US bikers divided over Trump's war with Harley-Davidson
published : 13 Aug 2018 at 00:59
writer: New York Times
STURGIS, South Dakota: Gary Rathbun rumbled into town to attend the United States' pre-eminent gathering of motorcycle enthusiasts atop his Harley-Davidson, a 2009 Ultra Classic that brought him 800 miles from Idaho. It is the 40th Harley he has owned. It will also likely be his last.
Like many of Harley's most loyal customers, Rathbun was enraged by the company's announcement this summer that, because of the Trump administration's trade fight, it would begin manufacturing the bikes it sells in Europe and Asia outside the United States, including at a new plant in Thailand.
His anger echoed that of President Donald Trump, whose public denouncement of Harley's decision has put one of the country's most iconic brands in the uncomfortable position of clashing with a president who is immensely popular with most of its customers.
"I'm riding my last Harley," said Rathbun, 67, a retired truck driver whose bike rally essentials included a steel knife nestled in his belt, a saddle bag stuffed with a Ruger pistol and a small bottle of Jack Daniel's cinnamon whisky. "It was American-made, and that's why we stood behind them."
Harley took a public relations risk to protect its bottom line when it said it would skirt European Union tariffs aimed directly at the industry in retaliation for Trump's steel and aluminium levies. Rather than eat the cost of the tariffs or raise prices on the bikes it sells in Europe by $2,200, the company said it would move some production overseas.
In a warning to other companies that might follow suit, Trump described Harley's decision as an act of corporate treason, declaring in a Twitter post in June: "If they move, watch, it will be the beginning of the end - they surrendered, they quit!"
He again criticised Harley's decision in a Twitter post Sunday: "Many @harleydavidson owners plan to boycott the company if manufacturing moves overseas. Great! Most other companies are coming in our direction, including Harley competitors."
Most of the hundreds of thousands of motorcycle enthusiasts who converged this past week upon the Black Hills of South Dakota developed a relationship with their Harleys well before Trump became president. Still, as leather-clad baby boomers revved engines, drank beer and swayed to classic rock ballads, Trump's influence was palpable.
Like Trump, Gary Panapinto, 63, a machinist from Illinois, had doubts about Harley's true intentions, believing that the company was planning to move the bulk of its bike production offshore, and, like Trump has intimated, he suggested that Americans would be forced to buy a product that was made overseas. While Trump has fanned that perception, Harley has said it will shift production only for bikes it sells in Europe and that American bikes will still be made in the United States.
"They need to keep them here in the United States, especially if they're going to sell them here," Panapinto said. "I think Trump is just trying to protect jobs in the US"
Oliver Lapointe, a retiree from New Hampshire who rides cheaper Japanese bikes, said he used to aspire to own a Harley but could never afford one. Now he thinks they are not worth it because they are filled with foreign-made parts and, he said, increasingly made overseas.
Like several Trump administration officials, he accused the company of using the tariffs to justify a decision that it already had in mind.
"They're always advertising that they're made in America, so I don't think they should do it," Lapointe, 70, said. "They're greedy."
The company declined to comment, but it pointed to a July interview in which its chief executive, Matthew Levatich, defended the decision. He denied that he wanted to shift its manufacturing, noting that it would not take up to 18 months to execute the plan if it were in the cards all along.
"We've worked very hard to be apolitical in how we approach our business and our consumers everywhere in the world," he said. "We have to do what we have to do based on the facts and circumstances before us, and we're doing that."
Some hard-core Trump supporters said they understood the economic rationale behind Harley's decision. Few complex machines are fully sourced and assembled in the United States these days, and even the riders who are devoted to the ideal of a fully American-made product said they understood that companies must compete globally.
Bikers have been among the groups most loyal to Trump, as motorcyclists in the United States tend to be predominantly working-class men older than 50 and veterans - demographics that comprise the bulk of the president's base. Trump has embraced that allegiance, saying recently that "I guarantee you everybody that ever bought a Harley-Davidson voted for Trump."
On Saturday, Trump invited hundreds of bikers from the New Jersey Bikers for Trump chapter to visit him on vacation in Bedminster, New Jersey. He praised them as "people who truly love our Country."
Some who are generally pleased with Trump said he was wrong to bully the motorcycle maker merely for trying to make a profit, but they remained loyal to him nonetheless.
"You've got to take it with a grain of salt. He's hot one day and he's cold the next," Bill Schaner, an electrical supply salesman from North Dakota who has owned seven Harley bikes, said of the president. "If they're going to make bikes in Europe and sell them in Europe, let them go. We'll take the bikes made in America."
At a souvenir stand selling Trump memorabilia off the main drag in Sturgis, Larry Rich said that, as a businessman, Trump should understand that Harley is doing what it can to stay profitable.
"I don't like everything he says, but I don't like everything my wife says," said Rich, 72, who used to ride Indians - another US brand, made by Polaris - before giving up the hobby.
For his part, Trump has been good for business. Rich was busy selling shirts printed with an image of the president blazing past the White House on a Harley-Davidson with Stormy Daniels, the pornographic film actress who claims to have had an affair with Trump, falling off the back. The tryst that Daniels - whose real name is Stephanie Clifford - says took place in 2006 has not turned off customers.
"Well, he was a Democrat back then," Rich said with a smile.
Veterans of the Sturgis bike rally, which is in its 78th year, said that the hardships facing Harley-Davidson go beyond Trump's tough words and stem from years of declining ridership in the United States.
Leslye Beaver, owner of The Beaver Bar in Sturgis and several other biker bars across the country, said that Harley and other US motorcycle manufacturers are at a crossroads because their products have lacked appeal to young people in the United States. She pointed out that the trade disputes have increased their raw material costs and hindered their ability to export to Europe, which is a growth market.
"I think they're doing what they have to do to stay in the game," Beaver, who lives in Georgia and supports Trump, said while patrolling the parking lot of her bar in a golf cart. "It's human for people to be mad because Harley is so American, but I think they want to be here."
For years, Harley-Davidson's sales in the United States have been steadily declining as the Milwaukee-based company grappled with an ageing population, a vibrant secondary market and the changing tastes of consumers. Recently, it has focused on marketing its motorcycles to women, selling branded clothing and boosting international sales as a way to grow profits.
The average cost of a Harley is about $20,000, and they top out at about $40,000, making the motorcycles a luxury item for people who do not use them as their primary mode of transportation. In 2017, the company's US retail sales fell for the third consecutive year to 147,972 motorcycles, while sales in international markets have been climbing slowly or holding steady, with more room to grow. In the past five years, Harley's stock price has fallen by nearly 25 percent, even as the stock market has been on a tear.
Harley is also under pressure from more intense competition. In the 1990s at Sturgis, Harley riders would torch so called "rice burners" - their pejorative term for Japanese bikes - or tie them to the back of their all-American motorcycles and drag them down the streets. Although Harleys continue to be the most popular ride, foreign brands such as BMW, Honda, Yamaha and Kawasaki are increasingly common.
The greater appreciation for foreign-made bikes was on display at Buffalo Chip, a sprawling 600-acre campground 5 kilometres east of Sturgis. At the campground, Michael Lichter, a Colorado-based photographer and curator, puts on exhibitions of speciality motorcycles from around the world as a way to make the rally less Harley-centric and broaden interest and inspiration beyond American bikes.
"People need to be exposed to more," said Lichter, who hopes to put on a show of customised motorcycles by all Japanese builders next year. "If you're buying just because it's American, I don't think that's a good thing."
He added: "It means there's no pressure on American manufacturers to build better."
To the president's most ardent admirers, there is nothing better than American-made.
Chris Cox, the founder of the Bikers for Trump group that has organised demonstrations for Trump across the country since he was a candidate, was using the Sturgis gathering this year to drum up more support for Trump and to mobilise opposition to Harley. He wants shareholders and riders to come together and petition the company to promise it will give generous severance packages to workers who might get fired as it moves manufacturing to other countries.
Like Trump, Cox is furious with Harley's chief executive, Levatich, whom Cox says has "ties" to Europe and wants to make the company less American.
Levatich, who has been with Harley since 1994, has held senior roles overseeing its European operations, including the management of the Italian motorcycle business MV Agusta that Harley acquired in 2008.
"We're not going to sit back on a hope and a promise that they're going to do the right thing," said Cox, who brought with him a leather jacket autographed by Trump at the White House when he was in Washington for a recent visit with some bikers. He said that Trump insisted that he visit the Oval Office because his group has been so supportive and loyal.
Explaining the importance of domestic production, Cox said that Vietnam War veterans who joined motorcycle clubs after the war were disappointed decades later when the new brake pads they needed to buy were made in Vietnam. He said that many bikers he knows are now wearing long sleeves to conceal their Harley tattoos.
But even Cox, a South Carolina chain saw artist who carves trees and other objects, could not escape the realities of global supply chains and the high cost of making some products in the United States. While he used to sell American-made T-shirts, the $20 Trump shirts he was selling outside his recreational vehicle were made in Haiti. The American-made shirts proved to be a hard sell.
"If I get a T-shirt made in the USA, it's going to cost about $8 more," Cox said. "I looked far and wide to try to get a shirt made in America, it's just they get you, they gouge you."