Classe might be moving production to China

You are assuming the move to China would be strictly cost-based.

 

Edit: I see you are in Cleveland. I understand your aggressive tone towards my comments. We also have a plant in Ohio. They are working very hard to stay competitive with China.

Look, my point is that crap doesn't come out of China solely because it's made in China. The labor pool is inexpensive and that's one cost variable. China serves as an enabler for making products as cheaply as possible. And the stuff we do make in China is also our lowest-speced. And those design/quality decisions are made right here in the U-S-A using lowest cost components. Our best stuff is made in Ohio. But also with better parts. Sometimes sourced from... wait for it... China.

 

There's a lot of hostility towards chinese-made products here, perhaps it was because of the association with loss of jobs here in US, or the lingering impression of poor China decades ago; but let's be fair and objective for a moment. There is no reason for China not to be able to manufacture high quality products; the resources, equipment, skills are all there. Not just potential, they are there now.

Of course there are cheap products made there, but that's because people want cheap products. There's cheap crappy products made here in the US too, so what, that doesn't mean we can't make good stuff.

I too have seen factories in China, as a job to perform audits over there, and I've seen really top notch manufacturing environment, including staffing, every bit as good as factories anywhere else.

China is emerging from a slum, that's true, and it will take a while for the entire nation to have the same level of awareness about quality manufacturing as the modern western countries. But part of China is already there, and the rest will follow.

 

They should not do it.

Looks whats going on with Nokia Phones. They had 10 years their plant in Germany and that was the best phones they have ever produced.

Nearly 2 years ago they go to Rumania. Since then their phones are really crap. Also their flagships (like N97 and so on) are really crap.

So, they should think about it, but I will don't buy any speakers in 10 years (I am happy with my Wilsons).

 

What other reasons could there be?

 

There seem to be divergent thoughts here. I don't think most well traveled and/or rational people think China means low quality. That just isn't true. There are fine products assembled in China (Oppo machines, Prima-Luna, Shanling quickly come to mind) I own products assembled in China and they are fine. Anyone who has an opinion that anything made in or assembled in China is bad by default is someone you should just avoid a debate with. Sadly, these conversations always bring out xenophobia and jingoistic nationalism. A shame.

This is the issue, the Classe brand & reputation has built themselves around Canada. The first sentence on their site is how they are Canada's leading maker of high performance gear. Imagine Ferrari or Lamborghini opening shop in China. What do you think that would do to the brand? Furthermore, moving assembly to China is not a lateral move like moving a factory from Kentucky to Alabama. It is usually a labor cost cutting measure. It might not be the only reason for a move, but it is a primary reason in most cases. How does that translate to the consumer? These aren't modestly priced or mass produced items, these are premium priced, luxury goods. You aren't just selling products that work well or can be built to the spec. You're selling prestige, history and legacy. Would Swiss watches be the same if they were made in Malaysia? From a technical standpoint, maybe - but many people also buy them because they are Swiss.

Of course, the move at this point is all speculation and for the time being should be treated as such. We shall see. Maybe TonePub can shed some light when he visits Classe.

 

The extension of your argument here is that buyers of premium priced luxury goods are xenophobic, nationalistic, not well traveled, and irrational, or, they only want luxury goods, if the people who produce them are well paid.

 

Your absolutely right, the same applies to the servicing industry, you can find call centres with excellent quality that equal anything in HK or KL or you can go for the ultra cheap, you get what you pay for and what fits your product strategy.

 

If you pay that much for a product, you expect certain qualities from the manufacturer which are more than just "best bang for the buck", for instance that certain social or environmental standards are being met.

And PLEASE, preferring to buy products from national manufacturers has nothing to do with being xenophobic. Helping companies which create local jobs is a very rational and healthy thing.

 

I have been saying for years that this globalization business is a smoke screen...bad times for the economies that succumb to that concept 100%.

 

I certainly agree that China is entirely capable of producing goods of extremely high quality, and they do. Even if the product isn't manufactured there outright, I would venture to say that by now there aren't many products made anywhere in the world that don't contain at least some components made in China. In the 1950's and 1960's people in the USA would laugh at "cheap Japanese ________" (fill in the blank). By the mid-1970's, however, when they were whipping the butt of our electronics and automotive industries, that expression was nowhere to be heard. In the 1990's and early 2000's it was common to laugh at "cheap Korean _________" (fill in the blank). They are now whipping the butt of the electronics, and soon automotive, industires in the USA and Japan.

It may be true, and if so, unfortunate, that some of the concern, if not fear, about the volume of Chinese-made goods is rooted in jingoism or xenophobia, and you're right, trying to have an intelligent debate with people of that mindset is a huge waste of time. That, however, doesn't mean that there aren't rational, enlightended people who are very concerned about the fact that the USA has virtually abandoned a hugely important strength that helped make our economy the strongest in the world, and provided unprecedented prosperity to an unprecedentedly large number of people.

The mass migration of the manufacturing segment of our economy to other countries, China being the largest, has created an enormous structural imbalance in our economy that has contributed mightily to the chronically high unemployment numbers and governent budget shortfalls we're now grappling with. Wealth that was at one time recycled in this country into more jobs, more capital investment, more investment into new product development, and greater tax revenues to support social programs (health care, education) and infrastructure improvements, is now pouring out of this country in two directions: East, for oil, and West, for almost every manufactured good we buy. While some of those countries reinvest some of that wealth in the US, much of it never returns. We can't remain economically stable if we assume that we can eliminate diversity in our economy to the point where we're all sitting in offices, behind computers, marketing things to each other that were made elsewhere, by other people. THAT is the legitimate concern here.

 

Just got an email from one of my contacts at Classe and it is true that they are moving production there. I've got an interview set up for mid next week, so will find out the complete story.

Not sure if it's like B&W where the lower products in the range and the 700/800 series are built in the UK. Classe might be planning the same thing, where the top range products are still built in Canada.

But I do know that at least PART of their production will be moving to China this year.

Stay tuned....

 

Jeff, thanks for the real time update - looking forward to the interview.

 

Here is a nice article that discusses the issues of "quality fade" with Chinese manufacturing.

http://www.economist.com/node/13642306

 

Oppo universal Blu-ray players are top quality products in my opinion.

 

Yes it has. Excellent post.

Unfortunately, the rampant consumerism and the desire for more goods at even lower prices that underscores the way of life for many in the US has played right into the void.

 

Jeff, I forget, but doesn't Classe and B&W have some sort of ownership relationship (or distributors).

 

It's possible that Classe wants to launch a lower-end product line to be sold in places like Best Buy.

 

This thread is now again open for business after many posts had to be deleted as being either off topic or being overly aggressive.

This is an interesting topic to discuss and we understand that some of you feel quite strongly about it one way or the other, however, let's please keep it civil and on topic so we can continue this discussion.

Many thanks ... Oliver

 

Not at all, that's far from what I meant. I simply meant that topics like this usually bring out people with those opinions. I don't think those opinions reflect the majority of the people that like a brand because of prestige or country of origin. Liking a brand because of prestige, heritage and legacy doesn't mean the individual is any of those things or harbors any negative feelings about any country. For example, If I have an affinity for fine Cuban cigars, it doesn't mean I despise cigars made anywhere else. Maybe I just appreciate and respect what they have to offer, and consider the product a mark of excellence. If they stop making and hand rolling them in Cuba, then the appeal would be gone for a lot of smokers. There is no shortage of cheaper cigars from the Dominican Republic, but many simply prefer Cubans. It's their prerogative.

 

I agree with you friend.

 

Well let's put it this way. If I design the ultimate toaster and want to find a US or Canadian manufacturer... I'm out of luck. I have to go to the far east, even if I don't want to. For a freakin' toaster!

The manufacturing investment in North America is virtually non-existent for going on 20 years.

 

My thoughts exactly.

I see gear being made in China these days that seems to cost just as much as stuff made elsewhere.
Yet the the cost to manufacture is supposedly lower in China.
Who is pocketing these "savings"?
Doesn't appear to be the consumer.
The big example for me are from another Canadian company: PSB.
Their Synchrony One speakers are highly regarded (not by me but that's another story), but they're made in China and still cost 5K. I don't see or hear 5K when I listen to those speakers. In my opinion I could let a lot more for a lot less, made in England of the USA or wherever.

I wonder if those saved labour costs are eaten up by other factors like shipping etc.

 

Exactly! I thank you two for making those points so early on in this thread.

 

Well, then they could still have some parts manufactured in China or somewhere else (which is probably already the case) and assemble the final product in Canada, which would give them the right to call them "Made in Canada" (I don't know the exact rules that apply to indications of origin).

I suppose it does not require chinese expertise to assemble and test an amplifier or CD player.