EpicSki › The Barking Bear Forums › On the Snow (Skiing Forums) › Ski Gear Discussion › Job Cuts at Adidas-Salomon
New Posts  All Forums:Forum Nav:

Job Cuts at Adidas-Salomon

post #1 of 27
Thread Starter 
K2 is not alone.

From Bloomberg News

Job Cuts at Adidas-Salomon

Adidas-Salomon the sporting goods maker, will cut almost 10 percent of the French work force at its winter sports division as it shifts production of snowboards and skis to China and Romania. Salomon will cut 160 jobs over the next two years and reduce the level of production there to 35 percent from 55 percent the copmpany said.
post #2 of 27
Stay tuned for what might happen between Atomic and Salomon.
post #3 of 27
Quote:
Originally Posted by PRAGMATICSKIER
K2 is not alone.

...snip...
What happened at K2?

And by the way, is K2 privately held or is it a subsidiary of a public company? If private, anyone know who the owner(s) is (are)?
post #4 of 27
K2 has moved all production to China. With their purchase of Volkl, there are rumors that that production will be heading east as well.

As to the A/S issue, still rumors. Haven't been able to confirm anything and everyone is still pretty tight lipped. If there is something in the works, then it is very high up in both companies and hasn't trickled down yet.
post #5 of 27
K2 Skis is a subsidiary of a public company, which is -- hard to believe -- named K2 Inc. Symbol: KTO.

Since both Atomic and Salomon are also public companies, nothing had better trickle down about any pending deal between the two before it is publicly announced. "Trickling" that information outside executive officers and the professionals working on the deal is called a felony.
post #6 of 27
Quote:
Originally Posted by sjjohnston
Since both Atomic and Salomon are also public companies, nothing had better trickle down about any pending deal
<sigh> there go half the binding controversy threads <sigh> What ARE we to do in the summertime?
post #7 of 27

Didn't know that!

Quote:
Originally Posted by sjjohnston
K2 Skis is a subsidiary of a public company, which is -- hard to believe -- named K2 Inc. Symbol: KTO.
I didn't know that!

And after looking up the company info, I see that K2 alpine skis are only a tiny part of K2 corporate. (They make fishing line for weed trimmers, too!).

It sure would be nice to be able to buy skis from a small, privately-held company with an engineering focus. K2 looks to be trying to be the Nike of skis: All marketing with outsourced manufacturing.
post #8 of 27
"It sure would be nice to be able to buy skis from a small, privately-held company with an engineering focus. K2 looks to be trying to be the Nike of skis: All marketing with outsourced manufacturing."

Try Armada,4frnt,PMgear,Evolution,Wolf(if still around?),DB,Line(Canada), and just refuse to buy product from china and walmart when there are viable options available.
post #9 of 27
Quote:
Originally Posted by bogusbill
"It sure would be nice to be able to buy skis from a small, privately-held company with an engineering focus. K2 looks to be trying to be the Nike of skis: All marketing with outsourced manufacturing."

Try Armada,4frnt,PMgear,Evolution,Wolf(if still around?),DB,Line(Canada), and just refuse to buy product from china and walmart when there are viable options available.
I really don't care care if my skis are made in somebodys garage or have been outsourced? I want the best skis. K2 still design their skis, they just build them elsewhere. Unless you are willing to pay 20-50% more for your skis, they will be built where the labor is cheaper. Do they build in china or other third world countries to creat more profit, yes, but it is also to be more price competitive. We are in a global economy.
post #10 of 27
Ten years from now, if not sooner, the vast majority of ski production will be in Asia.

K2 was the first to test the waters. Two years later, it hasn't hurt them at all. They are still the US market leader in terms of pairs sold.

With the recent acquisistion by K2, rumors are that Völkl will produce some less expensive, entry level models at the k2 facility. Guess what? Völkl has never been competitive at these price cataegories, so once they are, it will only make the overall brand stronger.

Fischer moved a huge portion of their production out of Austria to the Ukraine a while ago.

Salomon is just the next one to jump. Between their Romania and China plants, more than half of all Salomons will be made outside of France. But other than a few disgruntled Union people in France, Salomon will still be "French," I don't expect any negative effect for them overall.

Bottom line, it's really expensive to make skis in the US or Western Europe. Labor costs/hassles are huge in Europe. Factories can't produce over the weekend - it's illegal in some countries. Workers get an obscene amount of paid vacation time. The list goes on...

It's only a matter of time before all ski manufacturers are forced to move at least some production east. They'll have to stay competitive.

Personally, I don't like it, but it's the way it is.
post #11 of 27
Check out where most boots are made......Montebelluna Italy
post #12 of 27
Quote:
Originally Posted by Lucky
Check out where most boots are made......Montebelluna Italy
And this will not change as quickly as skis will. There is lots more technology/experience needed to build a boot than a pair of skis, and the Italians do know something about feet.

That said, Nordica has already moved most of their production from Italy to Hungary.
post #13 of 27
Quote:
Originally Posted by Phil Pugliese
I really don't care care if my skis are made in somebodys garage or have been outsourced? I want the best skis. K2 still design their skis, they just build them elsewhere. Unless you are willing to pay 20-50% more for your skis, they will be built where the labor is cheaper. Do they build in china or other third world countries to creat more profit, yes, but it is also to be more price competitive. We are in a global economy.
well i guess you really dont care."you want the best skiis" (are the best skiis really K2's).So I guess it would be allright to force people,even children to work for pathetic wages while the goverment subsidizes the factories loses in order to steal jobs from US or Eourpean manufacturers in order to ensure you get the "best skiis"
post #14 of 27
The best ski are sure as hell NOT k2's....
post #15 of 27
BMW and MB build cars in the US because the labor is cheaper than in Europe. Audi builds in Hungary. VW in Mexico. Heck..Asian manufacturers are bulding cars here. Everyone is trying to be competitive with everyone else and still make a profit to stay in business.
post #16 of 27
Quote:
Originally Posted by Phil Pugliese
BMW and MB build cars in the US because the labor is cheaper than in Europe. Audi builds in Hungary. VW in Mexico. Heck..Asian manufacturers are bulding cars here. Everyone is trying to be competitive with everyone else and still make a profit to stay in business.
Don't mix that one up with relocating ski manufacturing.

Automotive corporations run highly automated assembly transplants in the global markets they are targeting for high volume sales, meaning the percentage of labor costs per unit in today's modern facilities is not the driving force. 80% of the components built into a vehicle are sourced around the globe from tier one suppliers where labor is already a bit more intense on an average. However they need to stay in closer touch with local OEMs. Mainly tier two and below level suppliers are effected by moves into low-wage countries since labor costs can be up to 30% (more or less) of the product's total costs.

Ski manufacturers roughly comare to automotive tier two level suppliers regarding the cost structure - that's why they have to and are seeking the same advantages when relocating to Eastern Europe or China. When cutting back labor expenses to 5% of the initial value, savings of 25-30% is the potential we are really talking about. HUGE!
post #17 of 27
Quote:
Originally Posted by bogusbill
well i guess you really dont care."you want the best skiis" (are the best skiis really K2's).So I guess it would be allright to force people,even children to work for pathetic wages while the goverment subsidizes the factories loses in order to steal jobs from US or Eourpean manufacturers in order to ensure you get the "best skiis"
A good point.

Some people may see themselves as 'consumers'. They don't care where something is made as long as they can get it at a good price.

It is not just manufacturing jobs that are going either. There is huge outsourcing of computing, legal work, telesales etc. to places like India.

The third world countries work like serfs to supply the market - although the more work they get the more the foreign workers can afford to pick and choose.

However, jobs still go overseas.

I am surprised that the French let this happen. Their workforce are usually well protected. The workers don't just roll over and accept things. Just as importantly, their politicians are not fully paid up members of the globalisation bandwagon either.
post #18 of 27
Quote:
Originally Posted by troutman
Bottom line, it's really expensive to make skis in the US or Western Europe. Labor costs/hassles are huge in Europe. Factories can't produce over the weekend - it's illegal in some countries.

Workers get an obscene amount of paid vacation time. The list goes on...
Probably does not look 'obscene' if you are a European worker though....

From the European side of the Atlantic, a fortnight's paid holiday time looks completely useless.

We hear that some Americans only get that. I cannot see how they could ski, have a Summer holiday, have a few days playing golf, go to the races and keep their houses decorated unless they also take unpaid leave.

Five weeks plus bank holidays seems reasonable to me.

I certainly could not manage on less than the six and a half weeks plus bank holidays that I currently get.

I certainly would not be able to ski.
post #19 of 27
I've never taken 6-1/2 weeks vacation in my life (okay, not since I graduated from school).
post #20 of 27
Quote:
Originally Posted by Latchigo
Probably does not look 'obscene' if you are a European worker though....

From the European side of the Atlantic, a fortnight's paid holiday time looks completely useless.

We hear that some Americans only get that. I cannot see how they could ski, have a Summer holiday, have a few days playing golf, go to the races and keep their houses decorated unless they also take unpaid leave.

Five weeks plus bank holidays seems reasonable to me.
All fair points. I certainly wasn't trying to belittle the European worker, nor is there any merit to arguing the whether the European or American work culture is better than the other.

My main point is still clear, however. The alternative to "outsourcing" manufacturing to less expensive labor markets is simple - higher prices.

So, in five years time, would the global ski market buy $1500 skis simply to support the European worker and the lifestyle to which they've become accustomed?

There's a reason why the ski manufacturer outsourcing discussion is hitting critical mass. A new, high performance model from most manufacturers, with binding (system or not), is $1000 in the US. US distributors know that there will be significant resistance to prices over $1000, and since the US is the largest single ski market in the world, the mother companies are listening and doing everything they can to keep prices the way they are and still have a margin.
post #21 of 27
I think the driving force is higher margins/profits rather than higher prices for the consumer.

$1000 becomes $1500 in 5 years ? That is 50% inflation, which is just not a reflection of current or projected inflation in either Europe or the US.

Look at the sports shoe example. They cost precious little to make in the Far East, but the additional cost is all marketing and margin.

People need to think seriously about globalisation and protectionism.

As I said, it is not just manufacturing jobs that are going.

You might not be worried about the car industry or shipbuilding disappearing to Asia, but it could be your job that is next on the line.

No job = no $1000 to buy those 'cheap ?' skis.
post #22 of 27
A better question is why are skiers so cheap? In any high end equipment oriented sport people pay more for better performance(moto-x/shooting/golf etc.)
Other than maybe tennis i can't think of gear sport that the low end and hi end are so close together in price.
I don't golf(not old enough) but when a new driver comes out it is snapped up at 1000$ and i guarantee you that your golf game didn't get any better without instruction. If you can't afford the new driver you wait 12-18 months til it goes on sale or buy a cheaper model. Put any body on a new ski and if their current gear is 3-5 years old they are better skiers in a 1/2 day(with or without instuction depending on athleticism). If you can't afford the new ski you wait 2-3(maybe) months until March when nervous retailers start dumping stuff to make way for new stuf next year that really is usually repainted old stuff.
Why can't people get their heads around 1000$+ for skis and bindings? When manufacturers have to build skis to meet a price the whole industry stagnates. Compare bindings from 10 years ago to today, the new binding may release in a few different directions(maybe) but they tend to be plastic/composite and judging from the various complaint threads on the site not nearly as durable as the solid metal bindings of the 90s. Why? Because no one wanted to step up and pay 500$ish for the binding that might save their leg?
I love skiing and have chosen the industry to make a living/career out but some times i just shake my head with all the conspiracy theorys that come up re manufacturing/pricing/distribution/consolidation.
post #23 of 27
Quote:
Originally Posted by bogusbill
well i guess you really dont care."you want the best skiis" (are the best skiis really K2's).So I guess it would be allright to force people,even children to work for pathetic wages while the goverment subsidizes the factories loses in order to steal jobs from US or Eourpean manufacturers in order to ensure you get the "best skiis"
Noble thoughts but how do you avoid buying foreign made goods?

People in Europe, Japan, Australia, have the the same problem as manufacturing is outsourced to cheaper nations. China is the latest, and most ominous nation of cheap labor.

It will be interesting to see how long it takes for China to be priced out of the labor market. It took Japan about 35 years but China has lots more poor laborers looking for a way to improve their lives.

We should vote any congressman or senator out if they provide tax incentives to any company that outsources.....guess that would mean most large companies.

Sorry to play the devils advocate but I don't know an easy solution to the problem. Outsourcing has evolved to the point that a simple "buy American" program is not practical even if it makes you feel better.

Also, I don't think that China subsidizes factories running operating deficits. However, they do not allow their currency to float and control interest rates, tariffs to favor China. Their trade balance account is as much out of whack as ours is....only in the opposite direction. In the end, as Japan found out, the health of both nations is dependent on the other. If America is sucked dry, China will have lost its best customer and have a huge problem. So it is in Chinas best interest to keep things more in balance than they currently are. It wll probably be easier to deal with China than with Walmart...but then that is not a ski topic.
post #24 of 27
As I read through this, I see some very valid points. However, I keep circling back to the "near fact" that most of us here want a deal or industry hook-up on our ski purchases. Heck I have never paid retail in my life for a pair of skis! I bet there are others here who are in the same bargain-hunter boat. I don't care where my skis are made. Maybe some of us contribute a bit to the industry looking to keep costs down? Skiing is a business after all...even though for many of us, it is a bit more than that.
post #25 of 27
Quick question-why are K2 skis so expensive (amongst the highest priced at wholesale currently among any ski manufacturer) even though they are competing with other companies that have higher labor costs from Europe and import duties that US companies don't have to pay? Shouldn't K2's move be accompanied by much lower prices? I can't believe that K2 was "forced" to move when they are selling a $1000 ski/binding combo for the same price that a European manufacturer is selling it here for-as a US company, they already had a built in advantage. No way they couldn't compete selling skis in the US, when manufacturing in the US. Given that logic, things should be WAY cheaper now-the prices haven't dropped $1, and even increased by about 10% last year.
post #26 of 27
Quote:
Originally Posted by dawgcatching
Quick question-why are K2 skis so expensive (amongst the highest priced at wholesale currently among any ski manufacturer) even though they are competing with other companies that have higher labor costs from Europe and import duties that US companies don't have to pay? Shouldn't K2's move be accompanied by much lower prices? I can't believe that K2 was "forced" to move when they are selling a $1000 ski/binding combo for the same price that a European manufacturer is selling it here for-as a US company, they already had a built in advantage. No way they couldn't compete selling skis in the US, when manufacturing in the US. Given that logic, things should be WAY cheaper now-the prices haven't dropped $1, and even increased by about 10% last year.
Great question. K2 has a massive margin advantage against the European Manufacturers this year because of the weak dollar. However, you won't see cheaper K2's this year. They know that there is a certain price level that the market accepts, so why lower it?

In K2's defense, moving to China does dramatically decrease their labor costs, but many of their raw materials (steel edge and base material come to mind) are purchased in Europe where the weak dollar still hurts them.
post #27 of 27
Thread Starter 
Quote:
Originally Posted by troutman
Great question. K2 has a massive margin advantage against the European Manufacturers this year because of the weak dollar. However, you won't see cheaper K2's this year. They know that there is a certain price level that the market accepts, so why lower it?
Skis sell for what skis sell for. If K2 lowered their price too far all of a sudden everyone would say the Chinese made skis were not as good as the US made ski.

I doubt total cost to manufacture any ski is more than $25 - $35 a pair (I'm guessing here and would weclome anyone with real costs). This of course would not include marketing, testing, designing, engineering and liability costs. These would be the similar for K2 and their competitors. So even if K2s raw manufacturing costs are 1/3 of Europeans they are only saving (by my wild guesses) $10 - $20 a pair.
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: Ski Gear Discussion
EpicSki › The Barking Bear Forums › On the Snow (Skiing Forums) › Ski Gear Discussion › Job Cuts at Adidas-Salomon