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Seesmart CEO Ken Ames on the company’s decision to move some of its manufacturing back to the U.S. from China and its impact on costs.
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Trade data out of Japan was out today showing exports from China -- just inching up last month and imports shrinking.
-- for one US company moving its manufacturing out of China or at least beginning to do so -- back to the US.
Was an easy decision and it may have been excellent timing joining us now is -- aims.
She's Smart technologies CEO.
And co-founder.
Great to see -- can we always love it when people come back to the United States that should be mentioned you're you're just so -- just begun the process.
Let's talk about.
What should do and why you chose China as a place to do what you do LED lighting how long were -- in China and why did you choose to go -- originally.
Well first of all thanks for having -- -- that is -- We we we chose to go to China and -- we've we first opened in 2007.
Common in China we did a lot of engineering stuff over there.
Because the costs were were obviously a lot cheaper.
Bomb -- in really what we concentrated on in 2000 was expanding their.
The quite a bit.
Since send some.
Since 2009 we've really we've really look at.
Our our costs and even though it's a lot cheaper for us to manufacture products in China.
We've we've we've done the proper social thing about bringing businesses back to the US so.
-- tell us how you resolve exactly how much of a loss I miss essentially you are gonna be paying more.
By higher labor costs will -- not coming into the United States.
Now we're paying more but you know there's there's fuel expenses to that have -- of that have gone -- which which makes China not.
Not as appealing to us and also the air shipments.
And the only -- that is everything is is very right away.
So we're bringing back a lot of you know where where -- shipping almost every everything that we're sending.
So really.
The cost differential for us is about 3% 3% difference to me you're you're here three to six right now.
Okay that is not a lot and I have talked to other companies who've done this.
And they say that when you add in all the shipping price in yet and the corruption which is you know face -- we got to face it's a part of doing business in China.
And quality control a lot of companies were complain about the quality control what.
What the shippers say they were sending from China wasn't always there and it wasn't always -- -- -- correct.
Now that's absolutely.
And from everything from buying components.
You don't know if you're buying components the same components from time to time I mean -- QC process over there is very difficult compared to the to the US along with many other things you know when we're designing new products that they're going out the back door just -- staffs there.
As as it as were were as were putting them out here.
Now argue the exception that makes or are you seeing a lot of other companies do the same.
No I think I think coupon I don't wanna see -- the exception I think a lot of people are forced to -- to do the same thing.
You know that the difficult part is for an new high tech companies.
To get the support from the US government usually when you're when your start up or -- you know aged three -- lessons very difficult to get help from the government in.
Until you reach a certain size where we can really say okay look we we need to bring more jobs how can you help with grants and whatever else is available.
Now you have you've moved to what about 2030%.
So far back from China are you gonna go a 100% -- you gonna.
Leave China entirely and and bring bring it all back home.
-- agree question on now we want the other leave China.
A 100% but we will try to bring over the next eighteen months to 24 months about 80% of our manufacturing.
Here.
You know we're working with several states on the state of Connecticut we've.
We talked to Chicago it's just that difficult stage of financing is financing the moves it seems like a lot of companies.
Here are more interested in you know stealing company from Boston to move to Connecticut vs starting from the ground into and walking in saying okay look.
We'll create fifty jobs this.
This year in a hundred next year in 300 the year after it's that slow transition where.
You know they don't get the instantaneous growth of of moving from one state to another.
-- Chicago could certainly use all the help but could -- right now cap names on this idea best elected cannot sorry -- run out of time please come back -- -- -- let us know how works out.
Ceased to see Smart technologies CEO and co-founder good to see you can thank.
What the where he thinks yeah now that's -- current pleasure for future game.
