Trump attacks Harley-Davidson, but his facts are wrong

Harley-Davidson, facing rising costs from new tariffs, will begin making European Union-bound motorcycles overseas instead of in the United States.
Harley-Davidson, facing rising costs from new tariffs, will begin making European Union-bound motorcycles overseas instead of in the United States.
(Keith Srakocic / Associated Press)

President Trump accused Harley-Davidson Inc. of using his trade conflict with the European Union as an excuse to move production overseas. But his Tuesday morning attacks on Twitter were factually incorrect about the motorcycle maker’s plans.

A day after Harley said it would shift manufacturing of bikes destined for EU markets out of the United States to avoid 31% tariffs, Trump cited earlier decisions Harley made to open a new plant in Thailand and close a plant in Missouri. Trump incorrectly said Harley was moving production to Asia from the United States, when in fact the expansion in Thailand was unrelated to the closing in Missouri.

Trump also threatened to tax any motorcycles the company ships into the United States. That’s an empty threat because Harley sells motorcycles in the U.S. that are made in American factories and is unlikely to import any.


Harley decided to build the new Thailand factory to supply markets in Southeast Asia when it was clear that the U.S. would abandon the Trans-Pacific Partnership, the free-trade agreement Trump withdrew from in January 2017, Chief Executive Matt Levatich told Bloomberg News in April. In a separate move linked to shrinking U.S. sales and having too much production capacity for its domestic market, Harley announced in January a plan to shut its plant in Kansas City, eliminating 260 jobs.

RELATED: Harley-Davidson says it is moving some production out of U.S. to avoid EU tariffs »

“Early this year Harley-Davidson said they would move much of their plant operations in Kansas City to Thailand,” Trump wrote in a tweet Tuesday. “That was long before Tariffs were announced. Hence, they were just using Tariffs/Trade War as an excuse.”

‘Big tax!’

Trump wrote in a subsequent post that Harley “must know that they won’t be able to sell back into U.S. without paying a big tax!” The company hasn’t announced any plans to import motorcycles from overseas plants, so it’s unlikely that the president’s threat will turn out to be relevant.

Michael Pflughoeft, a Harley spokesman, didn’t immediately respond to requests for comment on Trump’s tweets.

The EU’s retaliation to Trump’s steel and aluminum levies will add about $2,200 to the price of each motorcycle shipped to Harley’s second-biggest market in the world, the manufacturer estimated in a regulatory filing Monday. The company said it plans to eat much of the added expense, because trying to pass the increased cost along to dealers or customers would make an “immediate and lasting detrimental impact” on its business.


RELATED: Trump threatens tariffs on European auto imports in escalation of trade dispute »

Sales slide

Levatich has been dealing with woes independent of Trump’s trade policies, including a struggle to attract younger buyers in the company’s core home market. Harley’s U.S. retail sales plunged 12% in the first three months of this year, the 13th decline in the last 14 quarters. Overseas sales also have been stalling.

Harley shares fell as much as 2.7% to $40.46 on Tuesday after sliding 6% on Monday. The stock’s drop is the worst over two days since the end of January, when the company announced the plan to cut jobs and close the Missouri plant and projected that global sales will decline again in 2018.

Angry workers

The International Assn. of Machinists and Aerospace Workers, which represents workers at the company’s facilities in Wisconsin, Missouri and Pennsylvania, expressed skepticism that the production shift related to the EU tariffs is needed.

“This latest move is in keeping with Harley’s past decisions to open plants outside of North America,” union President Robert Martinez Jr. said in an emailed statement Monday. He called the plan the “latest slap in the face to the loyal, highly skilled workforce” that builds the company’s bikes.

Trump wrote in another tweet Tuesday that Harley’s employees and customers were “very angry at them.”


“A Harley-Davidson should never be built in another country-never!” he wrote. “If they move, watch, it will be the beginning of the end - they surrendered, they quit! The Aura will be gone and they will be taxed like never before!”

Coppola writes for Bloomberg.


10:30 a.m.: This article was updated throughout with additional context.

This article was originally published at 7:10 a.m.