TV manufacturing returns to U.S.

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Updated: February 21, 2012 8:24AM

DETROIT — A small Minnesota electronics company aims to bring TV manufacturing back to the United States, hiring 100 workers at a plant in Canton, Mich.

Element Electronics, which sells TVs made in China to big-box stores such as Wal-Mart and Target, has teamed up with a Michigan company, Lotus International, to produce low-priced flat-screen TVs that are 46 inches and larger.

The first large TVs could start rolling off an assembly line in March. The company plans to hire workers and set up a call center.

Michael O’Shaughnessy, Element’s president and owner, pledges that its Michigan-made TVs will not cost consumers any more than if the sets were produced in China.

“We are doing this to set an example,” said O’Shaughnessy, who grew up in Ohio. “This is the right thing to do.”

Sony closed its last U.S. TV plant in 2010. Vizio is American-owned but outsources its production.

Bringing back TV manufacturing is part of a growing business trend called reshoring. With soaring costs for Chinese labor and shipping, many companies are rethinking whether it still makes sense to make their products overseas.

If Element Electronics succeeds in making flat-screen televisions in Michigan, it will become the only American-owned TV manufacturer producing in the United States, something the country has lacked since Zenith Electronics became a subsidiary of LG Electronics 17 years ago.

But it’s a big if.

For decades, TV production has been migrating outside of the United States, first to Mexico and then to Asia. Like makers of other electronic products, textiles and shoes, TV manufacturers gravitated toward cheap labor, necessary to compete against growing global competition.

But O’Shaughnessy, Element’s president who spent 15 years working for home appliance maker Frigidaire, is hoping to reverse this trend. He’s betting that the United States can again be fertile ground for TV manufacturing, even against the likes of China.

“I support the global system, but there’s a better way to do it,” he said.

O’Shaughnessy launched Element in 2007, importing TVs, DVD players and other electronic products that were built by a variety of companies in Asia and sold at Circuit City. Last year, it partnered exclusively with Chinese manufacturer Tongfang Global, which makes TVs for Element in Shenyang, China.

The fledgling company, which is owned by O’Shaughnessy, nearly folded when Circuit City shut down. But after a rocky period, it found new customers, including Wal-Mart, Target and Costco, all of which sell Element’s inexpensive TVs online.

O’Shaughnessy, 44, embarked on his plan to build large TVs in the U.S. after doing some math. He said the costs for making TVs in China and then shipping them to America have been rising in recent years and are expected to increase further. But the economics only work for TVs that are 46 inches and bigger.

Element, based in Eden Prairie, Minn., plans to start limited production of flat-screen TVs in March at a 250,000-square-foot facility in Canton owned by Lotus International, which makes and tests electronic and electromechanical parts for the auto and electronics industries. The plant will start with one assembly line but has space for four more.

Since the hundreds of parts that go into a TV are all made in Asia, Element will be relying on Tongfang to deliver parts to the Canton factory. Element hopes to eventually set up its own supply network in the United States.