Trump to meet with execs from Harley-Davidson, which outsourced IT
- 02 February, 2017 09:44
President Donald Trump is schedule to meet Thursday with executives from Harley-Davidson to talk about job creation. This is also a company that has shifted IT jobs to Infosys, the large offshore outsourcing firm based in India.
Harley-Davidson is an American icon and its motorcycles are part of the cultural fabric. But it is also a modern corporation that benefitted from tariffs in the 1980s to protect it from overseas motorcycle makers, and it has globalized its IT operations.
In 2012, the company entered into a long-term "partnership" with Infosys, which is a major user of H-1B visa workers. The president has been critical of the use of visa workers by offshore outsourcing firms, but Sean Spicer, Trump's press secretary, didn't mention outsourcing today when discussing the meeting with Harley-Davidson executives.
"Were concerned about American jobs, moving this economy forward, and we're excited to welcome them (Harley-Davidson executives) here to Washington to talk about the great work that they do and the many thousands of people that they employ," Spicer said at a press briefing.
Harley-Davidson hired Infosys to outsource its IT under a $200 million, five-year agreement. About 125 Harley IT employees lost their jobs, although they were eligible to apply for new jobs at Infosys and Harley, the Milwaukee Journal Sentinel reported at the time.
Infosys now faces a discrimination lawsuit that includes two employees who were rejected for Infosys jobs related to the Harley-Davidson IT work. The lawsuit, filed in 2013, broadly alleges that Infosys favors the hiring of South Asian workers over those in the U.S.
The plaintiffs hired an economist, David Neumark, a professor at the University of California, Irvine, who analyzed Infosys' U.S. workforce. He called it "remarkably disproportionate" because of its South Asian hiring. In court papers, he alleged that from 2009 through 2015, more than 89% of Infosys' U.S. workforce was South Asian.
Efforts to reach Harley-Davidson officials were unsuccessful, so it could not be immediately learned what has happened to IT employment at the motorcycle maker since the Infosys agreement was signed.
According to that agreement, which is part of the federal court record, business objectives included "redeploying Harley-Davidson employees to higher value roles that allow for career enhancement opportunities and improved focus on the capabilities essential to the achievement of Harley-Davidson's strategic objectives."
Infosys has denied the discrimination claims and has been defending itself in court.
Trump is threatening to impose tariffs to help keep manufacturing in the U.S. Specifically, he is warning U.S. firms that if they make products overseas for sale in the U.S. he may impose a tariff on those imported goods.
That threat only applies to manufactured goods, not to IT services delivered over the Internet. Trump is considering H-1B reforms, however, that may disadvantage offshore outsourcing firms.
The Harley situation offers an example of how tariffs can be used to protect home-grown industry in the U.S.
In the early 1980s, imported Japanese motorcycles created a glut on the market in the U.S., depressing prices. According to a U.S. government summary: the "U.S. International Trade Commission found in 1983 that increased imports of heavyweight motorcycles threatened serious injury to the domestic industry. This finding gave the president authority to impose temporary import relief to allow the industry time to adjust. A 45% tariff surcharge was imposed with a scheduled phase-out of five years."