By Bill Saporito
Not content to undermine a NATO ally and wipe hundreds of billions of dollars in value from global stock and currency markets, President Trump followed up last week by punching a revered American company in the gut. The motorcycle manufacturer Harley-Davidson, celebrating its 115th year in business, offended the president by having the temerity to move jobs to Europe. The company did so because tariffs that Mr. Trump imposed on imported steel and aluminum, combined with countervailing tariffs from the European Union, raised Harley’s export costs by some $2,200 per bike. Unable to pass that on to European consumers, Harley acted in the face of mounting losses. “Many @harleydavidson owners plan to boycott the company if manufacturing moves overseas,” Mr. Trump tweeted. “Great!”
No, it’s not.
The stage for Mr. Trump’s corporate mugging was his country club in Bedminster, N.J., where he likes to cheat at golf on the weekends. There, in what used to be horse country, rode in a group of so-called Bikers for Trump. The old white biker dudes were invited by Mr. Trump because it’s likely that none of the old white golfer dudes at his club ride hogs; they’re more Audi than Harley.
These motorcyclist agitprops are emblematic of Harley’s current problems, and why Mr. Trump’s misguided trade strategy is hurting the company’s employees, its shareholders and our economy. More American companies and workers will suffer if his trade war continues, even though, you know, we’re “winning.”
In the United States, Harley has been trying to get younger. (Aren’t we all?) As aging boomers like me who form the core of the Harley cult ride off into the sunset — some on their motor trikes — Harley has been recruiting a younger and more diverse group of riders to replace them. This is a smart strategy, but the company has had mixed success so far. HOG, as Wall Street calls Harley, has in fact attracted younger riders, including women, but not quickly enough to replace the departing demographic and to expand sales. For boomers, a Harley was a two-wheeled middle finger, whether you were an outlaw Hells Angel or reported dutifully for work at a Fortune 500 company on Monday morning. Millennials’ digits are on their smartphones — they aren’t that interested in driving at all, never mind a motorcycle. Unit shipments of Harleys will decline 4 percent this year, according to Morningstar.
Because of this shift, Harley has much more riding on foreign sales. To succeed at home, the company has to expand overseas — the goal is to sell 50 percent globally, up from around 38 percent today. Just a week before Mr. Trump’s recent Harley tweet, the company announced a revitalization program, called More Roads to Harley-Davidson, intended to bolster ridership by two million in the United States. This is a multiyear, multinational, more than $500 million effort to meet new riders on their own terms, with lower-power 250 cc to 500 cc bikes for Asia — compared with the 1,746 cc engine on a Fat Boy — and smaller, more interactive retail formats globally.
As part of that program, Harley will introduce the long-awaited, all-electric LiveWire in 2019, which will likely pave the way for other electric bike models for the global market. The Harley roar may be supplanted by the Harley whine, but LiveWire is a beautiful piece of machinery. And in countries such as India, a place with both a huge moto culture as well as pollution problems, e-bikes are inevitable. “We expect this plan will result in an engaged, expanded Harley-Davidson community with a more diverse rider base, along with industry-leading margins and cash flow,” said Harley’s chief executive, Matthew Levatich.
The very measured Mr. Levatich, a mechanical engineer by training, is nobody’s idea of a wild biker. He is an uneasy rider, desperately trying to avoid getting muddied in the Trump maelstrom. “We don’t take sides in politics,” he told employees in a memo. “Today, however, we find ourselves in the center of a heated political conversation about fair trade.” But Harley can hardly plead to be an innocent bystander. If you’re a big corporation, you are taking sides in politics. Detroit’s automakers have already told Mr. Trump to shove his tariffs; they want to make cars in Mexico and trucks in the United States and export to China and import from China. Mr. Levatich also did not turn down a White House photo op with Mr. Trump when things were going his way.
Earlier this year, Mr. Levatich announced that Harley was closing its Kansas City, Mo., manufacturing plant, which has 800 or so union jobs. Half of those jobs will migrate to a plant in York, Pa., but the workers left behind saw the consolidation as a function of another Trump policy — corporate tax giveaways. “These companies are taking tax breaks with one hand and handing out pink slips with the other,” Robert Martinez Jr., the president of the International Association of Machinists and Aerospace Workers, told USA Today. “I’m going to call it like I see it … this is a corporate ambush on working people.”
It’s a refrain repeated in places like Lordstown, Ohio, where GM is closing two production lines, putting some 7,000 people out of work. Yet some union members themselves are complicit in those ambushes. Mr. Trump’s promise to keep or restore jobs in America played well in blue-collar states such as Ohio and Wisconsin, which he won by fewer than 23,000 votes. Milwaukee is Harley’s home, and Wisconsin’s governor, Scott Walker, a Republican and an avowed Harley enthusiast, has tried to distance himself from Mr. Trump. But this is the same governor who aggressively undermined unions representing state workers, including teachers. And his party is the same one that has kneecapped organized labor in nearly every state with a Republican majority. If you are wondering why real wages have flatlined for two decades, the decline in union power is a place to start.
Now, by encouraging a consumer boycott, Mr. Trump threatens to put more of Harley’s highly skilled and proud American employees out of work to punish the company for acting rationally in the face of his irrational trade policy. Under this president, businesses now face an arbitrary and unexpected new regulatory regime — obey him, or face his biker mob. Harley has forever marketed itself as an outfit that stands for the American ideals of rugged individualism and the right to ride untethered by authority. That sentiment is even embedded in Harley’s More Roads initiative, through which the company promises to “bring more freedom to the world.” That might turn out to be a tougher proposition to sell abroad now that Harley’s freedom to operate at home is being threatened.
Two more defendants in the murder case of April Kauffman have pleaded guilty in exchange for testimony during a trial expected to begin in September.
Beverly Augello, of Summerland Key, Florida, and Tabitha Chapman, of Absecon, became the fourth and fifth defendants in the case to take plea deals from the Atlantic County Prosecutor’s Office on Thursday before Superior Court Judge Bernard DeLury.
The two women were both charged with racketeering related to an opioid drug ring run out of James Kauffman’s medical practice. Prosecutors allege Kauffman’s wife, April, had threatened to expose his illegal activities, including the drug ring, which led him to hire a hitman to kill her.
Augello, 48, represented by attorney Hal Kokes, and Chapman, 35, represented by attorney James Grimley, pleaded guilty to third-degree conspiracy to possess drugs, specifically OxyContin. In addition, Augello pleaded guilty to possession of cocaine during a traffic stop in April on Route 50 in Upper Township. In the second matter, Augello was represented by Meg Hoerner and her plea was conditioned upon lab results.
“In return, the state is seeking a sentence no greater than four years in New Jersey state prison,” Kokes said, adding that he will seek a suspended sentence.
Grimley said Chapman will make an application to the pretrial intervention program, and if she is not accepted he would seek a suspended sentence as well. DeLury said Chapman was likely facing a probationary term due to not having a previous criminal record.
Sentencing for both women is set for Oct. 25.
But prior to that, they will testify in the trial of Augello’s ex-husband Ferdinand “Freddy” Augello, of Upper Township, accused of arranging for the hitman to murder April Kauffman and attempting to have James Kauffman murdered, in addition to leading the drug ring.
According to case documents, Beverly Augello allegedly picked up money from Kauffman’s office and delivered it to her ex-husband after April Kauffman’s murder. An affidavit of probable cause claims both Chapman and Beverly Augello received prescriptions for OxyContin from James Kauffman, and that some of those pills were then distributed back to Ferdinand Augello.
Ferdinand Augello is represented by attorney Mary Linehan, who sat in on Beverly Augello’s court appearance Thursday. He was in court Wednesday for a pretrial motion “in limine,” which, according to U.S. law, are motions made to exclude evidence or testimony during trial.
The state was represented Thursday by Atlantic County Assistant Prosecutor Christopher D’Esposito.
April Kauffman, 47, was found shot to death May 10, 2012, inside the Linwood home she shared with her husband, James. The Prosecutor’s Office said James Kauffman paid Ferdinand Augello to hire Francis Mulholland to kill his wife to keep her from exposing his drug ring and from winning a large divorce settlement. James Kauffman was found dead in his jail cell by apparent suicide in late January, two weeks after the charges were announced.
Since being indicted in April, three other defendants in the case, all charged with racketeering, have pleaded guilty in the case: Glenn Seeler, 37, of Sanford, North Carolina; Cheryl Pizza, 36, of Murrells Inlet, South Carolina; and Joseph Mulholland, 53, of the Villas section of Lower Township.
Defendant Paul Pagano, 61, of Egg Harbor Township, has a court appearance slated for 11 a.m. Aug. 30.
Trial for Ferdinand Augello is set to begin with jury selection Sept. 11.
A gag order instituted by DeLury prohibits anyone involved with the case from speaking about it outside the courtroom.