Made in America
Some consumers--and firms--prefer homemade goods
Harley-Davidson doesn't overtly market its made-in-the-U.S.A. status. Indeed, the company declined to discuss why or how it continues to build products here profitably while other manufacturers move offshore. "We prefer not to go down the road of commenting on that aspect of our business," says spokesman Bob Klein. But earlier this spring, an article in Advertising Age magazine credited the company's success to years of "linkage to American culture, values and imagery."
For a time, it also became an emblem of manufacturing's decline, as Harley-Davidson persuaded the Reagan administration to slap tariffs on the sleek, cheap Japanese models that threatened to drive it into bankruptcy. In one of the most storied turnarounds in the annals of U.S. business, Harley pared its workforce, improved product quality, and adopted its foreign rivals' management techniques, such as just-in-time inventory.
Today, if one counts scooters, small sport models, and off-road motorcycles, chief competitor Honda still sells more units in this country than Harley-Davidson. But in the heavyweight highway motorcycle realm that is Harley's core business, the U.S. manufacturer roared from a low of 12.5 percent market share in 1983 to 48 percent in 2003. Second-place Honda lags in this category with 18.6 percent. Harley, however, has not been immune to the cost woes that trouble U.S. manufacturers. Late last year, the company threatened to outsource some of its powertrain operations unless its unionized workforce in southern Wisconsin accepted a cap on retiree healthcare benefits. In a decision unpopular with workers, the union agreed to the healthcare concessions. "It was essentially a trade-off to keep the work here," says Richard Krause, head of the Paper, Allied-Industrial, Chemical and Energy Workers local. "As painful as it was, the workers at a lot of companies aren't getting that opportunity." Krause says Harley is investing well in excess of $100 million in improvements to its powertrain facilities. The company last year also signaled its commitment by building a new factory in York, Pa.
Perhaps Harley-Davidson's most important marketing of its all-American image is through its network of more than 1,000 Harley Owners Groups (HOG s), encompassing 800,000 members. Jeff West of Arlington, Va., a federal government worker who is director of one local chapter, says he admires Harley's focus on employee involvement in management decisions, charitable activities, and its safety classes. Yes, there's the riding experience, says West. But "the fact that they are heavily invested in the American community is of great value to me."
With Megan Barnett
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