Rolling Plunder: The GOP willingness to sell out Wisconsin (TPP is terrible for Wisconsin and Harley Motorcycles.)

http://theconservativetreehouse.com/2016/03/30/rolling-plunder-how-scott-walker-and-paul-ryan-plan-to-sell-out-wisconsin-and-the-voters-are-oblivious/

Beyond the terrible legislation is the actual TPP trade deal itself; and beyond the TPP are the consequences to the U.S. manufacturing base and U.S. worker.

For an example of those consequences we turn to the beloved Harley Davidson.

A few years ago Harley Davidson opened a plant in Northern India, yes India.

[ Remember the Wisconsin Sikh Temple shooting – did you see those police at the CNN town hall questioning Donald Trump? ]

Coincidences are funny that way. I digress.

The Street motorcycles being sold in the U.S. will be manufactured in the Milwaukee-based company’s Kansas City facility, Wandell said. The Street bikes for international riders will be made in the company’s Bawal, India, plant that opened in 2011.

Harley-Davidson (NYSE: HOG) currently assembles motorcycles in India and Brazil to avoid tariffs, but the parts are made in America and shipped as a kit to those countries. (link)

Harley Davidson in India?  Many die-hard hog fans were worried that Harley was going to start building their bikes out of country.  Given what happened to the auto industry can you blame them for worrying.   However, that wasn’t immediately what was happening, because Harley Davidson USA knew their bikes lived and died on the reputation of being “American Iron”, despite many of the parts made over seas.

However, India has a 100+% tariff on motorcycle imports.  When combined with other import taxes and duties it all adds up to a staggering 115% cost increase to sell a U.S. manufactured Harley in India.

India also has a population over a billion people.  A very large market!  But selling an expensive bike in a poor country with a 100+% import tariff makes the market virtually untouchable.  Unless…

….“We can make (the price) more attractive in those markets by building over there,” Blankenheim said

To work around the problem, and simultaneously set themselves up for future market opportunities, Harley Davidson built a plant in India.    If the Harley is built in India it can be sold in India for less than half the price of building in the U.S. and importing it.

However, the future opportunities angle stems from India not only building their own Harleys, but also manufacturing most of the Harley’s sold on the international market as well.  Build here and export from the U.S. and you find a big tariff at the destination; but build in India and export from India and the tariffs are avoided upon arrival.

How does this help the U.S. manufacturing of Harley Davidson?  How does this help jobs here in the U.S.?  How does this help the U.S. factory worker?

It doesn’t.