From where I am sitting, I have to wonder if manufacturing in China really is cheaper.
We hear tales of suppliers redirecting parts, middle men holding shipments hostage for “facilitation fees”, international shipping costs, customs bureaucracy, ridiculous tariffs, intellectual property theft, and god only knows what else. I have a hard time understanding exactly how Chinese manufacturing is a better deal for American businesses. Seems to me there is a lot of risk, expense, and uncertainty when you do business with China.
All of that creates a scenario whereby companies struggle to satisfy demand. When coupled with other market forces (e.g. component shortages), restocking becomes a debilitating constraint on the ability of the business to operate. What good is it to produce units $400 cheaper if you have no product to sell?
There are indeed challenges with moving production to China (or elsewhere to far east). And it will only be cheaper if you have a long term strategy for your production in China and willing to work with your factory/factories and supply chain to make it work.
There are no quick payoffs to moving production.
In this particular case as I understand its a worldwide shortage of these components so production anywhere wouldn't have made much of a difference.
As for challenges with custom bureaucracy, its not my experience at least when you EXPORT from China. I have managed a number of projects IMPORTING to China, and that's another story. The rules and regulations has improved and being more transparent and consistent, but there has been times when we had to choose different ports to import to depending on what type of products it was. Other challenges are similar to any other part of the world apart from the risk of getting your products/technology copied. Since nothing of the coding/software is "made in China" I don't see it being any risk for FAS in this case.
Still China is vastly more cheap than the West, but salaries, raw material along with all other prices going up. All kinds of "dirty" work, like plating, powder coating and other painting/finishing process are now heavily inspected and need to pass much higher requirements in terms of environmental standards.
But its nowhere near as cheap as it was years ago. Guitar manufacturers has moved from Japan to Korea to China to Indonesia. Clothing and shoes manufacturing also out of China due to being too costly, to Vietnam, Cambodia, Bangladesh etc.
I am working with some clients and we are looking into moving some production to Taiwan. Some products are same price as China now, some still slightly more expensive, but you are dealing with a more mature economy, more transparency and its actually easier for some of my clients which are not huge in volume, Taiwan suppliers typically is more flexible on smaller orders etc.
The decision to move or not pretty much depends on what product it is, if you are heavily invested in tooling and other machine setups etc and that might be the case for FAS as well, even if now with 25% tariffs production cost would have been somewhat similar to to in USA, tooling and everything is in China so I guess a move back to USA (or elsewhere) could be very challenging and further risks production dropout, delays etc etc.