Jean Turner | July 2, 2018
Indian Considering Moving Production Overseas Due to Tariffs—Indian Motorcycle has revealed it is considering a shift in its motorcycle production overseas thanks to retaliatory tariffs levied by the European Union, which, in turn, are a response to the Trump administration’s steel and aluminum tariffs.
Indian Considering Moving Production Overseas Due to Tariffs
The trade war between the Trump administration and the European Union has put Harley-Davidson, and now Indian Motorcycle, in the spotlight.
The list includes motorcycles with engine cylinder capacity of 500cc and above, which also ensnares the entire line of Polaris’ Indian Motorcycle. The company has remained relatively quiet about the issue, but in a report from the Associated Press dated Saturday, June 30, Polaris spokeswoman Jess Rogers revealed that the company could move some production of Indian Motorcycles overseas, from Spirit Lake, Iowa to Poland. “Nothing is definitive. We are looking at a range of mitigation plans,” Rogers said.
In its first-quarter earnings, Polaris stated additional costs could total $15 million for the company in the 2018 calendar year. Rogers added that Polaris is “definitely seeing an increase in costs,” regarding tariffs and the escalating trade war, but did not quote a dollar amount on what the most recent 25% motorcycle tariff from the EU could cost the company.
The move from Polaris sees them join chief rivals Harley-Davidson in considering shifting some production overseas to get around trade barriers.
The jobs of hundreds of union workers, both at Harley-Davidson and Polaris Industries, could be at stake in the tariff standoff, and Joe Capra of the International Association of Machinists & Aerospace Workers Local 176 spoke on the matter last week in an NPR interview with Noel King.
Capra, the union representative for the workers in Harley’s Kansas City plant, agrees with the President’s claims that Harley-Davidson is using the tariffs as an excuse to offshore manufacturing, something they allege the Motor Company has been planning for years. “What Harley-Davidson announced was a slap in the face for American workers across the country here. And the great icon of Harley-Davidson… moving overseas,” said Capra. “This is something that was just an excuse. They have been going overseas for some time. They’ve been in India. They’ve been in Brazil. And then now they have a plant in Thailand.”
When asked whether or not it could simply be considered a smart economic move by Harley-Davidson to supply its growing markets, Capra offered: “People might think this is a smart economic move, but how many more manufacturing plants are going to be moving over? We need to do something with the tariffs and we have to. We have to have a sit-down, and we have to have discussions over the tariff attacks on both sides. But we have companies that will take. And we’ll lose more jobs here in the United States. It’s going to cause the economic crash that obviously will be coming before long.”
President Trump isn’t happy…
How long will it be before Trump aims his anger at Polaris?
Harley-Davidson remains the target of President Trump’s twitter attacks, following the Milwaukee-based manufacturer’s announcement last week in an SEC filing that they plan to “implement a plan to shift production of motorcycles for EU destinations from the U.S. to its international facilities to avoid the tariff burden.” The newly imposed EU tariffs are a retaliatory response to Trump’s steel and aluminum tariffs, both of which amount to costly results for the Bar and Shield brand. Harley-Davidson already finds itself burdened with the steady decline of domestic sales, and has stated its goals of focusing on overseas markets to bolster growth, aiming to grow its international sales from 40 percent to 50 percent by 2027. Europe remains a large key to that growth as the current the second-largest market for Harley.
“Everybody who ever bought a Harley-Davidson voted for Trump…” – Donald Trump
The President criticized the company on Twitter for “waving the white flag,” and has continued his attacks throughout the week, tweeting on Tuesday, June 26: “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!” [sic]
Harley-Davidson says motorcycles to be sold in the United States and Canada will continue to be made in America, meaning it does not plan to import foreign-made units into the U.S. But the company’s statement hasn’t stopped Trump from continuing to rail against them. On Wednesday, June 27 he tweeted: “Harley-Davidson should stay 100% in America, with the people that got you your success,” adding, “We won’t forget and neither will your customers…”
In an interview on Sunday, July 1 with Fox News anchor Maria Bartiromo, Trump continued to assail the brand, adding the claim, “Everybody who ever bought a Harley-Davidson voted for Trump… and they are very unhappy about it. I feel that maybe Harley, I think they are going to take a big hit.”
