A Berlin economic development agency has sent a letter to Harley-Davidson suggesting they open a factory there to build motorcycles for the European market.
The iconic American manufacturer has not yet responded to the offer, but has expressed its intention to move some manufacturing to Europe to avoid 31% tariffs.
The tariffs were hiked 25% in response to President Donald Trump’s trade war which began with a 25% increase on foreign steel and aluminium.
Harley claimed the tariffs would increase the average price of their bikes by $US2200 ($A3800), but said they would absorb the price rise while they formulated plans for European production.
Indian Motorcycle has also expressed interest in building bikes in their Polaris factory in Poland to avoid EU tariffs, yet Trump has exclusively reserved his Twitter attacks for Harley, threatening to hit them with extra taxes.
“A Harley-Davidson should never be built in another country-never! Their employees and customers are already very angry at them. 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!” Trump said in a tweet.
It should also be noted that American auto companies Ford, Chrysler and GM have been making vehicles in other countries for years and are also considering their options after the Euro retaliatory tariffs.
Berlin offer
BMW Motorrad factory in Spandau, BerlinNow German economic development agency Berlin Partner has sent a letter to Harley asking the company to consider the city, pointing out that BMW Motorrad has a factory in the suburb of Spandau.
It also said the city was a European economic “hot spot” that attracts “highly qualified talents from all over the world:.
“Berlin is the city of freedom. You are looking for freedom? Freedom Machine Berlin is our answer,” the letter says, playing on Harley’s common marketing pitch about being a freedom machine.
Harley already has factories in India, Brazil and Thailand, and in January announced it would close its Kansas City factory as a result of the global motorcycle sales slump.
Kansas City HD factoryTariff history
Harley has a history of tariff issues, government aid and Presidential influence.
In 1983, Harley was facing possible bankruptcy, but was bailed out by President Ronald Reagan who hiked tariffs on Japanese motorcycles from 4.4% to a hefty 49.4%.
As a result, Harley was able to return to profit within four years and requested the tariff protection be ended early.
Like many companies, Harley was hit by the GFC, but was able to keep operating thanks to 33 cheap emergency government loans.
Hypocrisy
Harley isn’t the only one guilty of tariff hypocrisy.
A wide variety of products sold under the Trump name are made overseas, including China, the Netherlands, Mexico, India, Turkey, Slovenia, Honduras, Germany, Bangladesh, Indonesia, Vietnam and South Korea.
Many of these products are labelled as “Made in America”.
At least all Harley-Davidsons sold in the USA are built in the USA, mainly from American parts.
Trump attacks
Trump meets with Harley execsHarley may also have itself to blame for becoming the unfair target of Trump’s ire.
After all, shortly after Trump was elected, Harley executives visited the White House and it is believed high tariffs in India were discussed.
Trump tweeted: “Thank you, Harley-Davidson, for building things in America.”
Some time later, Trump mentioned the Indian tariffs on the American icon as an example of unfair trade.
So when Harley seemed to abandon the US with plans to build overseas, Trump was obviously miffed.
Trump told Fox News: “I guarantee you everybody that ever bought a Harley Davidson voted for Trump. I don’t think they should do it. I think that Harley is an American bike. It’s an American motorcycle and they should build them in this country. They shouldn’t play cute.”
Trump then Tweeted: “Now that Harley-Davidson is moving part of its operation out of the U.S., my Administration is working with other Motor Cycle companies who want to move into the U.S. Harley customers are not happy with their move – sales are down 7% in 2017. The U.S. is where the Action is!”
So far, no motorcycle company has come forward to say they are negotiating to build in the US.
Honda used to produce motorcycles in Ohio from 1979 to 2009, but now it only makes some parts there.