Making TVs in Detroit ?

An article in the Wall Street Journal (May 23, 2012) describes a decision by Element Electronics to assemble 46 inch flatscreen TVs, to be sold for $ 499 at Target, in a plant in Detroit. The company claims that the 5 % duty for imported TVs (about $ 27), the lower transport costs to retailers and the demand lift from the large US flag on the box with an assembled in the USA label, justify TV assembly in the US. But streamlined assembly, rising wages in China also help justify the decision. Will the demand lift from a US assembly label be sufficient to make this US production viable ? Is the competition that should be considered a production or assembly in China or in Mexico, where 50 % of US TVs are currently assembled ? Given that the 5 % duty justifies US manufacturing – is it a good idea to retain it and this increase costs for US consumers or is a better aproach to demand an even higher US productivity to justify domestic production ? Does the fact that the plant is owned by a Chinese producer and product sold by a branding company impact evaluation of its success in generating jobs in the US ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , , , , . Bookmark the permalink.

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