Electronics Engineering company "pretenders" who are simply middle-men - Page 1
Forum section: electronics / general

author: ocset
author_rank: Super Contributor
timestamp: July 27, 2019, 12:06:16 pm
content: Hello,I have been helping my friend with Mains Inverter designs for the Indian market. However, his UK based company has recently had a significant reduction in the number of projects that it does. (sorry to speak of UK, but this could happen in your country too, so please replace "UK" with your country througout) Now it seems, they only do a project if its say a “green-tech” project (eg solar power inverter etc), and often only if they have significant Government funding for it.It seems that the explanation for this slow-down in internal projects is that the company is now using its own status as an electronics design/manufacture company to pave the way for a multitude of finished electronics products which are being shipped in direct from China. (ie shipped in through the company, who act as “middle-man” for this activity, and cream off a nice middle-man profit)In other words, the company is now simply masquerading as an electronics designer/manufacturer, in order to make a load of money by simply acting as a “middle-man” for finished electronics products being shipped in from China, via the company, who kind of legitamise the middle-manned products, helping them gain access to the UK /EU market.The company's status as an electronics designer/manufacturer kind of gives "respect" for the finished Chinese products being middle-manned in and encourages UK/EU customers that these imported products are OK.Bringing finished products in from China actually destroys the UK electronics design/manufacture sector, so why is such a company able to receive Government grants for certain projects?.....why is any Government money flowing into this company?…surely it should be a stipulation of receiving Government grant money that an electronics engineering company never does “middle-man” shipping of finished Chinese electronics products?(BTW, i am not in any way belittling the Chinese products, they are fantastic quality...that's not what this post is about)

author: SiliconWizard
author_rank: Super Contributor
timestamp: July 27, 2019, 01:33:47 pm
content: Quote from: treez on July 27, 2019, 12:06:16 pmWell.I think it should be noted that some countries have become so desperate to maintain at least some form of industrial activity that their governments will grant money to pretty much any company having an industrial activity (or at least being classified as one) and that promises to make money and create jobs, even if the long-term consequences will worsen the situation.Unless the company is audited by a specialist, it's extremely easy to "masquerade" R&D activity as you said. Filing for grants is a job in itself.The line between simply subcontracting production to chinese plants and subcontracting complete development has also become much thinner.Even though your concern is valid, problem is that solving this would imply some kind of protectionism. Even conditioning grants could be seen as protectionism in some way (which it would be). I have no problem with the right amount of protectionism, but it seems to be very frowned upon (almost without any discernment) by most current economy and political leaders. So good luck, because as it is, you sound like a Don Quixote of the electronics industry...

author: David Hess
author_rank: Super Contributor
timestamp: July 27, 2019, 04:34:07 pm
content: Quote from: treez on July 27, 2019, 12:06:16 pmhttps://en.wikipedia.org/wiki/Rent-seeking

author: soldar
author_rank: Super Contributor
timestamp: July 28, 2019, 07:57:45 am
content: Quote from: treez on July 27, 2019, 12:06:16 pmWe don't know the details and everything is in the details. Government money is allocated because those doing the assignment believe it meets laws, regulations and policies. You could go into politics and make a career of your ideas.Quote from: treez on July 27, 2019, 12:06:16 pmWhy? Only Chinese? How about Australian or Polish or German? And should they also be obligated to buy British tooling and equipment?The company is getting some benefits because it is doing something the Government wants to promote. Now you set a condition that they cannot also be importers. OK, let's break up the company in two. One half does the subsidized work and the other half does the importing. Now what?Or, on being told they cannot get the subsidies, the company decides it is not worth the trouble of getting around the limitation and just decline the contract. Now what? The Government would have to raise the subsidy to achieve the same objective costing even more public money.I am not saying all Government economic programs are always right but really, this question is so simplistic it is impossible to answer. The answer is, generally, that things are much more complex than they appear at first sight.Quote

author: German_EE
author_rank: Super Contributor
timestamp: July 28, 2019, 08:20:15 am
content: Well, here in Germany you can start with Blaupunk which used to be a respected company and now they just practice 'badge engineering'.

author: 2N3055
author_rank: Super Contributor
timestamp: July 28, 2019, 08:25:53 am
content: Why is there so much isolationist political propaganda on an engineering forum?It is getting tiresome..

author: soldar
author_rank: Super Contributor
timestamp: July 28, 2019, 09:07:07 am
content: Quote from: 2N3055 on July 28, 2019, 08:25:53 amWhat do you expect? It's thetreezshow!

author: Zero999
author_rank: Super Contributor
timestamp: July 28, 2019, 09:24:16 am
content: I have noticed that lots of UK brands with used to be well respected now simply stick their label on cheap Chinese junk. In many consumer products, brand and price are no longer indicators of quality.

author: Mr.B
author_rank: Unknown
timestamp: July 28, 2019, 09:35:47 am
content: Quote from: soldar on July 28, 2019, 09:07:07 amSorry, I had to correct that for you.

author: jancumps
author_rank: Unknown
timestamp: July 28, 2019, 10:07:42 am
content: Quote from: Zero999 on July 28, 2019, 09:24:16 amI thought that Blaupunkt name and other brands were bought by companies specialised in monetising them.Other companies can then license the name on a case or product line base.So Blaupunkt, Lenco and those well-known UK companies aren’t rebadging. They are gonski and their name may have been the only thing worth some money.I believe Dave mentioned he wanted to do the same with the Tricky Dick brand.

author: ocset
author_rank: Super Contributor
timestamp: July 28, 2019, 10:59:41 am
content: QuoteThanks but this is irrelevant.The question is as follows........ie should companies who get payed for "pretending" to be electronics designer/manufacturers, get payed for "electronics engineering design projects" by the government, when their main aim is simply to bring finished goods in from China?....In other words, should companies who try and emulate "electronics designer/manufacturer companies", be subsidized to do electronics projects, when all they are doing is using the "designer/manufacturer" status, to bring in finished electronics goods from China?....ie they are actually deliberately stagnating their work in electronics design/manufacture....but are being subsidized to do it by the government.This is not about whether importing finished goods from China is right or wrong.QuoteIf that happened, then those two halves of the company would be in direct competition with each other......Thankyou, you are actually helping me to make my point with that statement.I am very grateful for all the above answers from all contributors.......the question i am asking is not at all straightforward, and i am grateful for the time spent looking into it.

author: coppice
author_rank: Super Contributor
timestamp: July 28, 2019, 11:08:46 am
content: Quote from: jancumps on July 28, 2019, 10:07:42 amIn most cases the old respected brand names were bought up for scrap value after bankruptcy, mostly by Asian or Turkish businesses. However, some companies are still in business making stuff themselves, but also licence out the use of their name for product types they don't make or sell themselves. I find the latter strategy odd. I doubt they can get a lot of revenue that way, but crap legally sold with your name and logo on the front can certainly ruin your reputation.

author: soldar
author_rank: Super Contributor
timestamp: July 28, 2019, 12:36:23 pm
content: Quote from: treez on July 28, 2019, 10:59:41 amI assume when you write "payed" you mean "paid" because otherwise I have no idea what you mean.And "pretending"? How are they "pretending"? Please define "pretending" in a clear and unambiguous manner that would allow the allocation of government subsidies. (Hint: you can't because the minute you do it they have found a workaround.)Quote from: treez on July 28, 2019, 10:59:41 amYou really do not understand any of this. If the two departments are in competition after the division then they were in competition before the division. The legal structure has nothing to do with it. If they are producing the same goods and/or services and going after the same customers in such way that a sale by one is one less sale for the other then they are competing, whether in the same legal structure or in separate companies. If they are producing non-competing goods or services, which may even be complementary, then they are not competing and the structure is irrelevant.So company ABC has two departments, B and C, B is mainly product design and development and C is mainly marketing, sales. Department B designs for in house and for outsiders. Department C sell their own products as well as stuff bought from others. They are not in competition, they are complementary.So you don't like that and say your company cannot do all that! OK, company ABC now changes its name to Holding company A and spins off company B which designs and develops products and company C which markets, distributes, sells, etc. Both B and C are wholly owned by A.Now what? Can company B get the subsidies? Are they still "pretending"? All the answers in the next episode of S.O.A.P.

author: soldar
author_rank: Super Contributor
timestamp: July 28, 2019, 12:51:10 pm
content: A fine example of the law of unintended consequences is the "chicken tax war".QuoteTell me how you define a "light truck" and I'll tell you how to get around it.

author: ocset
author_rank: Super Contributor
timestamp: July 28, 2019, 01:08:34 pm
content: OK thank you for clarifying Soldar, i see that you know what i mean, just you realise (as do i) the difficulty of finding some way of legislating against it.Thinking about it...should "engineering development project money" ever be given by a government to a company (in its country) that has ever imported finished goods from China?

author: VK3DRB
author_rank: Super Contributor
timestamp: July 28, 2019, 01:37:30 pm
content: Quote from: German_EE on July 28, 2019, 08:20:15 amBlaupunkt was never a respected company here in Australia except by dodgy salesmen and ignorant consumers. Blaupunkt picture tube colour TVs were overpriced, low quality German products sold under the false fascade of "German quality". Blaupunkt cut costs by using underrated components in many parts of their power supplies and HT deflection circuits. It wasn't one Blaupunkt colour TV model - it was ALL of them. They were particularly unreliable in Australia where the climate is hotter than in Europe over longer periods in the summer. In fact there was an entire book written for TV technicians on Blaupunkt symptoms and fixes. Every TV technician in the 70's and 80's knew they were crap, but the so-called "engineers" at Blaupunkt in Germany had provided our technicians a nice income stream.Blaupunkt colour TV's were potentially lethal. They should never have been sold here because they did not conform to Australian safety standards at the time. We were told by a lecturer at RMIT that a TV technician in Brisbane was called out to fix a bad picture on a Blaupunkt TV. He went on the roof to check out the antenna and wasELECTROCUTED AND DIEDas a result of a shorted capacitor between the live chassis and the RF circuitry inside the TV. The Australian government was partly to blame for turning a blind eye to non-compliant live chassis TV sets being imported here.Japanese TV's like NEC, Sony and National Panasonic were far superior in electronics design, component quality and price, even though most of them also were live chassis TVs.

author: jancumps
author_rank: Unknown
timestamp: July 28, 2019, 01:43:38 pm
content: Weren't TVs built with live chassis for many many years, around the world?

author: VK3DRB
author_rank: Super Contributor
timestamp: July 28, 2019, 02:09:44 pm
content: Quote from: jancumps on July 28, 2019, 01:43:38 pmNot all. The Australian government let them in even though they knew they were non-compliant. I do not know about other jurisdictions. A TV was required to have its chassis isolated galvanically by an isolation transformer inside. Most of the Australian made TV's did for sure. I know the National TV's made in Sydney in the early 1980's has one inside. But none of the European sets. It was all about selling TV's cheaper and lowering the weight of the TV for export. Some manufacturers also used auto transformers that did not isolate (Thorn 4kA chassis was one, if I recall correctly).It reminded me of the Ford Pinto fiasco, where safety took a back seat to profits. I am sure a few electronics enthusiasts over the years would have taken the back cover off the TV and got an electric shock from one of these live chassis TV's, without knowing he should plug in an external isolation transformer.

author: soldar
author_rank: Super Contributor
timestamp: July 28, 2019, 02:22:57 pm
content: Most radio and TV sets were designed to not need a transformer if possible because that made them cheaper. Pretty much all radio and TV sets I remember from my younger years had live chassis.My mother had a tiny "ladies" radio by her bed and the case and knobs were bakelite but if you touched the knobs sometimes you would touch the set screw that held it and then you would get a nice shock.That reminds me that in the early 60s, some American TV manufacturer, possibly Emerson, was advertising their TV sets were made really well, the traditional way, with cable harnesses and each wire lovingly connected one by one, and not like those cheap Japanese sets which used printed circuit boards.I remember the print ad very vividly and I remember still having it some years later when pretty much all American TV manufacturers were history and the Japanese were booming. It might have been Emerson or Zenith. I wish I could find the ad.Ha! Found it!http://blog.modernmechanix.com/zenith-handcrafted-tvs/

author: SiliconWizard
author_rank: Super Contributor
timestamp: July 28, 2019, 02:49:27 pm
content: Quote from: treez on July 28, 2019, 01:08:34 pmWell as I said above, if this money is supposed to help developing projects that are actually not developed by the company, the answer would be no obviously. That's just fraud. (But again many governments are desperate and would do anything stupid just to think they have managed to make things better for a country's economy, even when they actually destroy it in the end, so they just close their eyes and put figures in some Excel sheets...)But you're phrasing it ambiguously because of the last part: "that has ever imported finished goods from China?". Don't you think it's way too general and restrictive? That should clearly be directly related to the given project(s) which the company gets grants for. Thing is, as I said, it's very easy for a company to masquerade things so that nobody would ever notice, except engineers that are "working" on the project itself... and since I guess most of them don't want to lose their job, they just shut up and complain to their friends and not to any authority.Meanwhile, industrial activity has been severely declining in almost all european countries, except maybe Germany... and no, they are not doing better than the others because they import a lot of chinese products...Anyway, all I could suggest for you treez, is that you start your own company based in UK, and ask all your colleagues that suffer from the current state of things to join you.Just expect it's not going to be a picnic.

author: coppice
author_rank: Super Contributor
timestamp: July 28, 2019, 04:25:33 pm
content: Quote from: jancumps on July 28, 2019, 01:43:38 pmMost TVs moved to a live chassis design in the 1950s, and stayed like that until they moved to switched mode supplies. If you've ever tried to pick up a TV with a mains transformer you would remember it. Those things were really heavy. You might consider that they used a switched mode supply as semiconductors were first introduced into TVs, since the line output transformer based supplies they used were basically flyback SMPSes. However, that form of SMPS provided no isolation.

author: tooki
author_rank: Super Contributor
timestamp: July 28, 2019, 04:53:03 pm
content: Quote from: German_EE on July 28, 2019, 08:20:15 amNot exactly. Blaupunkt went out of business, and then some foreign company bought the trademark and slaps it on all manner of crap. It's the same with Telefunken, RCA, Polaroid, Philco, and countless other failed brands that were once famous.A related process is when a healthy company decides to exit the consumer products business, and licenses their name to someone else to use. This is/was the case with, for example, GE, Honeywell, Westinghouse, and AT&T, all of whom stopped making consumer products.Then there are companies which never made consumer products to begin with, but license their name, like Caterpillar and Ryobi.And finally, there are companies which do make consumer products for some markets, but in other markets license their brand, for example Philips, which actually makes TVs for Europe, but licenses its brand to Funai for TVs in USA, and Sharp, which licenses its brand to Hisense for USA and to Skytec UMC for Europe (though Sharp later bought a majority stake in the latter company).Quote from: coppice on July 28, 2019, 11:08:46 amI couldn't agree more!

author: Nominal Animal
author_rank: Super Contributor
timestamp: July 28, 2019, 07:09:51 pm
content: If one were to slightly adjust the topic, to"companies that pretend to design and innovate, but instead simply buy existing solutions", we could extend this from electronics engineering to just about all fields of commerce.In the simplest of terms, it is a matter ofbranding. A good brand allows one to double the price, just because of the brand.In Finland, government grants, subsidies and reduced-rate loans for innovations (byBusiness Finland, formerly Tekes) amount to something between three and five hundred million per year. Most of it goes to established companies, even huge companies like Nokia Oyj before its aquisition by Microsoft. In other words, to establishedbrands. These large companies can afford, and do, employ people whose only job is to write grant applications. No small-to-medium company can compete, unless they already have venture capital or business angels with experience in such. So, in practice, these subsidies benefit only investors, reducing their risks, without significantly affecting whether new technologies or products become available on the market or not.Although branding is often perceived similarly to certification by the customers, for publicly traded companies it is just another rent-seeking approach. (Remember, if the executives running a publicly traded company does not extract the most value, their shareholders can and often do change them to ones who will. This often occurs during acquisitions and mergers, where a good brand can be worth more (in exploitable future sales) than the entire organization otherwise.)

author: CatalinaWOW
author_rank: Super Contributor
timestamp: July 28, 2019, 08:23:44 pm
content: Quote from: tooki on July 28, 2019, 04:53:03 pmThere are a million variations on this theme. Fisher was a respected audio brand in this country. Then decided to go downmarket and imported less satisfactory goods. And lost their original market and weren't price competitive in the low quality market. Then went bankrupt and the name has been licensed.The RCA path to bankruptcy was complicated, but involved some of the outsourcing moves described here.The bottom line is that at every performance point the business follows price. And right now Asian countries enjoy a huge price advantage for several reasons. That cannot remain true in the long term, but certainly long enough to ruin existing companies and the careers of the employees in competing countries.It will be interesting to see how this plays out, though I doubt I will live long enough to see it. The pattern to date has been for production to move to a new low cost country as soon as wealth starts raising prices in existing producing countries. There aren't a lot of places left to move to, so something different is going to have to happen. It may move one or two more times (India?, Africa) but then the old plan is over.

author: jancumps
author_rank: Unknown
timestamp: July 28, 2019, 08:32:46 pm
content: Maybe it's the natural economical path for settled technologies? Since the start of border crossing commerce?Successful innovation offers the chance to get a prime margin for a while. When that effect works out, harsh competition takes over.

author: Kjelt
author_rank: Super Contributor
timestamp: July 28, 2019, 09:59:23 pm
content: Quote from: treez on July 28, 2019, 10:59:41 amIn theory the only thing that company has to do to become an electronics designer is to tell the chinese manufacturer to replace the HungLo brand capacitor with a Rubycon capacitor and they are done.Perhaps even putting your brand name on the product or box is enough.I know it turns my stomach around also but thats how silly it is.But there are larger tax payer money scams out there, like IT projects that eat billions of € and after years are cancelled because the requirements are just wacky and they never finish the end product.