By AP Business Writer
updated 2/8/2007 10:25:56 AM ET 2007-02-08T15:25:56

Harley-Davidson Inc. said Thursday an ongoing strike at its largest assembly plant means the motorcycle maker will miss shipment guidance for the first quarter.

The Milwaukee-based company had expected to ship between 82,000 and 84,000 bikes during the first three months of the year.

The company declined to provide its updated shipment guidance for the first quarter and also would not say whether the strike at its plant in York, Pa., will have an effect on full year financial guidance.

Nearly 2,800 unionized employees have been on strike since Friday after they overwhelmingly rejected the company's contract proposal last week. The three-year proposal offered annual raises of 4 percent, but it also would have reduced pay rates for new hires, required employees to begin paying part of their health insurance premiums and forced pension concessions.

The company has said the strike may force it to temporarily lay off as many as 740 employees at two southeast Wisconsin plants as early as next week. Harley-Davidson said it expects to reduce production of engines and transmissions in Menomonee Falls, Wis., and injection-molded components in Tomahawk, Wis. The initial layoffs would be voluntary, Harley said in a news release Thursday, but they could be followed by forced layoffs.

The facility in York employs more than 3,200 union and nonunion workers who make Touring and Softail motorcycles. The International Association of Machinists and Aerospace Works Local 175 represents the workers.

In November, 1,600 union workers in the Milwaukee area approved contract concessions that Harley-Davidson demanded to proceed with a $120 million plant expansion. Members of United Steelworkers of America Local 2-209 initially rejected the proposals, which included lower wages for workers hired after Jan. 1 and a decrease in health insurance, pensions and cost-of-living adjustments for all workers.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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