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Did you read the article? The whole point is that you can't just "reopen the plants" because those plants rely on other suppliers in a complex fast-moving suppl

Did you read the article? The whole point is that you can't just "reopen the plants" because those plants rely on other suppliers in a complex fast-moving supply chain; in China those suppliers are practically next door and have turnaround times measured in hours, while in CA the suppliers are miles, states, or even continents away with turnaround times measured in weeks. One hiccup in supply (say, something's wrong with a screw and it must be redesigned and a new batch produced) means a train wreck of production backup (nothing ships until that modified screw is produced, which is weeks if you're waiting for the next container ship to bring it). He's not talking a mere matter of paying an extra $65 for "Made in USA" markings, he's talking the USA model of iPhone 5 costing ~$200 more and introduction/production being chronically behind the China version for months. "Lesseehere...I can buy this now for $X, or I can wait to buy the exact same thing (save for different markings) 6 weeks from now for $X+20%." Those Fremont factories won't be open long. And somehow methinks Fender's supply chain isn't as fast & complex as Apple's.

podperson 15y ago
And even if it weren't, Fender isn't producing new classes of mass market products with unknown demand.
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eitally 15y ago
This has been a slippery slope for the last 15-20 years, actually. If you look at the history of Acer & Asus, for example, you'll see that they both (Asus was actually started by a few ex-Acer engineers) as component suppliers to larger, western OEMs and contract manufacturers. As they got a foothold there, they expanded their offerings to include more complex manufacturing (motherboards, graphics cards, etc), which they parlayed into a lucrative ODM/JDM business, and then eventually launched their own consumer brands to compete directly with their former customers. It took a decade+ to get from point A-->B, but by the time they finished the transformation it was too late for the slow western behemoths to do anything about it. And that, as they say, is the rest of the story [of how the global supply chain got Asia-heavy, causing eventual movement of manufacturing & logistics to the region, too]. It hasn't just been labor costs -- not at all; it's that unless there are extenuating circumstances (e.g. Brazilian import tariffs) there is almost always more savings to be had via supply chain refinement than via direct labor cost reduction.

podperson 15y ago

And even if it weren't, Fender isn't producing new classes of mass market products with unknown demand.

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eitally 15y ago

This has been a slippery slope for the last 15-20 years, actually. If you look at the history of Acer & Asus, for example, you'll see that they both (Asus was actually started by a few ex-Acer engineers) as component suppliers to larger, western OEMs and contract manufacturers. As they got a foothold there, they expanded their offerings to include more complex manufacturing (motherboards, graphics cards, etc), which they parlayed into a lucrative ODM/JDM business, and then eventually launched their own consumer brands to compete directly with their former customers. It took a decade+ to get from point A-->B, but by the time they finished the transformation it was too late for the slow western behemoths to do anything about it. And that, as they say, is the rest of the story [of how the global supply chain got Asia-heavy, causing eventual movement of manufacturing & logistics to the region, too]. It hasn't just been labor costs -- not at all; it's that unless there are extenuating circumstances (e.g. Brazilian import tariffs) there is almost always more savings to be had via supply chain refinement than via direct labor cost reduction.