Executive Briefings

Vizio Finds Too Much Static in Holding Suppliers to Labor, Environmental Standards

Vizio Inc. puts more trust into third-party contractors than many television companies. Rather than relying on its own factories, the Irvine firm has outside manufacturers do the handiwork, allowing Vizio to lower costs for itself and consumers.

But Vizio, which recently agreed to sell itself to Chinese mega-firm LeEco for $2bn in cash, doesn't require vendors to comply with a formal code of conduct - a common industry practice defining a company's labor and environmental standards. 

William Wang, Vizio’s chairman and chief executive, said there’s no need since it doesn’t run factories and works with the “best manufacturers in the world.” Prominent in the arrangement are discussions about maintaining high quality standards, which are “the most important thing” for the company, Wang said.

Still, the void concerns analysts who follow factory conditions because the nation's second best-selling TV brand’s relationships with major suppliers such as Foxconn, AmTRAN Technology and TPV Technology are out of step with its rivals for U.S. consumers.

Samsung Electronics, LG and Sony are members of the Electronic Industry Citizenship Coalition, which subjects the technology giants’ factories and supply chains to third-party audits. Suppliers such as Foxconn and Innolux say they follow EICC standards, although LeEco and Vizio aren’t participants.

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But Vizio, which recently agreed to sell itself to Chinese mega-firm LeEco for $2bn in cash, doesn't require vendors to comply with a formal code of conduct - a common industry practice defining a company's labor and environmental standards. 

William Wang, Vizio’s chairman and chief executive, said there’s no need since it doesn’t run factories and works with the “best manufacturers in the world.” Prominent in the arrangement are discussions about maintaining high quality standards, which are “the most important thing” for the company, Wang said.

Still, the void concerns analysts who follow factory conditions because the nation's second best-selling TV brand’s relationships with major suppliers such as Foxconn, AmTRAN Technology and TPV Technology are out of step with its rivals for U.S. consumers.

Samsung Electronics, LG and Sony are members of the Electronic Industry Citizenship Coalition, which subjects the technology giants’ factories and supply chains to third-party audits. Suppliers such as Foxconn and Innolux say they follow EICC standards, although LeEco and Vizio aren’t participants.

Read Full Article