Harley-Davidson Is Moving Some Production Overseas Thanks To Trump's Trade War

We may earn a commission from links on this page.

Good morning! Welcome to The Morning Shift, your roundup of the auto news you crave, all in one place every weekday morning. Here are the important stories that are your air, that you need to know to live.

1st Gear: Definitely Nobody No One Zero People Saw This Coming

President Donald Trump has decided to launch a trade war with the rest of the world, because trade wars are good and easy to win, and the first big winners appear to be the factory workers of Harley-Davidson. The European Union slapped retaliatory tariffs on a number of American products, including motorcycles, after Trump placed massive tariffs on aluminum and steel. Because American-made bikes are about to get a lot more expensive in Europe, Harley’s second biggest market, American-made bikes will soon become European-made bikes, the Associated Press reports:

Harley-Davidson Inc. sold almost 40,000 motorcycles in the Europe Union last year, generating revenue second only to the United States, according to the Milwaukee company.

The maker of the iconic American motorcycle said in a regulatory filing Monday that EU tariffs on its motorcycles exported from the U.S. jumped between 6 percent and 31 percent, which translates into an additional, incremental cost of about $2,200 per average motorcycle exported from the U.S. to the EU.

“Harley-Davidson maintains a strong commitment to U.S.-based manufacturing which is valued by riders globally,” the company said in prepared remarks. “Increasing international production to alleviate the EU tariff burden is not the company’s preference, but represents the only sustainable option to make its motorcycles accessible to customers in the EU and maintain a viable business in Europe. Europe is a critical market for Harley-Davidson.”


Harley said this would happen, and whattya know, it did. And while other companies may be better equipped to absorb the massive cost of moving a significant portion of its business overseas to maintain its second-largest market just because of an unnecessary trade war, Harley-Davidson is in enough financial trouble already.


But the trouble isn’t limited to Harley. Daimler, owner of Mercedes-Benz, is cutting its 2018 outlook due to tariffs being placed on American-made products, the AP notes. That’s because while relatively few cars are imported from China, a ton of American-made cars are exported to China, and that’s significant for Mercedes, as a huge number of its SUVs that are in high-demand in China are built in the States. But since manufacturing in America is about to get even more expensive, don’t be surprised if Mercedes starts pulling out of American manufacturing, too. Or BMW, with its own plant in South Carolina. Or, you know, pretty much every other manufacturer, since they all export cars overseas.


Love too win.

2nd Gear: Oh, You Thought Everyone Was Kidding About Car Tariffs?

Since President Trump also announced that he’s thinking of putting tariffs on imported cars because of “national security” or whatever the hell excuse he wants, the E.U. is also planning on placing retaliatory tariffs on American cars as well, since the current tariffs are targeted at things like American motorcycles, American whiskey, and American denim (if you’re looking for the common thread in those things, it’s not because they’re very ***patriotic***, it’s because they’re all made in places that voted heavily for Trump).


From Reuters:

U.S. President Donald Trump on Friday threatened to impose a 20 percent tariff on all imports of EU-assembled cars, a month after his administration launched an investigation into whether auto imports posed a national security threat.

“If they decide to raise their import tariffs, we’ll have no choice, again, but to react,” EU Commission Vice President Jyrki Katainen told French newspaper Le Monde.

“We don’t want to fight (over trade) in public via Twitter. We should end the escalation,” he said in the comments published on Saturday.



3rd Gear: So What’s Volvo To Do?

This is all bad enough for companies like Mercedes, BMW, Ford, Tesla, Toyota, Fiat Chrysler, and GM, which have been exporting American-built cars to the world for years. I mean, everything’s already set up here, they’ve already been making tons of money off the backs of American workers, and who doesn’t love that capitalistic setup?


But the company that might be the most screwed here is Volvo, which just started making cars at its own big new factory in South Carolina. And that’s because of a calculation that made tons of sense up until very recently, as Automotive News points out:

Volvo Cars’ new U.S. auto plant is only partially staffed, its assembly lines barely stirring. But don’t let the calm fool you: The clock is ticking on an ambitious plan to make the plant the exclusive global source of Volvo’s most profitable nameplate — the XC90 luxury crossover — in only 36 months.


Yes, the exclusive global source for the XC90. As in, the ONLY PLACE IN THE WORLD where its flagship SUV will be built. And that’s fine, if Volvo wants to sell XC90s to Americans, and Americans only.

But if anyone else wants an XC90? I guess we’ll just have to see what happens.

4th Gear: Cadillac Does Some Shifting

Not in terms of manual transmissions, mind you, but in terms of executives. Cadillac recently ousted CEO Johan de Nysschen, who had hailed from Audi and Infiniti, and replaced him with Steve Carlisle, who has spent decades at GM. But since that’s not enough GM-iness for even GM, they want a little more oversight from people who have spent a long time at GM. Again, from Automotive News:

General Motors has realigned the responsibilities of two top executives in a move that underscores the importance and immediacy of its work on autonomous vehicles. The change also gives product chief Mark Reuss more direct control over the ongoing revival efforts at Cadillac two months after GM ousted the luxury brand’s president for not progressing quickly enough.


Ammann, 46, who already was overseeing the autonomous operations, remains president, while Reuss, previously executive vice president of global product development, has the title of executive vice president and president of GM’s global product group and Cadillac. But Cadillac President Steve Carlisle, who replaced Johan de Nysschen in April, remains. Carlisle and Sam Basile, who leads global portfolio planning for GM, now report to Reuss, 54.


If that org chart sounds confusing, it’s confusing to me, too.

5th Gear: Ford Trademarks A Bunch of Names For Its Train Station

Ford, the car company, bought a train station. It reserves the right to put train stuff on everything now, the Detroit News says:

Ford Motor Co. has filed to trademark a variety of names for the Michigan Central Depot it just purchased in Corktown, reserving the train station name for possible use on everything from coloring books and hockey pucks, to smartphone apps and software for ride-sharing and navigation.

The names “Detroit’s Michigan Central Station,” “Michigan Train Station” and “Michigan Central Station” were filed with the U.S. Patent and Trademark Office on June 11, a week before the carmaker threw its party celebrating the purchase of the towering vacant building that had become a symbol of the city’s decline.


It should name a car the Ford Train Station.

Reverse: R.I.P. Packard

The last Packard–the classic American luxury car with the famously enigmatic slogan “Ask the Man Who Owns One”–rolls off the production line at Packard’s plant in Detroit, Michigan on this day in 1956.


Neutral: Which American Car?

You, the imported car owner, must now buy an American car, and ONLY AN AMERICAN CAR. Why do you choose the Studebaker Avanti?