Harley took a public relations risk to protect its bottom line when it said it would skirt European Union tariffs aimed directly at the industry in retaliation for Trump’s steel and aluminum levies. Rather than eat the cost of the tariffs or raise prices on the bikes it sells in Europe by $US2200 ($2800) , the company said it would move some production overseas.
In a warning to other companies that might follow suit, Trump described Harley’s decision as an act of corporate treason, declaring in a Twitter post in June: “If they move, watch, it will be the beginning of the end — they surrendered, they quit!”
It was a sentiment shared by many of the hundreds of thousands of motorcycle enthusiasts who converged this week upon the Black Hills of South Dakota, most of whom developed a relationship with their Harleys well before Trump became president. Still, as leather-clad baby boomers revved engines, drank beer and swayed to classic rock ballads, Trump’s influence was palpable.
Like Trump, Gary Panapinto, 63, a machinist from Illinois, had doubts about Harley’s true intentions, believing that the company was planning to offshore the bulk of its bike production, and, like Trump has intimated, he suggested that Americans would be forced to buy a product that was made overseas. While Trump has fanned that perception, Harley has said it will shift production only for bikes it sells in Europe and that American bikes will still be made in the United States.
“They need to keep them here in the United States, especially if they’re going to sell them here,” Panapinto said. “I think Trump is just trying to protect jobs in the US.”
The company declined to comment, but it pointed to a July interview in which its chief executive, Matthew Levatich, defended the decision. He denied that he wanted to shift its manufacturing, noting that it would not take up to 18 months to execute the plan if it were in the cards all along.
“We’ve worked very hard to be apolitical in how we approach our business and our consumers everywhere in the world,” he said. “We have to do what we have to do based on the facts and circumstances before us, and we’re doing that.”
Some hard-core Trump supporters said they understood the economic rationale behind Harley’s decision. Few complex machines are fully sourced and assembled in the United States these days, and even the riders who are devoted to the ideal of a fully American-made product said they understood that companies must compete globally.
Bikers have been among the groups most loyal to Trump, as motorcyclists in the United States tend to be predominantly working-class men older than 50 and veterans — demographics that comprise the bulk of the president’s base. Trump has embraced that allegiance, saying recently that “I guarantee you everybody that ever bought a Harley-Davidson voted for Trump.”
On Saturday, Trump invited hundreds of bikers from the New Jersey Bikers for Trump chapter to visit him on vacation in Bedminster, New Jersey. He praised them as “people who truly love our Country”.
Some who are generally pleased with Trump said he was wrong to bully the motorcycle maker merely for trying to make a profit, but they remained loyal to him nonetheless.
“You’ve got to take it with a grain of salt. He’s hot one day and he’s cold the next,” Bill Schaner, an electrical supply salesman from North Dakota who has owned seven Harley bikes, said of the president. “If they’re going to make bikes in Europe and sell them in Europe, let them go. We’ll take the bikes made in America.”
Veterans of the Sturgis bike rally, which is in its 78th year, said that the hardships facing Harley-Davidson go beyond Trump’s tough words and stem from years of declining ridership in the United States.
Leslye Beaver, owner of The Beaver Bar in Sturgis and several other biker bars across the country, said that Harley and other US motorcycle manufacturers are at a crossroads because their products have lacked appeal to young people in the United States. She pointed out that the trade disputes have increased their raw material costs and hindered their ability to export to Europe, which is a growth market.
“I think they’re doing what they have to do to stay in the game,” Beaver, who lives in Georgia and supports Trump, said while patrolling the parking lot of her bar in a golf cart. “It’s human for people to be mad because Harley is so American, but I think they want to be here.”
For years, Harley-Davidson’s sales in the United States have been steadily declining as the Milwaukee-based company grappled with an aging population, a vibrant secondary market and the changing tastes of consumers. Recently, it has focused on marketing its motorcycles to women, selling branded clothing and boosting international sales as a way to grow profits.
The average cost of a Harley is about $US20,000, and they top out at about $US40,000, making the motorcycles a luxury item for people who do not use them as their primary mode of transportation. In 2017, the company’s US retail sales fell for the third consecutive year to 147,972 motorcycles, while sales in international markets have been climbing slowly or holding steady, with more room to grow. In the past five years, Harley’s stock price has fallen by nearly 25 per cent, even as the stock market has been on a tear.
Harley is also under pressure from more intense competition. In the 1990s at Sturgis, Harley riders would torch so called “rice burners” — a pejorative term for Japanese bikes — or tie them to the back of their all-American motorcycles and drag them down the streets. Although Harleys continue to be the most popular ride, foreign brands such as BMW, Honda, Yamaha and Kawasaki are increasingly common.
The greater appreciation for foreign-made bikes was on display at Buffalo Chip, a sprawling 250 hectare camp ground 5 kms east of Sturgis. At the camp ground, Michael Lichter, a Colorado-based photographer and curator, puts on exhibitions of specialty motorcycles from around the world as a way to make the rally less Harley-centric and broaden interest and inspiration beyond American bikes.
“People need to be exposed to more,” said Lichter, who hopes to put on a show of all Japanese bikes next year. “If you’re buying just because it’s American, I don’t think that’s a good thing.”
He added: “It means there’s no pressure on American manufacturers to build better.”
New York Times