American Motorcycle Dealer AMD 228 July 2018

™ R NOW IN OU 26 EA t R h Y T H E L E A D I N G B U S I N E S S M A G A Z I N E F O R T H E I N T E R N AT I O N A L C U S T O M M O T O R C Y C L E A N D PA RT S I N D U S T RY Harley-Davidson to Absorb EU Tariff Hit in the Short-Term; Seeks Overseas Manufacturing Solution in the Long-Term n a Form 8-K filing to the United States Securities and Exchange Commission on June 25 (as required of public corporations in possession of news that can materially affect the interests of shareholders) Harley-Davidson stated that … The European Union has enacted tariffs on various U.S.-manufactured products, including Harley-Davidson motorcycles. These tariffs, which became effective June 22, 2018, were imposed in response to the tariffs the U.S. imposed on steel and aluminum exported from the EU to the U.S. Consequently, EU tariffs on Harley- Davidson motorcycles exported from the U.S. have increased from 6% to 31%. Harley-Davidson expects these tariffs will result in an incremental cost of approximately $2,200 per average motorcycle exported from the U.S. to the EU. Harley-Davidson believes the tremendous cost increase, if passed onto its dealers and retail customers, would have an immediate and lasting detrimental impact to its business in I RMO T TE N the region, reducing customer access to Harley-Davidson products and negatively impacting the sustainability of its dealers’ businesses. Therefore, Harley-Davidson will not raise its manufacturer’s suggested retail prices or wholesale prices to its Harley CEO Matt Levatich is on record as stating that he believed that import tariffs on steel and aluminum would hurt Harley- Davidson and other U.S. manufacturers dealers to cover the costs of the retaliatory tariffs. In the near-term, the company will bear the significant impact resulting from these tariffs, and the company estimates the incremental cost for the remainder of 2018 to be approximately $30 to $45 million. On a full-year basis, the company estimates the aggregate annual impact due to the EU tariffs to be approximately $90 to $100 million. To address the substantial cost of this tariff burden long-term, Harley- Davidson will be implementing a plan to shift production of motorcycles for EU destinations from the U.S. to its international facilities to avoid the tariff burden. Harley-Davidson expects ramping up production in international plants will require incremental investment and could take at least 9 to 18 months to be fully complete. Harley-Davidson maintains a strong commitment to U.S.-based manufacturing which is valued by riders globally. Increasing international production to alleviate the EU tariff burden is not the company’s preference but represents the only sustainable option to make its Continues on page 6 >>> ‘Ducky’ by Yuri Shif We like Ironhead Sportsters here at AMD Magazine, and we like the bikes that Yuri Shif brings to the AMD World Championship. Put the two together and you get ‘Ducky’ - 10th place in the Freestyle class in 2016; see more on pages 32/33 JULY 2018 ISSUE #228 THE COMMUNITY GARAGE MOVEMENT MIKE CORBIN 50 YEARS IN THE SADDLE