TV factory could turn state's reputation on its ear
Jim Steinberg, Business Editor
Article Launched:10/22/2006 12:00:00 AM PDT
How does the idea of making a television in the United States sound?

Doesn't it almost raise another question ... like "Haven't you heard about China?"

Well, I've got an even better one for you. How about the idea of an American firm capturing a huge share of the Chinese television market.

Well, both "ideas" are very true.

The American company that makes a top-selling television for Chinese consumers is going to start making televisions for the North American market right here in San Bernardino County.

You are reading all this correctly.

Maybe you haven't heard about Tempe, Ariz.-based Syntax-Brillian, but you will.

Their more expensive lines of Olevia liquid-crystal display TVs and high-definition TVs will be assembled in Ontario (yes, California).

The company will keep the manufacturing plant in China, but the output there will be for the explosively growing television market in China, not for America.

Okay, the thought of making a television in the U.S. and in - of all places - California would probably send some folks at the California Chamber of Commerce into shock.

It's so against the conventional wisdom that California is a horribly


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business-unfriendly place (isn't that slogan on our license plate?) with high taxes, high energy costs, high-priced real estate and nasty bureaucrats.
But Syntax-Brillian thinks it makes good business sense to make a product in San Bernardino County.

Let me state their case, which was presented to me last week by Vincent F. Sollitto Jr., the company's chairman and chief executive officer.

Sollitto is a Tufts University-trained electrical engineer with 21 years in a variety of technical leadership posts at IBM under his belt. He's also held a top executive level job at a Japanese-owned microelectronics firm. He holds four technical patents.

So I think we can safely conclude he's darn good at analyzing alternatives.

First, lets talk about some inventory and shipping issues, from the Syntax-Brillian perspective.

Make a television in Asia and you have inventory getting sea sick on some boat for three weeks. It's kind of like parking your money under the mattress. Not much is happening with it - no interest, no sales.

Televisions are getting bigger. (In fact, Sollitto believes the average screen will be 32 inches in a few years.)

To travel safely on a cargo vessel, assembled televisions have to be packed in bulky, nicely padded containers. Now pardon me for being blunt: These big, fat boxes cost a lot of money to ship.

And when this expensive cargo enters the United States, there's big duty to pay.

Ka-ching goes the cash register. (Or do they have custom ring-tones now?)

Then there's a manufacturing issue: The powder used to make plastic parts is cheaper to buy in the U.S. than in China.

Blend in all these factors and that competitive edge from lower-priced Asian labor isn't that big. Especially when you consider televisions of today aren't that labor-intensive. Just slap some self-contained modules together inside a box and a TV is born.

Now what about the advantage of making a television in the states?

Consider, for a moment, the possibility of being able to say "designed and assembled in the United States" on some models and being able to say (or perhaps sing) "Made in the U.S.A." on some others.

Doesn't that sound like a pretty neat marketing edge? Who else would be able to claim that? (Hint, think of Zoro, because it sounds like zero).

Now manufacturing in North America could mean Mexico, and Tijuana is close to California...

Well, again, the amount of labor costs come into play and then there's the reality, that despite NAFTA, manufacturing in Mexico isn't hitch-free.
Syntax-Brillian happens to have a warehouse in City of Industry. And the LCD TVs assembled in Ontario would continue to use LCD panels manufactured in Asia.

But the technical guts for the more expensive liquid crystal on silicon televisions are made in Tempe. These televisions will be able to display a "Made in America" label.

The company will start with about 100 employees in Ontario, then go to 200 and likely grow to about 400.

Now for a tidbit about their success in China.

Since Synax-Brillian entered the Hong Kong and China markets in August 2004, it has become one of the three top selling LCD TV brands in the 25- to 29-inch category and among the top ten in the 35- to 39-inch line
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