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NOW IN OU
26 EA t R h
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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