Feeling the effects of international trade, and a future without the TPP, Harley-Davidson is reported by the New York Times to be opening a new factory in Thailand – country that places a 60% tariff on motorcycles in Harley-Davidson’s relevant market.
The news comes at the dismay from Harley-Davidson’s workforce, which has just seen its ranks diminished by 118 jobs at its York plant, in Pennsylvania. Despite this, Harley-Davidson says that the move is about growing sales abroad, not losing jobs in the United States.
“This is absolutely not about taking jobs out of the United States,” said Marc McAllister, the Managing Director of Harley-Davidson’s international sales, while talking to the NY Times. “This is about growing our business in Asia.”
Of course, if Harley-Davidson wasn’t having to side-step a 60% tariff to sell motorcycles in Thailand, one has to wonder if the Bar & Shield brand would be building a factory in Thailand in the first place…
The United Steelworkers (USW), which represents workers at several Harley-Davidson plants in the United States takes issue too with McAllister’s point-of-view, telling the NY Times in a statement that the Thailand factory is a “slap in the face” to Harley-Davidson’s American workforce.
UAW President Leo Gerard goes on to say in his statement that Harley-Davidson should abandon its overseas factories, and focus on doing all of its manufacturing here in the United States.
This point-of-view too is flawed, as we have already noted in previous stories the difficulties that abound for motorcycle manufacturers abroad, especially now with the TPP scrapped, and also how domestic sales for Harley-Davidson continue to drop.
For Harley-Davidson, the prospect of building motorcycles only in the United States would mean having to ignore the financial and political climate that surrounds the iconic brand. Unfortunately for the company’s American workforce, this means a lose-lose proposition.
We will surely see Harley-Davidson closing more job positions at its American factories in the coming years, as Harley-Davidson is forced to favor factories abroad, in countries where the company is seeing growth in sales.
So, the question will then be: would there have been deeper job cuts for the brand if it kept all of its production in the United States? As always, time will tell.
Source: NY Times