Casualty Of Trade Tensions: Harley-Davidson Shifting More Production Overseas

Harley-Davidson motorcycle engines are assembled at the company's plant in Menomonee Falls, Wis. Tariffs from the European Union are prompting the company to shift production of some motorcycles for the European market overseas.
Harley-Davidson motorcycle engines are assembled at the company's plant in Menomonee Falls, Wis. Tariffs from the European Union are prompting the company to shift production of some motorcycles for the European market overseas.
Scott Olson/Getty Images

Harley-Davidson says it plans to move production of motorcycles it sells in Europe overseas in response to growing trade friction between the United States and Europe.

European officials last week imposed stiff tariffs on a wide range of U.S.-made goods sold within the European Union. The response came to President Trump's recent decision to slap tariffs on European imports.

In a Securities and Exchange Commission filing Monday, Harley-Davidson said the tariffs imposed by the EU "would have an immediate and lasting detrimental impact to its business in the region."

The company reported $5.65 billion in revenues last year and Europe is its largest overseas market, with almost 40,000 customers buying motorcycles there in 2017.

The European tariffs have jumped from 6 percent to 31 percent, the company said. That increase will add on average $2,200 to the cost of each motorcycle sold in the EU, and would cost the company $90 million to $100 million a year, the filing said.

"Increasing international production to alleviate the EU tariff burden is not the company's preference, but represents the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe," the filing said.

The company did not say where production would be shifted, or how many jobs might be affected, but said the move would take nine to 18 months to complete.

It also did not say which U.S. factories would be affected. The company's U.S. factories are in York, Pa.; Kansas City, Mo., and Menomonee Falls, Wis. It also has manufacturing operations in Australia, Brazil, India and Thailand.

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