German Forklift Maker Kion Plans U.S. Expansion to Avoid China Tariffs

January 23, 2019

Editor’s note: China tariffs creating more jobs in the USA, this time from a German company wanting to avoid import tariffs. 

Germany’s Kion Group AG plans to expand its factory in Summerville, S.C., in a move to escape a 25% tariff the U.S. levied on forklifts imported from China.

Nina Trentmann | Jan. 18, 2019 | WSJ]

About half of the 3,000 vehicles that the Frankfurt-based company sells in the U.S. each year come from China, where Kion operates two forklift manufacturing facilities, Chief Financial Officer Anke Groth said Friday in an interview with CFO Journal.

“It is worth exploring ways to expand our production in the U.S. to avoid tariffs,” Ms. Groth said. The company is searching for additional U.S.-based suppliers that could provide its factory in Summerville with parts, she added.

Foreign companies ranging from auto makers to solar panel manufacturers have sketched outplans to expand their U.S. manufacturing footprints in response to trade tensions between the U.S. and China. The U.S. levied two rounds of duties on Chinese imports last year, in July and September, which now affect roughly $250 billion worth of goods.

The U.S. tariffs cost Kion a few million euros last year, Ms. Groth said. “In 2019, this amount will be higher,” she added.

Kion reported net income of €243.8 million ($277 million) on revenue of €5.8 billion in the first nine months of 2018. The company’s North American sales accounted for roughly 20% of total revenue for the period.

Kion makes industrial trucks including Linde-branded electric forklifts; Still-branded trucks sold in Europe and South America; and Baoli, a truck brand marketed in emerging markets. Its Dematic business sells supply chain automation technology.

The company has about 3,000 employees in the U.S., of which some work for its Dematic sites in Grand Rapids and Holland, Mich.; Monterey, Calif.; and Salt Lake City.

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