Harley sales drop in US, rise in Asia. So: new Thailand factory

[Testarossa]

https://www.nytimes.com/2017/05/23/business/harley-davidson-thailand-factory-manufacturing.html?ref=business&_r=0

[Demar]

American companies have been doing this for 40 years, it's nothing new. Part of the reasoning is cheap labor and part of it is skirting around tariffs and taxes. Fender Stratocasters are made in the USA and also Mexico; the Strat bodies are labeled MIM for made in Mexico. MIM Strats cost a lot less than the made in the USA Strats. Consumers want to pay as little as possible for their goods. The Triumph Bonnevilles are assembled in Thailand from parts made around the world. I think the tanks are still made and hand painted in England as is the case with my 2010 T100. Thailand has a booming motorcycle production scene. I think Moto Guzzi is doing well to keep their costs down and still make/assemble the bike in Italy. With the factory/dealer discounts the entire line is a very competitive value.

[Two Checks]

Someone should explain to the HD union guys if those bikes were assembled here and subject to a 60% tariff and didnt sell what good does it do the company tbat employs them?
Soon bikes wouldn be marketed there ad the company takes a loss. Them what would happen to those people who built the bikes for export?
The UAW knows exactly how this works. Its why there are foreign car and bike plants here. To avoid the tariffs tnat would make tber products unaffordable.

[Kev m]

Someone should explain to the HD union guys if those bikes were assembled here and subject to a 60% tariff and didnt sell what good does it do the company tbat employs them?
Soon bikes wouldn be marketed there ad the company takes a loss. Them what would happen to those people who built the bikes for export?
The UAW knows exactly how this works. Its why there are foreign car and bike plants here. To avoid the tariffs tnat would make tber products unaffordable.

YUP!

But far too many people are too short-sighted to see the big picture. If it means export sales grow, then the plants and workers in the US that make components (including the motors) benefit as well.

Anyway, this goes along with their final assembly plants in both Brazil and India.

[ITSec]

Someone should explain to the HD union guys if those bikes were assembled here and subject to a 60% tariff and didnt sell what good does it do the company tbat employs them?
Soon bikes wouldn be marketed there ad the company takes a loss. Them what would happen to those people who built the bikes for export?
The UAW knows exactly how this works. Its why there are foreign car and bike plants here. To avoid the tariffs tnat would make tber products unaffordable.

It's not that simple.

Many of the tariffs on incoming autos you mention have been eliminated or replaced/reduced over the decades since they hit their peak in the 70s. Companies like BMW, Nissan, Toyota, etc. have joined the classic Big Three in having plants all around the world, and having a blend of both imported and locally produced vehicles in almost all markets. Many 'overseas' brands produce models in the US for the world market, and produce models elsewhere and not in the US for sale here. The only truly protected markets for such products are in the Third World, where governments fear (for good reason) a flight of capital out of the country, threatening their economies.

The big issue that is raised is mentioned late in the quoted story. Agreements like the TPP (which the administration pulled out of) would eliminate import duties in these target markets, letting US manufacturers and employees make and sell products into them without these penalties. Such trade agreements do threaten some US jobs, but also help others survive and grow.

[wymple]

" Agreements like the TPP (which the administration pulled out of)"

This is why these bikes won't be built here. Those tariffs were coming off.

[JJ]

These days...it's a global market...and a global economy...and it's ever expanding outside the USA....and it's not turning back...for motorcycles or any other products...

[Two Checks]

The reason those foreign companies can build products here and ship them overseas is they dont get hit with yhe tariffs because they are not US companies. They are treatede as if the products were made in their home countries.

[Rough Edge racing]

 I have ad blockers and can't open the link....Is HD going to build a full range of bike in Thailand? Are they only for non US sales?

[ITSec]

I have ad blockers and can't open the link....Is HD going to build a full range of bike in Thailand? Are they only for non US sales?

If the article is accurate, it will be some manufacture. some assembly. All bikes will be for non-US sales, since Thailand has preferential import-export agreements with other southeast Asian nations. It's a continuation of the move they made opening the plant in India.

[Kev m]

If the article is accurate, it will be some manufacture. some assembly. All bikes will be for non-US sales, since Thailand has preferential import-export agreements with other southeast Asian nations. It's a continuation of the move they made opening the plant in India.

So yes, like their other foreign plants they're primarily assembly and only for foreign markets.

All US, and I think all N/A sales are of models made in the US of largely US parts.

[timonbik]

So yes, like their other foreign plants they're primarily assembly and only for foreign markets.

All US, and I think all N/A sales are of models made in the US of largely US parts.

Except 500's and 750's which I believe are both built in India.

Cheers, Tim

[Rough Edge racing]

So yes, like their other foreign plants they're primarily assembly and only for foreign markets.

All US, and I think all N/A sales are of models made in the US of largely US parts.

 So Harley is like every other high volume vehicle manufacturer that builds foreign market stuff in a foreign place...

[yackee]

Thailand wasn't going to be part of TPP, so the high tariffs on US-origin bikes would have remained.

I'm living in Thailand right now, and I think I can count on 1 finger the number of Harleys I have seen. In fact, I've seen very few bikes over 250cc, even on the highways. Harley's presence here seems more or less totally inconsequential.

The bikes people do ride -- obviously, tons of scooters. New vespas, old 150cc 2-stroke vespas, Honda cubs and similar (e.g. Clicks), Yamaha scooters... The Honda mx-5 ("grom" in the US) is amazingly popular. I personally think it's a great modern take on the old "monkey bikes", very attractive. For proper motorcycles, you see tons of café racers by Thai brand Stallions, all singles of, I'm guessing, no more than 400cc or so. Build quality looks ok from the ones I've seen up close, and aesthetically they are decent-looking examples of the style. Also a lot of Honda CBRs of the low-displacement variety.

In Bangko, a full-size Harley would be at a huge disadvantage. Lane-splitting is alive and well (it's more like lane-swarming), and the practice is essential for dealing with the insane Bangkok traffic. (However, it is quite terrifying from the perspective of a passenger on the back of one of the innumerable scooter taxis. That said, many Thai women ride passenger sitting side-saddle while texting on their phones). And of course we have the two-adults-and-two-kids-on-a-single-scooter phenomenon. I've seen dogs riding on scooters; scooters carrying huge bouquets of flowers between the driver's legs, or scooters carrying crates of eggs, or bungee-corded stacks of propane tanks, even a scooter carrying 20-foot sections of steel tubing.

[Kev m]

Except 500's and 750's which I believe are both built in India.

Cheers, Tim

Nope. I mean yes the foreign sales ones are built in India. But the North America sales ones are built on the same line with the Sportsters in the Kansas City plant.

And I believe motors for all are still coming from the one motor plant in WI.

[Two Checks]

Mosrly US parts...if you exclude wheels, lighting and suspension and brakes.
Where is the union on this?

[Kev m]

Mosrly US parts...if you exclude wheels, lighting and suspension and brakes.
Where is the union on this?

Well let's examine that some more.

The wheels were coming from an Aussie plant (but owned by Harley). Not sure if that changed.

Suspension was from Showa USA, who does have plants on the US, but I can't say if they specifically produce the Harley suspensions.

Brakes are Brembo and Nissan now, not sure of plant locations.

EFI and a lot of the electrics are Delphi and I believe Jay's company AMP. That's largely US.

Engines, frames, much of the bodywork, paint, ABS plastics etc. come from Harley's own domestic plants.

I'm not about to attempt an automotive window sticker analysis of percentages, but it seems like a decent number of American workers are involved in manufacturing components for Harleys.

But I don't think anyone would claim 100% on most any motor vehicle manufactured today, no?


Edit - And PS, no one used the term "mostly".

[Two Checks]

HD suspension is Showa, a Japanese company. Brembo is Italian.  Nissin is Japanese. Lighting is Stanley. Japanese.
Showa is Japanese.
The wheels were contracted to the Aussie plant then HD bought it. Why dont they bring that manufacturing here?
Where is the union on that?
All those other products may be made here but the profits go overseas.
If you are going to brag about being American at least be consistent. The unions are the ones complaining about Walmart selling foreign goods.
Not trying to be political just offering the counterpoint to the unions arguments about HD building a plant overseas.

[GearheadGrrrl]

Being a union retiree, my preference is for products made by workers who are paid and treated well in a democracy. Thus I have no quarrel with parts made in countries like Canada, Australia, Japan, Europe, etc. because in many cases those workers are better paid and have better working conditions than U.S. workers. I prefer not to buy products made in dictatorships like China where workers are not allowed to organize to obtain better pay and working conditions.

[Kev m]

HD suspension is Showa, a Japanese company. Brembo is Italian.  Nissin is Japanese. Lighting is Stanley. Japanese.
Showa is Japanese.

Where is any of that not what I said? Though you seem to think you have a line on what components Showa USA produces vs their parent company with multiple plants throughout Asia?

As for the union/American babble I don't recall ever seeing Harley brag about using exclusively American components.

That doesn't mean it's not an American company.

[Arizona Wayne]

Are the newer, smaller Harley models here made overseas?  I'd say it's been a long time since any US Harley models have been 100% made in the USA, even tho by their high prices you'd think otherwise. 

[Kev m]

Are the newer, smaller Harley models here made overseas?  I'd say it's been a long time since any US Harley models have been 100% made in the USA, even tho by their high prices you'd think otherwise. 

As I said the Street models for North America are made in the US (in the Kansas City plant in the Sportster/Street assembly line).

As for pricing every time I've done a model-by-model comparison with metric brands the US pricing on Harleys is very competitive with most models coming in close to or equal to their competitors.

Export pricing however can be steep for lots of reasons from VAT to tariffs.

[KiwiKev]

Being a union retiree, my preference is for products made by workers who are paid and treated well in a democracy. Thus I have no quarrel with parts made in countries like Canada, Australia, Japan, Europe, etc. because in many cases those workers are better paid and have better working conditions than U.S. workers. I prefer not to buy products made in dictatorships like China where workers are not allowed to organize to obtain better pay and working conditions.

Good luck with that, most stuff is made in China these days is it not ?


Sent from my iPhone using Tapatalk

[Rough Edge racing]

Good luck with that, most stuff is made in China these days is it not ?


Sent from my iPhone using Tapatalk

  No, not all....there are many choices but consumers more often go for the least expensive price...

[Two Checks]

Where is any of that not what I said? Though you seem to think you have a line on what components Showa USA produces vs their parent company with multiple plants throughout Asia?

As for the union/American babble I don't recall ever seeing Harley brag about using exclusively American components.

That doesn't mean it's not an American company.

How can a company based in another country be an American company?
And HD puts the UAW label on every HD made. Does that mean the parts that are foreign made are in UAaw orgyanized plants?
They also use or used the ad slogan, "made in America by Americans".
My son works in a steel mill that used to be owned by a Russian company. They supplied steel to pretty much every car maker in the US. And they were not union. Yet the vehicles built in unionized plants got that UAW sticker. And he gets the same pricing on vehicles as the car factory workers.

[Kev m]

How can a company based in another country be an American company?

Unless you know something about Showa USA and their labor force, and the products produced in their factory that you are not sharing then you are drawing conclusions without facts.

[Rough Edge racing]

 In my opinion, the the profits of the company go overseas to a parent company , then it's not "American" despite parts being made here with an American work force..Doesn't mean it's not good, just what it is...On the other hand the main focus of this website is bikes made in Italy...

[Testarossa]

And many companies headquartered in the US, and listed on US stock exchanges, send profits to offshore accounts or foreign divisions, to avoid US taxes. Are they still American companies?

[Lannis]

In my opinion, the the profits of the company go overseas to a parent company , then it's not "American" despite parts being made here with an American work force..Doesn't mean it's not good, just what it is...On the other hand the main focus of this website is bikes made in Italy...

That doesn't make much sense to me.   

If a company manufactures in the USA and has $100,000,000 in sales, then about $45,000,000 goes to wages for US workers to spend in the USA,  probably $30,000,000 goes to materials either sourced or transported in the USA, $10,000,000 goes to USA local, state, and federal taxes ... and about $5,000,000 for headquarters salaries and $10,000,000 (the profits) goes back overseas to the home office.

WHY would we want to miss out on $85,000,000 of wages, materials, and taxes here in the US just so we can say that the company is "US Owned"?

Lannis

[ITSec]

That doesn't make much sense to me.   

WHY would we want to miss out on $85,000,000 of wages, materials, and taxes here in the US just so we can say that the company is "US Owned"?

Lannis

Not to mention, any publicly traded company might (or might not) be "American-owned" depending on who bought or sold shares that day. The only major industries with restrictions on foreign ownership are things like airlines, banks, etc.