Manufacture This

The blog of the Alliance for American Manufacturing

The company once promoted its American manufacturing footprint at the White House.

Oh, what a difference a year makes.

Almost exactly one year ago, executives from Harley-Davidson visited the White House as part of an effort by newly inaugurated President Donald Trump to promote American manufacturing. Trump thanked the Wisconsin-based company for building its iconic motorcycles in America and pledged to rebalance trade to drive more U.S. manufacturing.

On Tuesday, Trump gave his first State of the Union address to Congress, in which he continued to promise to act on trade to strengthen manufacturing (he hasn’t actually done much, but more on that over here).

Meanwhile, Trump’s big speech overshadowed an announcement by Harley-Davidson that also happened on Tuesday: The company said on a call to its investors that it will shut down its factory in Kansas City in 2019, leading to 800 layoffs:

“Tuesday’s announcement to investors was a complete surprise to employees, three fourths of whom are represented by one of two unions.

‘They didn’t even give us a call ahead of time,’ said Joe Capra, directing business agent for Local 778 of the International Association of Machinists & Aerospace Workers. ‘It is real devastation for these people who work here and work hard in the Kansas City area.’”

Harley-Davidson cited sluggish motorcycle sales as the reason for the closure; its worldwide sales fell 6.7 percent in 2017 compared to 2016, and U.S. sales specifically were down 8.5 percent. The company will shift some of the production at the Kansas City plant to its facility in Erie, Pa., which will create about 450 jobs there.

Analysts say the company faces an uphill battle in terms of sales, as motorcycle-loving baby boomers are getting older and millennials aren’t as interested in motorcycles.

But it’s also worth noting that while Harley-Davidson is shuttering an American factory, it is expanding its manufacturing footprint overseas – the company is building a factory in Thailand that is expected to open this year.

United Steelworkers President Leo Gerard, whose union represents some Harley-Davidson workers, called that decision “a slap in the face to the American worker.” The USW ended its two-decade partnership agreement with Harley-Davidson in September.

“This decision puts in jeopardy one of the few remaining genuine U.S. brands,” Gerard said. “Our members have been true partners with this company, working in good times and bad to make great products that fostered its growth and success. We remember the U.S. government stepping up in the 1980s to save Harley-Davidson and contributing to its revival.

“Harley owners and prospective buyers across the globe want to continue to enjoy machines made in America that provide quality rides and unique experiences. Harley’s potential outsourcing of production puts all of this at risk.”

Emil Ramirez, who represents USW District 11 that includes Kansas City, referenced the new Thailand factory in a statement about the factory clsoure, according to the Star.

“We cannot speculate about how the company plans to replace this production or to what extent these good-paying, family-supporting, American jobs will be outsourced to facilities the company has opened in Asia and other parts of the world,” Ramirez said.

There’s no doubt that Harley-Davidson’s decision is disappointing, to put it mildly. Not only will 800 people lose their jobs, but the closure of that factory will be a major blow to many others in Kansas City who depend on it for their own business.

Harley-Davidson also announced Tuesday that it expects to launch its first electric motorcycle within 18 months, part of an effort to attract new consumers. 

Here’s hoping the company makes those motorcycles in the United States.