Tom, Is the ECM Model Ruined?
Electronic Contract Manufacturing was based on just-in-time
delivery of components, high turn-rates, razor thin margins,
ability to shift manufacturing lines from one product to
another, from one geographical location to another, and
cheap labor in areas like southeast asia and mexico...
in other words, the free and easy movement of goods and
services worldwide.
With airlines drastically cutting flights, security at
airports greatly heightened, security measures on our
borders with both canada and mexico greatly tightened;
the inability to ship goods in a timely manner, and a
dramatic rise in transport costs that will surely follow
could possibly lead to a big change in the way companies
like Flex, Jabil, Solectron, etc all do business....In
other words anything but the free and easy movement of
goods and services for the foreseeable future...and if you
follow this line of argument, affect their profitability.
Obviously, this only addresses these companies ability to
function internally. I think it's all but conceded that
with the events that have transpired in New York over the
last several days, and the nation girding itself for war
of unknown duration and cost, consumer spending is going to
dramatically get whacked. I myself would hold off buying
any ECM given the substantive issues now confronting the
entire sector and the sheer amount of unknowns. It's truly
a new playing field out there.
Just my thoughts.
Regards and good luck.
Peter. |
