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sabre Silver Member Nikonian since 31st Dec 2006Tue 09-Apr-13 12:38 AM
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"Nikon quality to suffer to pay for financial woes?"


Bedfordshire, UK
          

Nikon has announced it will be moving initial production of entry and mid-range DSLRs to Laos from October 2013. This announcement comes at the same time that Nikon has again significantly reduced its sales forecasts for interchangeable-lens cameras and lenses.

Laos is an under-developed communist state, which Nikon sees as an opportunity to exploit financially in its efforts to reduce its decline in profits. Problem is that history has shown when manufacturing of such products as cameras is moved to under-developed nations it is often quality that becomes the victim.

To crown this situation, Nikon is still running around releasing products that are failing to meet its own sales hopes (such as the J and V series) and bringing out products that others have already released into the market (such as the Nikon A). Ridiculously, it chooses to ignore markets where good sales would be a certainty - where is that D400?!

Companies often go through ups and downs in their history. These cycles are often typified by such factors as fluctuations in product quality, questionable product release decisions, turning backs on established customers. All this sounds worryingly like Nikon right now. It is quite concerning.

Steve (Bedfordshire, England)
My Nikonians Gallery- please visit and leave a comment
A Nikon in the hand is worth two in the bag!

  

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cosmicfires Silver Member Nikonian since 22nd Nov 2011Tue 09-Apr-13 12:41 AM
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#1. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 0


Lynnwood, US
          

"...Nikon sees as an opportunity to exploit financially..." creating jobs for people and helping improve their economy is exploiting them?

Visit my Nikonians gallery.

my website

  

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sabre Silver Member Nikonian since 31st Dec 2006Tue 09-Apr-13 01:42 AM
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#2. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 1


Bedfordshire, UK
          

>"...Nikon sees as an opportunity to exploit
>financially..." creating jobs for people and helping
>improve their economy is exploiting them?

That rather depends on your views, but foreign companies often take much and give little back. However, my comment was not the political view you chose to read into it. I simply meant that Nikon sees an opportunity to exploit lower costs in a country where taxation, wages and materials are cheaper than it currently has to pay for in Japan and Thailand.

My real concerns which prompted my post are not about trying to cut costs, but the fact that Nikon is on the decline financially and its attempts to reverse the downward turn are resulting in some questionable strategies and actions.

For anybody who is unwise enough to think Nikon could never fail, let me just quote a single word from the history of photography: 'Kodak'.

Steve (Bedfordshire, England)
My Nikonians Gallery- please visit and leave a comment
A Nikon in the hand is worth two in the bag!

  

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mklass Platinum Member As a semi-professional involved in all manner of photographic genres including portraiture, sports, commercial, and events coverage, Mick is always ready to help Nikonians by sharing his deep knowledge of photography and printing. Nikonian since 08th Dec 2006Tue 09-Apr-13 02:17 AM
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#3. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 2
Tue 09-Apr-13 02:19 AM by mklass

Tacoma, US
          

I think you are being a bit of a "Chicken Little" about this.

Companies go through cycles. Some spiral downward. I don't see any sign that Nikon's financials are in a tailspin.

There are some Nikon products that may not be selling well, but others (D600, D7100, D800 and several new lenses) seem to be doing quite well.

Take a deep breath, go out an take some pictures, and let's see where we are at year end.

The company I would worry about is Microsoft. I think they are sucking air. How many more bells and whistles can you put on Windows? The Surface is not selling and Windows phones are a dud. Now that's a "Kodak moment".

Mick
http://www.mickklassphoto.com
or
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Scotty Silver Member Nikonian since 07th Feb 2002Tue 09-Apr-13 03:46 AM
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#4. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 2


Ely, Cambridgeshire, UK
          

Hey Steve, I think your issue is that you can't see them making a D400 in Laos and you want one... I may be wrong but I don't think the main source of Nikon profit is from semi-pro DSLR camera bodies so the production of a D400 is unlikely to turn around profitability. A few hundred units sold to people that want to buy a new camera to replace a perfectly good one isn't going to make that big a difference.

And in general why is quality seen to suffer when production moves to another country? Is Nikon likely to reduce quality control procedures just to make things in Laos? During the 1970's the worst cars on the market were Japanese... Now they are seen as some of the best... Did Toyota or Nissan compromise quality when they started to build in the UK (where cars haven't been built to a decent standard for decades) or to the USA (whose quality has always been questionable this side of the pond).

If Nikon go the way of Kodak (which I doubt) we'll just have to make do with the bodies we have or use Canon...

D2Xs + AF20-35mm f2.8 + AF35-70mm f2.8 + AF80-200mm f2.8

Hunger pays a heavy price to the shining Gods of speed and steel

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Alex

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agitater Gold Member Donor Ribbon awarded for his very generous support to the Fundraising Campaign 2014 Nikonian since 18th Jan 2007Wed 10-Apr-13 10:16 AM
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#19. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 4


Toronto, CA
          

>Did Toyota or Nissan
>compromise quality when they started to build in the UK (where
>cars haven't been built to a decent standard for decades) or
>to the USA (whose quality has always been questionable this
>side of the pond).

Toyota might not be the best example to use. Although the company has been at or near the top of the reliability rankings overall (just like Nikon), it took a severe hit for about two years in North America at least, specifically because it had previously engaged in expansion (new plants in a couple of different countries) too quickly and without its usual diligence. A number of huge safety recalls followed, and the company leaders finally had to step up and publicly acknowledge both the problems and the reasons.

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Ray B Registered since 17th Dec 2008Tue 09-Apr-13 10:48 AM
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#5. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 0


Worthing, UK
          

Another slant on this.

Nikon and it's competitors are clearly suffering with regards to drop in demand for consumer P&S cameras, due to smartphones.

That leaves the SLR, Pro market and similar to go at.

How much more can SLR sensor technology improve? Surely we are nearing technology maturity? With 36mp D800 do we really need any more?

In jumping from 12mp D700 straight to 36mp D800, and all the other high resolution bodies has Nikon shot itself in the foot? Would a more gradual uplift of resolution in bodies over say the next 10 years have given Nikon more wiggle room to introduce new bodies we are tempted into buying??

Just a thought

Regards, Ray

Visit: My Nikonians Gallery

  

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agitater Gold Member Donor Ribbon awarded for his very generous support to the Fundraising Campaign 2014 Nikonian since 18th Jan 2007Tue 09-Apr-13 12:23 PM
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#6. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 0
Tue 09-Apr-13 12:32 PM by agitater

Toronto, CA
          

>Nikon has announced it will be moving initial production of
>entry and mid-range DSLRs to Laos from October 2013. This
>announcement comes at the same time that Nikon has
>again significantly reduced its sales forecasts for
>interchangeable-lens cameras and lenses.

We're in the midst of recession in most of Nikon's major retail markets. So are the other camera makers. So are the makers of many other products. That's the reason for most of the corporate sales forecast reductions everywhere. Johnson & Johnson, the largest maker of health proudcts in the world, just reduced its forecast too (because the retail market is terrible, because the company has run out of acquisition targets, etc., etc.). In contrast to your feelings on the matter, I don't thing there's anything inherently wrong with Nikon's business model or decisions at this point in time.

>Laos is an under-developed communist state, which Nikon sees
>as an opportunity to exploit financially in its efforts to
>reduce its decline in profits. Problem is that history has
>shown when manufacturing of such products as cameras is moved
>to under-developed nations it is often quality that becomes
>the victim.

I think that many people have short memories and many people are looking at Laos as it was twenty years ago, forty years ago or even longer than that. Laos is in the midst of developing a Vietnam-style technology base. The Laotian president and his advisors have spent a lot of time in recent months conferring with Vietnamese business developers, touring various technology development and manufacturing centres in Vietnam and consulting with his own business developers at home. Laos is not some random, easily picked-off target for a bunch of corporate overlords. Laos is as self-determining nation. Laos sees part of its future as an important, small player in the technology business (among others) and its taking investments steps (taking on risk, in other words) to do the research and development to get there. Nikon is as good a partner as any I think. China used to be an "under-developed Communist state" (as you put it) too, but it's now showing the exact same growing pains as England did during the industrial revolution including unbreathable air (in both cases partly from burning enormous amounts of coal), wage slaves, sweat shops, rampant industrial labour abuses, etc., etc. Any of this ring a bell from your/our history books? The difference in Laos and Vietnam is that neither country was/is burdened with a legacy of older infrastructure that has to be replaced. Both countries are starting off with the latest technologies for telecom infrastructure, wirless, fibre optics, industrial buildings and so on.

The other big miss here is that short memory reference I made. Not two years ago Nikon and a couple of thousand other companies hit the beginning of an absolutely horrible series of natural disasters. The loss of life, destruction of manufacturing capacity, and the awful burden of rebuilding what was destroyed in both Japan (earthquakes and tsunami) and Thailand (flooding that was historic in its proportions), made a lot of companies sensitive to the future of the Thai region in particular. Everyone, and I mean everyone with flood-affected operations in Thailand has since looked around for manufacturing risk reduction in the general southeast Asia region. Laos, with its insistent new push and reasonably solid research and development open door, is one of several new locations.

Generally well-run companies such as Nikon look for opportunities to expand, diversify, create protections from man-made and natural disasters, and develop new partnerships. The fact that Nikon is now an early player in the new Laos is a great piece of news. When Nikon and a thousand other big companies and a hundred or so countries get past recession again, the expansion into Laos will provide it with manufacturing capacity that some other companies won't have.

As long as we're mired in global retail economics, Nikon might as well make the best of it, and it is.

>To crown this situation, Nikon is still running around
>releasing products that are failing to meet its own sales
>hopes (such as the J and V series) and bringing out products
>that others have already released into the market (such as the
>Nikon A). Ridiculously, it chooses to ignore markets where
>good sales would be a certainty - where is that D400?!

Lots of companies release products that are not perfectly designed to beat everyone else in the marketplace. By contrast, the D800, D4, D3xxx, D5xxx, D7100 and D600 are all home runs. We can get mired in woes about left-focus point issues and dirty sensors that refuse to clear up for thousands of shots, but it amounts to little more than preaching hellfire to the converted. The reviewers love the D600 and D800 cameras, Nikon retailers are doing good business with them, and the Nikon 1 series is holding its own even if it isn't a major winner. I also think that the Coolpix A is just as much of a feeler product as it is a potential new line. We'll see if Nikon keeps it and iterates it, or simply dumps it unceremoniously. The company can experiment and try interesting new things all it likes.

>Companies often go through ups and downs in their history.
>These cycles are often typified by such factors as
>fluctuations in product quality, questionable product release
>decisions, turning backs on established customers. All this
>sounds worryingly like Nikon right now. It is quite
>concerning.

I think there are a number of understandable assumptions in your thinking. There's no way that I think anyone should argue, much less bet, that Nikon will absolutely not let itself be hamstrung by poor attention to quality control or by compromising some of its engineering with cheaped-out manufacturing decisions. The problem is, none of us can point to any trend in that direction in any of the Nikon products. I think too many people read some of the product complaints on these forums and assume that Nikon is mired in some sort of down period all of its own making. That's simply not so.

My very first D700 contained an AF module which simply stopped working during the first week I owned the camera (it was the first batch out of the factory to hit Canada). I exchanged it at my dealer and never looked back. What I didn't do was wind myself up about how Nikon was failing as a company because I initially got a camera body with a module that failed. I'm not suggesting you've done that either, but I've read posts by other Nikonians which sound exactly like an outraged complaint about a mass produced item. It's understandable from one perspective (we expect expensive items which strain many budgets to work flawlessly out of the box for a very long time), but not from other views (the fact that mass production was never inherently a solution for quality improvement, but rather a cost reduction measure through standardization of parts for assembly). Whatever we may think about such things, Nikon merely suffers from time to time under the same problems-escaping-the-factory issues as other camera makers.

I think there's ample reason for us to rip into Nikon, as long-time consumers of many of the company's products, to continually demand better quality, smarter designs, faster operation, more intuitively usable products and so on - to keep the pressure on Nikon. But I wouldn't worry about the company's future or it business decisions at all. Our demands for even better (often market and industry leading) products than Nikon is already producing always influence improvements on some level.

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slalom002 Silver Member Nikonian since 11th Oct 2008Tue 09-Apr-13 12:58 PM
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#7. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 6


Ottawa, CA
          

OP does have a point. While I am not sure that Nikon is in financial trouble, it is revising sales forecasts and the stock price is hurt by that.

The inexperienced wunderkind who analyse stocks take a predominantly short term view. Corporate managers are then encouraged to do so too. Hence the product announcements "hey look at how full our pipeline is". A short term view will ultimately not serve investors or companies well.

Off-shoring production is designed to achieve lower production costs. This move to produce in locations that have low costs of labour, poor or unenforced environmental controls and no health and safety rules is also short-sighted. Beyond the moral question, there is also the economic one. As we move manufacturing jobs out of the OECD countries we find that their economies are in desperate shape. This drives down demand for manufactured goods. Some of that demand shifted to developing countries (BRIC) but as we outsource away from there the contagion will spread.

Laos, despite not having a free market, rule of law, safe labour practices or environmental laws that pass muster has been a member of the WTO since February 2013.

Welcome to the race to the bottom.

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agitater Gold Member Donor Ribbon awarded for his very generous support to the Fundraising Campaign 2014 Nikonian since 18th Jan 2007Tue 09-Apr-13 02:05 PM
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#8. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 7
Tue 09-Apr-13 02:12 PM by agitater

Toronto, CA
          

>OP does have a point. While I am not sure that Nikon is in
>financial trouble, it is revising sales forecasts and the
>stock price is hurt by that.

We're in a global recession, BRICs or no BRICs. Many other major companies in technology and other industries are revising their forecasts, some of them not for the first time in the last few years. I think Nikon doing so is no more notable than any of the others.

>The inexperienced wunderkind who analyse stocks take a
>predominantly short term view. Corporate managers are then
>encouraged to do so too. Hence the product announcements
>"hey look at how full our pipeline is". A short term
>view will ultimately not serve investors or companies well.

Companies have been doing this for centuries - in fact, ever since there were companies. It's an ancient technique that is used to try to persuade markets and consumers and investors. It's a short-term technique for sure, but one that has been used for hundreds of years. It's not a factor solely of contemporary economics.

>Off-shoring production is designed to achieve lower production
>costs. This move to produce in locations that have low costs
>of labour, poor or unenforced environmental controls and no
>health and safety rules is also short-sighted.

"Off-shoring?" Nikon has facilities established outside Japan for decades. It has done so, like many other Japanese companies, to combat untenable domestic labour costs which would serve to make it uncompetitive in markets being populated by good competing products manufactured for less than Nikon's products and sold at lower prices than Nikon's products. I'm saying there are two sides to the argument, and both perspectives pivot on the same issue. Don't ignore the advantages that Nikon will reap down the road because it is developing partnerships in an emerging region.

People were howling about losses of job to BRIC, and unfair competition by BRIC, and Japan (fifty years ago), and South Korea (25 years ago), etc., etc. It's all occuring naturally as various small nations and disadvantaged nations make themselves more attractive to partners.

Please don't isolate the issue to just "off-shoring" either. Parts of some key manufacturing areas in Japan were devastated by earthquakes and tsunamis less than two years ago. Key manufacturing areas in Thailand were saturated with historic floods less than 18 months ago. Does anybody think these disaster aren't going to happen again in the same regions? Nikon and thousands of other companies in the tech business have been making moves to protect themselves and their futures. A small move into Laos at this time makes sense, especially given the fact that the country is trying to turn itself into a good investment partner.

>Beyond the
>moral question, there is also the economic one. As we move
>manufacturing jobs out of the OECD countries we find that
>their economies are in desperate shape. This drives down
>demand for manufactured goods. Some of that demand shifted to
>developing countries (BRIC) but as we outsource away from
>there the contagion will spread.

I think we have to keep the timelines straight in these sorts of discussions. Manufacturing jobs have been moving, en masse, out of OECD nations for a lot of reasons. But the exodus began forty years ago and gradually spread deeply enough to get us to the point that the most affluent nations are in now. That is, many of them are trying to find ways to bring major manufacturing bases (and the re-establishment of all their attendant and fundamentally important supply chains) back home. It's a tough trek for sure. One manifestation is the "Right to Work" legislation enacted in several U.S. states in an effort to keep wages low enough to keep and/or attract manufacturers.

Driving down demand for manufactured goods is a great idea, IMO. Uncontrolled global retail economics and uncontrolled false markets (the financial industry, among others) is one of the things that has repeatedly driven stakes through the hearts of many different economies in recent years.

>Welcome to the race to the bottom.

That's what people were saying about South Korea and Japan and China many, many years ago. I remember when everything showing up on North American and European shores from Japan was rightly called "Japanese Junk." That changed. Slaves wages in Japan changed. Life in Japan changed. Same for South Korea. Now, it's happening the exact same way in China. You can't keep people down for long. They'll grow more affluent and more influential and then they'll look for (and in a few situations have already begun looking for) lower cost off-shoring of they're own. Twenty years from now, the Vietnamese and Laotians will be obtaining greater affluence as they pass through their apprentice years.

There's no straight line between poverty and wealth that doesn't go through struggle, idea, partnership, competition, investment, struggle and affluence (in that order). Nobody gets a pass. Every country goes through it. Standing on moral high ground seems sensible enough and is a necessary cross-check, but it doesn't respect history.

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sabre Silver Member Nikonian since 31st Dec 2006Tue 09-Apr-13 03:01 PM
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#9. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 0


Bedfordshire, UK
          

This is good - lots of debate!

I have read through the posts above and there are certainly some differing points of view. My three points I would take from the responses are:

1. Nikon has had to revise its sales figures significantly downwards several times over the current period. Sure, lots of companies have revised downwards once, but several times...? That does not look good to shareholders, the markets, or customers. Nikon used to be a king in the camera market. Now in terms of its product offering and quality it is a prince among many. The competition is out there to grab a chunk of Nikon's market and the continuously revised sales figures suggest that the competition is having a serious impact in this recession era.

2. There were a few references to memory. Well, me and Nikon go back over three decades and during that time I remember Nikon building other cameras overseas in a bid to service the market and cut costs, especially in the entry to mid-range sector. Who remembers the laughable quality of the FM10, which was assembled in Japan by Cosina from parts manufactured abroad? The point is that the further away from the mothership Nikon moves its production, the more out of control it becomes and the chances of quality issues increase rapidly. The very essence of moving production abroad is to save dollars (Yen in this case), so companies like Nikon are not then going to invest infinite finances on ensuring quality control exactly matches the Japanese model. Laos may have strengths as a growing economy, but the workforce will be coming at this from decades of communism where one-approach-fits-all and quality is not a cultural norm.

3. Yes, Alex, I am still hurting at the realisation that there will never be a D400, but that's just a personal thing and has no reflection on the fact that Nikon is not serving chunks of the market that other manufacturers are sweeping in their own direction; e.g., Canon cleaning up with pro DX. In this respect Nikon is fiddling while Rome burns!

I like Alex's parallel example of Japanese companies building cars in the UK, but it is not the same model being discussed here. The EU and the British government matched the investment of Honda to bring their factory to Swindon, UK. The same two bodies went even further in investing more than Toyota in assisting the creation of the Toyota facility in Derby, UK. It's easier to import a quality culture through training, methods and experienced staff when you have billions of dollars to play with. Nikon is not in the same boat regarding Laos. It is struggling financially and is looking to save as many Yen as it can.

Companies do go in cycles (micro and macro), but occasionally some never recover; e.g., Kodak. I rather hope that this will not be the case for Nikon. However, allied to any downward cycle there is often an accompanying loss of confidence by the same people who have helped the company to create its wealth. These are the customers. Ignore them at your peril. Worse still, take away some of the things that they love(d) about your products; e.g., Japanese quality - where the little gold sticker 'Made in Japan' could actually mean something to the customer. Strip away too many of these intrinsic extra aspects and one day the customer (or many customers) get out of bed and say 'I might give another brand a try today'.

Steve (Bedfordshire, England)
My Nikonians Gallery- please visit and leave a comment
A Nikon in the hand is worth two in the bag!

  

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archivue Gold Member Nikonian since 26th Mar 2002Tue 09-Apr-13 04:22 PM
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#10. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 9


Paris, FR
          

Just a point about the FM10, just to relativize things...
I've been a FM2 and FM2n user and almost collector, having the three shutter variants for the FM2n (while using a Leica M6 non TTL first batch and a Bronica SQ among the F4s and such).

I bought for each of my three kids an FM10 when they reached 14, so that I could train them in B&W film development, share some time with them (others goes fishing or hunting) without investing to much in case they dropped the whole thing a few months later, so I deliberately picked up the FM10, Cosina made, fully manual.

My eldest daughter (now selling pictures) went to China for two months (school very special trip, she was learning Chinese), part of the trip was "opening" the Gobi desert path for tourism.
When she came back, she complained that the film advance lever was stiffer then before and that there was some gritting sounds... I took it for CLA at my usual Nikon certified shop, and the tech guy called me in to show me a soup spoonful of Gobi sand in a neat little cone on his spotless table... We both wondered at a camera that still worked perfectly with so much sand in it !!!!
All the pictures were perfect as the sand didn't go anywhere near the film chamber (my daughter was trained to clean it at each new film introduced in it).

The "moral" of this true story is that the "not so great" FM10 can be a camera for the hard times, for people who know how to use it. It allowed access to photography to score of young people, who, otherwise, would still be with some Instamatic sort of camera or some light leaking Lomo !

I think Nikon was right with this one...

Sorry for being out of topic !

Jacques

"Un photographe, finalement, c'est quelqu'un comme les autres, mais qui prend des photos." - Man Ray
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agitater Gold Member Donor Ribbon awarded for his very generous support to the Fundraising Campaign 2014 Nikonian since 18th Jan 2007Wed 10-Apr-13 11:44 AM
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#21. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 9
Wed 10-Apr-13 01:21 PM by agitater

Toronto, CA
          

>1. Nikon used to be a king in the camera
>market. Now in terms of its product offering and quality it
>is a prince among many.

Nikon certainly has category-leading products, but strictly in terms of camera sales (since you've made a number of points based on your perception of sales), Canon has been the market leader for many, many years. Nikon has been chasing Canon's camera sales volume leadership for a long time. It doesn't matter. Nikon doesn't have to be the overall sales leader in order to produce cameras such as the F4, F100, D70, D300, D700, D3, D800, Nikon 1, etc., etc. - all of which were and remain the best in their classes.

>2. There were a few references to memory. Well, me and Nikon
>go back over three decades and during that time I remember
>Nikon building other cameras overseas in a bid to service the
>market and cut costs, especially in the entry to mid-range
>sector. Who remembers the laughable quality of the FM10,
>which was assembled in Japan by Cosina from parts manufactured
>abroad? The point is that the further away from the
>mothership Nikon moves its production, the more out of control
>it becomes and the chances of quality issues increase rapidly.

The FM10 might not be the best example for you to use. It's still made - it's one of the two remaining film cameras in the stable. It has been one of the standards in camera/photography instruction for about 25 years (although most of those types of courses have since gone digital).

>Laos may have
>strengths as a growing economy, but the workforce will be
>coming at this from decades of communism where
>one-approach-fits-all and quality is not a cultural norm.

I think the Laotians might disagree. The U.S. might regard itself as superior in terms of manufacturing quality standards, but needed decades to finally reach the product quality of cars it allowed Japanese makers to sell in the U.S. So too did British manufacturing suffer for a variety of reasons, yet there is nothing inherently wrong with the U.S., British, Scottish, Welsh or Irish factory worker. References to what might or might not be a "cultural norm" are sketchy at best, I think, and dangerous at worst. We shouldn't talk in those terms because they're really hard to back up with anything that doesn't also apply in some way to every other nation. All sorts of nationals talk about how their manufacturing quality is superior, but nobody wants few want to pay the retail prices derived from domestic manufacturing in many countries. I think talk of relative quality is a bit like chasing a train that has left the station - manufacturing in all the top economic powers was off-shored many, many years ago. That process continues. Thnking about it as though it is a new-ish development for Nikon is somewhat unrealistic I think. The supply chains have long ago been established in Taiwan, South Korea, Japan and Thailand. All four countries have suffered repeated natural disasters, with Japan and Thailand being absolutely the worst in recent memory. Manufacturers have to be realistic about where they put their investments. Distilling it into a simple cheap worker argument fails to take into account diversification, new business and government partnerships, supply chain management, mobility and a lot of other factors. If Nikon could compete by opening a facility in Birmingham, the company would do so, and in that light I think that any worries about an expansion into Laos are unfounded. Nikon has expanded into various regions over the past 25 years - it knows how to do it.

The D800 is made in Japan, but that didn't prevent a left-focus point problem from occuring. My own D800 received in May 2012 is the usual, perfectly operating Nikon camera body to which I'm accustomed to buying, but I hear that that are some problems with some Nikon camera bodies from time to time. My very first D700 had an AF module that died during the first week I had the thing. Exchanged it and never looked back. That was made in Japan too. Problems have less to do with Sendai or the Rojana Industrial Park or Wuxi or Birmingham or Winnipeg or Vientiane or Tupelo, Mississippi for that matter than they do with assembly faults, supply chain foul ups and poor supervision.

I don't hear anybody complaining about the Nikon 1 cameras made in Wuxi, China. From Micgadget: "Just in case you haven’t heard of Wuxi, the province actually boasts a huge purpose-built business park, serviced by its own freight airport that is home to over 1,5000 manufacturing companies, many of them foreign enterprises engaged in hi-tech operations. Most importantly, Wuxi is one of the 15 economic centers and 10 important tourist cities of China. So, the Nikon factory in Wuxi is one of three Nikon factories in China; the others at Hangzhou and Guangdong are responsible for the manufacture of Coolpix models." That's a development model being imitated by the Laotians and a number of other developing nations. I don't have a problem with it.

If all of us westerners have simply given away huge portions of our manufacturing bases starting decades ago, the Asians were always smart enough and entrepreneurial enough to see the opportunities. Let me point out too that the western nations never manufactured digital cameras or indeed any significant amount of that level of tech product because we never established the supply chains to do so. The Japanese, Taiwanese, South Korean and Chinese business people and tech companies did so because they seized the advantage. We can't worry about those same companies expanding into neighbouring Asian countries.

>3. Yes, Alex, I am still hurting at the realisation that there
>will never be a D400, but that's just a personal thing and has
>no reflection on the fact that Nikon is not serving chunks of
>the market that other manufacturers are sweeping in their own
>direction; e.g., Canon cleaning up with pro DX. In this
>respect Nikon is fiddling while Rome burns!

I have no inside knowledge about what Nikon is planning on releasing over the next 2-4 years, but I've been predicting that a pro DX Nikon body will appear late in the game for quite a while now. The disasters in Japan and Thailand set Nikon's pro DX production timeline back by more than a year. I originally predicted a D300s successor sometime this Spring, but that didn't happen. Instead, I think it will happen during the summer if Nikon can clear out the retail channels of older inventory (D90 and D7000 mainly). Nikon and Canon can design and produce all they want, but if retail is down so much that merchants don't have purchasing power (much less room on the display shelves) for new models, and if Nikon and Canon won't buy back old inventory, then certain camera models just aren't going to appear. Wishing otherwise won't make it happen, but enough retail sales will. In this economy, I wouldn't hold my breath waiting for sufficient sales volumes. Retailers can't discount the old inventory to sell at a loss unless they can also depreciate the inventory as a loss/expense on their taxes, which isn't happening. And if they can't do that then they'll be literally losing money on every heavily discounted sale. Nikon and Canon have thus far declined to participate in such things. In any case, I think those are, in part, the reasons for the D400 wait.

>I like Alex's parallel example of Japanese companies building
>cars in the UK, but it is not the same model being discussed
>here. The EU and the British government matched the
>investment of Honda to bring their factory to Swindon, UK.
>The same two bodies went even further in investing more than
>Toyota in assisting the creation of the Toyota facility in
>Derby, UK. It's easier to import a quality culture through
>training, methods and experienced staff when you have billions
>of dollars to play with. Nikon is not in the same boat
>regarding Laos. It is struggling financially and is looking
>to save as many Yen as it can.
>
>Companies do go in cycles (micro and macro), but occasionally
>some never recover; e.g., Kodak.

Kodak's failure, or at least its disassembly into the current shadow of its former entity, had nothing to do with micro or macroeconomic cycles. It's failure as a leader was tied to a lot of well-documented things, but it doesn't belong in a discussion about Nikon's expansion into Laos. Nikon is a successful and profitable company. How well it will manage that success through the current recession, economic downturn or whatever you want to call it is likely exmplified by the manner in which it has successfully weathered economic recessions repeatedly throughout the past 60 years. There is no reason for us to think that such successful management won't take place again or that it isn't already taking place again. This is not the first time that Nikon has successfully battled competitive pressures and economic pressures and natural disasters.

>These are the customers. Ignore them at your peril. Worse
>still, take away some of the things that they love(d) about
>your products; e.g., Japanese quality - where the little gold
>sticker 'Made in Japan' could actually mean something to the
>customer.

A magnesium alloy frame that has been fabricated and then shipped to an assembly facility in Thailand or Laos is no different from the same magnesium alloy frame assembled anywhere else. Laotian assembly plant workers will not be sitting in grass huts on dirt floors, and I know you understand that. A new Laotian facility will necessarily be state of the art and will, like most such facilities, be competing (internally in the company) to achieve quality benchmarks in order to earn bonuses for workers, awards, special holidays and the other sorts of incentives used in that business. Nikon, Canon, Samsung, Olympus and many other companies have got this down to a fine art and science. Of course we agree that problems crop up from time to time (and with Canon and all the other makers too on a regular basis), but until such time as Nikon announces that it's getting out of the profitable, good camera making business, I'll stick with Nikon products that serve my needs no matter where they're built.

"Made in Japan" does not mean "No Problems" any more than "Made in Laos" means "More Problems."

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Howard Carson

  

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jaclegau Registered since 28th Sep 2006Tue 09-Apr-13 05:49 PM
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#11. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 0


Lachenaie, CA
          

Hi !

I can't agree more. Instead of moving to countries where quality could be an issue, it would be better if it took care of the clients and gain a good following .For example, Nikon seems to have put an X on Quebec, Canada. I complained for many years on the quality of it's website compared to their counterpart in Europe. They updated a year ago. It is better now but when in january i tried to register my 70-200mm f4 lens, it didn't appear in the enumeration of their lenses. I complained again and I finally got to do it in march. We have no Nikon schools and never receive any email from them, even if a new product is put on the market. Even it's software, Capture NX2, as a feature that does not show when an update is available; same thing with the firmware updates for the camera. I have to rely on other websites to find out those things. Recently, I saw good photography store opening that don't carry Nikons. I could continue but I think you see my point.
I love my gear and anyway it would be almost impossible, financially, for a 40 some years Nikon owner like me to change.

Jaclegau
Modérateur Nikonians
Nikonians®, l'endroit où rencontrer les photographes Nikon® du monde entier
"Partager, Apprendre et Inspirer..."

  

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mklass Platinum Member As a semi-professional involved in all manner of photographic genres including portraiture, sports, commercial, and events coverage, Mick is always ready to help Nikonians by sharing his deep knowledge of photography and printing. Nikonian since 08th Dec 2006Tue 09-Apr-13 06:50 PM
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#12. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 0
Tue 09-Apr-13 11:47 PM by mklass

Tacoma, US
          

Except for perhaps North Korea, there really are no communist countries left. Quite a few preserve the fig leaf of calling themselves communist, but it is a silly pretense. Authoritarian- yes, totalitarian- maybe, but definitely not communist.

Mick
http://www.mickklassphoto.com
or
Visit my nikonians gallery

  

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sabre Silver Member Nikonian since 31st Dec 2006Wed 10-Apr-13 12:09 AM
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#14. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 12


Bedfordshire, UK
          

Just need to point out here that Laos is officially named the Lao People's Democratic Republic and the regime there declares itself to be communist.

Interestingly, the 'Democratic Republic' tag is a regular feature of socialist-communist states; e.g., former East Germany (German Democratic Republic), North Korea (Democratic People's Republic of Korea), etc.

I don't want anybody thinking I am some McCarthyist who goes round branding states as communist by my own reckoning.

Steve (Bedfordshire, England)
My Nikonians Gallery- please visit and leave a comment
A Nikon in the hand is worth two in the bag!

  

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mklass Platinum Member As a semi-professional involved in all manner of photographic genres including portraiture, sports, commercial, and events coverage, Mick is always ready to help Nikonians by sharing his deep knowledge of photography and printing. Nikonian since 08th Dec 2006Wed 10-Apr-13 12:22 AM
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#15. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 14


Tacoma, US
          

They may say they are communist, but the economy in Laos, (as in China and Vietnam) is heavily market oriented with lots of private businesses and wealth. Even North Korea has a growing number of private businesses, but is probably closest to being a communist country economically and politically.

As I said, it's a communist fig leaf.

Mick
http://www.mickklassphoto.com
or
Visit my nikonians gallery

  

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dagoldst Silver Member Nikonian since 02nd Dec 2012Wed 10-Apr-13 12:41 AM
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#16. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 12
Wed 10-Apr-13 06:10 PM by dagoldst

Little Rock, US
          

>Except for perhaps North Korea, there really are no communist
>countries left.

Mick,

Just my opinion here, but North Korea is nothing but a totalitarian dictatorship, (as was the Soviet Union).

From my understanding of history, there has never been a true communist state as Karl Marx described it - these so-called communist countries rapidly become a state ruled by tyrants supported by tiny privileged groups protecting their power and influence

Just a perspective,

David

"Sawed that board three times and it is still too short... "

  

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cosmicfires Silver Member Nikonian since 22nd Nov 2011Tue 09-Apr-13 11:36 PM
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#13. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 0


Lynnwood, US
          

I have a Nikon 10-24mm lens made in China. I see no difference in build quality from the lenses I have that were made in Thailand.

I read somewhere that Nikon's Chinese factory has the lowest defect rate of all it's factories. Thailand is 2nd and Japan is 3rd.

Visit my Nikonians gallery.

my website

  

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Stradman Silver Member Nikonian since 17th Nov 2012Wed 10-Apr-13 01:47 AM
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#17. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 13


Mertztown, US
          

Hello everyone,
Wow the opinions expressed on this topic are a great educational read.
My knowledge base may not apply here but my wife and I own a stringed instrument retail store .When a manufacturer moves their facilities to gain an economic advantage it is my experience that quality of product falls off until the new workers gain the experience necessary to create a quality product. Hopefully this won't be the case for Nikon,but I would be cautious of product from a new facility until the beta testing is done.


Free Time ...Really?...Where?

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James23p Moderator Awarded for his wide variety of skills, a true generalist both in film and digital photography Nikonian since 25th Apr 2004Wed 10-Apr-13 05:53 AM
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#18. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 0
Thu 11-Apr-13 02:33 AM by James23p

Memphis, US
          

As this has had excellent points made I think we are also missing another point, at least I think we missed it if not my apologies. Nikon is spreading its manufacturing base around to protect against having all its eggs in one basket and increase its output. We all complain how Nikon takes forever to get products to market when they expand we complain seems its a no win situation for Nikon. Another thing is every company tries to save on labor costs so this is nothing new.

I also want to add the FM10 is still made all the others are long gone but the FM10 soldiers on. It not great but its a nice little learner MF Nikon.

Last Nikon and all tech companies are in a global down turn but the D600, 800 and the D7100 and D51(2)00/31(2)00 are selling very well. As is the new crop of Nikkors.

Last as Chief Engineer Montgomery Scott says "the more complicated you make the plumbing the easier it is to stop up the drain", and todays DSLR's are very very complicated they have more processing power than the computers we went to the moon with.

Jim

Share, Learn and Inspire
www.nikonians.org




I will use film until the last roll and last lab are gone. Go Navy

  

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sabre Silver Member Nikonian since 31st Dec 2006Wed 10-Apr-13 10:27 AM
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#20. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 18


Bedfordshire, UK
          

>I also want to add the FM10 is still made all the others are
>long gone but the FM10 soldiers on.

...only in the USA and a few other markets. It has been long discontinued in Europe, having been a complete sales failure due to its poor quality construction. Check out any of the Nikon European websites (UK, FR, ES, DE, IT, CZ, PL, NL, RU, CH, etc) and you will see the only Nikon film camera for sale across Europe is the FM6. For example:
http://www.europe-nikon.com/en_GB/products/product_summary_list.page?sParamValueLbl=Film%20Cameras&ParamValue=Film+Cameras&Subnav1Param=0&Subnav2Param=0&Subnav3Param=0&RunQuery=l1&ID=0
This is unsurprising really, because Europeans generally pay higher prices for their camera purchases compared to the rest of the world, so they demand higher quality. This applies to other manufactured products also; e.g., compare the price and quality of an Audi or VW family car with that of a car produced in the USA by GM.

Steve (Bedfordshire, England)
My Nikonians Gallery- please visit and leave a comment
A Nikon in the hand is worth two in the bag!

  

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agitater Gold Member Donor Ribbon awarded for his very generous support to the Fundraising Campaign 2014 Nikonian since 18th Jan 2007Wed 10-Apr-13 11:58 AM
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#22. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 20


Toronto, CA
          

>This is unsurprising really, because Europeans generally pay
>higher prices for their camera purchases compared to the rest
>of the world, so they demand higher quality. This applies to
>other manufactured products also; e.g., compare the price and
>quality of an Audi or VW family car with that of a car
>produced in the USA by GM.

I think you really need to take a closer look at the reality of a comparative selection of markets. Sloppy management level supervision by VW in Mexico resulted in all sorts of warranty problems with Jetta models sold into the U.S. and Canadian markets. The problems are under control now, but man oh man there have been some grumpy VW owners walking the streets in recent years. Competing GM models have been largely trouble free during the same period and overall design, quality, fit and finish long ago improved in North American markets to successfully compete head on with Honda, Toyota, Nissan, Audi, VW, BMW and MB in various vehicle classes.

Toyota stepped out of its usual practice of exacting management and supervisory diligence and planning to expand too quickly in a couple of locations. The press and the analysts jumped on that error as the reason for the massive North American safety recalls of several Toyota models a couple of years ago. Took Toyota a couple of years to claw back its reputation.

Once again, it's not the manufacturing location, per se, which is the problem, but rather the speed with which expansion is undertaken, the level of experienced supervisory and management diligence applied at the assembly line level, the degree to which design and engineering implementations are fully met by the supply chain, and the decisions of management to accept (or reject) products of a certain kind in certain regional channels.

Let's stick to camera discussions.

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Howard Carson

  

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sabre Silver Member Nikonian since 31st Dec 2006Wed 10-Apr-13 01:32 PM
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#23. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 22
Wed 10-Apr-13 01:33 PM by sabre

Bedfordshire, UK
          

>Once again, it's not the manufacturing location, per se, which
>is the problem, but rather the speed with which expansion is
>undertaken, the level of experienced supervisory and
>management diligence applied at the assembly line level, the
>degree to which design and engineering implementations are
>fully met by the supply chain, and the decisions of management
>to accept (or reject) products of a certain kind in certain
>regional channels.


Thank you. Everything you have said in your latest comments proves my original concern exactly about Nikon moving production to Laos. Moving camera production to Laos is likely to incur the problems you have mentioned.

You said: "it's not the manufacturing location, per se, which is the problem, but rather the speed with which the expansion is undertaken". Nikon is planning to move a chunk of its production to Laos in less than 6 months. Due to significantly falling sales the chances are not good that Nikon will have the required Yen to invest in extensive supervisory and management diligence applied at assembly line level, etc.

If Nikon loses its reputation for quality, there are plenty other good camera manufacturers ready to jump into its shoes. The quality of Canon, Sony and Panasonic cameras is equally excellent, so Nikon would have trouble clawing back its reputation against them.

I hope that Nikon does manage to pull of this move to Laos, but I cannot help thinking it is a great risk to its business and reputation.

...and for the record, GM cars are far from trouble-free in European markets, so I agree it's a good idea that we should stick to talking cameras.

Steve (Bedfordshire, England)
My Nikonians Gallery- please visit and leave a comment
A Nikon in the hand is worth two in the bag!

  

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agitater Gold Member Donor Ribbon awarded for his very generous support to the Fundraising Campaign 2014 Nikonian since 18th Jan 2007Wed 10-Apr-13 02:18 PM
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#24. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 23
Wed 10-Apr-13 02:22 PM by agitater

Toronto, CA
          

>You said: "it's not the manufacturing location, per se,
>which is the problem, but rather the speed with which the
>expansion is undertaken". Nikon is planning to move a
>chunk of its production to Laos in less than 6 months. Due to
>significantly falling sales the chances are not good that
>Nikon will have the required Yen to invest in extensive
>supervisory and management diligence applied at assembly line
>level, etc.

Then how do we account, as I mentioned in a post higher up, for problems in D800/800E models that are clearly made in Japan?

And you've got it wrong. It's not moving a chunk of production, it's expanding its capacity by adding a new DSLR parts making facility in Laos. The press release is quite clear on that. it's also a baby-sized plant by Nikon standards - 10K sq metres/90,000 sq ft. Very small. But it will be a brand new facility, with brand new equipment, hiring, training, etc., etc. Nikon has done this many times, and like other companies with experienced managers who've done this sort of thing before, it will bring the Laos operation on stream as smoothly as it has brought Guangzhou, Wuxi and many other operations on stream. There's no evidence of any kind to support any doubt in this matter. If you have such information that you've come across online, you really should share it because it would fully support your concerns here.

>If Nikon loses its reputation for quality, there are plenty
>other good camera manufacturers ready to jump into its shoes.
>The quality of Canon, Sony and Panasonic cameras is equally
>excellent, so Nikon would have trouble clawing back its
>reputation against them.

We can drive ourselves completely bonkers by repeatedly asking "What if this or that happens?" Nikon has been participating in this sort of competition for 60 years or more. It's not about to willfully do something stupid. From time to time it has given ground, from time to time it has been the leader, from time to time it been in the doldrums. That's because all the other makers are competing just as hard most of the time. It is the competition for markets that motivates these companies. Nikon is, however, bound to make mistakes just as all companies make mistakes. My point in this thread is that I doubt that an incremental expansion into Laos represents any sort of mistake at all.

>I hope that Nikon does manage to pull of this move to Laos,
>but I cannot help thinking it is a great risk to its business
>and reputation.

Nikon and Canon regularly assess risks like this as an integral part of planning, revision, renovation, expansion, roadmapping and competitive participation. It may seem like a major risk, but it is not. Rather it is merely a comparatively small, incremental investment in a new region in which it makes sense to get in on the ground floor. It will give Nikon some capacity that it needs and wants in the region and will, as the press release notes, indriectly provide the Thailand facilities with additional capacity. Ultimately that's good for the wholesale and retail distribution channels.

>...and for the record, GM cars are far from trouble-free in
>European markets, so I agree it's a good idea that we should
>stick to talking cameras.

I beg you to please not mistake me for a GM fan in any way. I didn't meant to leave that impression. I was a Chevy buyer for many years, then switched to Ford, then switched to Toyota, then switched to VW. I've owned, leased and rented dozens of different makes and models over the years, just as many other people. I have no loyalties to any car maker. I think the point here is that one person's feast is another person's famine, and it has always been that way. One difference between cars and cameras is that the cars wear out and become too expensive to maintain after a point, but the cameras and lenses keep working at full spec long after cars of the same age have been recycled into soup cans (or Ladas).

I drove a Zhiguli/Lada Riva sedan for two years by the way. Great car (it was really a Russian copy of a Fiat 124 TC), lousy electrical system. The Russians sold me a good car in 1983. The point is that quality can come from anywhere, including some places where you'd least expect it.

Another difference between cars and cameras is that the GM vehicle you look at in the UK or Europe is made somewhere close enought= to the market to help keep shipping costs down. GM cars I look at in Canada are made in varous locations in North America (Canada, U.S., Mexico). By contrast, all the D800 bodies sold all over the world are all made in Japan. All the D7100 bodies sold all over the world are made in Thailand. All the Nikon 1 cameras sold all over the world are made in China. Yet more reasons why automobile manufacturing comparisons are inappropriate in this thread.

I have no reason to doubt that Nikon will make good cameras or lenses (or whatever) in Laos and no evidence to support any doubt.

If you want to voice concerns about problems, look to Japan for D800 left-focus problems. Nothing to do with Laos or Thailand or China or anywhere else in the world except Sendai, Japan. As with other problems that Nikon and other makers produce from time to time, Nikon got that one under control too. Even at the best of times, and in what many of us think of as the best of places in some respects, bad things happen. It shouldn't make us anticipate more problems though because I feel that's an unproductive approach and, for some of us, tends to sour our thinking about the perfectly great products we've mostly always purchased from Nikon.

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mklass Platinum Member As a semi-professional involved in all manner of photographic genres including portraiture, sports, commercial, and events coverage, Mick is always ready to help Nikonians by sharing his deep knowledge of photography and printing. Nikonian since 08th Dec 2006Wed 10-Apr-13 02:42 PM
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#25. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 24


Tacoma, US
          

It's funny: normally we wait until new products are released to start complaining, sometimes we complain about the specs and price when the product is announced. Now people are wringing their hands, tearing their hair out, and rending their garments over the announcement of a new production facility in a country some perceive as being unworthy.

Frankly, I'm glad Nikon is expanding production- clearly a sign they are optimistic about future sales.

Of course the similar thing has happened here in Washington State with Boeing. They built a new 787 production facility in that "backward" (read: "right to work") area known as South Carolina. They announced yesterday that they will double their investment there.

Of course, all of the 787 that have had problems were designed and assembled at the Boeing facilities in Washington. Now it's more complicated that that, but the point is, as Howard has stated, production facilities in "Advanced" locations with long experience, can screw things up, too.

Mick
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agitater Gold Member Donor Ribbon awarded for his very generous support to the Fundraising Campaign 2014 Nikonian since 18th Jan 2007Wed 10-Apr-13 04:08 PM
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#26. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 25
Wed 10-Apr-13 04:09 PM by agitater

Toronto, CA
          

>Of course, all of the 787 that have had problems were designed
>and assembled at the Boeing facilities in Washington. Now it's
>more complicated that that, but the point is, as Howard has
>stated, production facilities in "Advanced"
>locations with long experience, can screw things up, too.

You put your finger on it Mick. The quality and diligence that leading makers put into scrutinizing their respective supply chains often prevent problems like cheap/faulty/wrong batteries from getting into the final product. Then there's the completely separate supply chain into which the 'maker' of the complex battery assembly itself relies on. But no matter how diligent a company is, it can't possibly guarantee with any certainly that it will catch all real or potential issues.

I think what we're seeing, as often as not when problems crop up, is a certain and almost unavoidable failure rate associated with amazingly complex products. That it is generally so low, given the exigencies of mass production, is equally amazing to me. It's easy enough for me to say because I've experienced a vanishingly small number of problems with Nikon cameras and lenses over the years. I'm a happy camper.

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sabre Silver Member Nikonian since 31st Dec 2006Wed 10-Apr-13 04:11 PM
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#27. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 24


Bedfordshire, UK
          

Howard,

You have made some valid points, but your argument contains one fatal assumption - "Nikon has been participating in this sort of competition for 60 years or more". So what? Kodak was around much longer and is now dust.

Being around for a lengthy period of time does not make a company immune to mistakes. The people who successfully steered the organisation 60, 50, 40, 30... years ago may not be the same people at the helm today. People have a great propensity to demonstrate their short memories. This includes not learning and applying mistakes learned in business some years ago.

Nikon has so far had success in moving some production to China. The opening of the Thai facility was going swimmingly, until it became a swimming pool because Nikon had presumably not covered all the bases in their risk assessment. Let's hope that they get it right in opening another factory in Laos. Personally, I doubt it - I feel that quality will suffer - but time will tell.

Steve (Bedfordshire, England)
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dagoldst Silver Member Nikonian since 02nd Dec 2012Wed 10-Apr-13 06:16 PM
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#28. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 27


Little Rock, US
          

>Being around for a lengthy period of time does not make a company immune to mistakes.

In fact it can lead to mistakes - but I don't think the manufacturing issue is Nikon's primary challenge - read Hogan's latest column on digital video and Nikon.

With cell phones on the bottom end replacing small sensor P&S and cheap high-quality video cameras with capabilities far beyond Nikon, the company seems about to be the last one standing as a still-camera manufacturer with so-so video capabilities. Sony and Canon are certainly moving at a much more rapid pace.

Hogans article- Playing from Behind - on his site this morning.

http://bythom.com/

David

"Sawed that board three times and it is still too short... "

  

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agitater Gold Member Donor Ribbon awarded for his very generous support to the Fundraising Campaign 2014 Nikonian since 18th Jan 2007Wed 10-Apr-13 08:04 PM
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#30. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 28


Toronto, CA
          

>In fact it can lead to mistakes - but I don't think the
>manufacturing issue is Nikon's primary challenge - read
>Hogan's latest column on digital video and Nikon.

. . . and in his previous article he seems much more clear about what videographers want:

"The true videographers are much more likely to look at Blackmagic Design, GoPro, RED, Canon's C series, and Sony's F series cameras. Nikon isn't really winning any of them over with their consumerish video moves. Nikon either needs a dedicated video camera line, or it needs to understand the video user more. That means ProRes or DNxHD support, CinemaDNG support, metadata support, and more."

Not a single DSLR in the list. I agree with Hogan and I think he's been saying it for years now. A DSLR makes only an average videography platform irrespective of which company makes it. For quick short blasts (e.g., PJ, events coverage, web video to support news items) DSLR video is fine as it is (and it's getting better with Canon still leading the way), and putting any significantly greater percentage of development budget into it is a waste. If Nikon is going to get into video, IMO, it should take the form of a camera that can go head-to-head with the EOS-C or the Sony F55.

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agitater Gold Member Donor Ribbon awarded for his very generous support to the Fundraising Campaign 2014 Nikonian since 18th Jan 2007Wed 10-Apr-13 07:44 PM
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#29. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 27
Thu 11-Apr-13 04:41 AM by agitater

Toronto, CA
          

>You have made some valid points, but your argument contains
>one fatal assumption - "Nikon has been participating in
>this sort of competition for 60 years or more". So what?
> Kodak was around much longer and is now dust.

No fatal assumptions on my part. Nikon and many other companies successfully transitioned from film to digital. Kodak did not. Bye-bye Kodak certainly, but Nikon and many other competitors are alive and well. I just don't see the comparison between Nikon and Kodak.

>Being around for a lengthy period of time does not make a
>company immune to mistakes. The people who successfully
>steered the organisation 60, 50, 40, 30... years ago may not
>be the same people at the helm today. People have a great
>propensity to demonstrate their short memories. This includes
>not learning and applying mistakes learned in business some
>years ago.

Right you are. Let me clarify that I wasn't previously asserting some sort of false logic though, e.g., the so-called "argument from antiquity" which is that just because something has been around for a long time means it will continue to be around for a long time and that its age makes it authoritative. On that point we agree fully. But I see no parallel at all between Nikon's and Kodak's business operations now or at any time within living memory. Nikon successfully transitioned out of its old film-based camera making to become, variously, the #1 or #2 camera and lens maker in the world depending on which period of time we care to analyze. That's a history of success not failure, and a history of a majority of good decisions not bad ones.

>Nikon has so far had success in moving some production to
>China.

That's not accurate, strictly speaking. Nikon did not move any production to China. Rather, Nikon established and expanded China-based operations specifically for new camera models. There's a difference. It didn't move anything from, e.g., Japan to China or from Thailand to China.

>The opening of the Thai facility was going swimmingly,
>until it became a swimming pool because Nikon had presumably
>not covered all the bases in their risk assessment.

I beg to differ. The Thailand operations were very well-established - as opposed to being in the process of opening, as you wrote, or in an early operational period - when the flooding of unpredicatble and historic proportions hit. Climate change is a fact of life now, it is only marginally predictable, and I see no basis on which to question Nikon's risk assessment conclusions for the region.

Let's keep the facts straight. From the Nikon Wikipedia pages, "Nikon built its first Thai factory in Ayuthaya north of Bangkok in 1991. By the year 2000, it was employing 2,000 people at the facility. Steady growth over the next few years and an increase of floor space from the original 19,400 square meters (208,827 square feet) to 46,200 square meters (497,300 square feet) enabled the factory to produce a wider range of Nikon products. By 2004, it had more than 8,000 workers.

The range of the products produced at Nikon Thailand include plastic molding, optical parts, painting, printing, metal processing, plating, spherical lens process, aspherical lens process, prism process, electrical and electronic mounting process, silent wave motor and autofocus unit production.

From 2006-2009, Nikon began producing all of the DX format DSLR cameras in Thailand. The FX format camera production (D700, D3, D3S, D3X, D4 and D800) remains in Sendai, Japan. The Thai facility also produces most of Nikon's digital "DX" zoom lenses, as well as numerous other lenses in the Nikkor line."

I'd say there has been very little to question with respect to Nikon's risk assessment for the Thai operations over the past 22 years, except, IMO, for the fact that it is insufficiently multi-located because the entire DX line is produced in only one area, so that if that area is hit by unpredictable flooding for the first time in 22 years, it hurts the entire company. Nikon is reacting smartly by investing in and trying on a parts production facility in a new region. Makes sense to me.

We cannot suggest that Nikon and over a thousand other tech companies in the immediate area in Thailand should have been able to predict (months in advance, let alone years in advance) things such as earthquakes, tsunamis and flooding of historic proportions. If we're to question Nikon's or Canon's competing risk assessments, I think we have to look at the well established Thai operations as a whole rather than over just the past two or three years. If we look only at recent history, I think we're then not challenging Nikon's risk assessment abilities but rather only being shortsighted. 22 years in Thailand has been used by Nikon to produce billions in profits. I love that kind of risk assessment!

>I hope that they get it right in opening another factory in
>Laos. Personally, I doubt it - I feel that quality will
>suffer - but time will tell.

Nikon's history so far shows that the company has in fact gotten it quite right in every one of the manufacturing regions it has entered. Japan, Taiwan, Thailand and China. Once again, there's no evidence to the contrary. These guys, including the newer, younger crowd in management, know what they're doing.

Thom Hogan is currently musing in his excellent blog about Nikon's position in the marketplace vis a vis integrated video. He feels that Nikon is playing catch-up and having to work through design decision problems and product roadmap obstacles to do so. He might be right on the money. I think you said it well if I can apply it to that too - "time will tell."

I am looking forward to many new and interesting products from Nikon. Some of them will meet my needs or just capture my attention, some will not. I won't worry more than a nanosecond about major releases which contain bugs or functional problems because I have yet to see a technology product that wasn't beset by such things from time to time. Apple's iPhone antenna fiasco, Windows 8, the Newton, Palm, Windows Vista, iPod battery life and battery melting nuttiness, awful Canon 1D Mark III AF problems, and on and on and on. The good companies including Nikon and Canon eventually sort it all out and fix things.

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sabre Silver Member Nikonian since 31st Dec 2006Thu 11-Apr-13 12:37 AM
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#31. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 29
Thu 11-Apr-13 12:38 AM by sabre

Bedfordshire, UK
          

> "I beg to differ. The Thailand operations were very well-established - as opposed to
> being in the process of opening, as you wrote, or in an early operational period - when
> the flooding of unpredicatble and historic proportions hit. Climate change is a fact of life
> now, it is only marginally predictable, and I see no basis on which to question Nikon's
> risk assessment conclusions for the region. "

We are going to have to totally beg to differ on this one. One of my specialities in life has been designing, establishing and building secure IT facilities. I am good at doing that - according to a string of prestigious organisations who have successfully employed my services. For every facility I ever created I had to do extensive in-depth risk assessments. These included the glaringly obvious, such as: You don't build a facility in an area that could flood, even if there has been no previous history of flooding. If there is the remotest possibility of flooding you don't choose that site. End of story. Period.

Quite clearly, Nikon failed to do its risk assessment correctly in this respect in Thailand. You can blame it all you like on climate change, but if the wise man does not build his house upon the rock, the floods are going to get him if the rain comes tumbling down. If Nikon commits the same level of diligence to its proposed Laos operation, it can expect problems there too.

You seem to make out that Nikon is some sort of immune super-hero organisation that gets everything right, and can do no wrong. I am sure that Kodak employees once felt that way - ask any employee who spent their whole working life as a Kodak employee. Now Kodak is history. It has nothing to do with transition to digital - that is just one aspect of the history of photography, albeit a major aspect.

Likewise, the photographic industry has a whole chain of brands that flourished, lived, died. As a Nikonian I hope this will never happen to Nikon - I love Nikon gear. However, only a fool would assume that everything Nikon touches turns to gold. They have made mistakes before - they could make mistakes again. Laos might turn out to be a huge success. It could also be a questionable decision at a time when the organisation is having significant financial challenges. My original point was, and still is, quality of some of its products could suffer if Nikon makes this move without the right levels of investment. At this time it does not have a surplus of cash to invest extensively in a major overseas facility build.

Steve (Bedfordshire, England)
My Nikonians Gallery- please visit and leave a comment
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agitater Gold Member Donor Ribbon awarded for his very generous support to the Fundraising Campaign 2014 Nikonian since 18th Jan 2007Thu 11-Apr-13 02:05 AM
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#32. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 31


Toronto, CA
          

>For
>every facility I ever created I had to do extensive in-depth
>risk assessments. These included the glaringly obvious, such
>as: You don't build a facility in an area that could
>flood, even if there has been no previous history of flooding.
>If there is the remotest possibility of flooding you don't
>choose that site. End of story. Period.

Not really. After 22 years, something finally happened. I think Nikon's risk assessmment back in 1989 when the facility was first planned was absolutely excellent. And your current risk assessment strategies and processes had better start accounting for potential climate change problems. It's a suggestion really.

>You seem to make out that Nikon is some sort of immune
>super-hero organisation that gets everything right, and can do
>no wrong.

Not really. I've criticized Nikon repeatedly for its mistakes. If we are not diligent as Nikon product owners, they we cannot enforce our needs as they're manifested in new products. I've also criticized Nikon in this thread. All I'm doing is taking a positive attitude toward the enormous amount of success Nikon has achieved with so many of its products in the past and currently as well. That's hardly cheerleading.

>I am sure that Kodak employees once felt that way -
>ask any employee who spent their whole working life as a Kodak
>employee. Now Kodak is history. It has nothing to do with
>transition to digital - that is just one aspect of the history
>of photography, albeit a major aspect.

Nikon is not Kodak. If Nikon goes the way of Kodak any time during the next twenty, I will buy you dinner at the restaurant of your choice in the country of your choice.

>They have made mistakes before - they could make
>mistakes again. Laos might turn out to be a huge success.

Right you are, no doubt. But Laos is not some thousand pound gorilla in the room. It's a relatively tiny parts fab. It's as much of a test in the new region as it is a parts feed for the Thailand facility.

>It
>could also be a questionable decision at a time when the
>organisation is having significant financial challenges.

Now is the time to make moves. Everyone is working hard to find new business including newly establishing technology parks, fabrication machinery suppliers, and so on. Nikon will build and provision the facility for less money per square metre than anything of the kind it has done before. That still doesn't take into account the breaks it is negotiating with the Lao government. I think it's a great time to get into it.

>My
>original point was, and still is, quality of some of its
>products could suffer if Nikon makes this move without the
>right levels of investment. At this time it does not have a
>surplus of cash to invest extensively in a major overseas
>facility build.

It's not a major build - $6.9 million plus provisioning? That's cheap! I say don't worry about a thing. Nikon is going to come out of 2013 quite strong.

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Scotty Silver Member Nikonian since 07th Feb 2002Thu 11-Apr-13 03:52 AM
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#34. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 31


Ely, Cambridgeshire, UK
          


"We are going to have to totally beg to differ on this one.
One of my specialities in life has been designing >establishing and building secure IT facilities. I am good at doing that - according to a string of prestigious organisations who have successfully employed my services. For every facility I ever created I had to do extensive in-depth risk assessments. These included the glaringly obvious, such
as: You don't build a facility in an area that could flood, even if there has been no previous history of flooding. If there is the remotest possibility of flooding you don't choose that site. End of story. Period."

With the greatest respect Steve this is nonsense or you are the only guy in the UK working along these principles. There are many examples of premises - newly built in the UK suffering from flooding due to unprecedented rainfall.

In addition there are several developments recently given planning permission that are a severe risk from flooding that have been given the green light because , in the words of planning officials "danger from flooding is only one of the considerations we have to make. The others being social need, financial need and Government Policy regarding the area."

People build in flood plains all the time; they build in areas of risk all the time; they always have and they always will. In the UK you would be hard pushed to find any land that wasn't at some risk from flooding at some time either from rivers over flowing or from flash flooding, or from long-dry springs flowing again...

D2Xs + AF20-35mm f2.8 + AF35-70mm f2.8 + AF80-200mm f2.8

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dm1dave Administrator Awarded for high level knowledge and skills in various areas, most notably in Wildlife and Landscape Writer Ribbon awarded for his excellent article contributions to the Nikonians community Nikonian since 12th Sep 2006Thu 11-Apr-13 04:11 AM
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#35. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 31
Thu 11-Apr-13 04:43 AM by dm1dave

Lowden, US
          

So, what you are saying is, that no one should build facilities where natural disaster could occur?

So, that leaves out all of japan and California (high risk of earthquakes, mudslides), the entire east coast and gulf coast of the US and Mexico (Hurricanes, blizzards, tornados), the entire central plains of the US (tornados, severe thunder storms, flooding, or any city near an active volcano like Seattle Washington or Naples Italy.

Where should we put all of our manufacturing?

Risk management is not a quest for a 100% risk free environment, as that is an impossible requirement. Risk management is balancing risk with reward. Is the return on the investment likely to outweigh the possible loses from the risk?

Nikon has rebuilt the Thailand plant, indicating that that even with a known risk of further flooding, they feel that the plant will make them more money than they have already lost and/or will lose in case of another flood.

Dave Summers
Lowden, Iowa
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James23p Moderator Awarded for his wide variety of skills, a true generalist both in film and digital photography Nikonian since 25th Apr 2004Thu 11-Apr-13 05:26 AM
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#36. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 35


Memphis, US
          

Excellent point Dave!

Jim

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sabre Silver Member Nikonian since 31st Dec 2006Thu 11-Apr-13 03:22 PM
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#38. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 36
Thu 11-Apr-13 03:33 PM by sabre

Bedfordshire, UK
          

> Excellent point Dave!

I would suggest that it is not really, because I was not saying that you can allow for every single natural disaster possibility. However, you can allow for the obvious outcomes in the event of some natural disasters.

For example, building a facility on a glacial floodplain, or in a low lying area, or within a few kilometres of a stream/river, or on a coastal plain opens you up to the possibility that if flooding/tsunami occurs you are going to be put at risk. Equally, if you build a facility under the path of a mountain gully you can expect to suffer from rock slides and avalanches.

If you live in Japan, California, Mexico (to use the locations mentioned by Dave) you are probably more likely to see earthquakes, mudslides, hurricanes, tornados, etc). If you live in the UK you are less likely to see those disasters, but maybe more likely to see flooding. However, you can still build facilities in locations that significantly reduce the likelihood of a bad outcome.

I do not recall saying that "Risk management is not a quest for a 100% risk free environment" (Dave's quote, certainly not mine). My qualifications and experience have given me a good understanding of risk management. I do not know (or need to know) the qualifications and experience of the other posters here, so perhaps they are better qualified and have years more experience than I do in respect of risk management.

All I know is that I have decades of experience of working on installations ranging from IT server facilities, through to manufacturing plants and I never had a complaint from any of my clients. Indeed, not one of them lost a day of operations from natural disasters. These have been in the UK, all over Europe, in Asia and even one in the US.

It is not nice to feel uncomfortable in a forum. The last few responses have been quite contrary, and although a debate should contain views from all sides, it should not include people siding with each other against one person's views. Nor should it include deliberate misquotes.

All I intended to do was open a debate about the possible implications of Nikon opening a production facility in an under-developed country at a time when it has financial issues that could impact on its ability to concentrate on the methods, management, processes and training to support its quality reputation. I thought that the Cafe would be the appropriate place to pose the question. Perhaps I was wrong.

Steve (Bedfordshire, England)
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A Nikon in the hand is worth two in the bag!

  

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agitater Gold Member Donor Ribbon awarded for his very generous support to the Fundraising Campaign 2014 Nikonian since 18th Jan 2007Thu 11-Apr-13 05:11 PM
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#39. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 31


Toronto, CA
          

>We are going to have to totally beg to differ on this one.
>One of my specialities in life has been designing,
>establishing and building secure IT facilities.

It occurs to me to point out that secure IT facilities are designed according to an overlapping but nontheless overall notably different set of principle criteria compared to those of fabrication and assembly facilities. You seem to be implying that Nikon (and perhaps other camera makers too, along with all of the thousands of suppliers in the high tech supply chain located in the same Thailand region?) should adhere to the strict standards that you apply to IT facility location risk assessment and planning. That's an impractical, needless and impossibly expensive consideration for companies such as Nikon. The benefit we have here of 20/20 hindsight (after 22 years of normal operations by Nikon in the region), is irrelevant.

Then again, if I need a relatively disaster proof, secure IT facility or data farm risk assessment for proposed construction somewhere in the UK, I'll call you. Makes sense to me.

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sabre Silver Member Nikonian since 31st Dec 2006Thu 11-Apr-13 06:20 PM
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#42. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 39


Bedfordshire, UK
          

Howard, that's a fair point - perhaps I am applying too stringent risk-avoidance criteria in this instance. I have experience of establishing production and logistics facilities too, by the way. But perhaps you're right that Nikon does not need to adhere to such strict standards for a camera plant. Perhaps a complete flood-out once every decade is a cost it is willing to carry, in the example of Thailand.

I come back to my earlier point, which is that whatever the standards required, Nikon currently has financial constraints that could hinder it successfully establishing another production facility outside its home base, though by a curious twist it is clearly doing this in an attempt to reverse that financial situation.

Steve (Bedfordshire, England)
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James23p Moderator Awarded for his wide variety of skills, a true generalist both in film and digital photography Nikonian since 25th Apr 2004Thu 11-Apr-13 02:50 AM
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#33. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 20
Thu 11-Apr-13 05:26 AM by James23p

Memphis, US
          

One never assume that North America doesn't demand or want quality, this is just not true. The FM10 may be discontinued in Europe as they just choose not to carry it, but it is still an official Nikon product as evidence by Nikon's global site. On top of that I had a friend who lives in Germany ask his local authorized Nikon dealer and he could indeed get the FM10 for him thru official Nikon channels with a warranty. I have traveled all over the world and lived in many places and I can tell you every country has its ups and downs but I never take the people for granted or think I am better by the fact I am an American or that America can always do better I think this also applies to the UK, EU, Russia, Japan etc and so forth. Another point is let's not degrade a countries ability to produce quality products that smacks a bit of an elitis attitude as does posting North America doesn't want quality.

I have full confidence in the people of Laos and Nikon to create a first class staff and facility.

Jim

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I will use film until the last roll and last lab are gone. Go Navy

  

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sabre Silver Member Nikonian since 31st Dec 2006Thu 11-Apr-13 02:56 PM
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#37. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 33
Thu 11-Apr-13 03:25 PM by sabre

Bedfordshire, UK
          

> as does posting North America doesn't want quality.

Jim, please would you point out where anybody has said this in any of the above posts. I don't recall me saying this, so perhaps you have seen something that I have missed, or maybe you are reading something into the post that was never said, mentioned, or intended. Please do clarify where you read this.

Steve (Bedfordshire, England)
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James23p Moderator Awarded for his wide variety of skills, a true generalist both in film and digital photography Nikonian since 25th Apr 2004Thu 11-Apr-13 05:24 PM
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#40. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 37
Thu 11-Apr-13 05:28 PM by James23p

Memphis, US
          

You made it very clear Europeans demand higher quality, thus by your statement the rest of the world does not. I would say that each person has their own standard of quality. I lived in Europe something's were better some not and that goes for cars too, not every make of car driven in Europe is a high end family car. My family in Greece has no more expectations than I do here in the US on quality.

Broad and general statements like the above when placed in the contex of the topic is not productive and can be insulting as your premise that Laos can not produce quality Nikon parts.

Jim



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sabre Silver Member Nikonian since 31st Dec 2006Thu 11-Apr-13 05:49 PM
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#41. "RE: Nikon quality to suffer to pay for financial woes?"
In response to Reply # 40
Thu 11-Apr-13 05:53 PM by sabre

Bedfordshire, UK
          

No, what I said was, "Europeans generally pay higher prices for their camera purchases compared to the rest of the world, so they demand higher quality". That was/is my perception. You misquoted that. My comment was about a relativity of quality, absolutely not that one expected quality and the other did not. If you choose to be insulted by reading into what I said, that is your misunderstanding.

I have not introduced any premise that Laos can not produce quality Nikon parts. What I have said quite clearly is that, "quality of some of its products could suffer if Nikon makes this move without the right levels of investment. At this time it does not have a surplus of cash to invest extensively in a major overseas facility build." It is good to see that you are protecting the integrity of Laos, but my point was never an attack on that country.

Steve (Bedfordshire, England)
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avm247 Moderator Awarded for high skills in documentary architecture and aviation photography Donor Ribbon. Awarded for his support to the Fundraising Campaign 2014 Charter MemberThu 11-Apr-13 06:46 PM
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#43. "This thread has run its course, thank you for participating"
In response to Reply # 0


Rancho Cordova, US
          

After much discussion among the Moderators, it has been decided to close this thread.

Thank you for participating.


Anthony

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The important things in life are simple; the simple things are hard.

  

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