Macho bike-makers squeezed

Press, 13 October 1982, Page 9

Macho bike-makers squeezed

NZPA Washington For more than 30 years, the mystique of HarleyDavidson has dominated the macho motor-cycle world in the-United States. But now America's only remaining manufacturer ’of motorcycles says it is in danger of being run off the road by Japanese imports.

the Government is investigating complaints from the Harley-Davidson Motor Company that a wave of imported Japanese motorcycles is making it impossible for the 79-year-old firm to compete. They specifically point to the heavy, highwaytouring models similar to those built by Harley-David-son.

If the primary reason for the company's troubles is indeed the imports, the International Trade Commission could, under United States law. recommend to President Reagan an import quota or additional duties on motorcycles. In a petition filed earlier with the commission, the privately held company

accused Japanese manufacturers of copying its design and advertising style to grab customers who have been Harley-Davidson's "traditional’ support." It said Japanese sales of the powerful open-highway bikes of 700 cc and above have increased by nearly one-third since 1977, while Harley-Davidson's share of the motor-cycle market has fallen.

During the first six months of this year four Japanese companies — Honda. Yamaha, Kawasaki, and Suzuki — accounted for nearly 86 per cent of sales. Harley-Davidson’s share dropped to about 13 per cent. During much of the 1960 s and early 19705. HarleyDavidson collared almost all of that market.

The company ’ told the Trade Commission: "There is a serious question how long Harley-Davidson ... can continue to survive" without some temporary restriction on imports. "It the import situation continues to deteriorate . . .

the willingness of (HarleyDavidson's) lenders to continue to support the companywill be brought into question." the petition continued. Three of the four Japanese manufacturers declined to comment on the allegations, saying they had not thoroughly examined the petition filed with the Government.

Harvey Applebaum, a lawyer representing Honda, which makes 40 per cent of the motor-cycles sold in the United States, said the recession, general decline in motor-cycle demand and other issues had played a big role in Harley-Davidson's decline.

“We clearly don't feel there is any merit to Harley's argument that their problems are due to Honda's imports." Mr Applebaum said in an interview. He also noted that both Honda and Kawasaki had a motor-cycle assembly plant in the United States. HarleyDavidson argues those motor-cycles should be considered imports because

their power train assemblies comes from Japan. Harley-Davidson, bought by 14 of its executives last year, refuses to make revenue and loss figures public. They say the firm ran a deficit last year and losses are continuing. In 1980. the last year the company has publicly traded, it reported a profit of SNZI7 million on sales of SNZ4OO million.

During the last 12 months the company cut its workforce by 40 per cent, laying off 1600 workers at plants in Milwaukee. Wisconsin, and York, Pennsylvania. Other workers have had salaries frozen or reduced.

Japanese manufacturers began sending motor-cycles to the United States in large volume during the late 19605. They began pushing their bigger and more expensive open-road models in recent years.

"They're virtually copying our motor-cycles. ’. as well as our marketing approach." complains Harley's chairman. Mr Vaughn Beals. He noted the introduction last

year by several Japanese manufacturers of new. powerful V'-twin engine touring cycles in Harley s macho style.’

The worst may be ahead for Harley-Davidson. Mr Beals says that despite an over all decline in demand, the Japanese are sending the powerful bikes to the United States in record numbers. He says a two-year supply of Japanese "heavyweights” bikes already could be in the country.

"We are concerned they may start flooding the market with these machines at rock-bottom prices." Mr Beals said. "What we are requesting ... is an orderly market where we can stand on our feet and compete."

Harley-Davidson's heavyweight motor-cycles range in price from about SNZSSOO for a "bare-bones" model introduced this year to more than SNZI3.BOO for a de luxe model with a sidecar. Honda sells a wide range of models priced from about SNZ4OO to SNZ7OOO.