Soon to join Obama's G.E., Harley-Davidson puts tariff loss at $150 million as sales slump

[Leroy N. Soetoro]

https://www.usatoday.com/story/money/2018/07/24/harley-davidson-
motorcycles-earnings/824866002/

MILWAUKEE – Swept up in President Donald Trump's trade war, Harley-
Davidson said Tuesday it faces up to $100 million in European Union tariff
costs in 2019.

That's in addition to about $50 million this year as the company
calculates the damages from recently imposed tariffs.

The European Union imposed the levies in retaliation to Trump's tariffs
on imported steel and aluminum. The company said recently that it would
shift some production out of the U.S. to avoid the tariffs, a prospect
that drew a concerned tweet from Trump.

"We are doing everything we can as a company to absorb the costs," Chief
Financial Officer John Olin said during a conference call with analysts.
"But we can't eat the whole $45 million to $55 million," so the company
has lowered its motorcycle-segment profit margin this year to reflect the
tariffs.

Harley now says the margin will be between 9 and 10 percent, down from an
estimate of 9.5 to 10.5 percent before the tariffs.

The $90 million to $100 million in European Union tariffs in 2019, if
unchecked, would represent most of the company's profit in that market.

"We are making every effort to mitigate the costs," Olin said.

Olin's comments came as Harley-Davidson said U.S. motorcycle sales fell in
the second quarter ended July 1.

Harley, based in Milwaukee, said a strategy announcement is coming July
30. It could address new products, ways to reach customers and strengthen
dealerships.

Year after year, Harley and other makers of cruiser and touring
motorcycles have seen sales fall as baby boomers begin to age out of
riding and fewer younger people step up to take their place.

With sales slumping, Harley said its net income fell to $242.3 million, or
$1.45 per share in the second quarter ended July 1, down from $258.9
million, or $1.48 per share, a year earlier.

Revenue fell 3.3 percent to $1.71 billion.

However, the company's financial results zoomed past the earnings per
share and net income forecasts of Wall Street analysts.

Harley's U.S. motorcycle sales were down 6.4 percent, while international
sales were up 0.7 percent. Worldwide, including the U.S., sales fell 3.6
percent.

The company's share of the U.S. heavyweight motorcycle market was 48.4
percent in the recent quarter.


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Obama increased total debt from $10 trillion to $20 trillion in the eight
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