WHAT’S MORE IMPORTANT, GLOBAL COMPETIVENESS OR NATIONAL PROTECTIONISM?

Posted by Steve Kleber on Mar 06, 2008

With the state of the current housing market and pressure for globalization, it seems manufacturers universally are compelled to unite instead of compete. Mergers have become the name of the game for the home industry, and the number of players will subsequently shrink again soon. 

It wasn’t that long ago that Haier (China) was road blocked in its efforts to gobble up Maytag – who instead fell into the arms of domestic diva, Whirlpool. Now, instead of prolonged adversarial posturing and international legal conflicts, LG (South Korea) and GE (U.S.) chose instead to partner rather than fight.  

According to MarketWatch.com, LG entered into a cross-licensing agreement with GE to use one another’s patents for refrigerators and cooking appliances without paying licensing fees. Although, LG and GE have collaborated on cooking appliances since 1999, this new agreement will help the companies strengthen their competitiveness worldwide. This agreement is especially helpful to LG. Even though the company currently sells its products through all three top North American retailers – The Home Depot, Sears and Best Buy – the new venture will aid in LG expanding its digital appliance presence globally. 

Opponents of the venture, especially other big players in the industry, may argue that this merger results in price-fixing and reduced competition. Or, that this endeavor is a clear violation of antitrust laws and U.S. Department of Justice standards for industry concentration. It’s safe to say that other industry heavy hitters are questioning the logic of the Federal Trade Commission and aren’t particularly thrilled with the recent unification.  Apparently global competitiveness is more powerful than national protectionism.  

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This entry was posted by Steve Kleber on Thursday, March 6th, 2008 at 5:27 pm and is filed under Housing Market, Marketing, Public Relations. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.