No not actually skipping them although, when you read some of the tales of woe on the internet about Samsung washing machine rattling apart maybe they should consider it but, this is all about dumping products onto the market.
In the good old U. S. of A. this is a big deal where Whirlpool mainly is saying that Samsung are dumping washing machines at less than cost to undermine the market. We all know this, we’ve seen and read all the report on here for a few years on the topic and we all know what it’s about, right?
Okay, if not a quick catch up…
Samsung, LG and Daewoo got rapped for “dumping” washing machines into the US market, US legislators imposed sanctions in the form of fine, Whirlpool won, case closed.
Not quite.
Now Ohio’s state senators have joined the fray, mainly as Whirlpool have a plant in Ohio that builds washing machines and scuttlebutt is that the plant may be under threat if Sammy and crew are allowed to continue what they’re doing so they’ve joined the chorus asking for more sanctions to be imposed.
In short, we think that the sanctions aren’t harsh enough to put Samsung off.
Samsung, of course denies any and all wrongdoing as does LG and Daewoo. From Samsung though, the degree of confidence there in what has been branded the world’s most corrupt company well, let’s just say we’re not convinced about the whole “no wrongdoing” thing.
The beef here is that Samsung builds its washing machines in China, most European ones are from Poland we think but can’t say for sure as getting info from Samsung is like a session with MI5.
The Ohio senators say that production is now moved to Vietnam or Thailand which is what the data apparently shows has happened as, remember we also reported that the Korean firms were leaving Korea for manufacturing as costs increased there and sauntered off to cheaper shores. With senators saying that each time Samsung gets in trouble under trade laws it just up and moves to plants in other low-cost countries. They call this “serial dumping.”
Of course all this is under scrutiny in the US due to the election and this sort of thing is in the spotlight so, political moves are in play also here.
Whirlpool makes its large residential washing machines in Clyde, Ohio, southeast of Toledo.
Samsung and LG use factories across the world, including South Korea, China, Vietnam, Thailand, Poland and Mexico among others. The cost of labor and some materials are cheaper in many of those countries and safety, labour and environmental laws are weaker than those in the United States and Europe as well. In essence they can make stuff cheaper on labour cost alone and the cost of meeting safety standards.
(Uhm… Galaxy Note 7, exploding washing machines, fridge freezers…)
Under existing trade laws, there is nothing wrong with that unless a trade agreement requires higher standards or local legislation does.
If a company can cut costs by using foreign manufacturing, it can sell its products for less than they’d cost if made in the United States or Europe so, they do that.
Where this all goes horribly wrong is when the companies involved sell in the target market for less than they’d cost to make. Which his what Whirlpool said was happening with the three Korean companies and, seems they were right and the US government agreed. Hence, the sanctions.
What Whirlpool said that Samsung made a washing machine that sold in stores for $499.99 in the United States but really cost $657.70 to make in China. Samsung was absorbing losses to undercut its competitors.
This is known as “dumping”.
The USA imposed sanctions on the dumping of machines made in China and this looks like Samsung circumventing that by switching the production to other countries but, still doing the exact same thing.
Data now seems to show that by September, Samsung shipped only 4,591 washers from China to the United States, but sent 61,830 from Thailand and another 38,615 from Vietnam.
To put it mildly, that has upset some in the US government and obviously Whirlpool and others that are (so far as we can tell) playing by the rules.
When quizzed Samsung did the usual we’d expect and rolled out the PR friendly company handbook of stuff to say when you’re in a jam with this nugget…
“Samsung does not engage in unfair trade practices. American consumers stand to lose the most with limited choices and higher prices. We remain committed to fair competition and delivering innovation to the marketplace. We have a long-term commitment to investing and creating jobs in the U.S., and we will continue to deliver products that meet the highest standards in design, performance, and quality to our customers.”
In other words, Samsung hasn’t really commented.
Of course lets not forget, Whirlpool win big time here also as that’s three competitors they don’t have to worry about.
Where the truth lies in all this well, we’ll have to wait and see.
