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Sony Expanding TV Making in San Diego Area

January 14, 1988|CHRIS KRAUL | San Diego County Business Editor

SAN DIEGO — Sony, the Japanese consumer electronics giant, said Wednesday that it is expanding its already sizable television manufacturing operation in the San Diego-Tijuana area to accommodate the increasing shift of TV production here from Japan.

The company said it is making the shift to take advantage of lower manufacturing costs resulting from the weaker dollar and peso against the yen.

Sony Manufacturing of America, Sony's U.S. television unit, said it has leased a 111,644-square-foot warehouse on Otay Mesa, a burgeoning industrial area in southeast San Diego along the Mexican border. The warehouse will be used for storage of television parts for shipment into Sony's newly opened Tijuana assembly plant as well as for distribution and testing of Tijuana-made TV sets en route to U.S. markets.

Already Under Way

Last year, Sony opened a 300,000-square-foot plant in an industrial park in Tijuana and moved all production of 13-inch color television sets there from Japan. The plant has 800 employees.

Sony's principal U.S. television manufacturing plant is a 750,000-square-foot plant employing 1,500 people located in the Rancho Bernardo section of San Diego. Sony assembles all its 20-inch and 27-inch television sets for the American market there, Clint Michaelis, president of Sony Manufacturing, said Wednesday.

Sony also has decided to move all production of its 19-inch color television sets for the U.S. market to the Tijuana plant from Japan, Michaelis said, adding that the process is already under way.

The new warehouse on Otay Mesa, which will employ 15 to 20 workers, is located in the Gateway industrial park developed by Trammell Crow Co.

Sony ships about 1.2 million color television sets per year out of its San Diego-Tijuana operation, Michaelis said, accounting for about 6.5% of the 19 million TV sets sold in the United States each year.

Sony is not the only Japanese television manufacturer to have been attracted by Tijuana's low labor costs and proximity to the U.S. market. Matsushita and Hitachi both have sizable plants in the Baja California border city of 1.1 million.

Drawn by low rents and land costs, manufacturers are also looking more closely at Otay Mesa. This is particularly true of companies needing to match a manufacturing or assembly operation in Tijuana with a warehouse or distribution facility on the U.S. side of the border, said Mike Smith, an industrial space leasing agent with Coldwell Banker in San Diego.

Since the former farming area was opened for development in December, 1986, after sewer and water trunk lines were extended to the area, Otay Mesa has attracted Japanese consumer electronics manufacturers Sanyo E&E and Maxell in addition to Sony.

Sanyo has a 320,000-square-foot assembly plant for refrigerators and electric fans there and plans to add a 420,000-square-foot plant adjacent to the existing facility, Smith said.

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