Wisconsin wants to keep Harley Davidson in the state, and it offered the motorcycle company a substantial tax incentive to stay. However, Harley rejected the offer stating that the employment conditions were too rigid. Harley was concerned that they would not be able to meet all of the state’s stipulations.
Gov. Jim Doyle offered up the tax proposal four days after Harley workers ratified seven-year labor contracts that included job losses and a wage freeze but kept the company from pulling its manufacturing out of the state. Harley had earlier indicated that the company would possibly leave Wisconsin if a favorable labor agreement was not met.
The tax credit offer was to be implemented over 9 years and was tied to Harley's employment levels, capital investments and purchases from more than 100 in-state suppliers.
Harley Davidson released a statement detailing the company’s concerns on meeting the state’s mandates. "As previously announced, Harley-Davidson anticipates a reduction in the size of its Wisconsin production workforce upon implementation of the new labor agreements in 2012. While the workforce reduction estimates provided at the time of contract ratification have not changed, the anticipated employment level may not meet the technical requirements of the Wisconsin statute for job retention or growth."
There do not appear to be hard feelings over Harley’s rejection of the state’s offer. Wisconsin’s Commerce Secretary Aaron Olver stated, "I think the important thing is this iconic Wisconsin company has decided to stay here, has reached an agreement with the unions, and has made a commitment to manufacturing in Wisconsin. I think that is good news."
So AAB readers – what’s the lesson in all of this? Is it that governmental agencies need to reduce the red tape when offering tax incentives to major companies? Or is the lesson that companies should be left to take care of their own business without tax supported bailouts?