Nation & World

Harley-Davidson to move work offshore

Action taken to limit blow from trade wars

Harley Davidson motorcycles are displayed for sale at a showroom in London, Britain, June 22 2018. REUTERS/Henry Nicholls
Harley Davidson motorcycles are displayed for sale at a showroom in London, Britain, June 22 2018. REUTERS/Henry Nicholls

Facing higher costs from tariffs, Harley-Davidson said it is shifting production of motorcycles sold to European customers from the United States to another site offshore.

The European Union imposed tariffs on a range of U.S. products in response to similar levies that President Donald Trump put on steel and aluminum from Europe.

The EU tariffs will add $2,200 to the cost of an average motorcycle, threatening “an immediate and lasting detrimental impact to its business,” the company said Monday in filing with the Securities and Exchange Commission.

For the rest of this year, the company said the tariffs will add $30 million to $45 million to its expenses. Rather than pass on those costs to consumers in higher prices, Harley said it would absorb them for now while it begins planning to move production offshore.

The full-year tariff bill could reach $100 million, the company said.

“Increasing international production to alleviate the EU tariff burden is not the company’s preference, but represents the only sustainable option to make its motorcycles available to customers in the EU and maintain a viable business in Europe,” the company said.

Europe represents Harley’s No. 2 market, after the United States, with sales last year approaching 40,000 units. Shifting production to its non-U.S. plants will require additional investment overseas and is expected to take nine to 18 months, Harley said.

The move is among the first signs that Trump’s use of tariffs, which he has promoted as a way to boost employment in the steel and aluminum industries, is hurting other American businesses. Harley’s motorcycles division employs about 5,200 workers. The company provided no details of the number of jobs that would be lost as a result of the production change. A company spokesman did not immediately respond to a request for comment.

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.

CONTINUE READING

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.