APPLIANCES The big chill in home building is icing down prospects

Aug 01, 2007 | 07:07 AM |

Michael D. Locker, president of New York-based consultant Locker Associates Inc., said he believes appliance manufacturers will continue to move assets offshore.

"Soon the major trend will be moving production overseas, which is a major issue," Locker said, noting one example of the trend there are no U.S.-made air conditioners anymore. "If we lose our customer base we won't have anything left."

Maintaining production domestically is the real challenge, he said. "It all has to do with productivity. They need to lower their costs to be competitive with lower labor cost overseas. So through productivity, lower man-hours, they can offset higher labor costs. They can do it through technology, leaner manufacturing, lower inventory, a whole series of things. But the simple way is just move it; throw up your hands toward the route of least resistance. Problems with manufacturing abroad are perceived to be less problematic than honing domestic production."

While the high cost of commodities, like carbon steel, is a major factor, it isn't what's holding appliance makers back from manufacturing their products, service center executives said, offering their analysis of the market.....