The management of HP Inc., one of the three largest PC manufacturers, already announced yesterday that by the end of October the share of Chinese-made products supplied to the US market is going to be reduced to 10%, as this is required by the import duties imposed by Trump. The issue of localizing production in the US is also being considered.
Image source: HP Inc.
HP Inc. CEO Enrique Lores said this yesterday in an interview with Bloomberg TV. According to him, moving some of the production to the US is “one of the scenarios being considered” by HP Inc. management. However, no specific decisions have been made yet, as the head of the Californian company emphasized. According to him, the accompanying difficulties have a significant impact on the advisability of such a step.
Lores explained that HP Inc. would like to do more than just assembly operations in the United States. The company would have to localize the production of a wide range of components, using different suppliers for this purpose. This process would take a long time, but the company’s management is also analyzing such a scenario.
Localizing production in the U.S. would also reduce logistics costs and improve response times to fluctuations in local demand. “There are benefits to making products locally, and that’s why we moved from a centralized model to a more decentralized model a few years ago,” explained HP Inc. CEO. A modest profit forecast sent the company’s stock down 7.2% yesterday, as investors had initially hoped for more.