GW / FW China Production

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**Big O**

Posted By Orlanth on 01/30/2007 7:01 AM
"Prime reason why GW would likely not want to produce in china, IP infringement. No matter how reputable their supply base, Its possible copies of the figs would be flowing like water within a couple of months of introduction. A plastics injection house could claim to "destroy" the tooling upon its lifecycle end, only to sell them to someone on the side who puts out shoddy copies until he gets caught."

That sounds very true, but...why hasnt it happened already? The far east has been a center for counterfeit goods since the seventies. The kernel of Hong Kongs tech industry started with 'Apple street' which had a larger production run of Apple Macs than the genuine Apple factory back in the day.

If they can reverse engineer and build microcircuits thery could certainly poduce bootleg marines, all they would need is a laser scanner, a telemetric cutter to copy the tool and the sprue they want to rip off. Yes they have all those things, the people doing the rips are not backstreet sweathouses but in many cases large and well established businesses.

The reason it hasnt happened is because as counterfeit goods are concerned there are far bigger fish than GW. You make a tool for counterfeit Mercedes parts and you are in the money.

Saying that, yes quality is very high. So much so that the late Emperor Hirohito of Japan was caught wearing a YSL tie on television. It looked very authentic by its quality. that was in the 70's, things have gone a long way since. If Chinese bootleggers sold boxsets of GW minitures on the internet I seriously doubt anyone, including GW would be able to tell if they were genuine or not.

Dunno why it hasn't been done yet to be honest.

There are tons of examples I could give you of inexpensive items counterfitted and avail for purchase in the "Fake Markets" all over Shanghai. I have seen Livestrong bracelets, $50 retail Coach coin purses, $20 videogame copies for $2.00, Fake Gundam models, and a slew of other items fitting into the same price band and global demand band.

**Jmznudd**

@pnweerar: Good post, an interesting read. The only place I disagree with you is you use Hong Kong as your example... which is not necessarily the best place to be taking your info, since HK is one of the richest cities in China and not run in the same way the rest of the mainland is run. Chinese labor is cheap, not as cheap as Indian labor, but cheap nonetheless.

@Idaho... Sure you can put a plant manager on the floor if you're smart... but we're talking GW

Actually, my only disagreement is if a company outsources to a Chinese company, they may not allow any outsiders on the floor to "manage". Everything is state-run, except for those firms that are joint-ventures or straight subsidiaries of foreign firms. That's all together different.

With that said, strictly Chinese manufacturing isn't always the best. Sometimes is quite good, but other times its crap. If GW were to outsource to the Chinese, they would be best suited investing money into a joint-venture to ensure quality control.

-Jmz

**Hellfury**

I take comfort that if GW were to ever fold (an outcome that is looking to happen more and more lately) that some nice asian counterfeits would arise and keep the market saturated for years after GW's death.

I am confident that the internet would facilitate their distribution quite well.

**AJCarrington**

Can someone confirm if GW has ever indicated their actual manufacturing costs? I thought I saw something a while back to the effect of ~3%, but can't remember if this was for simply raw materials or included casting/molding/etc. If their costs are this low, how much more could they actually save by outsourcing? I'm guessing that 1/2% won't do a whole lot to their bottom line.

Now, if they were to look into pre-painted minis (a la the Sabertooth LoTR minis), I can definitely see this being the way to go.

Regards,

AJC

**Hellfury**

IIRC the cost of manufacturing a plastic model was 3% of its current retail price.

Which would include materials, packaging and labor.

Ill have to dig around for it, but I am 99% sure it was in last years GW financials hidden amongst the gobbledy [see forum posting rules].

**Lordhat**

I DO know that GW just opened a Warehouse in China last year. I know the person who was recently in charge of the production facility here in Memphis. Right before he got promoted and moved to England he spent approx. 2 months in multiple several week stints, getting the China facility up and running. Whether or not they're manufacturing there, I dunno, but it makes sense, as everywhere G.W. has a major Warehouse, they also have a manufacturing plant.

**Breotan**

Posted By AJCarrington on 01/30/2007 1:45 PM
Now, if they were to look into pre-painted minis (a la the Sabertooth LoTR minis)...

That would be the single reason I'd ever stop buying their product.

**Hans**

I'll go against the flow on this one, and say I'd welcome the change. In the scale modelling world some of the BEST stuff in the world is coming out of China. Especially the newer kits from Trumpeter and DML/Dragon. They have progressed the quality of sprue design, mold design, plastic quality far beyond anything coming out of Europe and in many cases superior to that coming out of Japan.

When looking at quality and price, the Chinese modelling world right now is so far beyond ANYTHING that Games Workshop could even hope do to that it isn't even worth comparing the two. Don't believe me? Go pick up some of the new Gen2 figure sets by DML or their new M4A3E8 'Thunderbolt VIII' kit.

-Hans

**Orlanth**

Sorry Hans - nig O hit it on the head by pointing ouit copyright infringement. Though he did use the wrong hammer.

The problem isnt selling off old tools (molds for plastics), most plastic tools have a long production life as they are made of steel. The problem is Overruns. Overruns occur when a factory doing say two shifts actually works three, the third shift is worked by the workers and those managers in on it for their own benefit. This is the hardest pirating to detect and counter because the product is genuine, its just that the proceeds do not go to the owner. An efficient overun scam will be run by the local management, who willoften even go as far as to pay for the raw materials and energy costs so as to make the fraud undetectable on invoices.
This way GW, or any other overun victim doesn't actually make a direct loss - only an indirect loss by the drop in genuine sales in favour of the bootleg stock.

To addinsult to injury if the overuns are detected by the authorities GW would have to pay the tax on them (bootleggers dont hand in tax returns) and local officials may claim that the company is responsible as it is their stock from their factory.

I wonder if thast is what Big O's contact said about 'you will be ripped off'. To do business GW would have to approach the Chinese with sharpened minds and two eyes open, something their management is not used to doing. Best leave Chinese production just for printing Codexes, its not how GW makes money and books are a relatively poor bootleg material as paper is relatively expensive.

**Hans**

That may be true that old molds last forever, but when it comes to making NEW molds and new designs, the Chinese, Korean, Taiwan and Japanese are well beyond what anybody else in the world is doing right now. They are where the best talent is, and I challenge anybody to say otherwise when it comes to quality of plastic kits. Lots of US and European model companies are in bad shape because they've produced old molds for too long, it killed Airfix/Heller, and has done a real number on Revell as well as AMT/ERTL.

Yes, there are possible pitfalls, but I think it would go a long way for customers and shareholders if they were able to significantly reduce price while a the same time improving quality. With what DML and Tasca have been doing lately with slide-molds, you could probably replace 75% of the metal lineup in plastic and not lose a bit in detail.

The ONLY thing GW have going for them right now is fan loyalty and good intellectual property. But that can only carry so far when you're paying $10 per figure, and Asian companies can do a set of 6 or more better ones for the price of a single Terminator. And vehicles? The comparison is just painful when you've got a Hammerhead on the workbench next to even stuff from DML in the late 90's.

-Hans

**RatBoy**

Perhaps not the best place to ask this question...

But does anyone know of any rogue traders in China?
There's plenty in Hong Kong/New Territories...but I've yet to see a store that carries anything closer then 'model kits' as far as strategy games go.

**Abadabadoobaddon**

Posted By Hans on 02/07/2007 12:21 AM
Yes, there are possible pitfalls, but I think it would go a long way for customers and shareholders if they were able to significantly reduce price while a the same time improving quality.

But GW's apparent strategy is to sell less product at a higher price, so reducing production costs won't translate into lower prices for consumers. Furthermore part of this strategy is limiting supply: thus the ban on internet sales, the restriction/elimination of discounts/sales, the "direct sales exclusive" models, and the slow release schedule. If moving production to China runs an increased risk of piracy (which would increase supply and create more competition in the marketplace) then that's a more direct threat to their business strategy than higher production costs. Of course that doesn't mean their business strategy is necessarily a good one.

Maybe moving production to China would make them more competitive, but it doesn't seem like "being competitive" is GW's thing. For the longest time they were pretty much the only game in town and I think they might have gotten a little too used to leveraging their position in the market to limit competition rather than engaging in it.

**Hans**

Yeah, I totally agree with you on every point there Abadaba. You would have hoped that having other big model companies in Western Europe all going out of business would have shaken them a bit, but I guess not. It's still the whole "LoTR bubble burst" mentality, while not actually paying attention to what is really causing sales to drop. You would almost think they want to go back to being a garage business, but don't want to scare the shareholders until it's too late.

To be honest, I'm still trying to figure out if there is a connection somewhere between GW and Emhar as their molding technique is very very similar. They are the only companies that use that odd half-hex shaped sprues that I know of and they are both based in the UK. They also mold in the same grey color plastic.

-Hans