MILWAUKEE — Harley-Davidson Inc. announced Dec. 3 it will keep its motorcycle operations in York, Penn., and said it will continue to restructure those operations.

The announcement followed ratification of a new seven-year labor agreement by company employees at York, represented by International Association of Machinists and Aerospace Workers (IAM) Local Lodge 175, and the decision by the Harley-Davidson board of directors to approve the restructuring plan and related funding.

"A restructured York operation will enable the plant to be competitive and sustainable for the future, and the new labor agreement is critical to making that happen," said Keith Wandell, president and chief executive officer of Harley-Davidson Inc. "On behalf of the company, I want to thank the employees at York for their vote to make the changes necessary to create a more flexible and efficient operation, and we look forward to moving ahead together to achieve that goal.”

The new York operation will be consolidated under one roof and focused on the core areas of motorcycle assembly, metal fabrication and paint.

The operation will about 1,000 hourly employees compared to about 1,950 today. The workforce will consist of about 700 to 800 full-time unionized production and maintenance employees and, on an annualized basis, approximately 200 to 300 unionized "casual" employees. The operation will also employ about 150 salaried employees, compared to about 270 today.

When fully operational in 2012, the restructuring is expected to generate about $100 million in annual operating savings compared to the current structure.

As part of the York restructuring, the Commonwealth of Pennsylvania has committed approximately $15 million in incentives for capital improvements and training.

"I want to acknowledge and thank Pennsylvania Gov. Rendell and his team for their support of the changes we are embarking on at York. They have been terrific to work with throughout our decision-making process," said Wandell.

Harley-Davidson’s decision to remain in York ends an eight-month assessment about whether the company should restructure operations there or relocate elsewhere in the U.S.