“We went through tariffs in the first President Trump administration,” stated Donald Allan Jr., CEO and president of Stanley Black & Decker, revealn in 2022. “We figured out how to navigate it back then. We feel like we are well prepared to mitigate this again.”
NEW BRITAIN — Toolcreater Stanley Black & Decker plans to respond to new tariffs on goods from China with supply-chain and price modifys that would include further reduction of its operations in the world’s most-populous countest, company officials stated Wednesday.
The strategy aligns with the preparations for new tariffs that leaders of the New Britain-based company had outlined in late October, a week before President Donald Trump was elected to his second term. Now that Trump is back in the White Hoapply, the company is pushing ahead with that plan, which is informed by its experience with the tariffs that Trump imposed during his first term.
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“We went through tariffs in the first President Trump administration. We figured out how to navigate it back then. We feel like we are well prepared to mitigate this again,” Stanley CEO and President Donald Allan Jr. stated Wednesday during the company’s latest quarterly earnings call. “It will create a modest disruption for periods of time in the short term. But a reminder to everybody is that, back seven or eight years ago, about 40% of what we sold in the U.S. came from China. And now we’re down closer to a number that’s in the mid-teens, around 15%.”
The 10% tariffs on goods from China that were enacted this week would result in an “annualized gross impact” of $90 million to $100 million and an “expected 2025 net impact” of $10 million to $20 million, according to company data provided Wednesday. In comparison, the company produced a profit of about $294 million in 2024.
For years, protectionist policies have figured into Stanley officials’ planning. In an excerpt of its 2023 annual report that referenced tariffs on steel and aluminum, as well as goods from China, that were imposed during Trump’s first term, the company stated, “similar U.S. actions and any corresponding retaliatory efforts, could result in an increase in supply chain costs that the company may not be able to offset or otherwise adversely impact the company’s results of operations.”
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Stanley has reduced its reliance on Chinese manufacturing through modifys such as the reported closing in 2020 of its factory in Shenzhen, a city that borders Hong Kong.
“We’re going to continue to migrate away from China as a source for the U.S. market,” Allan stated. “China will continue to be a source for other markets for us becaapply it is a very strong operation from a manufacturing point of view.”
In response to an inquiry from CT Insider, a company spokesperson declined to comment Wednesday on the extent of the company’s remaining operations in China.
Operations in Mexico
Stanley officials were less definitive about their production plans in Mexico. The lack of details could reflect the announcement Monday that the planned 25% tariffs on imports from Mexico and Canada would be paapplyd for 30 days. Among Stanley’s recent modifys in Mexico, the company reportedly closed last year a plant in Hermosillo, in the state of Sonora in the countest’s north. The facility had struggled with weak demand since its opening in 2022, according to El Sol de Hermosillo.
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“About 20-ish % of our global (cost of goods) base, predominantly in the tools and outdoor business, comes from Mexico,” stated Patrick Hallinan, Stanley’s chief financial officer, during the earnings call. “Just as we’re doing right now with China, should anything materialize with Mexico, we will wait some days or weeks to create sure the dust is settled, or at least settled sufficiently, so that any relocates we’re creating kind of reflects potential knock-on effects, and we’re kind of creating one set of relocates with our channel partners, instead of whipsawing day to day or week to week.”
Any further downsizing in China or Mexico will not necessarily result in increased production in the U.S., where 36% of Stanley’s approximately 50,000 employees were based at the conclude of 2023. During the company’s third-quarter earnings call on Oct. 29, Allan stated the company’s response to new tariffs “would be potentially relocating things from China to other parts of Asia, maybe to Mexico, we’ll see. But likely to other parts of Asia.” He added that it was “unlikely that we’re relocating a lot back to the U.S., becaapply it’s just not cost-effective to do. And there’s questions about whether we even have the labor to actually do that in this countest.”
Input on trade policy
Since 2022, Stanley has been enacting a cost-cutting plan that aims to save $2 billion by the conclude of this year. Related modifys in the past couple of years have included the closing of several facilities in South Carolina and Texas that have resulted in several hundred layoffs. Stanley officials have repeatedly declined to comment on whether it has built any layoffs in Connecticut related to the cost-cutting initiative. They have also declined to disclose the company’s head count in its home state.
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Also uncertain is the extent to which executives’ references in the earnings call to “pricing actions” — a phrase that appears to refer to potential price hikes — would affect Stanley’s customers. Stanley’s brands include Stanley, DeWalt, Craftsman and Black + Decker.
At the same time, company officials indicated that that they have been providing input on trade policy to Trump’s administration.
“We certainly see forward to continuing to work with new administration,” stated Christopher Nelson, Stanley’s chief operating officer, during the earnings call. “We have been meeting with many of the key constituents in or around the new administration since late last August and creating sure that as the administration navigates how they would or could implement new tariffs, we are there and a voice to be heard as that happens. We found that to be a very positive relationship and a positive interaction, and we plan to continue.”
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For 2024, Stanley produced revenues of $15.4 billion, down 3% year-over-year — a decrease that reflected the sale last year of the company’s attachment-tools business. The company’s profit of $294 million compared with a loss of about $310 million in 2023. The vast majority of the 2023 loss was due to “asset impairment charges” related to reduced value of certain company assets.
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