HTC closes factory, but denies plans to sell building or assets

October 23, 2013
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Reuters is reporting that HTC has closed one of five manufacturing plants on the heels of their first quarterly loss. This also comes after a recently hired executive abruptly left, being jettisoned by Beats Audio, and re-dedicating themselves to their products and marketing initiatives.


Statements made by HTC CMO Ben Ho seem to back this news up. He tells Reuters “Like any manufacturer, we do volume planning to optimize our lines, our manufacturing and production facilities. Whether we are operating those facilities depends on market demand and our own expectations. When you have less demand you work with less facilities to optimize your costs. When you have demand, or bigger growth, you definitely have to activate all these facilities.”

That statement was in response to a reporter for Reuters visiting an HTC plant in their former home town of Taoyaun, just outside of Taipei. According to the reporter, the loading docks were shuttered, and there was a sign on the lobby door noting it was closed -- temporarily.

Reuters says sources with “direct knowledge of the situation” tell them the factory is indeed shut down, all in response to HTC’s recent woes. HTC responded to inquiries from The Verge about the factory shutdown, saying “HTC is not shutting down nor does it have plans to sell any of its factory assets. HTC has a very strong balance sheet and will provide the latest financials in our upcoming earnings call to investors and the broader community.” That earnings call is set for November 5th.

Closing a factory down doesn’t necessarily mean a production slowdown, but it’s another breadcrumb to a destination we’re unsure of for HTC. Financial losses, underwhelming sales of their flagship device, and a marketing executive who boltes four months after landing the job don’t spell confidence or success. The official statement also contradicts what reads as an admission by their CMO that they are closing the factory, so the lines of communication are also broken within HTC. We’ll be keen to pay close attention to what HTC has to say early in November.


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