(Bloomberg) -- Harley-Davidson Inc. Chief Executive Officer Matt Levatich pushed back against what he called “misinformation” surrounding the company's plans to move some production overseas.
The iconic American motorcycle maker has been the target of angry tweets from President Donald Trump since announcing in June it would move some production abroad to sidestep tariffs the European Union slapped on its bikes. The spat flared up again on Sunday when Trump said he would support a boycott of the company if it moved production overseas.
Trump's pronouncement came a day after he welcomed bikers who support him to his golf course in Bedminster, New Jersey, and a New York Times article cited some Harley-Davidson owners criticizing the company at a rally in Sturgis, South Dakota. As a candidate and as president, Trump has used populist rhetoric to attack some companies that make products in other countries while praising those that announce investments in the U.S.
“We unfortunately find ourselves in the center of a heated political conversation about fair trade,” Levatich said in a memo sent to employees and dealers earlier Tuesday. “There continues to be misinformation circulated in conjunction with this issue, and I want to reiterate and share facts about Harley-Davidson that you can both be proud of and share with interested customers.”
The memo didn't mention Trump by name.
Many @harleydavidson owners plan to boycott the company if manufacturing moves overseas. Great! Most other companies are coming in our direction, including Harley competitors. A really bad move! U.S. will soon have a level playing field, or better.
Trump has lashed out more than a half-dozen times against the Milwaukee-based maker of motorcycles after praising the company early in his presidency. In June, he accused Harley of using the tariffs as an excuse to send jobs overseas. Harley had already announced plans to close a factory in Missouri and build a plant in Thailand.
Harley doesn't sell motorcycles in the U.S. that are built overseas, and that won't change, Levatich said.
“The only reason we have invested otherwise is so that our products have a fighting chance of being price competitive in markets that burden our products with high tariffs,” he said in the memo, which CNBC reported earlier.
The company is absorbing the cost of the European tariffs to protect dealers and customers there, at a cost of about $90 million to $100 million annually, but “we cannot carry these costs indefinitely,” he said.
The EU tariffs, which came as retaliation for Trump's steel and aluminum levies, will cost about $2,200 per motorcycle shipped to Harley's second-biggest market, the company estimated in a June 25 filing. The manufacturer hasn't specified which of its overseas plants will produce bikes for Europe.
Harley is trying to navigate escalating trade tensions as sales in its core U.S. market continue to shrink. The company's bike deliveries in the U.S. sank 6.4 percent in the second quarter, the 14th decline in the last 15 quarters, while worldwide sales fell 3.6 percent. Shares in the company rose 0.5 percent Tuesday to close at $41.60.
To contact the reporter on this story: Gabrielle Coppola in New York at gcoppola@bloomberg.net
To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Jamie Butters
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