Dear All:

B&W has built its own factory in China which it allows it to offer the 600s series speaker between $ 400-600 USD.  Granted, B&W will continue to build its top of the line equipment in England.  By building and running its own factory, B&W does not have to outsource the work to subcontractor(s).  Also, it allows them not to reveal any proprietary manufacturing secrets.   

Would we buy products from B&O if they ran & managed their own factory in China?  Is B&O getting any savings out of the factories in eastern Europe?  If so, are the savings being pass on to the customers?

Here in the USA prices are going for a number of things.  The factors are many, not too mention the weaker dollar.  

What say you B&O aficionados?  

Dario 

I wouldn't have a problem with B&O moving their manufacturing to China. Of course I would prefer if my B&O was Made In Denmark, but nowadays this is only a 'feel good' factor as the Chinese are perfectly capable of manufacturing B&O products at the same quality as they are currently being made in Europe. Times have moved on and I think B&O will continue to struggle if they retain all manufacturing in Europe, unless prices stay level or increase.

Only if the workers were on a strict diet of herring and Carlsberg.

Ludfisk should be part of that diet. 

I find the whole idea of moving manufacturing bases to China more than a little disconcerting. Lets not forget that this is a country where humanitarian policies leave a lot to be desired both historically and to a slightly lesser degree currently. Frankly it is money men chasing even more money and to hell with the rest of the world which has created this cheap manufacturing base. Sugar coat it as much as you like but this is the fundamental truth of it. I personally abhor the way China has been allowed to become the dominant global manufactuing base as they don't give a damn about the plight of their workers or the impact their policies have on the environment. In a nation where the cheapest and most easily replacable commodity is human life it's no wonder they can undercut the rest of the world. My gripe is really with the financial leeches that allowed this to happen the first place.

BTW - there is no doubting the quality of the goods they produce but you have to ask yourself who is providing the technology to attain these standards?

Chris.

I have to agree, I want my B&O to come from Denmark just like I want my Mercedes to come from Germany. Why? Because they are products of that country. I think it's important to me. Also if we keep outsourcing everything to China/Taiwan then what are our countryfolk supposed to earn their money with? After all not all of us want to work in an office or somesuch and others only know how to use their hands, you get my drift?

 

I know it will cost me more to buy the product if it is made in Europe etc. but then again it will be worth it, of course it would help if people were not always hell bent making 1000% Profit on everything. Greed ain't pretty.

 

Answer to original post: NO. 

I think that moving production to China is only prolonging the inevitable. At some point China is sure to join the modern world in terms of wealth & hopefully human rights. We will eventually run out of cheap manufacturing bases.

I think Bang & Olufsen should look ahead of the curve for once and hire creatures like minotaurs and other work beasts of the fantasy realm to construct their products. These creatures would be able to use both their skills and magic to match and even exceed the quality of the current Danish manufacturing.

 

TripEnglish:

At some point China is sure to join the modern world in terms of wealth & hopefully human rights. We will eventually run out of cheap manufacturing bases.

Unfortunately the deep seated proleteriat in me fears the exact opposite may just happen and we will all be dragged into a world of drudgery ruled by men with nothing better to do than count money. Can you really see China and their backers giving a flying fig about the rest of us 'cos I can't? When have either China or financiers ever given a damn about the common man or their so called rights? After all this is what their respective successes/wealths are based on.

If there's a button with "end of the world - do not push" printed on it you can rest assured you'd find it somewhere in Beijing.

BTW China "joined" the rest of the world in terms of wealth centuries ago - the human rights however.............. I won't be holding my breath on that one..............

Chris.

It is actually quite risky and tricky to set up a manufacturing facility in china. This is why mid sized companies often go into eastern europe plus they probably got some EU incentives.

Lastly, production cost seem to be only a small part of the puzzle for B&O. And lets face it, they would never bend over and pass savings on. 

 

 

As one of the lucky members I was up in Struer for the factory tour. Some process steps of manufacturing (asembling)a TV set (BV7) looked very strange to me, but on the other hand the productin of the alu parts was very advanced and could only be done with extensive know how. I understood that alu is one of the B&O's key cempetences. I doubt that you would like to moce this to china and sooner or later all your know how is with some one else.

So one question could be, how much sense it makes to produce or build low volume goods in china? Having in  mind some road blocks like long shipping time or tax for video products to the EU.

 

Karsten 

My new Macbook Pro was just delivered, "assembled in China", but designed by Apple in Cupertino. Hard to say how it will fair with other models that were not assembled in China. I am a little stuck in my ways, I like my Audi from Germany (despite a new A4 manufacturing facility in China), my Omega from Switzerland, and my Armani from Italy. As long as the build quality meets B&O's QA, there should be no difference. Then perhaps those owning shares will see a nice gain. However, I am worried about the potential for counterfeiting and gray market goods. Hopefully the B&O experts will let us know which product lines and serials are manufactured outside Struer.

All the people I know who have dealt first hand with having products produced in China have not had the most favorable experiences.  Yes, you do see some very high quality products coming out of China, such as the newer Apple products are supposed to be.  Many people mistake this as a sign of China improving their quality standards, when in reality it is because the overseeing company has the production facilities on a leash so short you couldn't measure the distance between their hand and the collar.  Say for example you say to your production facility that you want them to produce a steel enclosure using a certain method and a certain grade and type of steel, and that you'll pay them x amount of dollars for the finished enclosure.  The production facility will then pay for the cost of the raw materials.  They may find however, that a certain cheaper grade of steel costs 40% less than the steel you specified, and after determining that it won't make a noticeable difference they'll buy that cheaper steel and use it.  Since the material cost them less, but you're still paying them a fixed amount for the finished enclosure, they pocket the difference.  So you're left with an enclosure that you think has been made to your specifications, only to find out later that it wasn't.  And you can only hope you discover it soon enough.  In cases where the product quality is very high, its because companies keep a careful eye over all aspects of production, so things like this don't happen.

 So in short, yes, I think seeing some more affordable B&O products coming out of China would be ok, provided B&O has the capacity to manage the production successfully and avoid such issues.

Austin
 

I would be very upset if B&O started manufacturing in China, because that would mean they are stealing us even more than today! The high prices for B&O products are often justified by the fact that they are made in Denmark, so if B&O keep the same price & produce in China, it would mean they simply increase their gross margin, because they will never drop the retail prices.

Look at B&W's subwoofer, the PV1, often competing with B&O's BeoLab 2: it has a less powerful ICE amplifier, no magnetic shielding, 2 woofers instead of 3, no audio outputs, only inputs, and costs EUR 1,500, whereas the BL2 is around 2,600.The first is made in China, the second in Denmark: which company do you think is making more profit? I don't think it is B&O in that case..

By the way, I just bought a new Siemens cooking induction hotplate, and the label says "made in Spain"... like some Peugeot cars or Michelin tyres..Globalization again..

kawo:

Some process steps of manufacturing (asembling)a TV set (BV7) looked very strange to me, but on the other hand the productin of the alu parts was very advanced and could only be done with extensive know how. I understood that alu is one of the B&O's key cempetences. I doubt that you would like to moce this to china and sooner or later all your know how is with some one else.

Karsten 

Don't be fooled into thinking difficult techniques are any safeguard against job security.

I worked for many years for one of the worlds most successful and well established/respected chemical (Azo/Diazo) dye manufacturers and belive me the technology involved in that is extremely complicated with frighteningly tight tolerances within the manufacturing process. China started producing these same dyes with absolutely horrendous initial results but within 8 years the company I worked for went from annual profits of £20,000,000 to a defecit of £65,000,000 which also swallowed up the £80,000,000 we had in the bank.

China had simply caught up with us and could produce the same quality for a fraction of the price paying little or no regard to pollution they simply pumped out of their stacks or into their rivers.

I made a post earlier that got stuck in post limbo, but Peter freed it and it has appeared a couple posts up.

camshaft:

I made a post earlier that got stuck in post limbo, but Peter freed it and it has appeared a couple posts up.

A salient post Austin but let me ask you this. Would you buy a Cadillac or Chevrolet which was made in China to the parent companies spec's? and would you still consider it an American car if it was?

Do you also care about how these Chinese companies manage to undercut traditional Western manufacturers? Trust me it has nothing to do with being more streamlined or better at the task, it is all about exploitation somewhere down the line.

Chris.

Toby:

I have to agree, I want my B&O to come from Denmark just like I want my Mercedes to come from Germany. Why? Because they are products of that country. I think it's important to me. Also if we keep outsourcing everything to China/Taiwan then what are our countryfolk supposed to earn their money with? After all not all of us want to work in an office or somesuch and others only know how to use their hands, you get my drift?

 

I know it will cost me more to buy the product if it is made in Europe etc. but then again it will be worth it, of course it would help if people were not always hell bent making 1000% Profit on everything. Greed ain't pretty.

 

Answer to original post: NO. 

I agree with your sentiments, Toby. Your not entirely correct about Mercedes, however. Most of their vehicles are produced in Germany, but they have car production facilities in the United States, France, South Africa, Brazil, India, Vietnam, Indonesia and China as well.

Medogsfat:

..... 

Do you also care about how these Chinese companies manage to undercut traditional Western manufacturers? Trust me it has nothing to do with being more streamlined or better at the task, it is all about exploitation somewhere down the line.

Chris.

Right, I couldn't agree more with you.

One of my relative is still working in China since the year 2000. His feedback concerning the work condition could be illustrated by one or fiew words :
- Exploitation
- a Chinese citizen has not a lot of value in term of human being. This is more true when we are speaking about blue collar workers.

He told me when he was visiting the coal factories that many of them where living in some sort of dormitory or "farm". These places where located in the firm's area, in a way they could be reachable most of the time. The conditions of living there**, mean having to leave with your family in a small bedroom (ie. 15 m2) or to share a small space with your colleagues.
** there (in the areas far from the big cities)

Human exploitation is a reality and has been there for a long time in China.

Now the question is :
- With the increase of the cost of living in my country, the B&O's hefty prices tag and the weak inflation of our income, will we still like to buy those products made in China, at a better price knowing the human exploitation there ?

This is an example of the single (divorced) mother of three children. Her income does not allow her to buy sufficient average quality garments for them (not made in China, Malaysia, Macao, India). Those ones remain quite expensive.
Meantime, she knows she can use an alternative solution to provide to her children what they need :
- Products that cost much less but are manufactured in China. She is fully aware of the exploitation somewhere down the line.
- Will this mother buy those garments ? I can bet you that... YES.

 
IMHO, in her situation, I would have done the same, why ? Because I recognize that I will prioritize my family first, regarding my financial situation. Life is not easy with those factors like divorce, unemployment and weak income.
Some could say it's a customer's selfish point of view, I think they could be right indeed, but I fully assume that.

Let's face it, without those products made in China, India or Malaysia, many of the down and even middle class couldn't buy what they need and at a better price.
IMHO, I would be hypocrite to judge the Chinese government** that "minimize" the human exploitation knowing the fact that, as a customer, I indirectly encourage this by purchasing Chinese manufactured items.

 **even if I recognize the lack of transparency regarding the human rights in this country

Concerning buying B&O products, I will still buy them at better price, with the company's quality standards if they were made in China.

Just my two cents,

Guy 

 

 

GuyHui :

Medogsfat:

..... 

Do you also care about how these Chinese companies manage to undercut traditional Western manufacturers? Trust me it has nothing to do with being more streamlined or better at the task, it is all about exploitation somewhere down the line.

Chris.

Right, I couldn't agree more with you.

One of my relative is still working in China since the year 2000. His feedback concerning the work condition could be illustrated by one or fiew words :
- Exploitation
- a Chinese citizen has not a lot of value in term of human being. This is more true when we are speaking about blue collar workers.

He told me when he was visiting the coal factories that many of them where living in some sort of dormitory or "farm". These places where located in the firm's area, in a way they could be reachable most of the time. The conditions of living there**, mean having to leave with your family in a small bedroom (ie. 15 m2) or to share a small space with your colleagues.
** there (in the areas far from the big cities)

Human exploitation is a reality and has been there for a long time in China.

Now the question is :
- With the increase of the cost of living in my country, the B&O's hefty prices tag and the weak inflation of our income, will we still like to buy those products made in China, at a better price knowing the human exploitation there ?

This is an example of the single (divorced) mother of three children. Her income does not allow her to buy sufficient average quality garments for them (not made in China, Malaysia, Macao, India). Those ones remain quite expensive.
Meantime, she knows she can use an alternative solution to provide to her children what they need :
- Products that cost much less but are manufactured in China. She is fully aware of the exploitation somewhere down the line.
- Will this mother buy those garments ? I can bet you that... YES.

IMHO, in her situation, I would have done the same, why ? Because I recognize that I will prioritize my family first, regarding my financial situation. Life is not easy with those factors like divorce, unemployment and weak income.
Some could say it's a customer's selfish point of view, I think they could be right indeed, but I fully assume that.

Let's face it, without those products made in China, India or Malaysia, many of the down and even middle class couldn't buy what they need and at a better price.
IMHO, I would be hypocrite to judge the Chinese government** that "minimize" the human exploitation knowing the fact that, as a customer, I indirectly encourage this by purchasing Chinese manufactured items.

 **even if I recognize the lack of transparency regarding the human rights in this country

Concerning buying B&O products, I will still buy them at better price, with the company's quality standards if they were made in China.

Just my two cents,

Guy 

Well this debate is like a two edged sword.

Exploitation?  well its true that the factories making for many high end electronics companies have miserable conditions they all live on the factory site in tower blocks - many sleeping in one room and 12 hour shifts.

It is no different to the indistrial revolution in GB- in fact the conditions then were worse.

Of course the Chinese workers are happy, they have jobs that pay more than working on the land and in a country with  1,321,851,888 population human rights, pollution matter little.

If the real issue was to do something about global warming the correct way would be to impose a levy on eevrything made in China that did not conform to the standards of EU- and of course not one factory would!

The problem is the management and buyers need cheaper pricing- thats what kept the technology market afloat over the past few years- our manufacturing basses have dissapeared and now there is nowhere else to go. Despite rising commoditiy prices, China will  be the source of choice for many years and they have become wealthy- at the expense of the west- In the west we will have to accept less from now on. The only way the situation can truly sustain itself is if the chinese workers earn enough money to buy the product that they produce otherwise in the longer term one will have 'on the floor pricing' of all products- in fact this has already arrived.

Most electronics companies are already in China and any that choose not to will not survive, as B&O are aware

One day in the operating theatre my supervising surgeon told me a story about a trip he made to China which gave a fascinating insight into Chinese thinking.

He was at a conference giving lectures and hands on instruction in the use of a new design of retractor used for certain operations.  The design was rather innovative, and he joked with the local Chinese doctors "Now don't go copying this..."

One of the doctors replied, as deadpan as he possibly could:

"Oh no!  We don't copy.  Copying is illegal.  We improve."

355f:

Most electronics companies are already in China and any that choose not to will not survive, as B&O are aware

355f, you are way too negative, as always. B&O will survive - they target a completely different clientele that doesn't seek products made in China. They pay a premium for a number of reasons: quality components, high-end materials, support from a local dealer, as well as a future trade-in option. You don't get these with most other rivals.

You need to remember that most TVs do *not* look stunning in most high street stores. Most of the B&O clientele do not read What HiFi or similar magazines. They walk in to store, have a high disposable income and believe they are buying in to quality. In most circumstances, they are.

If B&O start moving to China - and reduce their prices by 30%, as an result -  the prices will still be high enough for people to expect Danish hand-built quality. For instance, how low would a BV7-40 or BV9 have to be, to justify a move to China? A BV7-40 for £4999? This isn't going to happen.

Why not? Existing clientele will see their trade-in value decrease rapidly and worry about both the future of the brand and the long-term nature of the products, if the prices reduce dramatically, overnight. In a business such as B&O, there's a fine line between perceived quality and a sudden/huge reduction in price.

I have not read the complete thread, but I have to add my option to this issue. I will not buy any B&O product any more if they move parts of the production to China. I am willing to (and am doing it already) pay more because I know that it is made in Europe (Denmark). This is no question of qualitiy for me, but some kind of (european-) patriotism. I think B&O will (like any other luxury brand) loose lots of customers if their products are branded "Made in China"!

Tom:

I have not read the complete thread, but I have to add my option to this issue. I will not buy any B&O product any more if they move parts of the production to China. I am willing to (and am doing it already) pay more because I know that it is made in Europe (Denmark). This is no question of qualitiy for me, but some kind of (european-) patriotism. I think B&O will (like any other luxury brand) loose lots of customers if their products are branded "Made in China"!

I understand that you and many other are proud of buying their B&O Made In Denmark, as am I, but do you really believe B&O will be able to grow as a company and in its range of products by maintaining its manufacturing in Europe? If you do, then unfortunately I think you are / will soon be wrong. I speak from the heart when I make discussion about B&O, so I certainly won't be over the moon if / when B&O moves part of its manufacturing to China, but I don't think there will be any more B&O (or atleast any more B&O as we know it today) if manufacturing stays in Europe. If it does, my guess would be that we would see only the higher-end products remaining, or prices going through the roof across the whole range of products.

Unlike what has been said in the past by many BeoWorld members, I think that on the whole, the pricing of B&O products is just right. Of course, if suddenly my BL3s are Made In China I will expect to be paying a little less cash for them, but I can only see this as the next big step forward for B&O. I wonder whether the share price would sky-rocket or plumet as soon as B&O released such news?

Legend:

"Oh no!  We don't copy.  Copying is illegal.  We improve."

Ahem........

Not quite true LINK

Chris.

My post to this thread needs Mod. Apologies.