President Donald Trump meets with supporters from a group called "Bikers for Trump" at the Trump National Golf Club in Bedminster, New Jersey.
Reuters/Carlos Barria
Shares of Harley-Davidson are down 1.93% Monday after President Donald Trump backed a boycott of the motorcycle maker if it were to shift production overseas.
"Many @harleydavidson owners plan to boycott the company if manufacturing moves overseas," Trump tweeted on Sunday, a day after hosting members of Bikers for Trump at his golf club in New Jersey. "Great! Most other companies are coming in our direction, including Harley competitors. A really bad move! U.S. will soon have a level playing field, or better."
In June, Harley said it would be implement a plan to "shift production of motorcycles for EU destinations from the US to international facilities" as potential tariffs implemented by the European Union would have an annual impact of $90 million to $100 million going forward, adding about $2,200 to the cost of each motorcycle.
"Harley-Davidson believes the tremendous cost increase, if passed onto its dealers and retail customers, would have an immediate and lasting detrimental impact to its business in the region, reducing customer access to Harley-Davidson products and negatively impacting the sustainability of its dealers' businesses," the company said at the time.
The company previously announced a plan to move some production to Thailand.
Monday's slide adds to the difficult 2018 for Harley shares, which have plunged 25% from their January highs, as the company has had to grapple with negative demographic trends in addition to the trade spat.
The motorcycle maker's second-quarter earnings showed shipments fell 11.3% versus a year ago - even before the impact of any potential EU tariffs. The company has been trying to solve its problem of a demographic headwind which has become apparent over the past several years.
As Baby Boomers look to unload their bikes, millennials have preferred to buy used Harleys and cheaper models made by the competition.
"So long as the base of ridership declines (in the United States), it will be an uphill battle for (Harley-Davidson), Bernstein analyst David Beckel said in August of last year, according to Reuters. "I have a projection of total motorcycle ridership for the country declining for at least the next five years."
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