[Phil]

Letter from Harley.

We know some of you have been getting questions about recent news reports regarding Harley-Davidson’s York, Pa., vehicle operations and want to update you on these developments.
As you may recall, Harley-Davidson has a clear three-part strategy to deal with the current economic conditions and also to strengthen the Company’s operations going forward. One part of that strategy is to get Harley-Davidson’s cost structure right.
Earlier this week Harley-Davidson advised employees at York that the Motor Company, working with its Union partners, will conduct a major evaluation of the York operations to assess how best to achieve long-term cost and competitiveness targets. The evaluation is an outgrowth of the continued review of operations, through which Harley-Davidson has determined that York, as currently structured, is not competitive long term on cost or efficiency. The study will explore a variety of options for addressing the situation, including the possible consolidation of Touring and Softail motorcycle production into the current Softail plant, as well as possible alternative sites in the U.S. for the work performed at York.
The study will be conducted over the next several months with the involvement of local and international union leadership, with a recommended course of action expected this Fall.
We want to emphasize that no final decisions have been made regarding the status of York, and that any consideration of alternative sites to York will be U.S. sites.