Dispatches From Taiwan: Radio Waste

I just remembered an aspect of yesterday’s meeting with E-Lead Electric that I forgot to mention in last night’s post. One of the company’s key business segments, as I told you before, involves in-vehicle DVD players and their associated front- and back-seat displays. For vehicles that aren’t built in their destination country, E-Lead and its partner (the geography-specific subsidiary of whatever automobile company it’s working with at the time) need to retrofit the vehicle at the port of entry. Keeping the vehicle bill-of-materials price as low as possible is key to minimizing import tariffs.

However, E-Lead is not able to obtain the vehicles radio-less; the only way the company can ensure that it has access to the necessary wiring harnesses is to order the vehicles with the cheapest-possible radio option pre-installed. The company subsequently removes the low-end equipment, replacing it with the full-featured DVD system…and then throws the original (and brand new, mind you) radio away. No radio = no wiring harness…with cost inefficiency like this, is it any wonder that automobile manufacturers around the world are having such fiscal difficulty of late?