6 ms·

Microsoft Closes US Surface Factory, Moves Production to China

138 points by duykhoa12t 8y ago

rayiner 8y ago
> Microsoft’s decision to shift Surface Hub manufacturing to China highlights the difficulty in bringing manufacturing jobs back to the United States. It’s not just a question of opening a factory and hiring employees. There are supply line considerations, source costs, and the simple fact that American companies now produce many more products with far fewer employees than they used to require in the 1970s, thanks to automation and improved productivity. Like with climate change, it's already too late.
- jjoonathan 8y ago
  Yep. Also, > American companies now produce many more products with far fewer employees PSA: You may have heard that American manufacturing is stronger than ever, it has just become automated. This story is largely result of funny accounting. https://qz.com/1269172/the-epic-mistake-about-manufacturing-thats-cost-americans-millions-of-jobs/ https://qz.com/1269172/the-epic-mistake-about-manufacturing-...
  - StillBored 8y ago
    Which is apparent to anyone who doesn't have their heads stuck in some spreadsheets. Huge American manufacturing sectors (textiles, electronics, home appliances, etc) which were made in this country 30-40 years ago are no longer made here, or are made here in significantly reduced capacity. So, its possible to talk about how efficient American manufacturing has become, but the average consumer doesn't see that as they walk the isles at Walmart. What they see is that its really hard to find anything actually made in the US. Those of us old enough to remember, _CAN_ remember a time when the clothing at the store said "made in America", or shed a little tear as we remove the 25 year old washer that has a made in america sticker and replace it with one that says made in Mexico or similar. So, we may be making more planes and john deere tractors, but we definitely have had huge swaths of our consumer goods simply wiped out by cheap labor countries where hiring a half dozen people for 10 years to do final inspections on clothing costs less than putting a robot in a factory in the US. The problem isn't that factory automation has been on a steady trend of reducing labor since Henry Ford. The problem is that now that those factories are located in cheap labor countries, they are still being slowly automated. So eventually when they reach 100% and the labor costs are strictly the cost of people programming and repairing the machines (see semiconductor fabs) they aren't magically going to move back to the US, rather they will stay in whatever part of the world managed to hold onto them during the final phases and still has the critical mass of supply chain.
    - greglindahl 8y ago
      Almost all of the high-value parts of an iPhone are made in the US. Yet there is a lot of hand-wringing about the low-value, labor-intensive work done on iPhones in China.
      - modeless 8y ago
        Which parts are you talking about?
      - ahartmetz 8y ago
        Which ones? Screen, flash memory, CPU, DRAM, battery come to mind. All of these product types are also manufactured in the US, but not the majority of the output.
        pfranz 8y ago
        I think they're referring to a graph similar to this I've seen over the years (bottom of the page) https://www.brookings.edu/blog/the-avenue/2014/05/22/china-a-manufactured-chimera-part-two/ https://www.brookings.edu/blog/the-avenue/2014/05/22/china-a... The ones I've seen never show the US as the biggest slice, but China is always a sliver and the chart is usually dominated by Germany, South Korea, and Japan.
        greglindahl 8y ago
        Exactly. And that analysis is of components, so it leaves out the value of ecosystem, software, and Apple’s cpu and SoC design groups, which is bigger than all of the components combined.
      - azurezyq 8y ago
        Screen&flash- South Korea, CPU - TSMC(Taiwan), frames - China. Which high value part are you talking about is made in us?
        winthrowe 8y ago
  - sct202 8y ago
    It's not really funny accounting when dollars is a relatively normal unit of measure. It's that if you choose to measure in dollars output is high, but if you were to measure in terms of pounds or cubic volume it's dropped.
    - jjoonathan 8y ago
      No, that's not at all the objection in the link. The "strong USA manufacturing" narrative took Intel's profits, multiplied them up by Moore's law, and used the result to hide the fact that everything else has imploded.
- Kurtz79 8y ago
  https://money.cnn.com/2018/01/05/investing/jobs-report-construction-manufacturing/index.html https://money.cnn.com/2018/01/05/investing/jobs-report-const... https://www.industryweek.com/leadership/america-s-new-factory-building-frenzy https://www.industryweek.com/leadership/america-s-new-factor... https://www.bloomberg.com/news/articles/2018-01-03/manufacturing-in-u-s-accelerates-to-cap-best-year-since-2004 https://www.bloomberg.com/news/articles/2018-01-03/manufactu... https://www.businessinsider.es/jobs-report-july-manufacturing-job-growth-highest-since-1995-2018-8?r=US&IR=T https://www.businessinsider.es/jobs-report-july-manufacturin... (Note: I'm not American but as far as I can tell these links should not come from overly biased sources)
SeaSeaRider 8y ago
There’s so much political bias in tbe posted news story, it makes it difficult to ascertain which are actual facts.
- myrandomcomment 8y ago
  What politically bias? Given that your account is 6 minutes old are you sure you do not have a ulterior motive for your comment?
  - simula67 8y ago
    From HN guidelines [1]: > Please don't impute astroturfing or shillage. That degrades discussion and is usually mistaken. If you're worried about it, email us and we'll look at the data. [1] https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
kylec 8y ago
This article is dated July 20, 2017
- greglindahl 8y ago
  ... and the title is wrong, it's about Surface Hub and not Surface (tablets and laptop)
  - maklu 8y ago
    The date is correct. This is an older article.
luma 8y ago
It isn't mentioned in the article, but I think it would be reasonable to suggest that a 25% tariff on nearly every component that goes into these devices might have impacted the decision. The alternative is to manufacture the device outside of the US and then importing the completed device with no tariff applied. Trump's economic policies are doing the exact thing everyone suggested they would, forcing modern manufacturing in the US to move elsewhere or face a 25% increase in component cost across the board.
- mmrezaie 8y ago
  It is so sadly funny that the strongest economy in the world can be manipulated so deeply this fast and nothing happens. This makes me want to read more about the Mongols, Romans, and Persians history. This must be a great time to do analytical research on how to measure manipulation of the mainstream opinions about well anything. I like to see some good simulators on the matter. Maybe gaming industry can help!
  - tunap 8y ago
    A fairly modern take on mass manipulation, circa 1964: The Image: A Guide To Psuedo Events In America https://www.goodreads.com/book/show/159979.The_Image https://www.goodreads.com/book/show/159979.The_Image
  - eksemplar 8y ago
    There is a lot of historical data on it already. Also in markets much more similar to modern markets, but it’s important to keep in mind that things are different depending on the period. Today the most valuable parts of a country isn’t raw materials or factories, but know-how, and know-how is a lot more mobile than any other resource. Romans faced a different threat, in that their biggest resource was the materials and the factories, and because of that, they didn’t want one region to have access to all of it. So they made their weapons in a different place than their food source. I don’t think protectionism or nationalism has ever really worked though. You mention the Roman Empire, but it thrived the most when it was the most inclusive, tolerating every region and culture as long as they all paid their taxes on time and accepted everyone else. One of the key reasons the Roman Empire originally was so tough on Christianity and Judaism was because the monotheisms didn’t accept others. I think it’ll be alright though, America has been through worse than Trump and the alt-right.
fgheorghe 8y ago
People still buy microsoft surface?
nailer 8y ago
The documentary The Thirteenth mentions Microsoft (among many other companies) US uses prison labour - which allows the company to pay workers a pittance which is viewed as being a type of exploitation. After this was exposed, a few similar companies (Victoria's Secret) stopped doing this. Has Microsoft?
- nailer 8y ago
  Reference: https://www.gamespot.com/forums/offtopic-discussion-314159273/microsoft-and-nintendo-exploit-us-prison-labor-31964583/ https://www.gamespot.com/forums/offtopic-discussion-31415927...

138 points by duykhoa12t 8y ago

> Microsoft’s decision to shift Surface Hub manufacturing to China highlights the difficulty in bringing manufacturing jobs back to the United States. It’s not just a question of opening a factory and hiring employees. There are supply line considerations, source costs, and the simple fact that American companies now produce many more products with far fewer employees than they used to require in the 1970s, thanks to automation and improved productivity. Like with climate change, it's already too late.

jjoonathan 8y ago
Yep. Also, > American companies now produce many more products with far fewer employees PSA: You may have heard that American manufacturing is stronger than ever, it has just become automated. This story is largely result of funny accounting. https://qz.com/1269172/the-epic-mistake-about-manufacturing-thats-cost-americans-millions-of-jobs/ https://qz.com/1269172/the-epic-mistake-about-manufacturing-...
- StillBored 8y ago
  Which is apparent to anyone who doesn't have their heads stuck in some spreadsheets. Huge American manufacturing sectors (textiles, electronics, home appliances, etc) which were made in this country 30-40 years ago are no longer made here, or are made here in significantly reduced capacity. So, its possible to talk about how efficient American manufacturing has become, but the average consumer doesn't see that as they walk the isles at Walmart. What they see is that its really hard to find anything actually made in the US. Those of us old enough to remember, _CAN_ remember a time when the clothing at the store said "made in America", or shed a little tear as we remove the 25 year old washer that has a made in america sticker and replace it with one that says made in Mexico or similar. So, we may be making more planes and john deere tractors, but we definitely have had huge swaths of our consumer goods simply wiped out by cheap labor countries where hiring a half dozen people for 10 years to do final inspections on clothing costs less than putting a robot in a factory in the US. The problem isn't that factory automation has been on a steady trend of reducing labor since Henry Ford. The problem is that now that those factories are located in cheap labor countries, they are still being slowly automated. So eventually when they reach 100% and the labor costs are strictly the cost of people programming and repairing the machines (see semiconductor fabs) they aren't magically going to move back to the US, rather they will stay in whatever part of the world managed to hold onto them during the final phases and still has the critical mass of supply chain.
  - greglindahl 8y ago
    Almost all of the high-value parts of an iPhone are made in the US. Yet there is a lot of hand-wringing about the low-value, labor-intensive work done on iPhones in China.
    - modeless 8y ago
      Which parts are you talking about?
    - ahartmetz 8y ago
      Which ones? Screen, flash memory, CPU, DRAM, battery come to mind. All of these product types are also manufactured in the US, but not the majority of the output.
      - pfranz 8y ago
        I think they're referring to a graph similar to this I've seen over the years (bottom of the page) https://www.brookings.edu/blog/the-avenue/2014/05/22/china-a-manufactured-chimera-part-two/ https://www.brookings.edu/blog/the-avenue/2014/05/22/china-a... The ones I've seen never show the US as the biggest slice, but China is always a sliver and the chart is usually dominated by Germany, South Korea, and Japan.
        greglindahl 8y ago
        Exactly. And that analysis is of components, so it leaves out the value of ecosystem, software, and Apple’s cpu and SoC design groups, which is bigger than all of the components combined.
    - azurezyq 8y ago
      Screen&flash- South Korea, CPU - TSMC(Taiwan), frames - China. Which high value part are you talking about is made in us?
      - winthrowe 8y ago
- sct202 8y ago
  It's not really funny accounting when dollars is a relatively normal unit of measure. It's that if you choose to measure in dollars output is high, but if you were to measure in terms of pounds or cubic volume it's dropped.
  - jjoonathan 8y ago
    No, that's not at all the objection in the link. The "strong USA manufacturing" narrative took Intel's profits, multiplied them up by Moore's law, and used the result to hide the fact that everything else has imploded.
Kurtz79 8y ago
https://money.cnn.com/2018/01/05/investing/jobs-report-construction-manufacturing/index.html https://money.cnn.com/2018/01/05/investing/jobs-report-const... https://www.industryweek.com/leadership/america-s-new-factory-building-frenzy https://www.industryweek.com/leadership/america-s-new-factor... https://www.bloomberg.com/news/articles/2018-01-03/manufacturing-in-u-s-accelerates-to-cap-best-year-since-2004 https://www.bloomberg.com/news/articles/2018-01-03/manufactu... https://www.businessinsider.es/jobs-report-july-manufacturing-job-growth-highest-since-1995-2018-8?r=US&IR=T https://www.businessinsider.es/jobs-report-july-manufacturin... (Note: I'm not American but as far as I can tell these links should not come from overly biased sources)

SeaSeaRider 8y ago

There’s so much political bias in tbe posted news story, it makes it difficult to ascertain which are actual facts.

myrandomcomment 8y ago
What politically bias? Given that your account is 6 minutes old are you sure you do not have a ulterior motive for your comment?
- simula67 8y ago
  From HN guidelines [1]: > Please don't impute astroturfing or shillage. That degrades discussion and is usually mistaken. If you're worried about it, email us and we'll look at the data. [1] https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

kylec 8y ago

This article is dated July 20, 2017

greglindahl 8y ago
... and the title is wrong, it's about Surface Hub and not Surface (tablets and laptop)
- maklu 8y ago
  The date is correct. This is an older article.

luma 8y ago

It isn't mentioned in the article, but I think it would be reasonable to suggest that a 25% tariff on nearly every component that goes into these devices might have impacted the decision. The alternative is to manufacture the device outside of the US and then importing the completed device with no tariff applied. Trump's economic policies are doing the exact thing everyone suggested they would, forcing modern manufacturing in the US to move elsewhere or face a 25% increase in component cost across the board.

mmrezaie 8y ago
It is so sadly funny that the strongest economy in the world can be manipulated so deeply this fast and nothing happens. This makes me want to read more about the Mongols, Romans, and Persians history. This must be a great time to do analytical research on how to measure manipulation of the mainstream opinions about well anything. I like to see some good simulators on the matter. Maybe gaming industry can help!
- tunap 8y ago
  A fairly modern take on mass manipulation, circa 1964: The Image: A Guide To Psuedo Events In America https://www.goodreads.com/book/show/159979.The_Image https://www.goodreads.com/book/show/159979.The_Image
- eksemplar 8y ago
  There is a lot of historical data on it already. Also in markets much more similar to modern markets, but it’s important to keep in mind that things are different depending on the period. Today the most valuable parts of a country isn’t raw materials or factories, but know-how, and know-how is a lot more mobile than any other resource. Romans faced a different threat, in that their biggest resource was the materials and the factories, and because of that, they didn’t want one region to have access to all of it. So they made their weapons in a different place than their food source. I don’t think protectionism or nationalism has ever really worked though. You mention the Roman Empire, but it thrived the most when it was the most inclusive, tolerating every region and culture as long as they all paid their taxes on time and accepted everyone else. One of the key reasons the Roman Empire originally was so tough on Christianity and Judaism was because the monotheisms didn’t accept others. I think it’ll be alright though, America has been through worse than Trump and the alt-right.

fgheorghe 8y ago

People still buy microsoft surface?

nailer 8y ago

The documentary The Thirteenth mentions Microsoft (among many other companies) US uses prison labour - which allows the company to pay workers a pittance which is viewed as being a type of exploitation. After this was exposed, a few similar companies (Victoria's Secret) stopped doing this. Has Microsoft?

nailer 8y ago
Reference: https://www.gamespot.com/forums/offtopic-discussion-314159273/microsoft-and-nintendo-exploit-us-prison-labor-31964583/ https://www.gamespot.com/forums/offtopic-discussion-31415927...