Subject:
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Re: LEGO® Systems, Inc. sells Enfield complex for $58.9 million
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Newsgroups:
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lugnet.general, lugnet.mediawatch
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Date:
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Tue, 16 Jan 2007 15:57:59 GMT
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Viewed:
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5391 times
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In lugnet.general, Joe Meno wrote:
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In lugnet.general, Gerhard R. Istok wrote:
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In lugnet.general, Harvey Henkelman wrote:
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Lego is on it’s way out, plain and simple. By 2012, it will be a memory.
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No it will still be around. In the future LEGO may not be owned by Kjeld
and Gunhild anymore (Godtfred Kirk Christiansen’s 2 surviving children),
however it will still be around.
There’s too much value in the brand name. A future owner may move
production to China or Vietnam or India. It seems that everything else is
ending up there, a loss for Europe, North America and Australia.
The future offset may be cheaper prices, but less in the way of quality.
Gary Istok
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Gary’s right. One the things that is happening is that globalization of
resources...the US has higher wages than the rest of the world in many
things, so to bear the costs that consumers want, less expensive places have
to be found to produce products. So like so many other industries, LEGO chose
to streamline costs.
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Keep in mind that wages in the U.S. are considerably less than in much of
Western Europe. In Switzerland, the minimum wage is $22/hour. A lot of that is
a consequence of the effects of VAT on national economies over there.
Production in the U.S. was an economy move, U.S. labor is CHEAP. But now TLG’s
major competitors are outsourcing to Asia, and if TLG doesn’t make a transition,
it will end up 4 times more expensive than its rivals. One hopeful note is that
the packaging from the new product is now including Mexican distribution info in
Spanish and it may mean that the new prices will be cheap enough that Lego can
reenter the Central and South American markets, which it withdrew from 10 years
ago.
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