Am I Next? BAK USA quitting business due to U.S. tariffs on China.

Buffalo, New York-based electronics manufacturer of computers and components, J.P. Bak USA, has announced that it is laying off all of its 77 employees and discontinuing operations. The decision was driven in part by new tariffs on imported electronic components from China which affected the profit margin and competitiveness of their rugged tablets and 2-in-1 laptop products.

Another example of government policy affecting small business that lacks the capital and customer base to sustain itself during trade wars that disadvantage the citizens of the country that imposes them.

In a statement, Chairman and CEO J.P. Bak said:

“It is with great sadness that I announce today that Bak USA will close its doors. My family started this business nearly four years ago with a bold vision: to empower American students and workers by producing computers in the U.S. Through the innovation and hard work of our talented team, we achieved more than we dreamed.

While we are beyond proud of Bak USA’s many successes, the business did not reach the point of profitability necessary to sustain itself. The additional, unanticipated expenses associated with the tariffs imposed by the White House were a deciding factor in our ultimate decision to close."

Apparently, there was a glimmer of hope until the end…

On October 11, 2018, Chairman and CEO J.P. Bak wrote:

“A few weeks ago, my family and I reached an agreement in principle to buy out Bak USA’s shareholders to regain full control of the company’s operations. There were many reasons for this, but the most important is this: we are deeply committed to this company and to having a positive social impact on customers and the community. To that end, we have hired and upskilled well over 100 people, nearly all of whom were new to tech and manufacturing. We’ve developed an innovative human-centric production process. And our computers are empowering more than 30,000 students across the U.S. this school year alone.”

“We’ve done all of this by innovating our way through a landscape littered with challenges and institutional bias. Despite our achievements, we remain vulnerable to unpredictable external forces—most especially tariffs on Chinese components, which will have a significant financial impact on our young company. And while we are still financially sound, we do not have the runway to absorb these blows as a larger company might.”

“Due to these pressures, Bak USA conducted a reduction in force today. Reducing our headcount was a necessary step to ensuring that the business remains sustainable and has a clear path to profitability. By taking this action, we are working to secure the futures of the employees who remain and reset for future success. The decision to reduce the headcount in each department was made carefully based on the skills that the company needs most; right now, and in preparation for the future.”

“In the coming weeks, we hope to finalize the management buyout of Bak USA. We look forward to sharing more at that time about our new outlook and vision for the next chapter in Bak USA’s company story.”

It can happen to anyone, anytime, anywhere ... are you wondering, Am I Next?