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GoPro To Move US-Bound Camera Production Out of China (reuters.com) 91

Posted by BeauHD from the cause-and-effect dept.
In an effort to counter the potential impact from new tariffs, GoPro is moving most of its U.S.-bound camera production out of China by the summer of 2019. The company said international-bound camera production will remain in China. Reuters reports: The company had previously said it was being "very proactive" about the situation regarding tariffs as U.S. and China ramped up its bitter trade war, in which both nations have imposed tariffs on hundreds of billions of dollars of each other's imports. "It's important to note that we own our own production equipment while our manufacturing partner provides the facilities, so we expect to make this move at a relatively low cost," said Chief Financial Officer Brian McGee. In the company's earnings call in November, GoPro said it had the option to move U.S.-bound production out of China in the first half of 2019, if necessary.
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GoPro To Move US-Bound Camera Production Out of China More

GoPro To Move US-Bound Camera Production Out of China

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  • Sure they can move it out of China (Score:4, Insightful)

    by frank_adrian314159 ( 469671 ) on Monday December 10, 2018 @07:12PM (#57783346) Homepage

    They'll move it straight to Mexico - the labor's still cheap enough there and, because of our shiny, brand new "trade agreement" with Mexico, there are no nasty Trump tariffs to contend with there..#MAGA!

    • Re:Sure they can move it out of China (Score:5, Insightful)

      by joelgrimes ( 130046 ) on Monday December 10, 2018 @07:46PM (#57783498)

      If companies learn not to make China their sole supplier of all things then it goes in the win column.

      Lack of diversity in our supply chain was making us vulnerable

      • Re:Sure they can move it out of China (Score:5, Insightful)

        by ShanghaiBill ( 739463 ) on Monday December 10, 2018 @08:31PM (#57783658)

        Also, a more prosperous Mexico benefits America. A more prosperous China, not so much.

        40% of Mexican imports come from America. 20% of Chinese imports come from America.

        More jobs in Mexico means fewer desperate immigrants to America.

        • More jobs in Mexico means fewer desperate immigrants to America.

          They'll reverse the flow, like the Chicago River [wikipedia.org]

        • China imports 1.8T and Mexico 430B. So Chinaâ(TM)s 20% is 360B and Mexicoâ(TM)s 40% is 172B, so China imports almost double from the US compared to Mexico.

          • It is the percentages that matter, not the absolute amount.

            If GoPro pays a worker in Mexico $100, then $40 of that comes back to America. If they pay a worker in China $100, then $20 comes back.

            Also, Mexico is not building weapons targeted at America, nor are they bullying our allies.

        • Mexico is #2 just behind Canada vs China being a distant #3 for importing American goods (Japan #4 is 1/2 China). Mexico is #2 for selling to us, behind China.

          How much room is there to grow for #2 in terms of buying from us? And it isn't even growth, we are charging #3 to discount #2.

          On immigration, more Asia's are coming to the US than Hispanics since 2016.

          On another note, I don't think these guys are really moving to Mexico. Per another post it was Taiwan. Which means it's basically the same supply chai

        • I suppose that's one metric you can use. Another is the level of corruption in the country [wikipedia.org]. And Mexico is worse than China by that measure.

          Ideally companies would be moving production away from corrupt countries as punishment, to less-corrupt countries as a reward.

          • Ideally companies would be moving production away from corrupt countries as punishment, to less-corrupt countries as a reward.

            Countries that trade internationally tend to be less corrupt. Within countries, sectors of the economy exposed to trade tend to be the least corrupt.

            So depriving corrupt countries of trade, will likely make them more corrupt.

        • Re: (Score:2)

          by gtall ( 79522 )

          Mexicans leaving Mexico for the U.S. has dried up. Think Central America, and do please try to keep up.

      • Re: (Score:2)

        by mr_exit ( 216086 )

        A lot of firms that have been operating in asia for a while have a China +1 policy. So factories in China + Vietnam or China + Thailand.

        They realise that if all your manufacturing is in China then it only takes one uptight local official to hold your business to ransom, plus if you have duplicated all your knowhow once, it's easy to spin up a third factory elsewhere.

        I doubt they expected their uptight local official to be a president at the import end, but the preparedness helps.

      • Most of the components still come from China though. Assembly is not where most of the value sits. So GoPro will have long supply lines for the components.

    • Trump just signed NAFTA 1.2. It's just like NAFTA except he snuck a few provisions from the TPP in there (notably the one that lets companies sue governments for lost profits, which should have be a big no-no among his America First base...).

      At any rate even if they bought a factory here I doubt we'd see jobs. There's always automation. Ever see the Steam controller get made? One guy dumps parts manufactured in China into a machine and out comes controllers.

      • Exactly backwards (Score:5, Insightful)

        by raymorris ( 2726007 ) on Monday December 10, 2018 @09:00PM (#57783784) Journal

        It seems like you got a little confused there, or whoever told you was confused. That provision was *removed*. It was in NAFTA 1.0, now it's gone.

        Canada wanted keep it, which is weird because:
        https://www.cbc.ca/news/politi... [www.cbc.ca]

        It was removed in the Trump deal except for one special case. Every so often Mexico makes efforts to nationality their oil industry, with the government taking refineries and other infrastructure from the private companies that built them. If Mexico wants to take American-owned oil facilities, the companies can get reimbursed under the chapter 11 process. It's been removed except for oil facilities in Mexico only.

        Whichever source of news / comedian told you the exact opposite, I'd be suspicious of them now. Apparently they are either hard to understand, or pulling your leg.

    • Might be hard to source components in Mexico. Or at least the supply chain is more complicated than it would be in China.

      Luckily there are loop holes and we can happily ship containers full of components from China to Mexico, then assemble in Mexico and call it Hecho en México.

      I wonder how far the loop holes can be pushed. Can China ship a nearly complete "electronics module" and in Mexico screw a plastic housing on it and stick it in some retail packaging? Is this a ban that doesn't hurt China at all,

      • Might be hard to source components in Mexico. Or at least the supply chain is more complicated than it would be in China.

        Luckily there are loop holes and we can happily ship containers full of components from China to Mexico, then assemble in Mexico and call it Hecho en México.

        I wonder how far the loop holes can be pushed. Can China ship a nearly complete "electronics module" and in Mexico screw a plastic housing on it and stick it in some retail packaging? Is this a ban that doesn't hurt China at all, only makes stuff more expensive in the US?

        Per TFA, they are moving it out of China to another country, and mentions Vietnam amogst others that have no tariffs. Southeast Asia makes it easy to source componenst and module sin China and ship them for final assembly elsewhere, then ship to the US. The overll impact on costs should be small and much less tahn the tariff would add.

        • I agree. I'm initially intended to comment on why Mexico might be a poor choice, but then I went back on my own thought because it might still be a viable choice for similar tech companies.

          Advantage of Vietnam is it has no labor laws and fewer environmental regulations then Mexico. Weird how communist countries turned into the libertarian ideal where everyone is free to choose if they want to work without any regulations or if they don't want to eat.

          • Weird how communist countries turned into the libertarian ideal where everyone is free to choose if they want to work without any regulations or if they don't want to eat.

            Not weird. That's what those countries were already like before communism, which is exactly why they had communist revolutions. The communism of course doesn't change much, it just means you're slaving for the government instead of a corporation... and then as communist nations move to market economies you get to slave for a corporation ag

          • Vietnam has labour laws ... no idea why you pretend otherwise, e.g. minimum wage laws: https://www.vietnam-briefing.c... [vietnam-briefing.com]

            • Unfortunately the reality is people work a portion of their day off the clock in Vietnam. So they get a double whammy of lower effective pay and having to work longer hours. You can cite the official laws all you want, but legal code doesn't necessarily reflect reality. In Vietnam the local municipalities are corrupt and the national ministries ignore the plight of most ordinary folks. One party states are bad news for the proletariat.

              Mexico's minimum wage is horrible too, I think it works out to around $14

      • I heard they already do that with aluminium and other metals...

    • Moving production to Mexico would be great. Mexico is a free, democratic, reasonably friendly country. Yes, they've got their share of problems (several of which they can thank the US for given that our war on drugs is what fueled their cartels), but until such time as the ruling party of China makes some major reforms, I would much rather my money be going to Mexico than to the dystopia that China is building.

      Besides, economic opportunity for Mexico is the best way to ease the border issues....I don't s

      • For the past 10 years, more Asians come here than Hispanics. NAFTA already solved the Hispanic immigration problem from the 1990s.

        • But are the Asians coming here legally or illegally?

          My biggest problem with illegal immigration is that a large illegal immigration population is vulnerable to exploitation by bottom feeders of all kinds. Ignoring illegal immigration allows those bottom feeders, whether they are big corporations, small businesses, drug cartels, human trafficking groups or gangs, to continue to exploit people who are too afraid to seek help from the local and federal institutions that are suppose to be protecting all of use

          • Then fix the immigration laws. Make the process easier for people to come here. Stop scaring them. Stop giving so much power to the corporations who have a ton when it comes to the H1, and L1 visas. Stop giving preferential treatment to "asylum seekers" just because they fit some of the US's biased checkboxes. Stop preferring the very rich over the normal and poor. Stop empowering the human traffickers who make it easier than the legal route. The list goes on and on.

            I am a US citizen and have had to deal

      • Mexico is a free, democratic, reasonably friendly country.
        It is not. It is run by several mafia clans. Which basically only exist because of the US.

    • Re: (Score:1)

      by Anonymous Coward

      My money is on Vietnam. Even China is outsourcing manufacturing there for lower costs.

    • Re: (Score:2)

      by AHuxley ( 892839 )
      The cost of China is too expensive. Workers, engineers. Communist government demands and laws.
      Want to replace workers with robots, that another upgrade cost.

      Non Communist nations start to look great.

  • FIX THE EFFIN LINK "EDITORS" (Score:4, Informative)

    by OzPeter ( 195038 ) on Monday December 10, 2018 @07:20PM (#57783388)

    The GoPro press release is
    https://investor.gopro.com/pre... [gopro.com]

    The link in TFS is for teh old version story

  • If it hasn't been updated in the summary yet, here's the correct link [reuters.com] to the article.

  • ... are so thin that they can't afford the tariff.

    I have two major thoughts on this announcement:

    1.) When (not if) the tariffs are rolled back, GoPro will regret the shortsightedness.

    2.) I don't have the chops to tell GoPro what its business model should be.

    • Re: (Score:2)

      by OzPeter ( 195038 )

      GoPro has been in trouble for a while now, so there may be a short window for regret and/or telling them how to (better) run their business

      https://www.fool.com/investing... [fool.com]

    • Shortsightedness ? You want our companies production out of China ? Is Russia ok too? Or is that too trumpy ?

    • I don't know of any company that likes having costs unexpectedly go up 20% especially if it is for a tariff. GoPro isn't the only company moving production. Some US manufacturing is moving overseas because their parts coming from China are now 20% higher. However if they manufacture in a country like Vietnam then import the finished food back into the US they get no tariffs. Until the Trump administration starts taxing more countries. This is the problem with tariffs. One of the most likely scenarios is eve

      • I agree with you.

        One of the most likely scenarios is everybody loses.

        History [wikipedia.org] supports your theory.

        This customs [or tariff] war is often cited as one of the main causes of the Great Depression.

  • "It's important to note that we own our own production equipment while our manufacturing partner provides the facilities, so we expect to make this move at a relatively low cost,"

    I am sure our president will take credit for this, as he [rightly] should.

    From my vantage point, that's "one down" for the Xmas season...more to come.

    Now, let's join America in celebrating this news.

    • Re:Well done Mr President (Score:5, Insightful)

      by matushorvath ( 972424 ) on Monday December 10, 2018 @08:11PM (#57783594)

      Notice they are saying "out of China", not "to the US". They will most likely move it to India or Vietnam or Mexico, or somewhere else cheap.

      • Exactly. GoPro is not the first. Most who are moving are moving to places like Cambodia and Vietnam. Mexico is nowhere near as cheap or reliable. They will likely look to improve their margins in the move versus what they had in China pre-tariff. Why wouldn't they?

        The affect of all this will be to spread the wealth and thus bring other countries up to the point of us viewing them as a problem. We simply can't stand other countries using our same tactics.

        But, it's too late. Once the countries cross a certain

    • Are you serious? I actually can't tell.

      Production will move at most 800km. Components will be sourced en-mass from china, shipped to vietnam and then assembled into the final product with a "made in vietnam" sticker.

  • The company said international-bound camera production will remain in China.

    The message to legislators around the world is clear. I wonder if other countries will follow US example.

    • The message is what exactly?

      That putting tarrifs on a particular country will make production move ~800km to a different country that is very much under the geographic sphere of influence of the 1st?

      That significant supply chain production will remain in the 1st country and only a negligible amount of money will change path.

      Thats the message?

      • No it means that tariffs won't necessarily make companies move production back to the US. It means that this is an inconvenience to US companies who manufacture overseas. GoPro will set up a 2nd factory in another country that will handle US imports. Their current factory will still make products for other countries. Chances are there that there is no real difference between the two products other than manufacturing site. GoPro probably didn't and will not consider moving those jobs to the US. So who won or

    • Smart move to keep other production in China versus here. Other countries are much more likely to place tariffs on us than China as Trump spreads his tariff wars. Moving it here would thus cause the same problem in reverse.

  • MAGA (Score:1)

    by Anonymous Coward

    I'm sure this will be a very unpopular comment on the heavily left-slanted Slashdot. But the tariffs are working. I build custom manufacturing hardware (in the US). While my component costs have gone up (since most ICs come from Asia) I've noticed a boom in business.

    • Everything I've ever read about tariffs conclude they are bad except in all but the rarest of instances. Enjoy your boom at our expense.

    • I'm sure this will be a very unpopular comment on the heavily left-slanted Slashdot. But the tariffs are working. I build custom manufacturing hardware (in the US). While my component costs have gone up (since most ICs come from Asia) I've noticed a boom in business.

      I assume you supply manufacturing machinery to other industries that benefit from tariffs. Good for you, you're one of the lucky ones.

      But there are plenty of losers from tariffs: those whose businesses depend on imported materials (or even domestic-sourced materials now priced higher thanks to less competition) and those who export to countries that have imposed counter-tariffs.

      Yes, the tariffs are working -- to the benefit of some, and to the detriment of others.

      • I don't know how much the steel tarrif was responsible for GM closing those factories, but it must have been considered.
        • GM problems go way beyond steel tariffs. The tariffs certainly don't help. Part of GM's new plan was to shut down small gasoline car manufacturing in the US because it probably wasn't very profitable and focus on trucks and SUVs. That product line wasn't profitable to GM but is very profitable to Honda and Toyota.
    • Well to your point: you are building custom equipment, not commodity or mass production equipment. The market is there for custom equipment that has support within the same country. Its not like you want to call up someone in China (let alone have someone fly out from China) if you need tech support or repairs.

      On the other hand, all of the commodity and mass production equipment is made overseas (China, Vietnam, India, Take your pick of a SE Asian country). You even admit to ordering commodity overseas p
  • What percentage of their product is shipped to the US? 10%, 50%? That not destined from the US will still be made in China. Didn't see any thing about manufacturing in the US.

    • No, the key statement is "Out of China". Even if the number is 100% of products there's nothing about moving to the USA. If there were they'd be shouting it from the hills for brownie points.

  • Didn't see anything about this from the link in the summary,

    "Verizon says to shed 10,400 jobs by mid next year"

    so I guess that sucks but it does not verify what the summary claims.

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