after months of negotiations. Part of that agreement is the state forgoing any rent on the property as long as Harley-Davidson honors their commitment to keep the operation going. There has been a public outcry that the government has been unfair in it’s generosity with Harley-Davidson when 100% local businesses of the same size have received no similar considerations.
Harley-Davidson had announced in December 2011 it would close the component- and wheel-making plant by the middle of this year .
It has already shed about 90 of 212 workers since that announcement.
Harley-Davidson vice president of manufacturing, John Dansby II, said it had determined that New Castalloy can be competitive at producing low-volume, high-finish specialty wheels.
“Harley-Davidson regularly assesses the competitiveness of our supply base and sources work accordingly,” he said.
“Through this evaluation process, we have determined that New Castalloy can be competitive at producing low-volume, high-finish specialty wheels and provides the optimal supply base for these components.
“We appreciate the support of the New Castalloy employees for their continued focus on operational competitiveness.”
He said New Castalloy is “expected to employ a workforce of about 110”.
“The South Australian Government has worked closely with us to help ensure the facility’s future competitiveness,” Mr Dansby said.
Harley-Davidson saved New Castalloy from extinction in 2006 to secure its supply of wheels and wheel hubs after previous supplier Ion went into receivership in 2004.
It leased the site from the Government, which bought the land for almost $9 million in return for New Castalloy’s continued operations guaranteed until November 2011.
The firm was producing about 1450 wheels and 500 wheel hubs per day for Harley-Davidson before restructuring began in 2009.
News of New Castalloy’s survival came the same day as Manufacturing Minister Tom Kenyon said he feared Holden might close its manufacturing operations in Australia before the end of the year.
Mr Kenyon said New Castalloy now had time to explore future business innovations and staff skills development.
“The employees at New Castalloy are already highly skilled but it’s important that people have the opportunities to continually improve their talents,” he said.
Harley-Davidson had flagged a 2013 closure of New Castalloy to become more cost competitive in face of the global financial crisis.
Australian Workers’ Union SA branch president Peter Lamps said workers had overwhelmingly voted to accept a new, four-year Enterprise Agreement, which preserved all conditions, including improved redundancy and shift penalty entitlements and guaranteed annual wage rises of 3.25 per cent.