Harley-Davidson Adelaide factory to stay open, saving 110 jobs

EXCLUSIVE: The world's most famous motorcycle maker, Harley-Davidson, has saved 110 jobs by reversing its decision to close its Adelaide manufacturing plant.

THE world's most famous motorcycle maker, Harley-Davidson, has saved 110 jobs by reversing its decision to close its Adelaide manufacturing plant.

The Advertiser can reveal the Milwaukee-based firm has struck a four-year extension to the lease of its New Castalloy factory at North Plympton as workers voted yesterday to accept a new four-year wage agreement, securing their future.

The State Government, which owns the Mooringe Ave plant, waived rent at the site to help secure the deal after months of talks in a major boon for manufacturing in SA.

Harley-Davidson had announced in December 2011 it would close the component- and wheel-making plant by the middle of this year.

It has already shed about 90 of 212 workers since that announcement.

Harley-Davidson vice president of manufacturing, John Dansby II, said it had determined that New Castalloy can be competitive at producing low-volume, high-finish specialty wheels.

"Harley-Davidson regularly assesses the competitiveness of our supply base and sources work accordingly," he said.

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"Through this evaluation process, we have determined that New Castalloy can be competitive at producing low-volume, high-finish specialty wheels and provides the optimal supply base for these components.

"We appreciate the support of the New Castalloy employees for their continued focus on operational competitiveness."

He said New Castalloy is "expected to employ a workforce of about 110".

"The South Australian Government has worked closely with us to help ensure the facility's future competitiveness," Mr Dansby said.

Harley-Davidson saved New Castalloy from extinction in 2006 to secure its supply of wheels and wheel hubs after previous supplier Ion went into receivership in 2004.

It leased the site from the Government, which bought the land for almost $9 million in return for New Castalloy's continued operations guaranteed until November 2011.

The firm was producing about 1450 wheels and 500 wheel hubs per day for Harley-Davidson before restructuring began in 2009.

News of New Castalloy's survival came the same day as Manufacturing Minister Tom Kenyon said he feared Holden might close its manufacturing operations in Australia before the end of the year.

Mr Kenyon said New Castalloy now had time to explore future business innovations and staff skills development.

"The employees at New Castalloy are already highly skilled but it's important that people have the opportunities to continually improve their talents," he said.

Harley-Davidson had flagged a 2013 closure of New Castalloy to become more cost competitive in face of the global financial crisis.

Australian Workers' Union SA branch president Peter Lamps said workers had overwhelmingly voted to accept a new, four-year Enterprise Agreement, which preserved all conditions, including improved redundancy and shift penalty entitlements and guaranteed annual wage rises of 3.25 per cent.

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