Harley-Davidson to make more motorcycles outside the US

26 June, 2018, 15:30 | Author: Salvatore Jensen
  • Harley-Davidson is shifting some production of motorcycles for European customers out of the United States to avoid EU retaliatory tariffs

Production of Harley-Davidson motorcycles sold in Europe will move from US factories to facilities overseas, the Milwaukee-based company announced Monday, a effect of the retaliatory tariffs the European Union is imposing on American exports in an escalating trade war with the Trump administration.

In a Securities and Exchange Commission filing, Harley-Davidson said the 31 percent tariff, up from 6 percent, would add about $2,200 to the cost of each motorcycle - and the impact could reach $100 million per year.

The firm said almost 40,000 people bought new Harley-Davidson motorcycles in Europe previous year, which in terms of revenue generated, was second to only the USA, making it a "critical market". Harley-Davidson maintains a strong commitment to USA -based manufacturing which is valued by riders globally.

In a filing to their investors, Harley-Davidson have announced that they plan to shift production of some of the models out of the USA to avoid the new European Union import tariffs.

Harley-Davidson's shares fell as much as 7 percent on Monday, before paring some losses in late trading.

Hours after Mnuchin's tweet, Peter Navarro, head of the White House office of trade and manufacturing policy, appeared to contradict the treasury chief.

"Surprised that Harley-Davidson, of all companies, would be the first to wave the White Flag", Trump said.

He says the ultimate goal should be no tariffs.

Harley-Davidson's move is already drawing the ire of tariff critics, including members of the president's own party.




Harley-Davidson says it plans to move production of motorcycles it sells in Europe overseas in response to growing trade friction between the United States and Europe.

A spokeswoman for House Speaker Paul Ryan, a critic of Trump's trade policies, said Harley-Davidson's travails were "further proof of the harm from unilateral tariffs". A company spokesman did not immediately respond to a request for comment.

In the wake of the sluggish USA sales, Harley-Davidson announced in January it would close its Kansas City, Missouri assembly plant and consolidate jobs in York, Pennsylvania.

A motorcycle is seen at the Harley-Davidson Museum in Milwaukee on August 31, 2013. It's unclear at this stage where production outside of the United States will be carried out.

An employee tends to Harley Davidson Motorcycles at the Boston Harley Davidson dealership in Revere, Massachusetts, USA 25 June 2018.

The EU's retaliation to Trump's steel and aluminum levies will cost about US$2200 per motorcycle shipped to Harley's second-biggest market in the world, the company estimated in a filing on Monday.

To deal with the increased costs, Harley announced it will shift production of motorcycles for European Union destinations from its US facilities to worldwide operations. "Europe is a critical market for Harley-Davidson", the company said in a statement.

It is worth mentioning that Harley could make the decision to shift production because it had chosen, in 2017, to open a new manufacturing plant in Thailand.

Additionally, retaliatory tariffs from the EU, Canada, Mexico, and more make it expensive to get finished goods into those markets.

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