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Wednesday, 4 July 2018

Comment by Editor-in-chief, Robin Bradley

Harley-Davidson is Meeting its Fiduciary Obligations

Congratulations to Harley-Davidson for having the courage and common sense to refuse to allow the interests of its stake holders, employees, dealers and customers to be compromised by inappropriate short-termism.
As Scott Wine said about Indian Motorcycles, Harley-Davidson is committed to seeing 50 percent of sales garnered from ‘international’ markets by 2027.
They have both set out that stall not because they are unpatriotic, but because not enough people in the United States want to buy their products at this time. As an alternative to simply allowing atrophy to kill their companies, Harley in particular has instead adopted the ‘American Way’ and decided to not be passive, but to actually do something about it and try to improve trading prospects.
Sadly, that reality is that whether air-cooled or combination cooled, normally aspirated or fuel injected, cruiser style 45/49 degree V-twin engined factory customs simply are no longer the riding lingua franca of enough domestic U.S. consumers to keep the dividends flowing, the union fees being paid and the dealerships able to meet their steepling local property taxes and regulatory overheads.
As publicly owned and traded corporations, they have a federally mandated fiduciary duty to make the best decisions they can at any given time to keep the lights on, keep meeting the payroll, and protect the investments their shareholders have made. It’s called “capitalism”.

 ‘Society has chosen capitalism’

At best, failing to do that is called incompetency, at its worst it is called gaol time!
I was recently dissed by a reader, someone I’ve known for many years, for allowing my “rag” to stray into territory where it apparently had no place to be - namely politics. The occasion of his ire was when I initially first reported on the prospect of EU retaliation to U.S. steel and aluminum tariffs some months ago.
Actually, politics first and foremost, is 100 percent about trade. Trade created politics in the first place, and its own first and most important fiduciary duty is to enable and enhance the trading opportunities of its constituents - a duty mandated by the needs of voters to be able to feed their families, pay their own property taxes or rents, and prosper in secure and rewarding employed endeavor.
For good or bad (and I believe for good), society has chosen “capitalism” as the mechanism through which it will achieve these ends. Therefore, the responsibility that society has, through its governance, is to do everything it can to enable rather than disable corporations such as Harley-Davidson to meet its needs.
If the board of directors of Harley-Davidson has decided that, given the present outlook and the time it takes to enable new production operations, the best decision it can take is to add production capacity elsewhere than in the United States, then the purpose of elected and government officials becomes not to ask what the company can do for them, but what they can do for the company.
It is simple - no profits translates to nobody going to the bank. No dividends, no payroll, no taxes being paid, no federal budgets for defence, infrastructure, healthcare or anything else.
Don’t get me wrong, those who know me know that my politics comes from all over the radar. It is my firm belief that anybody who claims that they have all the answers, whether on the right or the left, patently has none of the answers. The reality of politics, as in life, is that there is no monopoly on wisdom. It is perfectly possible for all politicians to actually have some good ideas, and for all parties to do some good things.
If I have a driving force that is the default that I fall back on as my litmus to calibrate how I think of an issue, it is trade. What promotes trade, where the best interests of trade are to be found and how to further foster trade. That’s why, of all the media and publishing specialties available to me, I gravitated towards trade journal publishing.
For me trade is the first gear on the car of progress. Production of surplus, known nowadays as the profit, is what set mankind off on this journey, and I simply think that the primary responsibility of politicians, the primary defining characteristic of good governance is to do exactly that – encourage the making of profits from trade. Simple.
So why, in my own country as well as in the United States, are we led by politicians who appear to have no grasp of economics 101?
If you think I’m just a pinko liberal having a pop at President Trump, no, I’m not. I’m having a pop at all of them. I’d actually trade Trump for our Foreign Secretary Boris Johnson – did you hear about his “f%&£ business” remark as he prepares to be part of the team that is soon to conclude our (in my humble opinion misguided) negotiations to leave the European Union?
As I said, nobody has a monopoly on wisdom and everybody is just as equally capable as the next man or woman of being dumb sometimes. Is it too much to simply ask to have some maturity, balance, knowledge, understanding and context in how the affairs of governance are conducted in the 21st Century?