A few weeks ago H-D management were passing out accolades to the Wisconsin legislators who were considering a designation of the H-D motorcycle as the “official motorcycle” of the state. But, that has since turned into a game of “double-dog-dare-ya” or something along the lines of ‘playing chicken’ as the latest management salvo didn’t sound conciliatory, rather they dropped the bomb about abandoning the state and moving the company.
Huh? Is the “Ride Home” dead? Is Wisconsin truly at risk of losing the motorcycle icon or is this more of a psychological ploy than practical? When ‘playing chicken’ someone is bound to get hurt!
Consider the Boeing Co., a huge part of Washington’s history and the threat of a move out of Seattle back in 2001. Few believed, especially the Mayor or state representatives in Olympia. The end result? Can you spell Chicago?! Several hundred employees were left behind when the headquarters moved. It didn’t stop there. With it’s continuing need to drive down labor costs, last October Boeing announced it would open a second 787 production line in Charleston, S.C., not Everett which turns out to be more about negotiations with labor not further tax breaks. Sound familiar to Harley-Davidson?
Wisconsin Tax Burden
Does Wisconsin’s tax structure drive Harley-Davidson business away? By clicking HERE you can check how each state collects taxes and measures up nationally on tax burden, government spending and user fees.
Fact: Wisconsin ranks 14th in total tax burden. Fact: Wisconsin ranks 26th in total spending by all levels of state and local government based on the latest figures (as compared with 20th in population, 24th in Gross Domestic Product and 24th in personal income for the same year). Fact: A Tax Foundation study identified Milwaukee County as 22nd highest on property taxes as a percentage of a median home’s value, out of 775 counties nationwide. If you’d like more detail, then reporter Dave Umhoefer of the Journal Sentinel researched and wrote a comprehensive article on Wisconsin’s tax burden HERE.
Will Harley-Davidson leave the state? It’s a complex answer and in the end, H-D selects a location to move or expand into based on a wide range of issues. One important issue is the balance between public services offered and the taxes levied to pay for those services. Harley-Davidson management will likely ask two basic questions: 1) are the mix of public goods and services in a given locale right for my business; and 2) am I getting what I pay for with my tax dollar? If the answer is no, then the state legislators further cutting business taxes will not have the desired result to keep them in the state.
If this is truly about labor costs and it’s tactics to renegotiate or obtain additional concessions from the union then it’s unclear how this riff will shake out. Further fragmenting their supply chain doesn’t seem like a credible business case, but moving to a state like South Carolina would mean lower taxes, easing regulatory burdens in the state’s tort and workers compensation system and it’s a right-to-work state. This might be the tipping point to make a change.
Photo courtesy of Double Dog Dare Band; WI tax chart courtesy of the Journal Sentinel.
Northwest Harley Blog 
Excellent, well researched. Informative. I’ve learned more reading this article today, than reading the news on this very same subject elsewhere. Thanks.