Buffett-owned footwear maker moves output from China to Vietnam

[Viet]

Brooks Running fears US tariffs on shoes will surge to 45% as trade talks grind on

MARRIAN ZHOU, Nikkei staff writerMAY 04, 2019 05:36 JST

Jim Weber, CEO of Brooks Running, said May 2 that the shoe company is in the process of moving some of its production out of China. © Reuters

NEW YORK -- Brooks Sports will move the bulk of its manufacturing operations from China to Vietnam as the trade talks between Washington and Beijing drag on with no certain conclusion, CEO Jim Weber said Friday.

The shoes and sports apparel company, known as Brooks Running, is a unit of Warren Buffett's Berkshire Hathaway.

"We believe the trade discussions are muddying the water," a Brooks Running spokesperson said. "We needed to begin making plans in order to future-proof our business."

Brooks Running was especially concerned about tariffs on shoes, following President Donald Trump's remarks last year that he would slap an additional 25% tariff on Chinese goods on top of the 20% tariff that has existed for years.

For a $130 pair of running shoes, a 45% tariff would be "significantly detrimental" to Brooks, according to the spokesperson. The company made a joint decision with its vendor partners in China at the beginning of this year to move some production out of the country.

China accounts for one-third of Brooks' factories worldwide, while 19% of the company's production is done in Vietnam, Brooks data on contract manufacturers from last year shows. It is unclear exactly how much production Brooks will move to Vietnam.

The U.S. and China are still in trade negotiations, though U.S. Treasury Secretary Steven Mnuchin this week said the conversations were "productive." Beijing and Washington had cited progress on issues, including ways to help end tariffs that have burdened the economies of both countries, disrupted supply chains and financial markets.

Trade talks will continue in Washington next week.

https://asia.nikkei.com/Economy/Tra...wear-maker-moves-output-from-China-to-Vietnam

 

[Viet]

A 45 percent tariffs if in place would kill the entire chinese exports to America.

@KAL-EL it looks Donald Trump is serious.

 

[Yaseen1]

they will only be able to supply u.s and rest world will continue to buy from china

 

[艹艹艹]

We already have our own brands, and We don't want to do OEM for foreign brands anymore
We have our own brand to earn more profit


MAY 2, 2019 / 6:41 PM / 2 DAYS AGO
Chinese sports brand Xtep to buy owner of U.S.' K-Swiss for $260 million

Chinese Sportswear Market: Watch out, Nike & Adidas!

 

[Samlee]

We already have our own brands, and we don't want to be a OEM anymore

MAY 2, 2019 / 6:41 PM / 2 DAYS AGO
Chinese sports brand Xtep to buy owner of U.S.' K-Swiss for $260 million

Chinese Sportswear Market: Watch out, Nike & Adidas!

These Brands Should Set Up Factories in Pakistan Which Has GSP Status That Way They Can Bypass Trump Tariffs

 

[艹艹艹]

These Brands Should Set Up Factories in Pakistan Which Has GSP Status That Way They Can Bypass Trump Tariffs

I think in the future they will set up factories in Pakistan

 

[Deathstar]

I think in the future they will set up factories in Pakistan

Chinese companies like Xiaomi now manufacturer their mobile phones in India ,they have huge investments in India , i hope India China sort out their differences and increase cooperation

 

[艹艹艹]

Chinese companies like Xiaomi now manufacturer their mobile phones in India ,they have huge investments in India , i hope India China sort out their differences and increase cooperation

We hope that the friendly cooperation with all countries

 

[macnurv]

Brooks Running fears US tariffs on shoes will surge to 45% as trade talks grind on

MARRIAN ZHOU, Nikkei staff writerMAY 04, 2019 05:36 JST

Jim Weber, CEO of Brooks Running, said May 2 that the shoe company is in the process of moving some of its production out of China. © Reuters

NEW YORK -- Brooks Sports will move the bulk of its manufacturing operations from China to Vietnam as the trade talks between Washington and Beijing drag on with no certain conclusion, CEO Jim Weber said Friday.

The shoes and sports apparel company, known as Brooks Running, is a unit of Warren Buffett's Berkshire Hathaway.

"We believe the trade discussions are muddying the water," a Brooks Running spokesperson said. "We needed to begin making plans in order to future-proof our business."

Brooks Running was especially concerned about tariffs on shoes, following President Donald Trump's remarks last year that he would slap an additional 25% tariff on Chinese goods on top of the 20% tariff that has existed for years.

For a $130 pair of running shoes, a 45% tariff would be "significantly detrimental" to Brooks, according to the spokesperson. The company made a joint decision with its vendor partners in China at the beginning of this year to move some production out of the country.

China accounts for one-third of Brooks' factories worldwide, while 19% of the company's production is done in Vietnam, Brooks data on contract manufacturers from last year shows. It is unclear exactly how much production Brooks will move to Vietnam.

The U.S. and China are still in trade negotiations, though U.S. Treasury Secretary Steven Mnuchin this week said the conversations were "productive." Beijing and Washington had cited progress on issues, including ways to help end tariffs that have burdened the economies of both countries, disrupted supply chains and financial markets.

Trade talks will continue in Washington next week.

https://asia.nikkei.com/Economy/Tra...wear-maker-moves-output-from-China-to-Vietnam

There is a lot of manufacturing moving out of China, as Chinese industry is moving towards more high tech industries, Vietnam wont be the only beneficiary of this, Thailand, Malaysia and Indonesia all will benefit from this. But that is not the reason you are sharing this here, isnt it? You are not looking at the larger picture, over the course of next decade or so Chinese GDP will account for about 34% of global GDP and Chinese leadership is transitioning China from a manufacturing hub of low-grade products and exporting them abroad to move into a more advanced market, That is why Chinese seems to be more open to FDI.

So understand this, they will be manufacturing advance tech with a very high turnover rate for new tech, low cost manufacturing wont help them greatly in the future.

 

[Viet]

There is a lot of manufacturing moving out of China, as Chinese industry is moving towards more high tech industries, Vietnam wont be the only beneficiary of this, Thailand, Malaysia and Indonesia all will benefit from this. But that is not the reason you are sharing this here, isnt it? You are not looking at the larger picture, over the course of next decade or so Chinese GDP will account for about 34% of global GDP and Chinese leadership is transitioning China from a manufacturing hub of low-grade products and exporting them abroad to move into a more advanced market, That is why Chinese seems to be more open to FDI.

So understand this, they will be manufacturing advance tech with a very high turnover rate for new tech, low cost manufacturing wont help them greatly in the future.

Ok we both conclude the current trend is for you, for China if low cost manufacturing move to low country as Vietnam. We are poor and desperate, our people need jobs and income.

We make shoes, while you make quantum. Win win.

 

[Brainsucker]

Chinese companies like Xiaomi now manufacturer their mobile phones in India ,they have huge investments in India , i hope India China sort out their differences and increase cooperation

You know, the answer is simple. Because they sell the products in India. It's better for the manufacture to be placed near their targeted market, because they can cut the transportation cost for the product.

 

[ZeEa5KPul]

I have to tell you the truth, it breaks my heart to see Vietnamese so proud that shoemakers are moving from China to Vietnam. It's like a dog panting in delight that it's about to be fed some table scraps.

 

[macnurv]

Ok we both conclude the current trend is for you, for China if low cost manufacturing move to low country as Vietnam. We are poor and desperate, our people need jobs and income.

We make shoes, while you make quantum. Win win.

2 things
1- Low cost manufacturing will not induce high economic out put in smaller countries such as Vietnam. Such industries do carry a significant environmental impact. Furthermore unless the Vietnamese government is ready to protect and safeguard its workers right, the wealth inequality and disparity will only worsen. And the only reason such industries are moved out of China is to further reduce their cost of production, not to elevate the condition of Vietnamese workers.
2- I am not a Chinese citizen.

 

[Viet]

2 things
1- Low cost manufacturing will not induce high economic out put in smaller countries such as Vietnam. Such industries do carry a significant environmental impact. Furthermore unless the Vietnamese government is ready to protect and safeguard its workers right, the wealth inequality and disparity will only worsen. And the only reason such industries are moved out of China is to further reduce their cost of production, not to elevate the condition of Vietnamese workers.
2- I am not a Chinese citizen.

2 things:

1- China exports lots of cheap products that only cost handful cents or $1 in shops. Making funny comments on shoes costing $130 made in Vietnam is rediculous!

2- I am chinese citizen, either.

 

[macnurv]

2 things:

1- China exports lots of cheap products that only cost handful cents or $1 in shops. Making funny comments on shoes costing $130 made in Vietnam is rediculous!

Your attempt to be sarcastic fell flat on its face. Show me where I have stated that making a shoe in Vietnam will cost 130 USD? Do you think that your hypothetical Adidas 1 Dollar Shoe will be produced by paying liveable wage to workers, providing better working facilities to workers including a sustainable system to not destroy the environment during this so called manufacturing.

I have no dog in this fight, and stop harping such non-sense, we already have lot of Indians for this kind of clownish behaviour. As I said earlier, low cost production Industry is moving out of China as the Chinese economy is moving towards advanced industries and these industries will end up in Malaysia, Thailand and Vietnam and other South East Asian countries. Kindly get this through your head.

2- I am chinese citizen, either.

You are a Chinese Citizen! Dude your sentence made less sense than your previous claim.