Symbol of U.S. manufacturing opening plant in Thailand
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.
Workers unpack new motorcycles at a showroom in Bangkok. Harley-Davidson is building a factory in Thailand to build motorcycles for the Asian market.