The members of the International Association of Machinists and Aerospace Workers Local 175 rejected the company's contract offer Wednesday and authorized a walkout.
Harley-Davidson's proposal included annual wage increases of 4 percent over three years. Two percent of the increase depended on the union's agreeing to pay toward health insurance coverage. Unionized employees currently pay no premium.
The proposal also included pension concessions and a two-tier wage system the union said would penalize new hires.
A union spokesman told United Press International the union was prepared to return to negotiations but none had begun as of early Wednesday afternoon.
When Harley-Davidson was near bankruptcy in the early 1980s "it was union members who refused to let it die," union President Tom Buffenbarger said. "Harley went on to become an international success story, but they've obviously forgotten how they got this far."
Harley reported more than $1.6 billion in revenue in the third quarter of last year.
"We are obviously disappointed by the union's decision," local General Manager Fred Gates said. "The proposed contract was structured to help manage future costs that could be detrimental to our business over the long term."