Hurting from low sales and Trump tariffs, Harley Davidson will close its Kansas City plant

A year ago the president promised to help the company.

Harley-Davidson motorcycles stand on display at a dealership on March 8, 2018 in Potsdam, Germany. U.S. President Donald Trump has promised to authorize tariffs on imported steel and aluminum. (Photo by Sean Gallup/Getty Images)
Harley-Davidson motorcycles stand on display at a dealership on March 8, 2018 in Potsdam, Germany. U.S. President Donald Trump has promised to authorize tariffs on imported steel and aluminum. (Photo by Sean Gallup/Getty Images)

Members of the Association of Machinists and Aerospace Workers, a labor union that represents Harley-Davidson Inc. employees, met with House Minority Leader Nancy Pelosi (D-CA) Wednesday to discuss the corporation’s plans to close their Kansas City factory while opening an assembly plant in Thailand. The Kansas City factory currently employs 800 workers.

According to Harley-Davidson, Kansas City’s work will be moved to the company’s plant in York, Pennsylvania, creating 400 jobs there.

Union members, however, claim at least part of their work will be outsourced to Thailand.

“Part of my job is being moved to York, but the other part is going to Bangkok,” said Richard Pence, a machinist at the Kansas City plant, to the Milwaukee Journal Sentinel.


Pence also said engineers from the plant are heading to Thailand in a few months to help set up shop there, and he has reason to believe some of the equipment from the Kansas City plant will also be shipped off to Thailand along with the jobs.

Harley-Davidson claims there is no connection between the shuttering of the Kansas City factory and the opening of an assembly plant in Thailand.

“The plant under construction in Thailand is a separate and unrelated issue. Part of our long-term strategy is to grow our international business to 50 percent of our annual volume by 2027. The Thailand facility will allow us to be competitive and provide riders greater access to our brand and our products in an expanding global marketplace,” the company said in a statement. “Increasing production capacity in Asia is consistent with the company’s long-term strategy to focus on growth internationally. It is not intended to reduce U.S. manufacturing.”

The popular motorcycle company also has a plant located in India.

Just over a year ago, President Donald Trump met with Harley-Davidson executives and union representatives to ensure them that he would make it easier to create more jobs and factories in the United States.


“In this administration, our allegiance will be to the American workers and to American businesses, like Harley-Davidson, that were very strong in the 1980s and I remember this — you were victims of trading abuse — big trading abuse, where they were dumping all sorts of competitors all over the place,” Trump said in February of 2017.  “And Ronald Reagan stepped in and he put on large tariffs and you wouldn’t be talking about Harley-Davidson probably right now if he didn’t do that.”

In 1984, Reagan did raise tariffs on Japanese motorcycle companies like Honda, Kawasaki, Suzuki, and Yamaha. Many experts claimed the move saved Harley-Davidson, which was struggling due to competition from the Japanese market, however, there is debate over how much the tariffs actually helped the company.

Trump’s tariffs, ironically enough, are only hurting Harley-Davidson even more.

The president’s implementation of tariffs on steel imports could add $30 million to the company’s costs. Even worse, European leaders have tinted at possible retaliation for the tariffs against American companies like Harley-Davidson.

“A trade war has no winners and if it does not happen for the better, then we can work with our American friends and other allies on the core issue of this problem, overcapacity,” European commissioner for trade Cecilia Malmström said at a press conference in Brussels. “But if it does happen we will have to take measures to protect European jobs.”


Because roughly 16 percent of Harley’s sales are to Europe, the company released a statement cautioning against the tariffs: “A punitive, retaliatory tariff on Harley-Davidson motorcycles in any market would have a significant impact on our sales, our dealers, their suppliers and our customers in those markets.”

Harley-Davidson is based out of Wisconsin, the home state of House Speaker Paul Ryan. He also caution against the tariffs, warning of the damage it would cause to the business.

“We are extremely worried about the consequences of a trade war and are urging the White House to not advance with this plan,” said AshLee Strong, Ryan’s spokeswoman. “The new tax reform law has boosted the economy and we certainly don’t want to jeopardize those gains.”

The motorcycle company’s story is likely familiar to workers of Indiana’s Carrier plants, which closed and moved to Mexico. Candidate Trump promised to save these jobs, yet ultimately failed to act appropriately. Around 700 workers  were affected and forced to train Mexican citizens to do their jobs.