updated 2/16/2007 8:47:35 PM ET 2007-02-17T01:47:35

Motorcycle maker Harley-Davidson Inc. said Friday it reached a tentative labor agreement with union workers at its largest manufacturing plant, a breakthrough in the two-week-old strike by nearly 2,800 employees.

The company issued a two-paragraph statement saying a vote by the union rank-and-file was expected next week. It did not disclose terms of the deal or say when production at the factory in York., Pa., might resume.

Harley’s stock jumped $1.05 to $69.09 in after-hours trading, regaining all the ground lost during Friday’s regular session on the New York Stock Exchange.

The nearly 2,800 workers have been on strike since Feb. 2. The union membership had voted to reject a company contract proposal that provided 4 percent annual raises but reduced pay for new hires and lowered health-insurance and pension benefits.

Picketing by the International Association of Machinists and Aerospace Workers Local 175 is expected to wind down on Saturday and a vote could occur Thursday, union spokesman Tom Boger told the York Daily Record.

Neither the union nor the company returned calls late Friday from The Associated Press.

The strike disrupted Harley-Davidson’s national production and had ripple effects as far away as Wisconsin, where 440 employees were laid off Monday. The company had warned that additional layoffs were possible if the work stoppage in York continued.

Many Harley suppliers also laid off workers because of the strike: A York company that polishes the metal used in Harley motorcycles laid off 35 of its 50 workers. A Nebraska plant that makes Harley exhaust products laid off 35 of its 100 employees.

Analysts said the strike was costing Harley as much as $11 million a day in sales, but that they expected the strike to be brief and to have little impact on the company’s full-year performance.

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