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Molex in Asia…really?

Friday 21 November, 2008

I found this article by Greg Burns in the Chicago Tribune  Lisle-based Molex may follow its fortunes to Far East My 1st impression is “yeah, well…duh.”  That a manufacturer of electronics sees the future in Asia should be no surprise. Many of their suppliers & direct customers are there, so they need to be there in a big way.

What is surprising is considering moving a headquarters location there.  Although being near your suppliers & customers obviously has advantages, leaving well-established legal & financial accounting environments poses some risks.  However, our litigiousness & required transparency might make other locations more desirable.  Marketing & sales are done locally for the most part, so those will be little affected.  Basing division HQ’s there is different from basing the company HQ in a different location.  The company HQ is where the company is “domiciled,” which determines a whole lot of ways it does business.  That’s a big part of the reason the US state of Delaware is the relative king of corporate HQ’s in the US.

Although I flinch when I see naturalized Brits leading international companies in the US, as many seem to do, a Brit in the leadership position does reflect a level of involvement in international arenas that many more domestically-oriented US companies seem to lack.

What concerns me is the lack of discussion of the ramifications of moving a HQ somewhere else.  An arguement could be made, as with Boeing, that only a few hundred people move, so it’s not that big of a deal.  My response is “Au contraire!”  If you look at the level of involvement of Boeing in Chicago before & after moving their HQ, the differences are palpable.  A move like this means a lot to the company & cities which lose & win the battle.  Hong Kong is an obvious choice which avoids many of the pitfalls which reside in other jurisdictions, but should still not be taken lightly.  Now that Hong Kong is a Special Economic Zone of China, whatever affects China affects Hong Kong as well, so it’s riskier than it used to be.  This seems to be another example which highlights the local media’s ignorance of what’s going on in the rest of the world & how Chicago companies react to changes in it.  Their lack of education & awareness filters down to readers & being uninformed about the rest of the world gets riskier & riskier every day.

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