Can Harley-Davidson ride out Trump's tweet storms?

By Kyle Swenson Time of article published Jun 27, 2018

Share this article:

Milwaukee, Wisconsin - Go hunting for the Harley-Davidson origin story, you'll end up in the black smoke and workshop tinkering of the early 1900s. But the true jumpoff point for understanding the modern American motorcycle manufacturer is 6 May 1987 - the day the President blessed the brand.

Wearing a light-colored suit as he bounced up onto a platform at the company's plant in York, Pennsylvania, President Ronald Reagan stood before a factory floor jammed with assembly-line workers to deliver a limited-government victory speech.

Five years earlier, Harley-Davidson was in a corporate tailspin due to intense competition from Japanese manufacturers dominating the US market. In 1983, the Reagan administration imposed five years of limited tariffs on Japanese bikes. The assist helped Harley-Davidson's management retool the company. Now in 1987, they were ready to again take on the Japanese competition alone. The company was the only American motorcycle brand left standing.

"American workers don't need to hide from anyone," Reagan told the crowd. But the president, a free trade hawk, walked an interesting line in his speech. While praising the "breathing room" the tariffs allowed the company to get back on its feet, he argued against further protections.

"Our trade laws should work to foster growth and trade, not shut it off," Reagan said. "And that is what is at the heart of our fair trade policy: opening foreign markets, not closing ours. The idea of going to mandatory retaliation and shutting down on presidential discretion in enforcing our trade laws is moving toward a policy that invites, even encourages, trade wars."

The workers - many still fearing what international competition would do to their jobs later - were silent.

Now the famous American brand is again the target of presidential focus - this time with a much different intensity. On Tuesday President Donald Trump blasted the company following Harley-Davidson's decision to shift some production overseas due to the administration's aggressive trade policy. 
The company says Trump's steel and aluminium tariffs will cost Harley-Davidson $20 million (R275 million) a year; retaliatory tariffs could cost an additional $45 million (R616 million).

In a series of tweets, the president lashed out at the company, saying Harley-Davidson - a brand he has embraced in the past - was only using the tariffs as an excuse to take away American jobs. The bikes, Trump stated, should "never be built in another country-never!"

"If they move, watch, it will be the beginning of the end - they surrendered, they quit!" Trump wrote. "The Aura will be gone and they will be taxed like never before!"

Trump's ire at a quintessentially American brand is noteworthy. So much of the Harley-Davidson story - a company started by the sons of immigrants in what we now call the Rust Belt - is wrapped up in the same concerns dominating the White House, from trade wars and broad-stroke nationalism to celebrity and image-maintenance.

In the late 1800s, motorcycles were a joke.

As Darwin Holmstrom writes in his book "Harley-Davidson: The Complete History," petrol-powered bicycles were unwieldy at century's start due to the size of the engines - more a "carnival freak" than actual mode of transportation, according to Holmstrom. In 1895, an entrepreneur named Edward Joel Pennington showed off his curious "Motor Cycle" on a street in Milwaukee. Neighbors rushed to watch. Two 14-year-olds who lived nearby may have been in the crowd, Holmstrom speculates: William S. Harley and Arthur Davidson.

By the early 1900s, lighter-weight engines made motorcycles a more feasible product. Harley and Davidson worked on designs and built bikes, eventually selling their first models in 1903. According to the company, the two tinkered on their early designs in a three by five metre wooden shed behind the Davidson house. 'Harley-Davidson Motor Company' was scrawled on the workshop's door.  Demand was enough in 1906 for the friends to build a small factory in their Milwaukee neighborhood. 

Harley-Davidson showed early on that the company could easily slip from one identity to another. T he bikes were originally designed as a primary mode of transportation. But from 1908, however, Henry Ford's affordable Model T began dominating that market. Harley-Davidson pivoted, pitching its products not as your ride to work or for the daily errands but a leisure craft. It started riding clubs for owners. In the cash-heavy 1920s, motorcycles were another activity of the rich.

Military shipments

A second market helped Harley-Davidson outlive the Depression: the military. The company's cycles had been used early on by various armies. One reason Harley-Davidson survived the bottomed-out 1930s were military shipments to Japan. When the Second World War ripped the world apart the Motor Company was busy producing bikes for the Allies.

The postwar years were when Harley-Davidson stepped fully into the identity that's now welded completely to the brand: the outlaw. M otorcycle clubs - favoured by World War II veterans eager for a jolt of adrenalin after combat - started up in the 1950s.

Thanks to screen time in movies such as 1953's "The Wild One" and 1969's "Easy Rider," as well as reports of leather-clad mayhem linked to groups such as the Hell's Angels, the myth of the Harley-mounted, anti-social misfit stuck in the social consciousness. Whether feared or revered, Harley-Davidson riders - bulling down the street with the V-twin engine's unmistakable roar - became American fixtures.

And yet the outlaw image would also set Harley-Davidson on a path to economic disaster. Hondas were portrayed in ads as a clean, nice alternative to the Harley-Davidson's social menace. In 1959, the Japanese manufacturer only sold 1700 bikes in the Unitee States. By 1970, after Harley-Davidson had become the highway's bad boy, Honda was selling 500 000 motorcycles a year.

Identity change

Other overseas competitors also began piling into the stateside market. Harley-Davidson's then president John Davidson, a descendant of one of the company's founders, would eventually accuse companies such as Honda of "dumping" products in the US.

Davidson once said:  "The Japanese established production schedules that were much higher than the demand for their products; they chose the US to unload their excess production."

The company's own mismanagement did not help Harley-Davidson's business at the time, e xecutive Vaughn Beals explained to Fortune in 1989.

'We were being wiped out by the Japanese because they were better managers - it wasn't robotics, or culture, or morning calisthenics and company songs - it was professional managers who understood their business and paid attention to detail."

But the company also executed another skillful identity change in the 1970s that would eventually help refurbish its image in bold red, white and blue strokes.  Feeding off the patriotic energy soaking the country for the Bicentennial, the company released a "Liberty Edition" bike in 1976 featuring patriotic coloring, the Statue of Liberty, and "Born Free" inscribed on the frame.

American icon

The new line suggested the idea that the brand's toughness and edginess were not anti-social values but inherent to its American identity. That association had fully stuck by the time Reagan cheered the company's resurgence in 1987 after the tariffs were dismantled.

"As you've shown again, America is someplace special," Reagan told the crowd of workers. "We're on the road to unprecedented prosperity in this country - and we'll get there on a Harley!"

Harley-Davidson's recent years have been difficult, leaving the company vulnerable to the global chaos Trump's trade policy may spark. Motorcycle riders are getting grayer: in 1990 the median age for American motorcyclists was 32. Now it's 47. Global sales are down 6.7 percent, with US sales dropping 8.5 percent.  Yet the brand's iconography has been resilient to bad sales before. It's one of the few American companies hooked so firmly to the national identity.

Washington Post

Share this article: