Consumer Electronics Company Eyes Production Shift to Florida if Tariffs 'Become a Problem,’ CEO Says
If the Chinese tariffs situation “continues to become a problem,” Voxx International late this fiscal year “quite possibly” will move “certain” manufacturing of printed circuit boards from contract OEM factories in China to one of its own facilities in Orlando, CEO Pat Lavelle said on a July 11 earnings call. Lavelle sees that as the only factor that would significantly impact Voxx capital expenditures for the year, he said. On the “first tranche” of tariffs that took effect July 6, Voxx was able to move “some production” to Taiwan from China “without having the impact” of the higher duties, Lavelle said. Voxx also was able to “reclass” certain products with approval of CBP, “and we were able to get around the individual tariffs there,” he said. “The ones that we’ve gotten hit on are basically lower-value products,” including cables and remotes, he said. The administration proposed additional tariffs on July 10.
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If Voxx continues to need to shift Chinese production elsewhere in Asia, "it's not going to have that much of an expense, unless we decide that we are going to do it ourselves in one of our facilities" in Florida, Lavelle said. "Having our manufacturing partners move from plant to plant, in many cases, they're already producing some of our product in a Taiwanese plant, some of it in a Chinese plant," he said. "They'll just move newer products in" to the Taiwan factory, he said. Voxx warehouses have at least 60 days' worth of inventory "on hand, so it will give them the time to move," he said.