The most popular HDTV manufacturer in North America, in terms of units shipped, Vizio has been extolled as a great American success story in an industry dominated by Asian companies. Considering the near total decline in the U.S. consumer electronics industry, the company is a very notable 21st-century exception. So how has it succeeded at a time when former stalwart brands like RCA and Westinghouse grace second-tier products?
Vizio makes no secret as to how it can remain so competitive on price in a notably cutthroat industry: More than 90 percent of its workforce are outsourced workers. In fact, it only has 300 full-time employees despite having $3 billion in revenue. To its credit, Vizio does count customer-service employees among those 300, choosing to keep tech support in this country instead of shipping it overseas.
But does that make Vizio an American company worth emulating? According to a recent piece on the Bloomberg Businessweek Website from Rick Wartzman, executive director of the Drucker Institute at Claremont Graduate University, it sure is. After all, the company's bottom line isn't weighed down by "giant manufacturing facilities or pension benefits for an army of factory hands." That this army could contain Americans who are currently unemployed apparently doesn't factor into Wartzman's cost-benefit analysis.
Of course, Vizio's methods are similar to those of Apple's, another American company that relies on overseas contracts for producing its devices. And we all know the general trend is for many U.S. firms to ship work to other countries to reduce their costs. It's business as usual these days, but is a firm like Vizio really doing "wonders" (in Wartzman's words) as a U.S. company that hires as few American workers as possible in order to produce a cheaper TV?
No one denies that Vizio generally makes a good HDTV for the money, but should we be celebrating its management principles and outsourcing to achieve that goal at a time of rampant unemployment in this country? Let us know your thoughts in the Comments section.