Engines and transmissions for the motorcycles are produced in a factory near Milwaukee while other motorcycle accessories like saddlebags are made in the city of Tomahawk, Wisconsin.
If the company were to move after 107 years in the state, 1,350 jobs would have been lost.
The Monday decision by the United Steelworks and the International Association of Machinists and Aerospace Workers ratified three new seven-year deals with union employees. The vote had a 55 to 45 percent margin of approval.
"Change is never easy, and we have asked our employees to make difficult decisions. However, we are pleased to be keeping production operations in our hometown of Milwaukee and in Tomahawk," Keith Wandell, the president and chief executive officer of Harley, said in a statement.
Under the new agreement, union employees’ pay remains the same, a few hundred jobs are cut, and more part-time workers will be enlisted. The contracts will be set into motion in April 2012.
Harley-Davidson has been in a restructuring process as the market for their luxury motorcycles and choppers has shrunk due to the current economic recession. Under the new agreements, the company is expected to save $50 million.
"Together, we are making the necessary changes across our entire company to succeed in a competitive, global marketplace while continuing to meet and exceed the expectations of our customers," Wandell added.
