Ten Years Later
It seems like only a couple years ago Callaway was releasing their very first golf ball. It’s actually been 10 years though since they decided to enter the golf ball business…man how time flies. Those 10 years have been somewhat of a nightmare for the company. In its first 5 years Callaway’s golf ball division lost an average of $20 million dollars a year. This created shareholder concern and started about them exiting the ball market as quickly as they entered. But, shutting down would not have looked to good in the mind of the analysts, so they decided to make a wise move and purchase Top-Flite. At the time Top-Flite was the 2nd largest producer of golf balls in the world. So when Callaway heard the company was selling not only its assets but its very valuable golf ball patents they jumped at the opportunity. After a small bidding war between Taylormade and themselves Callaway ended up the victor and instantly tripled their market share.
Watch out for what you ask for, you just might get it.
But like the saying goes, “Watch out for what you ask for, you just might get it”. The new purchase made them a major player in the industry but it also came with major problems. The company suddenly owned three golf ball plants and had to figure out what to do with them. It was a problem 5 years ago when they purchased Top-Flite and it still is today. Because today we heard news that they have decided to shut down one of their golf ball plants based in Gloversville, N.Y. and move it to China.
Callaway spokeswoman Michele Szynal said that because almost half of the company’s sales and more than 50 percent of its profits come from outside the United States, the move made sense “from an operations, logistics and cost point of view.”
Callaway Big Deal In China and Japan
Many might think that they are just trying to export American jobs for cheaper labor, but inactuality Callaway has a huge presence overseas. And with shipping costs rising everyday and the cost of production and materials soaring, it just makes sense for Callaway to produce their most popular Asian products in a plant based in China. And Callaway has said that some of the products that were produced in the Gloversville plant will be moved to their plant in Chicopee, Mass., where the majority of Callaway’s golf balls are produced.
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