Advertisement
Business

GoPro will move some manufacturing out of China to avoid tariffs — but it’s not promising U.S. jobs

FILE - This Nov. 11, 2015 file photo shows the GoPro HERO4 Session action camera in Decatur, Ga. Act
GoPro, which makes action cameras, said it will stop making U.S.-bound cameras in China but has not said where it will move that work.
(Ron Harris / Associated Press)

GoPro Inc. will move most of its U.S.-bound camera production out of China by summer, becoming one of the first brand-name electronics makers to take such action to minimize the impact of the U.S.-China trade war.

“Today’s geopolitical business environment requires agility,” GoPro Chief Financial Officer Brian McGee said in a statement Monday. “We’re proactively addressing tariff concerns.” The company is still deciding where to put the manufacturing operation.

The trade war between the world’s two biggest economies has made more than $250 billion worth of goods from China more expensive for Americans, and President Trump has threatened to place tariffs on all goods from China.

Trump and China’s president, Xi Jinping, agreed Dec. 1 to hold off on increasing tariffs for a few months. But that day’s arrest of Meng Wanzhou — chief financial officer of Chinese tech giant Huawei Technologies Co. — in Canada at the behest of U.S. authorities has stoked renewed fears of a further escalation.

Advertisement

U.S. legal action against Huawei executive could backfire in unexpected ways »

GoPro shares fell 1% on Monday to $4.92. They have declined 35% so far this year.

“This is a sign that those in the technology supply chain aren’t confident we’ll get a clean resolution soon to the trade war,” said Joe Wittine, an analyst at Longbow Research.

The San Mateo, Calif., company said it expected shifting U.S. production to come at a “relatively low cost” since GoPro owns its production equipment. Cameras headed for other countries will continue to be made in China, GoPro said. In the third quarter, more than 40% of the company’s revenue came from the Americas, while about 25% came from countries in Asia and the Pacific area.

Advertisement

China became the world’s factory as multinational companies took advantage of the lower production costs. Yet the tariffs are hurting already thin margins, causing companies to turn toward countries in Southeast Asia as an alternative base if they want to move manufacturing away from China. About one-third of more than 430 companies in China are considering sourcing components or assembly outside of the country as a result of tariffs, according to a survey by AmCham China and AmCham Shanghai.

“GoPro could provide an early look of the post-‘Make America Great’ tech supply chain, where your gadget is made in Vietnam or Indonesia instead of China,” Wittine said.


Newsletter
Get our weekly California Inc. newsletter
Advertisement