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Wisconsin Dropped $25 Million in Tax Breaks on Harley-Davidson to Stay Put

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Through an Enterprise Zone tax credit, the Wisconsin Department of Commerce has handed Harley-Davidson a $25 million tax break for coming to terms with its labor unions in the company’s Tomahawk and Monemonee Falls production facilities. In a move that saw , the Bar & Shield brand has disclosed to the SEC that the agreement will save the company $50 million in annual operating expenses, but not before the company writes off a one-time charge of $85 million in restructuring costs, which includes the severance packages for laid off workers.

$70 million of that $85 million restructuring cost is related to one-time termination costs: incentive payments made to employees in order to sway them to ratify the new labor agreements and curtailment charges related to the pension and postretirement health care plans. The remaining $15 million covers the costs incurred by implementing a production process changes for the new labor agreements, which is a fancy way of saying changing the way the Milwaukee company will build motorcycles with its new “casual” employees.

“Together with our employees we are making the changes necessary for us to compete and win in a global marketplace,” said Wandell. “We have worked closely with the state of Wisconsin and we appreciate their efforts to foster a competitive business environment that will help us succeed here long term. As we look to the future, we are confident that Harley-Davidson will be as great going forward as it has been in the past.”

Source: Harley-Davidson

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