Tuesday, May 23, 2017

Harley-Davidson Building Factory in Thailand

Even Harley-Davidson Can’t Resist the Tug of Overseas Factories

Milwaukee, Wisconsin (May 23, 2017) – Harley-Davidson is building a new plant in Thailand, reflecting the industry’s push for global sales growth.

Harley-Davidson Inc.’s plans to operate a motorcycle assembly plant in Thailand are drawing strong criticism from labor unions, although Harley says the plant won’t result in any U.S. job losses.

The Thailand plant is scheduled to open in late 2018, Harley said Tuesday, and it will assemble bikes from components produced at the company’s U.S. facilities.

Milwaukee-based Harley has similar operations in India and Brazil, where complete motorcycles are assembled from kits.

New motorcycles arriving from the United States at a Harley-Davidson showroom in Bangkok. Seeking to avoid high tariffs, the company is planning to build a factory in Thailand.
Luke Duggleby for The New York Times

In India, where big touring motorcycles and cars are saddled with a 100% import tariff, Harley's sales have grown by a brisk 30% in the past two years.

That's largely because the company has been able to get around the tariff by assembling bikes there, something it's done in that country since 2011.
The Thailand tariff on motorcycles assembled in the United States is about 60%, according to Harley.

“By opening this plant, we expect our regional (Asian) operations to help reduce those costs,” said Harley spokeswoman Katie Whitmore.

“There is no intent to reduce Harley-Davidson U.S. manufacturing due to this expansion,” Whitmore said.

“We anticipate an increase in the number of additional U.S.-manufactured components that will be shipped to the Thailand facility,” she added.

Asia is one of Harley’s fastest-growing markets.

But the Thailand plant, and others like it, worries the United Steelworkers.

“Harley-Davidson has been the crown jewel of American manufacturing. Management’s decision to offshore production is a slap in the face to the American worker and to hundreds of thousands of Harley riders across the country,” Steelworkers President Leo Gerard said in a statement.

Harley-Davidson has said it intends to grow its international business 50% by 2027, and that international sales are pivotal to the company’s future.

Harleys shipped from the United States to Bangkok. The Thailand plant will assemble motorcycles for Asia that were previously imported from India or the United States.
Luke Duggleby for The New York Times

But the Steelworkers, which represents employees at the Harley engine operations in Menomonee Falls, says the company should abandon offshoring plans and, instead, expand operations in the U.S.

“Offshoring production is the wrong path to prosperity. It puts in jeopardy the success that has propelled Harley over the years,” Gerard said.

A similar statement came Tuesday from the International Association of Machinists and Aerospace Workers, which also represents employees in Harley's manufacturing plants.

“Harley-Davidson is going overseas and taking American jobs with it. While other companies think about moving work home, Harley-Davidson is doing the opposite. Harley-Davidson is laying off U.S. workers monthly while continuing to hire temporary workers," said IAM President Robert Martinez Jr.

He added: “What part of ‘Made in America’ does Harley-Davidson not understand?”

In April, Harley-Davidson Inc. said it was cutting 118 jobs at its plant in York, Pa., as the company moves the production of all cruiser motorcycles to Kansas City.

The layoffs, which will begin June 23, affect 110 hourly employees represented by the Association of Machinists and Aerospace Workers.

The remainders are salaried employees and contractors.

Harley said the employees were notified in November 2015 that it planned to consolidate the production of Softail cruiser motorcycles at its Kansas City plant starting with the 2018 model year.

The move will create 118 positions in Kansas City, according to the company, and it doesn’t affect employment in Milwaukee.