The Milwaukee Journal-Sentinel says that American icon Harley-Davidson is making waves with some U.S. labor unions over its recent decision to open an assembly plant in Thailand.
The plant, scheduled to go online sometime in 2018, will assemble bikes from components produced by Harley’s U.S. facilities. The company says there will be no net loss of U.S. jobs and that the move is really just a pragmatic one, in order to better target customers in Southeast Asia – a region that CNBC said yielded the best results for Harley in 2016.
The fact is, Harley already has operations just like this in both India and Brazil, a strategy the company says allowed them to avoid steep import taxes by assembling bikes from kits. India’s tariff on imported bikes is 100% and in Thailand, it’s 60%.
But despite Harley’s justification, the United Steelworkers Union is calling the move a “slap in the face” to not only Harley workers, but Harley riders as well.
The Steelworkers Union, which represents employees at Harley’s engine operations in Menomonee Falls, WI, says offshoring production is the wrong path to prosperity and that the company should be focusing on expanding its U.S. operations instead. The International Association of Machinists and Aerospace Workers has chimed in as well, accusing Harley of taking jobs away from American workers.
IAM President Robert Martinez Jr. said that while other companies think about moving work home, Harley-Davidson is doing the opposite, further suggesting that the company is “laying off U.S. workers monthly while continuing to hire temporary workers" – likely a response to a recent announcement that Harley would be cutting IAM union positions in York, Pennsylvania and moving them to Kansas City.
The company reported its Q1 financials in April and both sales and earnings were down. Specifically, Harley’s worldwide motorcycle sales dipped 4.2 percent over the year prior, with a 5.7 percent drop in the U.S. Some see this as a trend that will continue, as the Baby Boomer generation, while loyal to Harley, may be aging out of their motorcycle buying years.
I’m Anna Wells and this is IEN Now.