Two Ways the U.S. Government Has Helped Keep Harley-Davidson Alive
The U.S. government has helped keep Harley-Davidson alive on a couple of occasions.
Government Assistance
Over the years, more than a few companies have been aided by the U.S. government in some ways - perhaps the most famous coming from the automotive sector, as Uncle Sam helped bail a few out during the last economic crisis. These moves always prove controversial for obvious reasons - some would rather see big corporations fail rather than having tax dollars allocated to save them - but Harley-Davidson isn't immune to receiving its own fair share of government assistance over the years, either, though it isn't in the way most would think.
Photos: Harley-Davidson
Tariffs
One of the biggest ways the government has helped Harley is via tariffs, most notably. Back in the 1980s, Harley found itself in financial hot water after it was acquired by AMF, which promptly reduced its staffing and streamlined its production process. These moves pushed back R&D and resulted in some quality woes, which opened the proverbial door for Japanese competitors to establish themselves in the U.S. market.
Photos: Harley-Davidson
Falling Share
This threat was so real, in fact, that Harley's market share in the heavyweight motorcycle segment fell from 100 percent down to 18 percent by 1983, prompting it to take action in the form of arguing that Japanese imports were impacting American production. The United States International Trade Commission (USITC) and then-president Ronald Reagan agreed, signing a relief package that would result in significant tariff increases.
Photos: Harley-Davidson
Buying Time
That package imposed a tenfold increase on tariffs with engines that displaced more than 700cc, hitting a whopping 45 percent in year one. However, that figure was slated to fall in the ensuing years. Even though Honda and Kawasaki already had U.S.-based production plants at the time, this increase bought Harley enough time to revamp its business and recover to the point where the government lifted these tariffs in 1987.
Photos: Harley-Davidson
Government Loans
Things were going quite well until the aforementioned financial crisis of 2008, when many large companies quickly found themselves on the brink of failure. Thus, the government handed out below-market rate loans to help keep them afloat during these troubled times, to the tune of a whopping $9 trillion, in fact.
Photos: Harley-Davidson
Troubling Times
Most of these loans went to banks, of course, but Harley-Davidson also wound up taking out 33 of its own - for a total of $2.3 billion in low-cost government assistance. However, one could argue that MoCo needed the money, as it was facing sharply declining sales at a time when many people found themselves upside down on mortgages and unable to pay.
Photos: Harley-Davidson
Saving from Extinction
Of course, Harley wound up paying back all of those loans, which helped keep it afloat during some historically difficult times that might have otherwise bankrupted it. Thus, while we could argue the merits of government bailouts forever, they very well may have saved H-D from extinction on at least two occasions.
Photos: Harley-Davidson
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