Friday, November 26, 2004

Sino-French TTE largest producer of TVs

WSJ covers TTE, created from the takeover of French TV maker Thomson by Chinese company TCL. This may be the first example of a major western technology company and prominent brand (RCA) taken over by a Chinese firm. TTE produces 20M televisions a year, in a dozen factories worldwide (China, France, Mexico, Poland, Thailand and Vietnam).

The agreement between Thomson and TCL was highly ambitious and seemed to be clearly necessary. TCL, with just 11 years in the TV-making business at the time, produced more sets than Thomson and was profitable as well. But the company was virtually unknown outside China and had little expertise in global marketing. Thomson, keeper of the 85-year-old RCA brand, was being squeezed by cost pressures in developed markets and posting losses in North America. It also had only dabbled in China, which two years ago passed the U.S. as the world's biggest TV-set market in terms of unit sales.

One of the obvious difficulties, covered briefly in the article, is the huge salary differential between TTE employees (including top executives) in China and France.

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