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Registered Member #1875
Joined: Sun Dec 21 2008, 06:36PM
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Posts: 635
Well, at first I was ready go on with an outsourcing rant... but according to the article, the market is to meet demand that is actually in India. They say the parts will still be made in America, too, so as long as we see the parts going out and nothing coming back (though who knows when that'll start happening), it's actually good for the US.
It's just exporting, spreading sales overseas, unless I misunderstood something. I support American industry, but I don't think expanding in this way to meet demand hurts it particularly. Perhaps if there was evidence of Americans losing their jobs over this, I'd change my opinion.
Registered Member #618
Joined: Sat Mar 31 2007, 04:15AM
Location: Us-Great Lakes
Posts: 628
Yea, that's the way I understood the article, HD is trying to gain a bigger global market share, while reducing shipping and freight costs, much like Honda and Toyota did here in the states.
Have the manufacturing of a particular good near the customer, while still expanding the company, and in a way this kind of out sourcing is actually a "double" plus in terms of requiring more employment here in the states to build certain parts or sub assemblies, then ship them over to India.
Registered Member #1875
Joined: Sun Dec 21 2008, 06:36PM
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Ken M. wrote ...
Have the manufacturing of a particular good near the customer, while still expanding the company, and in a way this kind of out sourcing is actually a "double" plus in terms of requiring more employment here in the states to build certain parts or sub assemblies, then ship them over to India.
I agree that it does good, but not necessarily in terms of local employment. It depends on whether the increase in part demand (due to the increase in foreign sales) outweighs the decrease in local demand for manufacturing (due to the fact that locals are no longer making bikes for India). So it's potentially good for the parts guys but possibly bad for the manufacturing guys, but obviously Harley projected a net gain. Either way it's good for the company as a whole to expand to meet demand, and with only two non-US facilities, it's hardly overdoing it.
Trends could change, though. Maybe Harley is overestimating the demand. Then they'll have to figure out what they're going to do with all that space in India, where it's cheap to do business and easy to import Chinese parts. ;P But of course, that's worse-case-scenario.
Registered Member #1792
Joined: Fri Oct 31 2008, 08:12PM
Location: University of California
Posts: 527
From the article:
wrote ... to bring down India's import duties which right now are so high Indian consumers pay double for fully assembled imported vehicles. Exporting just the parts to India could lower the import duty tariffs by around 80 percent according to Prakash.
I'm not a businessman, but this seems like a no-brainer to me if they have a significant Indian market. As I understand the manufacturing and profits are still in the US, just final assembly is hired out to local Indian workers to save on the tax bill.
Registered Member #15
Joined: Thu Feb 02 2006, 01:11PM
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Mattski wrote ...
From the article:
wrote ... to bring down India's import duties which right now are so high Indian consumers pay double for fully assembled imported vehicles. Exporting just the parts to India could lower the import duty tariffs by around 80 percent according to Prakash.
I'm not a businessman, but this seems like a no-brainer to me if they have a significant Indian market. As I understand the manufacturing and profits are still in the US, just final assembly is hired out to local Indian workers to save on the tax bill.
So it seems from the outside looking in . . .
But how long until they start manufacturing parts destined for the US and simply slapping a MADE IN THE USA sticker.
Remember, the stakeholders of Harley are no different than those of any other corporate entity. They are there to make profit. And if they already have a plant in India making parts at a much lower cost than parts made here in the US, how long do you think it will be before they start importing those parts back in the US to cut costs. Its a no brainer.
Sure you could argue that "loyalty" is at stake if they ever pulled something like that. But historically (look at the big 3), any dent in sales due to "loyalty issues" are merely short term and will not represent the long term prospects of revenue for that company.
Registered Member #1792
Joined: Fri Oct 31 2008, 08:12PM
Location: University of California
Posts: 527
wrote ... But how long until they start manufacturing parts destined for the US and simply slapping a MADE IN THE USA sticker.
Remember, the stakeholders of Harley are no different than those of any other corporate entity. They are there to make profit. And if they already have a plant in India making parts at a much lower cost than parts made here in the US, how long do you think it will be before they start importing those parts back in the US to cut costs. Its a no brainer.
Sure you could argue that "loyalty" is at stake if they ever pulled something like that. But historically (look at the big 3), any dent in sales due to "loyalty issues" are merely short term and will not represent the long term prospects of revenue for that company.
Are there regulations about "Made in the USA" stickers? I imagine there are rules about how much of the product needs to actually be made in the USA for it to get the sticker. So as long as it is substantially made in the USA then I don't see the problem. Yes it may be bad for our country's companies to send business elsewhere, but the only way to stop it is to implement more protectionist trade taxes. That's a tricky thing, as it doesn't address some of the underlying problem of why some goods can be made cheaper in other countries: lower standard of living and fewer safety and environmental regulations. Though it would address the currency manipulation that China may be guilty of.
I guess fundamentally I see the problem you are raising, but in a fair world I think that a person/company has the right to build and sell their product where they want. I drive a Toyota for example, and it may have been made in the US for all I know because Toyon has factories here too.
Registered Member #1875
Joined: Sun Dec 21 2008, 06:36PM
Location:
Posts: 635
Well it said the parts will still be made in the USA... but yeah, for how long?
Anyway, I do feel like Harley has a closer tie to loyalty than most other corporations. Very few corporations pride themselves based on their nationality, especially to the extent of Harley. Harley isn't just "one of the US' most iconic motorcycle brands" but is, rather, "the most." But then, money talks.
I just say hope for the best. I think it'd be a shame if Harley started mass-outsourcing, but for some reason I don't think it's likely to happen. Who knows?
I don't care much for bikes, though... especially after my experience on a friend's dirt-bike a couple years ago. Luckily (for me!) the permanent damage was to the friend's bike.
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