Rossignol is a french brand that sells winter sports equipment. Up until 2010 the company had a part of its production line based in Taiwan, but they decided to relocate that part of the production in Sallanches (Haute-Savoie) France. That was a bold move justified by the fact that the production in Taiwan was not as efficient and cheap as they expected.
As Bruno Cercley, the President of the Rossignol Group explained “We are more competitive in France and Taiwan”. He adds that “The raw material is more than 70% of the cost of our products, and as it comes to Europe, it is very expensive to transport and the Asia back to Europe.” In other terms, on paper, offshoring in countries with a low price workforce sounds like a success story but actually it may not be as rewarding as expected which was the case for Rossignol. That is why they decided to cut the expenses and turn the horror story – in 2008 the former owner Quicksilver sold its share of Rossignol to Chartreuse & Mont-Blanc due to bad results – back to a successful one.
Nevertheless, this economical decision was not a good news for everyone. There were many job cuts after the offshoring in Asia and only 40 jobs have been created thanks to the “relocation” in 2010. Indeed in five years, the Rossignol ‘s Group have seen their members divide by two, over 2300 in 2005 to 1200 today.
Furthermore, that strategic decision was also motivated by the need to improve the logistics within the production sites. “The chain of command is more agile if we control everything in place and we have the opportunity and respond in a few days to a last-minute order, which is unthinkable if we manufacture in Asia,” says the director. In addition, the main targeted market of Rossignol remains Europe, thus it is more relevant for the company to have their production sites close to its main market.
In conclusion, this story is to be continued, maybe Rossignol will come back to Asia, its Director does not close all doors to it: “The day we have a large Asian market, we rethink the issue of on-site generation”. In any case, the Rossignol Group managed to make the best of this situation which led them to win the TMA award of the best international turnaround in 2010 (Turnaround Management Association, 9000 professionals worldwide).