President Ronald Reagan With CEO Vaughn Beals
In 2020, April Fools is passé and pranks are out. The pandemic crisis has changed humor!
The popular metaphor for speech is “Shouting fire in a crowded theater,” which may cause panic. The seriousness of COVID-19 has the capacity to frighten in a visceral way the public and dedicating a blog post to misleading people just seems like a very bad idea.
Do you remember a long time ago in a galaxy far far away, when tariffs were being used to control unfair trade practices (labor, environment and other issues).
Former H-D CEO Matthew Levatich With Recode’s Kara Swisher Discussing Tariff’s
Recall the hysteria of — Tariffs bad, Harley good?
Harley-Davidson execs and investors panicked when the European bloc raised its 6% tariff to 31% on motorcycles. That made each motor company motorcycle about $2,200 more expensive to export, and forced the company into opening another manufacturing plant in Thailand.
Thirty-seven years ago today, President Ronald Reagan took bold steps to protect Harley-Davidson from foreign competitors. It was April 1, 1983, when Reagan ordered massive tariffs on large Japanese motorcycles to help the last surviving maker of American-made motorcycles.
President Ronald Reagan at H-D York, Pennsylvania on May 6, 1987
I’ve previously written about how during the 1970’s, Japanese motorcycle manufacturers flooded the U.S. motorcycle market decreasing Harley-Davidson’s market share. It had only been a few years since Harley-Davidson executed the epic buy back from AMF. Their sales hadn’t reached the levels they envisioned, in part, because the AMF era was famous for shoddy quality, bikes requiring a lot of maintenance and the Milwaukee motor company was getting knocked down publicly and in need of some sunshine.
With poor quality and high-maintenance requirements, Harley was skiding toward bankruptcy. In 1982, Harley-Davidson sought protection from the International Trade Commission (ITC) and requested a tariff on all overseas heavyweight motorcycles. This was the first and only time such a request was made to the ITC. They also lobbied the Reagan administration to raise tariffs on Japanese manufacturers because of “Dumping,” which in this context refers to exporting a product at a lower price than is charged in the home market, or selling at a price that is lower than the cost to produce it.
President Ronald Reagan and CEO Vaughn Beals at H-D York, Pennsylvania on May 6, 1987 — Recieving Appreciation Award
It was a different time and President Reagan used tariffs, versus tweets, to change the course of the American motorcycle industry.
On April 1, 1983, April Fools Day, President Reagan signed into law an act that imposed draconian import tariffs for a five-year period on Japanese motorcycles with displacement of greater than 700 cc’s. This would give the American motorcycle maker some breathing room from intense competition to retool, get its act together and turn profitable. While the act was supposed to last for five years, then CEO Vaughn Beals asked that it be lifted a year early in 1987.
It was as good then and just as good today… Remarking about the celebrated Harley-Davidson turnaround in 1987, President Reagan quipped (recorded in this Podcast), “Never bet against Americans.”
If you are in need of some reading humor, check out these previous April Fools posts:
Harley-Davidson Boom Box Infotainment Virus
I Quit
Harley-Davidson Launches Blackline L-Edition
Keith Wandell Retirement Revs Up Harley
Wagoner Tapped As Harley CEO
Bonus: President Reagan’s Remarks (Video) to Harley-Davidson Company Employees in York, Pennsylvania on May 6, 1987.
Photos courtesy of Harley-Davidson, Recode and Ronald Regan Foundation
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