A former economic adviser to President George W. Bush, who oversaw the collapse of the United States economy, says the iconic motorcycle brand Harley-Davidson — which is outsourcing American jobs overseas — has a “responsibility” to maximize their profit margins, rather than to be economic patriots.
In an op-ed for the Wall Street Journal, Edward Lazear, who served as President Bush’s chairman of the Council of Economic Advisers during the Great Recession, attacked President Trump’s job-created tariffs on steel and aluminum imports and sided with Harley-Davidson executives who are set to outsource hundreds of American jobs.
Lazear writes that Harley-Davidson has a responsibility to maximize its profits, rather than worry about the patriotism of its company:
In response to the Trump tariffs on steel and aluminum, the EU imposed a 25% tariff on American-made motorcycles. To avoid this levy, Harley-Davidson announced a shift of some of its production to overseas plants. Mr. Trump responded with a tweet promoting a boycott of the company. [Emphasis added]
The problem is the tariffs, not Harley-Davidson’s response. The company has a fiduciary responsibility to its shareholders to maximize their return—not to engage in what the president believes is patriotic behavior. The alternatives to shifting production abroad are to absorb the tariffs and accept lower profit, or else to raise prices and lose sales. Both imply harm to Harley’s stock price, which its board has a duty to protect. If it ignored shareholder interests to please the president, Harley’s management would be reneging on one of its core obligations. [Emphasis added]
As Breitbart News has closely chronicled and exposed, Harley-Davidson executives have used Trump’s tariffs as a scapegoat for their outsourcing of American jobs. But, as Breitbart News reported, many of the U.S. jobs being outsourced by Harley-Davidson were announced before Trump’s tariffs were even implemented.
In a rebuke of Harley-Davidson’s announcement that they would be sending American jobs overseas — with some jobs going to Europe after retaliatory tariffs by the European Union (EU) were implemented on American motorcycles — Trump blasted the company, writing online that his administration was working with other American automobile and motorcycle companies on bringing jobs back to the U.S.
Harley-Davidson complains of tariffs (they were protected by tariffs in 1980s) while they lay off at least 260 American workers at their Kansas City plant. They laid off about 183 American workers last year, as well. https://t.co/03lCb10FG8
— John Binder 👽 (@JxhnBinder) March 8, 2018
Harley-Davidson workers, as Breitbart News noted, have praised Trump for his tariffs and said they did not blame his fair trade agenda for their jobs likely moving overseas, but instead blamed the company’s executives.
In March, Harley-Davidson — which was saved by tariffs on imported motorcycles back in 1983 — slammed Trump’s tariffs on imported steel and aluminum just as they were laying off hundreds of American workers and moving their jobs to Thailand, as Breitbart News reported.
In January, Harley-Davidson announced that it would be closing its plant in Kansas City and moving leftover production to York, Pennsylvania. The decision to close the Kansas City plant will result in about 260 American manufacturing workers losing their jobs.
Last year, as Breitbart News reported, about 183 American workers were laid off by the motorcycle company in Kansas City and Menomonee Falls.
John Binder is a reporter for Breitbart News. Follow him on Twitter at @JxhnBinder.