HD to have parts made overseas Did they learn nothing from AMF Years

H-D must have a short memory they are going to out source part production overseas again. time to buy some bowling shoes. call it WTF instead of AMF

 

All of the switchgear and ECUs have been made overseas for 20+ years.
The U.S. is a shrinking market. The move they announced today is to be able to build bikes for the Euorpean market without having to pay high import tariffs.
They already have plants in Brazil and India to serve those markets. The Brazil plant also assembles bikes for shipment to Portugal and Spain (to avoid tariffs).
U.S. market machines will still be made here, except for the parts that have been made overseas for years (like the forks, which HD buys from Showa).

The truth of the matter is if HD continued to bulld European bound bikes in the U.S. they would be priced out of that market because of recent tariff increases.

Note to everyone. Please don't turn this into a political thread. Keep it about discussing motorcycle related business decisions or it will be locked.

 

I don't much know whether this will be political or not, since I'm not really "for" or against any particular party (or person), I tend to look at issues like this from a practical, results-based point of view, and try to take into account both the seen and the unseen ramifications of decisions.

"Free-trade" theory basically says that in the long run, it's more efficient for you to purchase supplies or service from the least expensive source (quality being equal.....hopefully). And in theory, it makes some sense (although I disagree with it for a long-term strategy). Unfortunately, the really bad effect of this theory, from a company or country viewpoint, is the that "unseen" (note: that's questionable, but a topic for another day) result is that you lose the experience and knowledge that you would get if you kept your work in-house (rather than farming it out for short-term profits). Plus other factors such as management training and development in multiple areas of expertise, etc......what are those skills worth? I mean, when you add up all the costs and benefits of "in-house" vs. "outside", those costs need to be evaluated too, right?

Unfortunately, those costs are rarely taken into account, usually until it's way too late. And then you're left w/o the skills or machinery or infrastructure to be able to actually "do" such things when it's needed.

As a manager, I'd always err on the side of keeping as many internal aspects of a business internal to itself, even though there may be a price (profit) difference, not only as part of a risk-management strategy, but also for morale and people-development reasons. When there's lots to do, then a lot can get done, and many people are excited and dedicated to such an environment. Having a job just because you're currently the lowest-cost option (at least for now....) cannot be all that motivating, no matter what level you are at in a company.

On the other hand, sometimes there really is no choice but to outsource tasks (and thus jobs), as you'll either go crazy, or broke (or both), trying to keep it all inside.

 

In that vein, I think anyone who has not read about (or lived through) the demise of International Harvester should do so.
Having everything in-house can be as much of a burden as it is a benefit.

Yes IH is still alive, but it is nothing like it once was. Not even remotely.

 

Absolutely. The skill most lacking in big corporations (or countries) is intelligent management, whose job is to make cost vs. benefit decision on both the seen and unseen issues/costs, and to hopefully direct the company (or country) towards long-term success. That, primarily that, and perhaps only that is the real "job" of management.

 

This reminds me of a true story that I read in (I think) Reader's Digest around 30 years ago. Those who may know the tale better should feel free to correct any errors on my part.

In the late 80's (maybe early 90's) Oxford college was renovating their chapel, and a decision had to be made about where to source oak logs of the correct size to make new beams that would be identical to the 400 year old beams that would remain.
There happens to be a oak forest on the campus, and that would have been the obvious choice, but many of the students and faculty were opposed to logging it since it was seen as a quiet refuge from studies (a valuable asset to anyone who is involved with academia). The other option was importing logs, but the cost was drastically more, even before shipping costs.

As it happened part of the project involved researching the original construction process so the chapel could be restored as closely to the original condition as possible. During the research process one of the ledger books from the project was found.
This was a great help because of the amount of detail for the entries. Every board, nail, and stone was accounted for, in addition to labor costs. One item among hundreeds stood out. A payment for 30,000 acorns. Why on earth would you buy acorns to build a church with?

More reasearch was done, and the exchequer's journals were found. The acorns were to be planted in the field next to the chapel, so that there would be a supply of logs for repairs should any of the buildings on campus need them in the future.

That is long-term planning.

 

That is a great story!

 

So... were the trees taken for the renovation as this was the original intention?

 

And how many years does it take for an oak tree to grow big enough?!!!?? Just saying, from the perspective of a backwoods guy who grew up in the sticks in the Poconos.....

 

And that's another reason why I buy my parts from Len---

 

Yes. I think that a plan was made to thin the forest instead of logging a whole section.
I wish that I had kept the article.

 

100 years is about the minimum for cutting a load-bearing beam from one. Of course that depends on species, climate and soil type.

I miss trees. Never move ot the plains. All they have here are tall bushes.

 

Yup-- that's my point.........100+ yrs isn't exactly "renewable". It's more like 'it's at least replaceable'.

 

The oak we grew up climbing is still pretty much the same size, 50 years later. It's quite a rarity in the village, were only 800ft up, but well above most the other surrounding countryside.
40 odd yrs ago there was another, on the road towards the school, one of the boys decided to "prune" it for Guy Fawkes night. It looked a mess, and one day might have become a beautifull oak....

 

I suppose that depends on how far ahead one is thinking. 100 years is but a blink of an eye (so to speak) for some tree species.

 

To get back on topic; Polaris is considering moving some Indian production to Europe as well.

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HD problems have grown in last several years , a few years back they sold , demand was greater than supply. Folks bought bikes just to sell them for more than they paid ...and then supply exceeded demand , their sales have fallen . I read an article recently , millenials are not buying and riding bikes . Which is true to an extent , but it also comes down to price , and competition . Indian is making a bike a little higher than HD , but has a mystic factor . Yamaha has the Bolt/ Star that is lower than a sportster , Honda has the Shadow, Kawasaki has a range of bikes , Suzuki as well . I'm all for buying American and do when ever I can, I support unions , have been in 2 different unions , been a shop steward and on the negotiation committee in my career. I owned a Buell Blast for several years first "new" bike I ever bought 4995$ I liked it now if HD put the engine in a sportster frame called it a Sprint and could keep it under 6k it would sell. Now about tarrifs business has to do what is best to ensure what is best for survival and share holders when they feel threatened by competion , and overseas markets . I'm opposed to this trade war ,and worry it could lead to job losses . Pray that cooler heads will prevail.

 

It seems much more cost efficient to build bikes that are sold in Europe on the continent. The numbers I've read are around $2500-3000 cheaper per bike. As Europe is the second largest market for Harley's bike, it only makes sense to move production there. You can't expect them to hold national loyalty higher than the viability of the company.

 

Whatever the reasons, there sure are a lot of Harleys around the clubs here, more popular than ever.

 

After being in the belly of the beast (I worked at HD for a brief period), they are in dire straits and any move that will keep them solvent for a few more years is wise (?).

Proficiency in manufacturing struggles when parts are sourced around the globe. As Len said keeping people excited and dedicated is valuable in making a proud product. Sadly profits for shareholders trumps (that’s a small “t”) integrity, quality, pride and customer satisfaction.