Sym­bol of U.S. man­u­fac­tur­ing open­ing plant in Thai­land

The Hamilton Spectator - - BUSINESS - NEIL GOUGH New York Times

HONG KONG — Pres­i­dent Don­ald Trump has held up Har­ley-David­son as a pil­lar of U.S. man­u­fac­tur­ing.

“We’re proud of you! Made in Amer­ica, Har­ley-David­son,” Trump said to the com­pany’s leather-clad top ex­ec­u­tives in Fe­bru­ary as five of its motorcycles rum­bled on the White House lawn.

But even as he praised Har­ley-David­son’s all-Amer­i­can cre­den­tials, the com­pany was busily build­ing a new plant — in Thai­land.

Har­ley-David­son, an icon of Amer­i­can style and know-how, serves as an ex­am­ple of the nu­anced eco­nomic re­al­i­ties push­ing U.S. com­pa­nies to lay off work­ers at home and set up new fac­to­ries over­seas. Unions rep­re­sent­ing its work­ers ac­cuse the com­pany of cut­ting U.S. jobs to hire lower-paid for­eign work­ers. Yet global trade bar­ri­ers and prox­im­ity to a grow­ing base of new cus­tomers also play roles, com­plex­i­ties in­her­ent in Trump’s am­bi­tion to over­haul trade pol­icy.

Motorcycles made in the new fac­tory — plans for which had not been pre­vi­ously dis­closed — will be sold in Asia, not the United States, which its do­mes­tic plants will con­tinue to serve, Har­ley-David­son said.

“This is ab­so­lutely not about tak­ing jobs out of the United States,” said Marc D. McAl­lis­ter, a man­ag­ing di­rec­tor of in­ter­na­tional sales at Har­ley-David­son, based in Sin­ga­pore. “This is about grow­ing our busi­ness in Asia.”

Still, unions rep­re­sent­ing its work­ers in the United States are not pleased.

“Why couldn’t we build them in the U.S. and ex­port them?” asked Leo W. Ger­ard, the in­ter­na­tional pres­i­dent of the United Steel­work­ers, which rep­re­sents Har­ley-David­son work­ers at plants in Wis­con­sin and Mis­souri. He ex­pressed con­cern that the com­pany could be en­ter­ing a “race to the bot­tom” in pur­suit of lower labour costs.

“It’s a slap in the face to the U.S. work­ers who built an Amer­i­can icon,” said Robert Martinez Jr., the in­ter­na­tional pres­i­dent of the In­ter­na­tional As­so­ci­a­tion of Ma­chin­ists and Aero­space Work­ers. The union rep­re­sents Har­ley-David­son work­ers at plants in­clud­ing one in York, Penn., where the com­pany plans to lay off more than 100 work­ers.

Har­ley-David­son ar­gues that steep trade bar­ri­ers in a high-growth mar­ket, not a de­sire to cut U.S. jobs, drove the move. South­east Asia of­fers rapid de­vel­op­ment and in­creas­ingly af­flu­ent spenders, but many coun­tries in the re­gion levy high tar­iffs on im­ported goods that make its motorcycles pro­hib­i­tively ex­pen­sive, the com­pany says.

Har­ley-David­son’s made-in-Thai­land motorcycles will avoid the coun­try’s up to 60 per cent tar­iff on im­ported motorcycles. They would also get a huge break on tar­iffs when ex­ported to Thai­land’s neigh­bours, thanks to a trade deal among the 10 mem­bers of the As­so­ci­a­tion of South­east Asian Na­tions, or ASEAN, which is is pur­su­ing an en­larged free-trade area with Bei­jing.

The Thai plant is also in­tended to help serve a vast mar­ket in main­land China. And McAl­lis­ter said the Thai plant would cut the trans­port and ship­ping time to the Chi­nese mar­ket to around five to seven days, from 45 to 60 days from the U.S.

LUKE DUGGLEBY, NEW YORK TIMES

Work­ers un­pack new motorcycles at a show­room in Bangkok. Har­ley-David­son is build­ing a fac­tory in Thai­land to build motorcycles for the Asian mar­ket.

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