Philips could shift its production due to a commercial feud

Philips is extremely serious about the possibility of a shift in production as a result of trade measures taken by the United States and China. Chief Frans van Houten said Monday in an explanation of the third quarter figures. "If the rates go up to 25%, you have to do it, if not, your business will stop." We can not always easily lower the price. "

The medical technology manufacturer plans to outsource the production of goods sold in the United States from China to the United States. Conversely, current production in the United States will be relocated to China

. The company plans both to relocate the production of consumer goods and toothbrushes or razors, as well as large medical systems such as MRIs or CT scanners. "Incidentally, we do not need to build new factories or start production lines, we produce in both countries, so this is a renovation of production lines."

not in pairs or jumps, but this is possible in a few quarters. "You have to make sure your suppliers are able to move their production, and you're in medical technology with all the regulations you have to follow, and that's also a risk that you have to eliminate first."

On the road to Europe

Europe could possibly benefit, said Van Houten. "There is reason to be optimistic that Europe is communicating with the Americans and that trade measures are not announced.This could be a solution to increase production in Europe if no tariffs are imposed. is not perceived in China and the US I can not anticipate this, but it is a possibility. "

Philips suffered a lot from the depreciation of the Turkish lira and the Argentine peso at third trimester. Philips' sales increased by 0.2 billion to reach 4.3 billion euros. The operating result increased from 36 million to 568 million. Net profit rose 17% over last year, to stand at EUR 307 million.

Philips is not the only one, according to the VNO-NCW employer organization. In addition to the benefits, high import duties have disadvantages. Marhijn Visser, Trade Policy Secretary: "We hear that more, Dutch companies are suffering from the trade war, this is about a few big companies producing in one of the two countries, or both. intermediary of the umbrella organization Business Europe VNO-NCW, discussions on the subject with China and the United States

. Rome Report page E2-3