Harley-Davidson, the world’s largest and most iconic manufacturer of heavyweight motorcycles, announced yesterday its fourth quarter and full-year results for 2017, which saw a steep 82% decrease in Q4 net income to just $8.3 million compared to $47.2 million the year before. In addition to that announcement, the Motor Co. declared that it would be shutting down the Kansas City, Missouri manufacturing plant, leaving up to 800 H-D employees without jobs by July 2019.

Harley-Davidson Q4 and 2017 Results: Not So Hot

The 400,000-square-foot Kansas City plant was built in 1997 and currently produces the Sportster and Street families of motorcycles, and, until recently, the former Dyna and V-Rod model lines. According to the company’s fourth-quarter earnings report, closing the Kansas City plant is expected to “incur restructuring and other consolidation costs of $170 to $200 million and capital investment of approximately $75 million over the next two years and expects ongoing annual cash savings of $65 to $75 million after 2020.”

H-D calls it a “multi-year manufacturing optimization initiative.”

“The decision to consolidate our final assembly plants was made after very careful consideration of our manufacturing footprint and the appropriate capacity given the current business environment,” stated Matt Levatich, Harley-Davidson’s President and CEO. “Our Kansas City assembly operations will leave a legacy of safety, quality, collaboration and manufacturing leadership.”

Harley-Davidson Kansas City

Harley-Davidson declared it would be shutting down its 20-year-old 400,000-square-foot Kansas City, Missouri, manufacturing plant, leaving up to 800 H-D employees without jobs by July 2019.

The decision to close the KC plant is purely based on economic reasons, and manufacturing of Sportsters and Streets will be consolidated in its recently revamped York, Pennsylvania, plant, where 450 new full-time, part-time and contracted jobs will be created. With the V-Rod and Dyna lines already dead, Sportster and Street production will join Softail and Touring model manufacturing all under one roof.

Touring Harley-Davidson’s Pilgrim Road Powertrain Operations Plant

“Factors that impacted the decision were plant size and layout, and the need for additional investments in equipment and floor space,” the Motor Company stated. “Consolidating into York will require less capital and can be completed one year sooner than if we consolidated into Kansas City.”

President Trump praised the company last year as a “great example” of a business creating jobs and building factories in the country, however, the earnings drop comes partially as a result of an increased effective tax rate of 39.6% compared to 32.4% in the year prior along with a $29.4 million charge for a voluntary product recall.

The increased tax rate was largely due to the impact of the write-down of deferred tax assets related to President Trump’s 2017 Tax Cuts and Jobs Act, which cost Harley-Davidson an additional $53.1 million in income tax for 2017. Harley-Davidson expects its 2018 full-year effective tax rate to be approximately 23.5 to 25.0 percent, down considerably behind the expected benefit of the new tax legislation.

Harley-Davidson Kansas City

The Kansas City manufacturing plant is also where the former Dyna model line was produced.

It comes as no surprise that the Kansas City workers are shocked by the news. Kansas City beat out 30 other cities in 10 states in a months-long competition back in the mid-90s when deciding where to build a new H-D manufacturing plant. Then-mayor Emanuel Cleaver called it “a once-in-a-century catch for Kansas City,” according to the Kansas City Star.

“They didn’t even give us a call ahead of time,” Joe Capra, directing business agent for Local 778 of the International Association of Machinists & Aerospace Workers told the Star. “It is real devastation for these people who work here and work hard in the Kansas City area.”

Overall, Harley-Davidson worldwide retail motorcycle sales were down 6.7% in 2017 compared to 2016. U.S. retail sales decreased 8.5%, and international retail sales were down 3.9%. However, H-D representatives remain optimistic moving forward into 2018 and beyond.

“Our actions to address the current environment through disciplined supply and cost management position us well as we drive to achieve our long-term objectives to build the next generation of Harley-Davidson riders globally,” said Levatich. “We finished 2017 with over 32,000 more Harley-Davidson riders in the U.S. than one year ago, and we delivered another year of strong cash generation and cash returns to our shareholders.”

We don’t want to see Harley-Davidson, or any manufacturer for that matter, struggle or go anywhere, but the Bar and Shield certainly has a considerable amount of work cut out for itself.

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Harley-Davidson Communities

  • Jon Jones

    IT’S NOT FAIR!!! I DESERVE THOSE TIRES!! I demand a recount that favors me!

    Just kidding. Congratulations!

    • BRIAN C PETERSON

      It’s okay Jon, there’ll be more contests!

      • Jon Jones

        For fabulous prizes?!

  • Merlin Stewart

    Perfect, to a fellow Norge owner!

    • BRIAN C PETERSON

      Thank You Merlin!

  • BRIAN C PETERSON

    Just want to mention that I am amazed at the performance of these tires. I have been convinced that the Michelin Pilot Road 4 has been my favorite tire, until now. The handling and confidence this tire gives is much better, and if the treadwear is actually better, I might as well stick with these. Thank You Motorcycle.com!

  • Deryl Clark

    Harley-Davidson began manufacturing motorcycles in India, opened an assembly plant in Brazil and last May they announced they will build a plant in Thailand.

    800 Kansas City workers will lose their jobs when Harley-Davidson closes its assembly plant in the fall of 2019.

    You just can’t make this crap up………………..Great American Freedom Machine my ass.

    • Mary

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    • spiff

      Can’t blame them for building bikes where they will be sold. That is just economics.

      • TonyCarlos

        If all decisions where made purely on “economics,” there would be no manufacturing left in the US. Labor is always cheaper elsewhere.

        • Starmag

          All the places mentioned by DC have large populations and wisely have large import tarriffs to protect their employment and economy. The US could do the same.

        • spiff

          That has been the struggle for the last 35 years. It is also the reason China suppresses the value of their currency. It is cheap to build there.

        • RyYYZ

          Most of the Japanese bikes that we get here are still made in Japan, which is hardly a cheap labour country, and yet they can still produce competitive motorcycles. The European guys tend to be more expensive than the Japanese, but they also tend to build more “premium” bikes with better components.

      • doughboy1338

        Sad thing is, those bike manufactured overseas won’t be sold there. They’ll be shipped back to the US and sold here probably.
        I think you should sell them wherever you build them or put a high tariff on them if they bring then into the US

        • spiff

          Those Harleys won’t be shipped back to the US. Atleast I doubt it.

          The problem with tariffs is that it makes everything expensive. Importers loss their margins, and stuff us to expensive to buy. A tight rope to say the least.

        • Harold O’Brien

          The bikes built in Asia are for the Asian market. If you import anything over 300cc to India they are slapped with prohibitive tax. The bikes they build in KC were never going to Asia and those bikes are coming here.

      • mikstr

        you can when the “them” in this case play the patriot Made-in-USA card so loudly…

        • spiff

          The bikes sold here are built in the US. Honda builds Accords here, and sells here. KTM builds in india, and sells them there. Etc.

          Edit: Need to bite my tongue. KTM exports their India bikes.

          • mikstr

            built in the US or assembled in the US with foreign-made parts? May have been the former at one point but it’s becoming more and more the latter, though you’d never know from their propaganda

          • spiff

            They have been importing parts all along.

          • mikstr

            so all along they should have been labeling their bikes “Partially made in the USA”…

          • John A. Stockman

            How long have they been using Showa suspension, European electronics/switch gear, and British tires? Some of the most fun I had on any HD was my aunt’s late 60s Sprint 250 and my grandfather’s Sprint 350. Heavy clutch, but plenty of lean angle and clearance. I club-raced with guys/gals that raced with Sprints, we all had a blast. Aermacchi made those, along with the 2-strokes that had the HD badge on them back then. I had an HD 90 2-stroke right before my spine and hips fused together. A friend bought it and commuted to work on that little 90 for years. I rode a modern Sportster, 2008 model, and going a slow, modest pace, levered the back tire off the tarmac tightening up my line a little to avoid a car coming at me on a curve, over the center-line. Ridiculously small amount of 25 degrees of lean angle, combined with 1.5″ of rear suspension travel. Just one instance where there’s just not enough decent performance available, experienced first-hand. I have empathy for those employees that had no clue, nor any idea they’d be out of a job.

          • Strat

            Again, there’s a thing called “Buy America” my company has to deal with and there are several ways around it. It’s a joke.

          • jeff benson

            American auto companies and Harley have special exemption from the “made in USA” labelling laws. None of them could meet the standards any other company must. Thank your Congress.

          • mikstr

            How ironic that a company that built its image on the whole Made in USA mantra has to be hide behind loopholes in the law… bunch of hypocrites (BTW, I am a Canuck, but hypocrisy and opportunism are reprehensible regardless of the country you call home)

      • Strat

        That’s fine, they can do what they want, what they have to, but stop waving the flag like they’re 100% home grown.

    • mikstr

      yessir, hypoocrisy at its finest… and yet the brainwashed masses still buy in…

    • Harold O’Brien

      The motorcycles they build in Asia are for that market as anything over 300cc is slapped with big tariffs, to the point that they’d never sell in quantity there.

    • Ozzy Mick

      They shut down ttheir wheel manufacturing factory in Australia a coupla weeks ago. 120 people lost their jobs .
      Now you know why Harley’s pull to the left .

  • spiff

    Demand is down, that’s just the way it is. Harley is preparing for the future. Condensing their line, and facilities. It may not be a happy transition, but it is necessary and inevitable. Better do it now while you still have some momentum and cash.

    • UBloMe

      They condensed those lines by eliminating the most popular platform, the Dyna. The Vrod was also very popular with the less traditional HD crowd and with the european market. Now they have the Street, Softails and Baggers.

      • KevinM044

        And the Sportsters.

        They did make the promise not “too” long ago to introduce 100 new models within 10 years. We all need a little patience.

        • jeff benson

          100 new models is not much of a feat when what you are mostly doing is bolting on some different accessories and calling it a different name.

  • Bmwclay

    Just can’t drop the Dyna, the people have spoken.

    • Harold O’Brien

      Dropping the Dyna? That has nothing o do with it. Harley’s problem is that the riders are aging out. Since about 2000 the average age of their riders has gone from the mid 40s to mid 50s. The issue is getting younger riders not the elimination of the Dyna. Hopefully, the Street line will get the attention of younger riders. The 750 looks pretty good. And, perhaps the Live Wire will get the attention of younger riders attention.

      • Born to Ride

        I’m a younger rider, and the only Harley I’d spend my own money on would be a Dyna. Either a Street Bob to customize or a Low Rider S.

    • Barry_Allen

      They’re not closing the factory because they got rid of the Dyna. They got rid of the Dyna so that they COULD close the factory. This decision was made long ago.

  • CvS

    Student loans is a key factor here. New grads have to spend years paying down student loan debt they could otherwise buy a Harley with.

  • michael32853hutson@yahoo.com

    it seems like they should at least give the workers the option of relocating; also it was my understanding corporate taxes would be cut along with the individual taxes,in fact it is supposed to be beginning now,now that it is February! seems like maybe Harley should call the president!

    • HeDidn’tWeDid

      Is relocation worth it for those workers though? The plant has been there for 20 years and I would imagine many of those workers have been there for much of that time. It would be cheaper for HD to hire new employees in a new location. It is a way of booting out an aging workforce.

    • mikstr

      covfefe!!!!

  • TonyCarlos

    It’s the Trump kiss of death. He used Harley as a prop on the WH lawn (after changing plans to go to Milwaukee because he’d run into union members).
    He did the same at a Carrier plant, which has since terminated many of the jobs he took credit for saving.

  • Tom

    Alls I know is them damn dealers had better try a little harder to sell bikes. The days of deposits and waiting on bikes to come are LONG over. They don’t want to work with me i will WALK….and evidently a LOT of people feel that same way.

  • UBloMe

    When they killed the Dyna and the Vrod they were preparing to close that plant. With the Dyna gone and the Vrod, IMO HD is in some serious trouble. I for one would have spent the money for a new VROD based Bagger, at this point Ill just keep mine and buy a used one to convert. Would never spend money on anything HD is producing right now.

  • Joseph Carper

    tvs in india will build the bmw 310gs and tvs builds 2.5 million bikes a year not to mention all the bikes built in china and Harley only builds bikes for just one market of riding.no adventure,mx,enduro,dualsport,or scooters not even kids bikes.

  • William Buffton

    The elephant in the room is cost, cost, cost. In 1966 you could buy a Honda 50 for $225 which is about $1750 in today’s money. If a kid got a summer job and saved his money, by the end of the summer he could buy a brand new motorcycle. Not something to blitz the Autobahn nor the Streets of Willow but a machine that could get him in the wind. There is no one who produces a bike a kid could buy new with a warranty for $1750 today. If you want to get kids interested in motorcycles today, figure out what a 16 year old could be expected to make in a 3 month summer job and build a bike that he can afford.

    • Harold O’Brien

      To be fair there are two other, more important factors. First, nobody today is riding a 50cc bike. Even back in the day if you were young, a new rider and you were riding a street bike it was at least a 250cc and there were a lot of decent 200-300cc bikes to be had. So, the $250 starter bike is a specious argument. I started riding in the mid 70s and never saw anything that size. Also, there are 125cc Kawasaki’s and Honda’s that are in the low $3K range that are street motorcycles. And, both offer 300cc bikes in the mid $4K range that are very capable motorcycles. It would be more likely that if a teenager wanted a bike, he works all fall, winter and by late spring he has a bike for the warm weather. And, that doesn’t even address used purchases, which for $2-$4K one can get a lot of bike. A bigger issue for motorcycling young is the cost of insurance. But, you can dismiss all the economics of the difficulty of youth getting into motorcycle’s. The real hindrance is most parents are not allowing their teenager to get a motorcycle, .. as in “not as long as you are living in my house”. Me, I’ve a 15 year old that I’m inclined to give a motorcycle rather than a car. But, that decision is strategic in that on a motorcycle, no cell phones, no booming radio, no buddies, .. no distractions. Just him, in a helmet alone with his thoughts aware that if he screws up he’ll suffer. My wife think that’s nuts and isn’t having it. Despite the fact that I’ve ridden as long as she knows me, her dad and two brothers ride. Not her son though. I agree, the economics of motorcycling are significant, but especially so insurance, as opposed to the cost of the bike. Neither compare to a parents intrangence.

      • hipsabad

        “back in the day” i was a young, new rider on a street bike and it wasn’t “at least a 250cc” but rather a Honda CB175.

        • Harold O’Brien

          Except for a couple of guys that rode endures, including 125cc Harley, the riders I knew were on 250 Yamaha’s or CB 360 Honda’s or 450 Super Sport Honda’s. The “days” I refer to were mid 70s.

          • Michael H

            50cc motorbikes are ALL OVER THE US. They are just called mopeds.

      • lennon2017

        People do use 50cc bikes, just not in the US. There is a market for, say, 125cc bikes, enjoyed by Honda and Kawasaki in the Grom and Z125 rigs respectively, but they are not just prohibitively expensive for younger people, they run any interested youth right into the issue of: used I-4 car for 2-3 grand or a lil 4-speed grom or grom-“killer.” Driver’s licenses are systematically afforded to teens. It’s still pretty much a rite of passage for many, practicing with parents, school-associated lessons, etc. Motorcycle licenses or endorsements are seen as additional inconveniences, not attainments in lieu, and can be had on your own time, if older persons are even amenable to these “death machines.” I see motorcycles in America firmly remaining in the “if you insist” box. You can pursue a sports career, or arts career, or the life of a whittler or some other thing that most people look skeptically or askance at, like it’s just punishment, unnecessary difficulty, impractical, etc. And if the market is so small, and has ingrained impediments (industry economics, dealer economics, service economics, second-hand economics, insurance issues), any solution short of far greater cultural acceptance is going to make zero difference, or close to it. I will agree to the hilt with anyone saying people ask too much for motorcycles, new and used, putting people into these weird decision making moments of, “So, that seller is expecting that 5-10-20-year-old motorcycle to fetch less, yet not much less, than a modern or new bike with similar or superior specs on the basis of super low miles (not the great incentive many owners think that aspect imparts; ride your bikes more, much more, y’all, and they’ll be seen as MORE mechanically sound overall, not festering, congealing, oxidizing question marks). What to do, what to do…” Unfortunately, it’s a hopeless point of argument. “Price is FIRM” is the ignorant, unsophisticated scream unto everyone trying to broach the subject of depreciation and the strange middle ground where everything costs about the same amount of too much. American motorcyclists are burdened to expect exorbitant fees relative to the cager supremacy, from tires to oil to fork seals to interval work, it’s all more more more. Learn mechanics and how to resurrect non-runners, I guess.

        • hipsabad

          I concur with many of your points. As i regularly peruse the used vehicle ads i continue to notice that car prices range all over the place from sweet deal to joke while bike prices much more rarely represent good deals, unless they’re obvious weak-runners or basket cases. Often the prices asked manifest this new phenomenon of being close to new and sometimes even at new. “Save on dealer prep” they say. It’s as if it were a seller’s market, in other words a market driven by very strong demand. It’s puzzling. And as you mention, the price of, say, tires compared to cagers…hah! I started riding motorcycles not because they were more affordable than cars but because leaning on two wheels fed my brain sublime sensations while the accelerative difference was deliriously risible

        • John A. Stockman

          You’re right about the economy of scale. Tens of millions of autos/trucks, more in consumable parts, accessories, means lower costs. Motorcycles, less all across the spectrum. My first street bike was a used KZ250. Low miles, $500. Each successive bike I owned were in various states of neglect and disrepair. The challenge to find the parts or repair/refurbish ones I couldn’t buy/find was enjoyable. I realize that many do not find that enjoyable, nor have the background or skills to do it. But you can learn. One, an early 80s KZ440 needed 3 months of rebuilding, finding parts. I found it in a woman’s garage, laying on its side, buried under a huge pile of furniture. Horrible shape, the only thing that didn’t need attention was the engine/transmission. Every spec and clearance checked out like new, compression was excellent. It only had 700 miles on it! Yet it had been neglected for 7 years. She was going to sell it for scrap. I put 10,000 trouble-free miles on it. Because I spent so much time on it, it was a source of pride that it turned out looking and running so well. I don’t see much of that anymore. I know there are men and women out there doing that, but it’s not as common. Me, I had to overcome a serious condition that destroyed my joint cartilage at a young age. By the time I was 14, my entire spine and hips were fused. Atrophied muscles were the least of my worries. I rode dirt bikes as a kid, but when you can’t get your legs apart enough to even straddle the seat, what options do you have in the early 70s? In my early 20s, I went through numerous joint replacement surgeries, then the tortuous physical therapy for years of atrophied muscles. I was able to get that first motorcycle and rode the wee out it. I was so fortunate to be actually riding again, I had a permanent smile for decades. Yet, I had to keep my dream of being able to ride again to myself. Even after I accomplished that goal, no one paid attention to what I had gone through. There was no applause, no congratulations, no recognition. If I had gone through all that to chase a ball around, run a marathon, or climb a mountain, I would’ve received all those accolades and recognition of my determination and courage. I did not do any of it for attention or recognition of my accomplishments, I just wanted to ride a motorcycle. Your mention of the negative aspects regarding motorcycling was true then and it is now. I don’t have a solution. But I will continue to talk about the positive aspects and how my life was completely changed because I was able to live my own dream of riding. Motorcycling saved my life.

    • Sheri

      Goℴgle paying the people 98 US dollars/hr to complete easy work on a home computer .. Labor Some just few hours and have greater time together with your family … Any person can get this super post…on Sunday I bought a new Lotus Esprit just after earning $21683 this last five weeks .it is the best work but you could not forgive yourself if you don’t have a peek at this.!fg48q:=>=> http://GoogleCashPointJournalsJobsReport1/easy/jobs ♥♥♥k♥d♥j♥♥t♥♥d♥l♥v♥d♥♥♥v♥♥♥q♥u♥♥b♥♥q♥♥♥y♥i♥♥s♥♥n♥v♥♥♥v♥♥p♥♥y♥♥w♥♥♥u♥♥b♥♥g:::::!sf242k:wkyuks

    • Michael H

      A kid with brains is never going new. Your money goes so much farther, used. That said, I bought my kid a 80 something Kawasaki 450ltd last year for $600. Great, Easy bike, to learn on. Oh and cheap. Little wreck? Who cares.

    • SerSamsquamsh

      Also different – financing was not 0% back in the day. Insurance wasn’t $250/ month.

  • VRobb

    That’s a shame, my 1st year V-Rod (#4494) was ridden back to that plant in 2003 for HD’s 100th Anniversary. Guess I won’t be doing that ride again, though…
    Here she is at 137k+miles, sure cleans up nice eh? https://uploads.disquscdn.com/images/7547649ddf74abc0944f1e157e7d106328dbf7a59a4c1fe7521b764282aa0b55.jpg

    • olds13

      My first Harley was an ’03 Silver Anniversary with detachable windscreen, and hard saddle bags. I loved her!!! I especially loved the liquid cooled (and powerful) 1133cc engine! But the motor company killed the VRSCA in favor of unrideable drag bike styled cafe racers. Old farts like me can’t or won’t ride those. AND WHAT THE HELL HAPPENED TO THE CHROME?!? My suggestion would be to forget ‘electric’ bikes nobody wants and return to affordable bikes that young families can afford.

  • mybluestar

    So many good looking and quality bikes with the metrics are impacting sales globally, bikers like all manufacturer’s machines, it’s not what you ride now, but that you ride.

  • Deryl Clark

    I like to think there is more to a motorcycle than just the badge it wears. I truly feel that the people that put the machine together are as much a part of the bike as the designers and engineers.

    I like to think my Griso was worked on by a Italian guy who who most likely is always 10 minutes late to work and spent the first 30 of his shift throwing back an espresso while chatting up the girl working in the paint department. He breaks for a two hour lunch where paint girl and him grab a quick bite and then make love for the remainder of the lunch break. Returning to work they work tirelessly pouring all their passion into my Moto Guzzi.

    My ST1300 built by an army of of impeccably dressed and trained men and women who take their job very, very, very seriously….the whole Samurai Creed thing. Then after work they all go to Midnight Dinner and the dude fixes them what ever he has in the kitchen, lots of drinking ensues, and hopefully the guy who did my bikes final inspection got lucky.

    I want my Triumph made in England by some guy who lost half his bad teeth in a fight at a Manchester United Football brawl.

    I want my BMW made by brooding anal retentive never smiling German who is still pissed great grand paw and grand paw got their asses kicked trying to rule the world.

    So forgive me if I want my Harley Davidson made by some kick ass and take name American men and women who have proven time and again that if given the proper resources are some the most productive workers in the world. Thankfully they are still manufacturing bikes here in the U.S. but still a company that so ties it self to the America Dream could have done better by those 800.

    So now if you will forgive me:
    In my best Al Pacino voice….”hey Harley Davidson marketing directors and bean counters….. F%@K YOU TOO!”

  • BigCatfish

    It was touring that plant in 2006 that convinced me to go with Harley-Davidson when I got back into riding. This is heartbreaking news.

  • toilet brush

    HD better get it together and quick. the young people don’t give a damn about the Harley “mystique” and all the older guys like myself are getting too old to ride anyway and are dying off. if I was a young man, I would be remiss to spend the extra money it takes to buy an HD these days because there are alot of motorcycles out there that are just as good or better than HD’s and cheaper too. No bias by me against HD, I have owned several and own one now but they are in trouble right now

  • jeff benson

    Eh. Probably some financial doubletalk here to justify the closure that they would have done anyhow even if sales were up. After they way they treated Eric Buell, HD can kma forever.

    • John A. Stockman

      I was going to mention how they treated Erik Buell in my earlier post, but didn’t. Thanks. That kind of poor treatment should not be forgotten, after all the hard work and positive attitude he gave HD over the years.

    • Gruf Rude

      One suspects the expiration of the sweet tax deal HD got from the city factored in also . . .

  • RyYYZ

    Here’s the thing about Harley:

    People keep telling me, oh Harley can compete if they put their mind to, and Harley’s technology is as good as anyone’s. So why do the clean-sheet Street 500 and 750, and the Street Rod, consistently trail behind pretty much every bike they’re compared to in terms of pricing, performance, comfort, and fit and finish. They’re asking a price premium for these over comparable models from Japan that have superior reliability, build quality, handling, braking, etc.

  • Michael H

    Harley needs to take that tax break and get the prices down on the bikes. $25-30k is car buying money, but that is the Road Glide price. I instead bought a 07 v-rod deluxe with a road glide fairing, stereo, bag, fender kit, added a Trask turbo. All said and done, under $20k. New was never a consideration due to high cost.

  • ADB

    Hate to hear this. However, inevitable with the death of the Dyna and all the new Softails taking their place?

    With this being said, if H-D would have taken the V-Rod motor and built a “regular” motorcycle, I would have one of those in my garage instead of my Norge. One more sale lost through the years because “Harley is Harley”….

  • Gruf Rude

    Corporate money does not recognize national boundaries. Harley’s red, white and blue marketing is marketing, not patriotism. If corporations were actually people, they would be sociopathic people,