President Donald Trump criticized Harley-Davidson again on Wednesday for announcing it’s shifting some operations overseas in the wake of retaliatory EU tariffs against U.S. duties.
“Harley-Davidson should stay 100% in America, with the people that got you your success,” Trump said in a tweet.
“I’ve done so much for you, and then this. Other companies are coming back where they belong! We won’t forget, and neither will your customers or your now very HAPPY competitors!” he added.
Early last year, Trump publicly thanked Wisconsin-based Harley-Davidson for “building things in America” and criticized other companies for moving production outside the U.S.
Harley said Monday that new EU tariffs implemented Friday would increase the average cost per motorcycle by about $2,200 and the company will shift some production overseas as a result. The European Union imposed the tariffs in retaliation against the Trump administration’s duties on steel and aluminum imports, which were an effort by Trump to protect U.S. jobs.
No production will be moving to Europe as a result of the tariffs, according to the company. Harley’s overseas manufacturing plants are in Brazil, India, Australia and Thailand. In the U.S., the company is shutting down a Kansas City factory and transferring operations to York, Pennsylvania.
Trump tweeted Monday and Tuesday that Harley was using the tariffs as an excuse to justify existing plans. He also said the iconic U.S. motorcycle company would be “taxed like never before” if it moved operations overseas.
Also on Wednesday, S&P Global Ratings said EU tariffs will add so much to Harley-Davidson’s existing challenges it is putting the company’s credit rating on negative watch.
“The CreditWatch placement reflects our belief that near-term cost increases due to retaliatory tariffs recently imposed by the EU, combined with other significant headwinds, could cause margin deterioration and increase business risks over the next several years,” Primary Credit Analyst Daniel Pianki said Wednesday in a report. “We could lower our rating on Harley as a result.”
As of Wednesday, S&P had an “A-” corporate credit rating on Harley, toward the lower end of investment grade. The motorcycle company did not immediately respond to a CNBC request for comment.
“The CreditWatch placement follows our outlook revision to negative in January 2018 due to persistent sales declines, elevated marketing costs, and our expectation that EBITDA margin would decline over the next two years while Harley consolidates some assembly plants to achieve longer-term cost savings,” S&P’s Pianki said.
Shares of the motorcycle company were little changed Wednesday after the Trump tweet and S&P announcement. The stock has dropped more than 6 percent this week, for a decline of more than 20 percent over the last 12 months.
In the first quarter, Harley reported a 12 percent decline in U.S. motorcycle sales, and a 0.2 percent increase in international sales. Last year, the company reported an annual decline in new motorcycle sales in both U.S. and international markets, down 8.5 percent and 3.9 percent, respectively.
S&P said it will resolve the CreditWatch after Harley’s second-quarter results, due July 24.
“Persistent new-motorcycle sales declines during periods of GDP growth and a relatively healthy economy could reflect unfavorable longer-term trends in the motorcycle industry,” the S&P report said. “Sales of other high-ticket discretionary leisure products (e.g., recreational vehicles and timeshares) have grown substantially over the same period.”