Trade war tension between the US and China has put an end to the local stock market's record run as risk and fear return to investor thinking.
Marc Skildum is an avid supporter of US President Donald Trump who raises alpacas in nearby Dousman, Wisconsin, and rides Electra Glide Ultra Classics with his wife, Stacey. But he doesn't share the president's outrage that Harley-Davidson, headquartered here for 115 years, is moving work overseas to get around Trump's brewing global trade war.
"It's business," said Skildum, 48, visiting the company's museum near downtown Milwaukee. "If they can expand overseas and save money, you do it. Trump himself would do it, I feel."
After Harley announced Monday it would shift work overseas to avoid the fallout from Trump's aluminium and steel tariffs and Europe's retaliatory tariffs, the president repeatedly criticised the company, threatening it with severe taxes and predicting the decision could represent the "beginning of the end" for the brand.
"Harley-Davidson should stay 100 per cent in America, with the people that got you your success," Trump said in his latest tweet on the subject Wednesday. "I've done so much for you, and then this. Other companies are coming back where they belong! We won't forget, and neither will your customers or your now very HAPPY competitors!"
Yet a visit to a motorcycle repair shop and the museum here Wednesday revealed that Harley customers might not be willing to choose between the president they support and the motorcycle company they love. The company said the retaliatory tariffs by the European Union would increase the cost of its motorcycles by an average of $2,200 in European markets if they were made in the United States.
Supporters of the president, who made up the majority of riders surveyed, continue to back him, though with caveats.
"He gets himself into all these squabbles that he shouldn't," such as this one with Harley, said Jeff Polak, a 54-year-old from Milwaukee who rides a 2013 Harley FLTRU Road Glide. "I don't support that."
But he doesn't blame the president's tariffs for Harley's decision to set up more manufacturing operations abroad.
"I think Harley has been planning this for years," he said. The tariffs presented the company with an easy way to explain the move, he reasoned.
Bob Franz, 76, Stacey Sklidum, 49, and Marc Skildum, 48, are all Harley-Davidson motorcycle owners and Trump supporters. Photo/Washington Post.
Harley has built both an enduring brand and a near-peerless reputation for high-quality American craftsmanship, a reputation that Trump himself once celebrated. In February 2017, shortly after his inauguration, Trump joined company executives on the front lawn of the White House, holding it up as an example of a US company that would benefit and expand thanks to Republican policies on tax and trade.
The company's relationship with its hometown has been largely unblemished, and a massive party will be held in Milwaukee over Labor Day weekend to celebrate its 115th anniversary. Groups from San Diego, Seattle, Portland, and Fort Lauderdale will ride in on the company's motorcycles, converging in what the company calls "the motherland" of Milwaukee.
Harley-Davidson motorcycles have long been a symbol of American identity. Photo/123RF.
But some here have soured a bit and fought back against the company's mystique. Jim Mead, a retired Milwaukee man, quit high school for a job on the Harley-Davidson assembly line in 1968 but stopped riding the company's motorcycles a few years ago in favour of an Indian-brand bike. He doesn't buy the company's stated rationale for the overseas move.
"Using the tariffs as an excuse to move offshore is weak at best," he said. "Anyone who knows anything about Harley-Davidson knows that they have been using non-American products in their bikes for years. They have had plans for this move long before Donald Trump started taking a hard line on the trade imbalance."
An unwavering Trump supporter, Mead said his moves on trade make sense.
"The president is, in my opinion, doing exactly what he should do to correct the imbalance and bad deals on trade that haven't been addressed ever," he said.
Bob Franz didn't vote for Trump, sitting out the election entirely, and doesn't support his tariffs. You'd be hard-pressed to find a more avid Harley supporter. In his younger days, he rarely met weather not suitable for riding a Harley. One day, it was 40 degrees below zero. He drove to work in his native Milwaukee on his three-wheeled motorcycle, wearing insulated layers beneath and above his black leather riding jacket. The bike's engine kept his legs toasty. It was comfortable, he said. Now 76, he still puts about 100 miles a week on his 2002 Road King but takes winters off.
Like many in the city where Harley-Davidson got its start, Franz not only rides the company's motorcycles but also worked there, as a mechanic for a decade in the 1960s. The pending move to overseas manufacturing can't be avoided because of the tariffs, he said.
"I don't think they have any other choice," Franz said. But it won't work in the long term, he said. He pointed to the company's sale in 1969 to American Machine and Foundry (AMF). AMF moved some manufacturing overseas, he said, which only created problems because factory hands weren't used to making Harleys. Quality suffered, the company's finances went south and a group of 12 investors that included Willie G. Davidson, grandson of company co-founder William A. Davidson, bought the company back in 1981.
"You start sending stuff overseas, and nothing works," Franz said. "History repeats itself. I've seen it happen. In a couple of years it will all be back in Milwaukee."
On that point, Stacey Skildum, a strong Trump supporter, agrees.
"Made in America," she said, raising her hands in a celebratory pose. "Buy American. Support your country. Support your neighbour who needs a job."
Trump's tariffs make that possible.
"They aren't designed to punish," she said. "It's if you want the privilege [to bring goods to U.S. markets], you have to pay for it."
