AMSTERDAM, Oct 25 (Reuters) - Lighting maker Signify
is considering moving some of its production out of
China if the company is confronted with a new round of U.S.
tariffs, its chief executive said on Friday.
Signify, the world's biggest maker of lights, is looking at
production sites in India, Indonesia and changing existing
operations in Mexico, CEO Eric Rondolat said on a call with
analysts after the company reported third quarter earnings.
Former U.S. President Donald Trump has proposed a tariff of
up to 60% on imports from China, where Signify has much of its
production, if he is elected for a second time on Nov. 5.
"We have a ... plan A, we have a plan B, and we have a plan
C, depending where the political decisions are going to go,"
Rondolat said.
Signify had been affected by the introduction of tariffs
under Trump in 2017-18, with about 40% of company sales in the
Americas. Rondolat estimated tariffs continue to run at the rate
of about 20-25% 'throughout our business."
In response, the company looked at sourcing and
producing in the U.S. or Mexico but only did so for a limited
part of its portfolio as Chinese production remained more
efficient and cost-effective.
"Now things may change and we are preparing ourselves,"
he said. "We are very well positioned, and probably much better
than when the tariffs increased the first time."
He estimated the company and broader industry would be
able to respond to new tariffs in 6-9 months.
Signify's stock was up 9.4% on Friday following the
earnings, which showed margins recovering after a cost-cutting
program, despite persistent economic weakness in Europe and
China.