A new twist to the ongoing “tariff war” was added this week when American-made Harley-Davidson announced on Monday that it will move its production of motorcycles for sale in the European Union outside the United States.  Harley-Davidson has been headquartered in the U.S. for 115 years.
The Milwaukee-based company views offshore production as “the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe.” In response to the administration’s tariffs, Europeans are targeting the most iconic American products, such as motorcycles, blue jeans, and bourbon. The EU raised U.S. motorcycle tariffs from 6% to 31% which adds nearly $2,200 to the cost of an average motorcycle, according to the public filing.  Europe is second to only the United States among Harley-Davidson’s most important markets.
The Wall Street Journal reported that “the Trump administration’s trade agenda this week pushed Harley-Davidson to shift production of motorcycles for sale in the European Union outside the U.S.”  “We’d rather not make investments to address these regulatory hurdles and take the profit hit, but we are doing so to protect European riders and our dealers,” Harley’s vice president for U.S. sales, Dave Cotteleer, wrote Monday in a memo to dealers that was reviewed by the WSJ.  Kurt Bauer, chief executive of the Wisconsin Manufacturers & Commerce, the state’s chamber of commerce, said Harley’s decision was necessary to support overseas sales and avoid added costs from the EU tariffs.
Some are of the opinion that using the tariffs as an excuse to move offshore is weak and that this has been part of Harley’s long-term strategic plan since they had already been using non-American products in their bikes for years.
The company’s relationship with its home town has been largely unblemished, and a large celebration is planned in Milwaukee over Labor Day weekend to celebrate its 115th anniversary. Groups from all of the United States will ride in on the company’s motorcycles, converging in what the company calls “the motherland” of Milwaukee.
METALCON 2015 attendees were treated to a special keynote presentation by Clyde Fessler, former Vice President of Business Development for Harley-Davidson Motor Company.  Especially when they heard the distinctive rumble as he rode into the ballroom on a Harley!  As Fessler reflected on the iconic history of Harley- Davidson and its turnaround in the 70s, he captured the essence of how communication with customers played a major role, stating that “problems are in the office; solutions are in the field.”
So much of the history of Harley-Davidson – a company started by the sons of immigrants in what we now call the Rust Belt – has shaped this quintessentially American brand.  Despite all the rhetoric, Harley has built both an enduring brand and a near-peerless reputation for high-quality American craftsmanship.
 
 

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