Wednesday, November 14Information That Matters

Harley-Davidson to make New motorcycles outside the US

Harley-Davidson to make New motorcycles outside the US
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Harley-Davidson plans to shift some motorcycle production away from the US to avoid the “substantial” burden of European Union tariffs.

The measures are a response to new US duties on steel and aluminium imports.

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Wisconsin-based Harley-Davidson said the increased cost from the tariffs threaten its international sales, which it has been trying to expand.

US President Donald Trump tweeted his disappointment at Harvey-Davidson’s decision which he characterised as the company waving the white flag of defeat.

The company has assembly plants in Australia, Brazil, India and Thailand as well as in the US.

It said it would raise investment in its international plants, though it did not say which ones.

“To address the substantial cost of this tariff burden long-term, Harley-Davidson will be implementing a plan to shift production of motorcycles for EU destinations from the US to its international facilities to avoid the tariff burden,” the company said.

Harley-Davidson said it expected the ramp-up in production to take nine to 18 months.

The company’s move is one of the most visible consequences of the trade disputes triggered by Mr Trump’s decision to levy tariffs on steel and aluminium imports.

They have drawn retaliation from the EU, Canada, Mexico, India and others while driving up the cost of metals for manufacturers in the US.

Mr Trump says the duties are necessary to protect the US steel and aluminium industries, which are vital to national security.

However, the tariffs have also helped to spur investment in US steel plants.

For example, British-owned GFG Alliance, has said it plans to invest $5bn over several years to reopen a shuttered steel plant in South Carolina. The firm says the move will put about 125 people back to work “immediately”.

US companies that range from boat-builders to nail manufacturers have warned about the consequences of escalating trade tensions.

‘Only sustainable option’
Harley-Davidson said the EU’s tariffs would add, on average, $2,200 (£1,660) to each bike exported to Europe from the US as the import tax increases from 6% to 31%.
Harley, which sold nearly 40,000 motorcycles in Europe last year, said it planned to absorb those costs rather than pass them onto customers and risk hurting sales.
Harley-Davidson said the tariffs make shifting production “the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe”.
Shares in the company sank almost 6% after the firm announced its decision, which is expected to add between $30m and $45m to its expenses this year.
Harley-Davidson, which has been focused on expanding its overseas sales, said it remained committed to US manufacturing.

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