Harley-Davidson turns down $25M tax deal

MILWAUKEE, Nov. 12 (UPI) -- Harley-Davidson said it could not accept $25 million in tax credits offered by Wisconsin due to conflicting employment goals.

The $25 million that was supposed to be spread over a nine-year period included stipulations that Harley-Davidson meet certain goals in capital investment and utilization of more than 100 Wisconsin suppliers, the Milwaukee Journal-Sentinel reported Friday.

It also included stipulations the company maintain a set level of employees, which the company said clashed with its plans of reducing its payroll.

"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," Harley said in a statement.

The company said it was not pulling out of Wisconsin, although it had previously threatened to do so if its workers union did not ratify a contract with cuts that would put labor costs more in line with a non-union company.

Workers approved a seven-year deal Monday. The contract calls for wage freezes and a reduction in the workforce.

Company spokesman Bob Klein said Harley-Davidson was no longer discussing a deal with the state. "We are just backing away from it," he said.