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New US tariffs could prompt Signify to move some production from China, CEO says
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New US tariffs could prompt Signify to move some production from China, CEO says
Nov 3, 2024 11:30 AM

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.

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