The Milwaukee-based company said in a public filing Monday that it would need to move production overseas because of tariffs being imposed in Europe against USA -made motorcycles. "Their employees and customers are already very angry at them", he wrote on Twitter.
Harley-Davidson executives said the company would not raise prices on their motorcycles, but rather they will absorb the cost and are expected to lose up to $100 million. That's why the company says it needs to open plants overseas to avoid countries' tax and tariff costs and price their motorcycles competitively.
President Donald Trump reacted with surprise on Monday to news that motorcycle maker Harley-Davidson chose to move some of its manufacturing overseas in response to hefty European Union tariffs. "Harley must know that they won't be able to sell back into USA. without paying a big tax!" he said in another tweet. "I think the people that ride Harleys are not happy with Harley-Davidson, and I wouldn't be either", he said at the White House. He's followed through on that by imposing a 25% tariff on steel imports and a 10% tariff on aluminum imports from the European Union, Canada, and Mexico - America's first, third and fourth trade partners respectively. He was referring to tariffs Harley-Davidson would face on motorcycles produced overseas and shipped back to the USA for sale.
Last fall, Ryan traveled to Harley-Davidson headquarters in his home state to tout how the Milwaukee-based motorcycle maker and other companies would experience lower taxes from the historic GOP tax-cuts law. In January, it said it would consolidate its Kansas City, Missouri, plant into its York, Pennsylvania, facility. "Hence, they were just using Tariffs/Trade War as an excuse", Trump said.
In recent years, it opened plants in Brazil and India.
The administration's move to impose the tariffs came after a nine-month investigation, led by Commerce Secretary Wilbur Ross, which found the current level of aluminum and steel imports to the US had the "potential to threaten our national security". The company has said ramping up production overseas could take at least nine to 18 months.
But Harley-Davidson's plight in Europe drew fresh interest from French Parliament member Eric Straumann, who contacted Levatich to propose a new factory on the French-German border in Alsace. But who can tell the President, who has made Harley Davidson's woes (arising mainly from a global slowdown in what is widely seen as a vanity purchase) a part of his mission, ostensibly because its bikers are part of his core political constituency?
Harley-Davidson said: "The tremendous cost increase, if passed on to its dealers and retail customers, would have an immediate and lasting detrimental impact to its business in the region, reducing customer access to Harley-Davidson products and negatively impacting the sustainability of its dealers' businesses".
In another tweet, Trump said the company could face a "big tax". Trump said in a post on Twitter on Monday night.
Charles Payne, host of "Making Money with Charles Payne", said he does not buy the company's reasoning, arguing the plans to shift production were "old news".
"Companies are now coming back to America".
Asked about the Harley decision, Wisconsin Governor Scott Walker addressed the issue of tariffs in general but not specifically the situation faced by the company. That makes the market second to the US.
Mid-Continent Nail of Poplar Bluff, Missouri, the largest USA nail manufacturer, cut 60 jobs on June 15 and plans to lay off an additional 200 workers in a few days, citing plummeting sales following the imposition of Trump's metals tariffs.
So far, though, those hurt by Trump's tariffs do not appear to be European Union countries but American workers. Harley responded with the promise of an electric model, but even that is unlikely to counter the tariff-related increase in sticker price.