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June 29, 2018
So, are your loyalties with Harley-Davidson or Donald Trump? Man, that's a dumb question!
By Samuel Vargo
Will Donald Trump's reaction in tweets to Harley-Davidson affect the loyal upholders of this All-American brand? No, not in this world. Harley-Davidson seems to enjoy inelastic demand and its buyers and riders will throw Trump under the bas before they turn their backs to that corporate name surrounded by flying wings.
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I had a very bad dream last night -- call it more of a nightmare -- that all my biker friends and acquaintances were gathered together, and all were taking all their Harley-Davidson garb and were throwing all their tee-shirts, hoodies, jackets, hats, belts and other garments onto a big burn pile.
And all these guys and chicks were on foot, if they didn't have another vehicle besides their motorcycles. The reason being was that they had all taken their bikes to the junkyard and had scrapped them.
"We're all angry that Harley Davidson hurt Donald Trump's feelings because the company moved some of their operations overseas. We've decided now, that our loyalties are with the President rather than Harley-Davidson," a pretty good friend told me, then he threw a match onto the burn pile and whoosh! flames hit and all that beautiful clothing went up in flames.
Yes, it was quite a nightmare. Then I woke up and realized that none of my friends and acquaintances were going to switch their loyalties just because this crazy, dime-store Mussolini (as Steve Schmidt calls him) had a lamebrained epiphany to put so many tariffs on other countries that the USA will have to produce, buy, and sell everything within our borders because it will be too costly for our domestic concerns to be able to afford to do business otherwise.
"President Trump's tweet Tuesday morning that Harley-Davidson would be 'taxed like never before' puts the Milwaukee motorcycle maker in a growing club of U.S. companies that have been singled out for criticism by the president," according to Samatha Masunaga of the Los Angeles Times.
Singling out companies for vindication and treating them unfairly, as opposed to other companies in the market, is not only immature and inequitable, it's also illegal and is an impeachable offense for a President take this route. Here, Trump's decision to have his little Tweety Bird temper-tantrum with Harley-Davidson shows that he wants to decide how American companies can buy or sell, or even operate, in our country (which has a laissez faire, free market economic system). Trump seems to want to force this All-American company, Harley Davidson, to start reacting to his tweeting storm of threats as if Harley-Davidson was making bikes in Trumpenstan rather than a free democracy.
"Trump's sentiments on Harley-Davidson come a day after the company saidit would move some production out of the U.S. to avoid European Union tariffs levied in the increasing trade tensions between Europe and the U.S. Harley-Davidson had previously said it would close a Missouri plant and open one in Thailand after Trump pulled the U.S. out of the Trans-Pacific Partnership trade agreement," the Los Angeles Times' Masunaga writes.
[Harley-Davidson already has been operating assembly plants in India and Brazil, according to numerous sources, including USA Today. click here
"Trump's penchant for singling out U.S. companies -- dating from when he was president-elect and called out the price of Boeing Co.'s Air Force One presidential plane-- is 'extremely unusual,' said Phil Levy, adjunct professor of strategy at Northwestern University's Kellogg School of Management. 'Part of the problem with it is, almost by definition, it means that you're having fairly unequal treatment of companies by the government,' he said. 'And we usually aim, as part of our rule of law, that companies will be treated equitably and not singled out or intimidated,'" the Los Angeles Times writer continues.
"Harley-Davidson did not respond to a request for comment on Trump's tweets, but Levy said most companies that have been targeted by Trump have chosen to ride out the storm. Their responses have included keeping mum, releasing bland statements and repackaging existing plans in a way that makes it seem like they're responding to Trump," Musanaga writes.
"'These companies do not want to get into a public dispute with the president,' Levy said. They 'presume that this is probably a short-lived thing on the president's part which, for the most part, has proven to be right.'"
Trump's decision to tax our European allies not only was bad for the sale of Harley-Davidson's sales of motorcycles domestically and overseas, it will also, most likely, be a bad thing for those who need parts for their bikes. One of the main reasons this brand of bikes became so popular is because Harley-Davidson motorcycles are rather easy to work on -- and in the case of their older bikes, this is very true. I once worked with a city reporter who, during times when he was bored, would tear down one of his Harley-Davidson bikes, then meticulously clean, repair, and replace its parts, and then, he would put his bike back together again. I also have a friend who recently bought an old Harley-Davidson bike that was placed in an old, dusty, greasy box, and he replaced some parts, fitted the box-full of parts into a two-wheeled motor vehicle, and today is riding around on a spiffy, almost-like-new, classy classic.
That old sales credo that Harley-Davidson once used, "Don't just get there -- arrive," is particularly evident with this biker. When he gets somewhere, he certainly arrives, like rolling thunder!
The economy does not like tariffs. Combined with the predicted exponential rise of the national debt in direct correlation with Trump's tax cuts, a recession has been prognosticated by some economists. Harley-Davidson seems to enjoy an inelastic demand. Many who own a Harley-Davidson buy other bikes, and they're usually other Harley Davidsons. An extremely popular brand among white, blue-collar workers, with many loving that winged symbol surrounding the brand's corporate name, there is only one rite-of-passage to wearing this garb: To actually own and ride a Harley-Davidson motorcycle. All Trump's maligning of this company will undoubtedly pass over, with much of his banter probably causing angst and discord among this sector of the populace, who seem to be a forgiving but not a forgetting lot. Over the long term, bikers who have a bit of independent spirit in them will probably be swayed to vote for a Trump opponent, even if they had some fervor during Trump's campaign and over the first few years of his presidency. Yes, this is how devoted Harley-Davidson bikers are to their favorite corporation. In a nutshell, nothing is going to penetrate the devotion and loyalty Harley-Davidson lovers and bikers have to their brand. Many look upon this company as if it was their own, and the tirades and diatribes of a political leader who acts irrationally and is caustic and sarcastic will not dampen their amorous feelings toward this great company.
Harley Davidson just made a business decision to save itself. As selfish and self-serving as Trump has always been, all patriotism would surely go out with the baby and the bathwater if he could save money by transplanting one of his companies overseas, if money could be saved. He has no right to criticize this long-established, great American company, a concern that has remained loyal to this land, its workers, and its customers. For seeming eons now, Harley-Davidson has kept all its operations on American soil. Unfortunately, the global market dictated an ominous alternative and option that Harley-Davidson obviously accepted reluctantly. And that option was to have some of its assembly and operational plants transferred to other countries.
In an opinion headlined June 27 on The Smirking Chimp, writer P.M. Carpenter opines, "To sell motorcycles in Europe, what choice did Harley have? It was facing a 31 percent tariff -- up from 6 percent; a retaliatory increase by the E.U. Trump's response was that he '"fought hard for them,' but they 'wave[d] the White Flag' --'they quit!' So the scapegoat, in this case, is the victim, which is usually the case. And of that, we'll see more. "
Trump's decision to put a litany of tariffs on innumerable countries has been met with a lot of opposition - even aggravation - on Capital Hill and even in the Republican Party. As Alan Rappeport and Stacy M. Brownwrite in The New York Times, "The president's public attack on Harley is likely to further frustrate Republicans, who have been increasingly worried about the fallout from his trade war."
"Speaker Paul D. Ryan, a Wisconsin Republican, said Tuesday that the company's move was a sign that unilateral tariffs did not work. 'I don't think tariffs are the right way to go,' Mr. Ryan said. 'I think tariffs are basically taxes, and what ends up happening is you get escalating tariffs, or escalating taxes,'" The New York Times article says.
"Representative Jim Sensenbrenn, another Wisconsin Republican, urged Mr. Trump to take a more targeted approach in his trade negotiations that would protect American workers and businesses. 'It's unfortunate that such a strong Wisconsin company like Harley-Davidson should have to bear the brunt of this trade dispute,' he said," according to this article.
"And Senator Ben Sasse, a Nebraska Republican who is a frequent critic of Mr. Trump, defended Harley's patriotism and condemned Mr. Trump's trade policies as bad economics. 'This will go over like a Vespa at Sturgis,' Mr. Sasse said, invoking the scooter brand and the South Dakota site of a large annual motorcycle rally. 'The problem isn't that Harley is unpatriotic -- it's that tariffs are stupid.'" Alan Rappeport and Stacy M. Brown write.
In another article written by Alan Rappeport dated June 25 in The New York Times, it reads: "Mr. Trump's trade war is beginning to ripple through the United States economy as companies struggle with a cascade of tariffs here and abroad. While Mr. Trump says his trade policy is aimed at reviving domestic manufacturing, Harley-Davidson's move shows how the White House approach could backfire as American companies increasingly rely on overseas markets for materials, production and sales."
* Writer's Note: An earlier draft of this storyappeared on The Smirking Chimp on June 28.
Samuel Vargo worked as a full-time reporter and editor for more than 20 years at a number of daily newspapers and business journals. He was also an adjunct English professor at colleges and universities in Ohio, West Virginia, Mississippi and Florida for about a decade. He holds a B.A. in Political Science and an M.A. in English (both degrees were awarded by Youngstown State University).