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How U.S. Lost Out on iPhone Work
- asdkl234890 15y agoNew screens began arriving at the plant near midnight. A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day. OK, that is not flexibility and manufacturing know how. That is too much power in the in the hands of the job providers. As jobs continue to grow eventually even China will start to go short on workers and then things will start to change.
- shareme 15y agoThe article misses a broad obvious point.. The entry level workers for those factories in China are not what would fund Middle class. Its the workers who design and fabricate the factory automation equipment..ie Japan's Middle class.. The article author needs to get a clue.
- wr1472 15y agoWow! This article is a trending tweet here in the UK.
- wmblaettler 15y ago"The facility’s central kitchen cooks an average of three tons of pork and 13 tons of rice a day." The massive scale of Foxconn really hit me when I read the amount of food served is measured in TONS per day.
- binarysolo 15y agoIt's a complicated problem. Essentially, employee wages and production control (by compelling arduous hours upon workers) wins out en masse. The free market system is what it is, and this is what it leads to. Jobs will go to whoever can do them cheaper, better, faster. I don't know much about "better", but cheaper and faster is definitely an advantage to the Chinese people. To be fair though, if we honestly believe that everyone's life is of equal value, then should the work not go to those who need it most? Those who live in countries where a factory job is the height of what they can hope to achieve? It's our obligation, as those who have the opportunity, to pursue the jobs that aren't available to the world's starving people. Off the top of my head, around 500k-1M people are now involved in developing phone applications. This is a whole industry that did not exist 5 years ago. American economists would rejoice that as a nation, the US is getting involved in higher value proposition jobs at the expense of losing commoditized, low-barrier-of-entry work. Of course, the measurement of human suffering to by those who cannot or will not transition gets lost in the shuffle.
- MichaelApproved 15y agoIf you're going to post a story with a pay wall/login wall, please also post the TL;DR.
- wallflower 15y agotldr When President Obama asked Steve Jobs why iPhones can't be made in America, he replied: "Those Jobs aren't coming back." Companies no longer feel an obligation to support American's workers. Apple feels that to design one of their products with the highest quality - that it has to be manufactured in China. There is no other place in the world that can scale up (millions in weeks) while maintaining a very healthy profit margin. The fact of the matter is that the supply chain for high-end and low-end electronics does not touch America in a significant way - it is mostly in Europe and Asia. Even Corning's much touted Gorilla Glass is manufactured in new factories in Asia because that is where the action is. Even though once Apple marketed about being made in America, that is no longer the reality. In America, you cannot wake up workers for an emergency production shift at midnight. In China, that is business as usual. As the pace of innovation quickens (five iPhones in four years), American businesses must rely more on China to compete globally.
- Natsu 15y ago> In America, you cannot wake up workers for an emergency production shift at midnight. This part is not completely true. There are no workers in dorms that you can just round up, no. But a supervisor can call up a bunch of people and tell them to report in, or they can ask people to stay for another shift after their first one finishes. It is by no means impossible for people to work 18 hour shifts in America.
- caffeine5150 15y agoIt's close enough to true, though, in the context of manufacturing. Extended shifts at overtime rates are not cost effective. And there are no good alternatives. I ran a manufacturing company (granted in California, a very employee friendly state) where everyone wanted to run 4 days of 10 hour shifts, called the 'alternative work week', instead of the usual 5 - 8 hour days. There is a regulatory means for doing this without it resulting in overtime pay. The problem is, the regulations are onerous and full of potential pitfalls and the consequence of screwing it up is that an employee sues 2 years later and all those 2 hours logged over the usual 8 hour max are retroactively deemed overtime and must be paid to the employees. So even though everyone wanted to put in an extra 2 hours each day to get the fifth day off, we couldn't do it because of the risk. In other words, it's not always just about what people are willing to do.
- learc83 15y agoWhy worry about Chinese workers making iPhones, eventually robots will be making them anyway. In addition most of the value of an iPhone is in the design and marketing, which is primarily done in the U.S.
- potatolicious 15y agoMost of the perceived value of an iPhone is in the design and marketing. But surely the employment value of an iPhone is still largely in the manufacturing. How many employees at Apple do you think is directly involved in the design and marketing of it? Versus the number of Foxconn employees building it?
- _delirium 15y agoI think he meant a third thing, the monetary value. Of every $500 you pay for an iPhone, only $180 goes to China for manufacturing.
- learc83 15y agoThose jobs couldn't exist in the US. The article said Foxconn has 200,000 workers assembling iPhones. The average wage for a factory worker in China is ~$200 (according to a quick Google search). That's $40 million per month, now move those employees to the US and it's going to cost around 20 times that. Close to a billion dollars a month to employee an equivalent number of US citizens. The iPhone couldn't exist at those prices.
- ivanzhao 15y agoThe video in the article is a very good summary. http://www.nytimes.com/interactive/2012/01/20/business/the-iphone-economy.html?ref=business http://www.nytimes.com/interactive/2012/01/20/business/the-i...
- tobias3 15y agoYes they should send a link to the government so they learn what's really the problem.
- jerrya 15y agoThat is a terrific video, but the accompanying soundtrack and all the shh shh of the images sliding in, wow, horrible. Good content "ruined" by someone getting excited with the canned sound buttons.
- sinkercat 15y agoWhy doesn't Apple assemble iPhones here in the USA? It's all in the economics. Cheap skilled labor, fast and easy access to components, unregulated work conditions - none of this is possible in the USA. A long article that does little to provide any insight into how we can solve this problem.
- brador 15y agoWould unions come into the equation?
- jeffool 15y agoHe mentioned "cheap labor" and "unregulated work conditions"? Aren't those the arguments against and for unions?
- grantheaslip 15y agoSure, ununionized labour would be more employable, but these would be lower-class jobs, not the middle-class jobs that the west of today was built on. Nobody’s going to be able to support a family at middle-class standards on $10-15 an hour. For some reason, the broader socioeconomic discussion the western world should be having has been condensed to creating jobs. But jobs aren’t a binary thing; and they’re means to an end, not the end goal (an equitable society in which the average person can be a member of the middle class).
- count 15y agoUm, 'middle class' is squarely in the $10-15/hr range in the US today. That's about $25-30k per parent, with 2 working parents. That's 'average' in most of the US.
- grantheaslip 15y agoI’m not in the position of supporting a family, but is that really enough to support a mortgage, car(s), daycare (if we’re assuming both parents are working), putting kids though university, buying supplementary insurance, etc? I get the sense that “average” is no longer middle class unless you really loosen the definition of middle class.
- flipside 15y agoIf you go to the nyt home page, you can watch the video for free. Just click the link then the logo. The video made a very good, straight forward argument, highly recommend watching.
- tlogan 15y agoThe plant sophistication there in China is staggering: workers are not treated well, but the factories, infrastructure, and processes are state of the art. Now, I know I might downvoted (because this is quite touchy subject) but I do want ask this question: If US does not have sophistication, talent, and infrastructure to make production of iPhone, then how US armed forces can maintain its world's dominance? This is in relationship to the story about drone begin hacked and down in Iran: it seems to me that US armed forces probably do not even know what they don't know.
- _delirium 15y agoThe U.S. probably does have the sophistication, talent, and infrastructure to make the iPhone, if price was no object. For things that are economical, which mostly means low ratio of employee-hours to value of the finished product, the U.S. does a reasonably good job manufacturing them, which is why U.S. manufacturing output by value is the highest in the world. China actually imports a substantial amount of the machinery it uses in its factories from U.S. factories, which are fairly competitive in the meta-factory category of building industrial machinery for use in other kinds of factories (China annually imports about $20b in industrial machinery from the U.S.).
- encoderer 15y agoActually, the defense industry sort of proves that we DO have the ability to manufacture myriad high tech devices. But the analogy fails because the defense department doesn't have to concern itself with profit margins.
- Natsu 15y agoIt's odd for them to go back and forth between claiming that the US lacks the skills required and talking about a Chinese iPhone factory where thousands of workers hand assemble components during a 12-hour shift they suddenly started at midnight. The average factory job is not rocket science and the average factory worker learns what they're supposed to do on the job.
- dmethvin 15y agoThe problem is the ecosystem. Those low-paying slavish jobs support the next layer of skilled middle-class engineers and infrastructure. If there is no manufacturing in the USA there is no need for manufacturing process engineers. As the article said, even material suppliers like Corning have to locate their manufacturing nearby to be responsive to orders and save money on shipping costs.
- Natsu 15y agoRight, but it all boils down to having an army of cheap workers in the end. That feeds everything else, because we still don't have manufacturing robots that are as adaptable as humans for cases where you would have to retool your whole line on the fly.
- Natsu 15y agoWhile I'm at it, I wrote a fairly long comment about working conditions a few days back on another story: http://news.ycombinator.com/item?id=3469159 http://news.ycombinator.com/item?id=3469159 Basically, I think the Chinese have it a lot worse than the US with respect to safety, but that some things are exactly the same in both countries. I would also note that, right now, it's possible that Foxconn is one of the best factories in China, simply because they're under scrutiny. So on one hand, it's quite possible that someone will be able to point out that they're being unfairly singled out. On the other hand, conditions are still bad and one might hope that the scrutiny focused on them will force them to improve. Hopefully other companies will follow suit, but I doubt they'll do so without coming under pressure.
- philwelch 15y ago
- zerostar07 15y agoWell it seems anything having to do with manufacturing moves to China. How long before software engineering moves there too?
- philwelch 15y agoIf you're building glass, or gaskets, or tiny screws, or LCDs, you want your factory to be in China next to the iPhone factory so the parts can arrive as quickly as possible. If you're building iOS, you can just upload it to the factory from California with comparable delay.
- jeffool 15y agoUntil your manager decides three other programmers from China or India could output a larger quantity of serviceable code for half your wage. And the drop in cost nets him a bonus from his bosses. Until they offshore him, and only need translators to run their company.
- zerostar07 15y agoYes this is what I m talking about. Eastern Europe is also a target
- joejohnson 15y agoThe part about Eric Saragoza (the guy who worked for Apple in Elk Grove 10 years ago) was interesting. He was at a level of education that could have given him opportunities to work his way into middle class maybe 20-30 years ago. But why did he have 5 children? This may seem harsh, but that seems like a foolish decision. Why would he decide to support 5 more people?
- ams6110 15y agoWell having children is just about the most fundamental thing we are driven to do besides keeping ourselves alive. Additionally he probably felt he had a good job with a good company and that things would work out.
- jobeirne 15y agoFTA: "However, what has vexed Mr. Obama as well as economists and policy makers is that Apple — and many of its high-technology peers — are not nearly as avid in creating American jobs as other famous companies were in their heydays." Economists? Only economists who either don't understand basic principles like division of labor (http://en.wikipedia.org/wiki/Division_of_labour http://en.wikipedia.org/wiki/Division_of_labour) and comparative advantage (http://en.wikipedia.org/wiki/Comparative_advantage http://en.wikipedia.org/wiki/Comparative_advantage), or are willing to neglect them in return for being on some protectionist politician's payroll.
- Raphael 15y agoIt's simple to bring manufacturing back to the USA. Impose tariffs on imports, thus making local products competitive in price.
- philwelch 15y agoBut then other countries will impose tariffs on US exports, thus reducing demand for US-made products. And since there are more of them than us, it'll hurt us in the long run. For instance, Airbus, over in the free-trade EU, will probably poach all the airplane orders that Boeing could have filled.
- jobeirne 15y agoThe untrained eye sees jobs being taken away from Americans. The economist sees value being passed on to American citizens in the form of a price reduction of Apple products, and healthy acknowledgement of the reality that the American workforce is no longer suited to produce computer hardware efficiently. Jobs are not a sign of prosperity; we don't go to work just to go to work. If that were the case, we'd mandate that people must farm with spoons.
- mwsherman 15y agoNot to mention the new jobs created overseas. The notion of “American jobs” seems illiberal to me. Further, Apple is creating jobs. The criticism should be directed toward those who aren’t.
- jobeirne 15y agoI agree with your sentiment, but job creation isn't the end goal. Prosperity is. Prosperity comes through automation, which is the exact opposite of job creation.
- mwsherman 15y agoIndeed! Automation distributes the proceeds to consumers in the form of lower prices. The only way to “run out of jobs” is to run out of things that people want.
- deleted 15y ago[deleted]
- reuven 15y agoThe article and video don't seem to be arguing that it's bad to lower costs. They aren't even saying that it's inherently bad to outsource some of these functions to China and other countries. Rather, there seem to be two points: (1) Ignoring the cost of labor (which everyone thinks is the reason that US companies outsource to China), it's still logical to send manufacturing to China. Their plants, labor force, and supply chains are all better suited to the needs of high-tech manufacturing than anywhere in the US. (2) Moving all of these manufacturing jobs to China (or elsewhere) has not only meant the loss of many mid-skill manufacturing jobs in the US, but also many jobs that were created to support those jobs, to a degree that the service sector doesn't even come close to reaching. This has long-term ramifications for US jobs, in that many of the traditional middle-class jobs that people used to be able to get no longer exist. It certainly sounds to me as though the US should not expect to get any of these manufacturing jobs back. It also seems unlikely that you can train an entire country to do white-collar, high-tech and service-sector jobs. And while I know that the US continues to do a huge amount of manufacturing, it's with many fewer (and more highly-skilled) employees than ever before. So, what's an economy to do? It's easy for me to tell my own children to study hard and to try to get good jobs, but that's not scalable, nor is it realistic. Maybe when everyone can manufacture things at home, using 3D printers, then manufacturing will be as flexible and portable as software startups nowadays. But barring that, the solution is far from clear to me.
- nsxwolf 15y agoWhy shouldn't Chinese people have jobs?
- kingkawn 15y agoThe brief mention in the beginning of the article about Chinese government subsidies allowing the Chinese manufacturers to offer better pricing options than even their cheap labor force should allow is the key to their success. The government is taking an active interest in promoting this industry.
- mudil 15y agoThe focus on 12 hour shifts and dorms in China is all dandy, but what does it take to build a factory in the US? By the time all the environmental reviews and other regulations are observed, and law suits from Sierra Club and others are cleared, there is simply no way to build the factory! Hence no one builds them, hence ...a current Apple executive said. “The U.S. has stopped producing people with the skills we need.”
- _delirium 15y agoFactories get built in the U.S. all the time. Since there is some amount of competition for them between states, the typical approach is to shop around for a nice deal, where the state/city will usually not only offer to shepherd you through the environmental/approval process, but actually pay for it or subsidize your construction, and give you 10-20 years of tax breaks. Happens with car factories all the time. Even Apple is doing it with the A5 chip manufacturing facility it announced it's going to open in Austin.
- Vivtek 15y agoThat, my friend, is bullshit. Here in Indiana, we have factory space standing empty, thus no environmental review required, even if we had environmental reviews in Indiana, which we fucking don't. All we require is health care and a working wage - and it's cheaper to let us die.
- theoj 15y agoHow many of you would like to work in dormitories at your employer, be called up to start a 12 hour shift within a moment's notice be given nothing but one biscuit and a cup of tea to last you through that shift? Maybe you'll do it for your own startup, but I don't think any of you would do it for an employer. The reason why Apple manufactures in China is because workers have no rights -- and with that comes unmatched labor flexibility and rock bottom prices too. It's not US competitiveness that is the issue here -- it's China's lack of human rights.
- teyc 15y agoI've worked on a remote mine site in Australia before. Single workers are housed in dorms built by the employers. These have cooks and cleaners. We have regular hours, but if there were to be some urgent work, we would be expected to get our act together and get things done. (The only point of difference is we get paid overtime).
- sjtgraham 15y ago"A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames." Is anyone else disgusted by this? Waking employees during their rest period, not to mention it being after midnight. These poor workers are essentially slaves in all but name. It's quite unconscionable that Apple should make $400,000 profit/employee while the aforementioned is happening.
- mattmcknight 15y agoIs it that different from getting "pager duty"?
- theoj 15y agoAgreed. The media is not helping either by framing the issue wrongly. It's not US competitiveness that is the issue here -- it's China's lack of human rights.
- wallflower 15y agoThis is a somewhat controversial article but it makes a point that China's unfair competitive advantage is its lack of respect for most human rights, IP laws, etc. http://www.tapsns.com/blog/index.php/2010/01/what-is-china/ http://www.tapsns.com/blog/index.php/2010/01/what-is-china/ EDIT: Another thing is that going to college is not a fundamental right of a citizen. If you do not score high enough on the NCEE, you are basically slotted for factory work (if your family is not well-off enough to pay full freight at at a European or American institution)... "Students in the Chinese education system endure six years of elementary school and six years of middle and high school to prepare for what is often the most important turning point of their lives: the National College Entrance Examination. The exam takes place once each year. If student scores are high enough, they might be able to enter one of the few high-ranking Chinese universities in big cities like Beijing or Shanghai. This builds the foundation for good jobs after graduation. And if their English is good enough, they can take the TOEFL (Test of English as a Foreign Language) or the IELTS (International English Language Teaching System, or the British equivalent of the TOEFL). And last, if their families are financially blessed, they might have a chance to apply to colleges in English-speaking countries such as the USA, United Kingdom, Australia, Canada, or New Zealand. Unfortunately, if their entrance examination scores are below a certain point, the options after high school are limited to obtaining associate’s degrees or starting in extremely low-paying jobs. For most Chinese students, the only way to a brighter future is to ace every subject in school and to be in extraordinary condition on the three days of the National College Entrance Examination... Many American students find it hard to understand the Chinese schedule. But we accepted the rigor because competing for the few high-ranking Chinese universities requires a lot of work. Nearly 8.8 million students take the college entrance exam each year, and only about 20,000, or 0.2 percent, make it to the top colleges in China." http://www.mercurybrief.com/2010/06/chinese-teenagers-stick-it-to-the-man/ http://www.mercurybrief.com/2010/06/chinese-teenagers-stick-...
- Aloisius 15y agoUnless we want to turn a small part of America into a third-world country by suspending worker's rights, environmental protections and safety regulations, I don't think we could compete with these Asian countries. I also don't think we should. These jobs, well, suck. They are semi-skilled and are doomed to inevitable automation. The people who work these jobs are treated as chattel right now. When these people rise up and demand to be treated better forcing costs to rise, these jobs will move again to some other desperate country. If the first world wants to compete better, start certifying products as (human & environment) cruelty free. Label how many children were used to produce the product. Label how many years of life were robbed from people by working on the product because of chemicals. Stick an import tax on any place employing children or harming the global environment. Because straight nationalism isn't going to cut it.
- milfot 15y agoso perhaps the very best solution to stop the flow of jobs overseas is to start campaigning for Chinese work rights?
- ZenPsycho 15y agoIf you had actually read the article, perhaps you would have added the immigration of all of Foxconn's employees into the U.S. Apple's complaints weren't about wages or regulations in the U.S. at all. The primary complaint was that there simply weren't enough people with the sufficient training to do these jobs in the U.S. the workers do not exist.
- bandushrew 15y agoThe are not doomed to eventual automation, because the people who work these jobs have a huge advantage over the machines that might replace them: they are flexible in what they build, and easy to train. Robots have to take a huge leap forward before they can even come close to the flexibility offered by a person. People are flexible in what they build, they are flexible in how they build it, they are flexible in what job they do, and (depending on the contract) they can be dropped instantly where they are unnecessary. Compare that with a factory made of robots representing a large capital investment that could very quickly become out of date if you change your product slightly.
- swombat 15y agoWhat I take out from this article is that a company like Apple creates work for some 763 thousand people worldwide. That's mind-blowing. 763 thousand people working together to produce my macbook pro, my iPhone, my iPad. 763 thousand people earning a living because of Apple. Seven hundred and sixty three thousand. My business currently employs 3 people full time, including 2 founders. We're looking to hire some more in the next year, but we have a long way to go.
- protomyth 15y agoI always assumed that the job trend would work its way back to the US when automation trumped the masses in factory labor. The problem I see is that we are not doing enough to get ourselves ready for the next generation. Our school systems have been stripped down and do not have enough of the sciences or vocational studies that would allow people to get interested in engineering.
- axylone 15y agoWith automation, many of the jobs won't come back with the factory. There will be a few highly-technical positions for the engineers that set up the plant and keep it running, but for the most part it's like building a datacenter as mentioned in the article - $500 million for ~100 jobs.
- protomyth 15y agorepair and maintenance jobs are better than what is currently here
- UK-Al05 15y agoEngineering isn't really vocational; it's math and applied science.
- protomyth 15y agovocational gives you a good feel for the realities of engineering.
- yonasb 15y ago“We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.” <-- agreed
- pwg 15y agoLink to the single page version, for those who don't want to read an article chopped up into seven parts: http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?_r=2&hp=&pagewanted=all http://www.nytimes.com/2012/01/22/business/apple-america-and...
- vectorpush 15y agoI'm not so sure we should even aspire to train our future workforce for these jobs. Robotic workers are slated to supplant some of the most complex manufacturing tasks currently executed by humans. By the time our manufacturing force is primed to take on these jobs, we may find that they no longer exist. As a side note, I think it's interesting that at a time when Americans are clamoring for more employment, they are simultaneously emptying their wallets for iPhones in record numbers. Somehow, despite the ailing economy, Americans can find it in their hearts to lift poor Chinese workers out of poverty.
- ww520 15y agoBut robots are not good enough (way worse than human) to adopt to new jobs. It takes lots of time to reconfigured or reprogram robots to do new jobs. Human are very good at adopting and reconfiguring to new environment and new challenge. It will take a long time for robots to get to that level.
- kia 15y agoThere is an excellent book "Poorly Made in China: An Insider's Account of the China Production Game" by Paul Midler [1] for those who want to know more about behind-the-scenes of China's manufacturing. [1] - http://www.amazon.com/Poorly-Made-China-Insiders-Production/dp/0470928077 http://www.amazon.com/Poorly-Made-China-Insiders-Production/...
- deleted 15y ago[deleted]
- philwelch 15y ago“The entire supply chain is in China now,” said another former high-ranking Apple executive. “You need a thousand rubber gaskets? That’s the factory next door. You need a million screws? That factory is a block away. You need that screw made a little bit different? It will take three hours.” The rationale for doing a startup in Silicon Valley is that everything you need is right there in Silicon Valley with you. Apparently, parts of China are turning into the Silicon Valley of manufacturing.
- Daishiman 15y agoThis is probably the most insightful comment in the thread. Beyond the working conditions, which add a significant cost advantage, the integration and proximity of factories is a massive benefit which is very costly to replicate.
- georgemcbay 15y agoMassive economic benefit, yes, but also a massive ecological disaster, as anyone who has experienced the smog around manufacturing centers in China could tell you just by seeing the impact with the naked eye (and feeling it in their reduced-capacity lungs). China's version of the CDC is currently advising people in Beijing to stay indoors because the smog is so bad.
- giardini 15y ago"...a massive ecological disaster..." Indeed, but it will take much more to change China's ways. Until pollution becomes a risk to human life that takes an obviously shocking immediate toll the Chinese will not do anything about their pollution. Even then, given their huge population, problems are more likely to be swept under the rug (employees sent home to die, etc.). So change due to environmental concerns is a long way off.
- splrb 15y agoHow awesome! The key to success in device manufacturing is: 1) treat your employees like animals (or worse) 2) get the host government to subsidize the endeavor under threat that you'll move your business to a more accommodating country and 3) have a deep disdain for the responsibility of corporations to do anything but make as much money as possible. Apple is certainly not the only company that does this but they've certainly made a fine art of it. This is simply grotesque. Society created corporations (though there appears to be some debate about this) because it was thought that limited liability would make us better off, you know - more, better stuff. Corporations clearly feel that they have some inalienable rights and those include screwing the societies that enabled them if it means making another buck. This is vile and sociopathic. If a corporation does not serve the best interests of the society that enables it, that corporation should be terminated.
- MaysonL 15y agoThe consumer electronics business has become an Asian business. And of course, when people in the '70s and '80s complained about Asian companies dumping TVs and memory chips in the US, they were denounced as anti-free-trade. And this is the result.
- polshaw 15y agoMost people seem to be focusing narrowly on wages and worker conditions, which is not the main point of the article-- even if you take wages out of the equation, China is now much better positioned for production. The whole supply chain is nearby-- vast majority of high-tech electronics are made in asia (Taiwan, Japan, Malaysia etc), everything else in China itself. To make even one component in the US would require shipping it to China for assembly, which would introduce a lead time of weeks, whilst still costing more. There is a lack of mid-level (degree > x> HS) skilled workers (engineers) in the US, many in China. These are bigger problems for US manufacturing than the costs alone (labour costs aren't a huge portion of most manufacturing).
- bugsbunnyak 15y agoThe Atlantic has an interesting take on this, quite in line with your point about mid-level skills: http://www.theatlantic.com/magazine/archive/2012/01/making-it-in-america/8844/ http://www.theatlantic.com/magazine/archive/2012/01/making-i... the take-away is that American companies can be, and are, very competitive in some areas of manufacturing thanks to automation. But automation requires a relatively small number of these high- and mid-skilled workers to design things and operate machines. the layer below them - when, for various reasons, they are even still employed in the US - doesn't earn enough to make middle-class (they earn 10x Chinese workers, but that's not enough for a home even in low cost areas such as S. Carolina).
- stonemetal 15y ago“Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” said Betsey Stevenson, the chief economist at the Labor Department until last September. “That’s disappeared. Profits and efficiency have trumped generosity.”Companies and other economists say that notion is naïve. Anyone find the Apple position to be the naive one. You can't sell luxury goods to peasants. Every employee at crap wages is one less potential customer.
- tristan_juricek 15y ago> Many more people work for Apple’s contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple’s other products. I wonder, if Apple attempted to work most of those jobs in a western system, how many total jobs would there be? I'd have to think less. As bad as this may seem, I see this sort of globalization as a good thing, because the total overall number of jobs is probably higher. (A job, meaning a steady paycheck, and not rural poverty.) I might have read this too recently, which might be clouding my judgement: http://gmj.gallup.com/content/149144/coming-jobs-war.aspx http://gmj.gallup.com/content/149144/coming-jobs-war.aspx In the end, more jobs = fewer serious problems. I'd have to think, though, that you'd need to take care that you don't lose job counts. Western countries probably need to worry about that a bit more. I don't see how it can be done without more education and training.
- guelo 15y agoOne way to think about it is that we shipped a lot of our pollution over to China also.
- teyc 15y agoVote me down if you want. I don't know why you see is workers living in dorms as being disgusting. You have to compare these people against waiters who only make money when customers tipped enough, or stitched together two or three jobs back to back. These people have no leverage against small business owners. FoxConn workers may threaten suicide, the waiters in the US knows that suicide is not going to make an iota of difference to the bosses. At FoxConn, workers earn enough to have money left over for savings. Can you honestly say that for the minimum wage hourlies you see everyday but care to ignore? The fact is - as reported - even if the Apple or Corning wished to build the factories in the US, the center of gravity of manufacturing has moved to Asia. It is very difficult to shift. Structurally, the manufacturing world has changed. It is very the same reason why other countries struggle to reproduce Silicon Valley elsewhere, or build a new financial center outside of New York.
- rdl 15y agoI've worked at a lot of jobs where people have on-site company-provided housing; it's common in defense, oil and gas, mining, etc. in remote areas. Depending on how it's done, I have no problem with it. It's definitely better if you're a high-paid worker than someone who might end up borrowing from a company, doing the company store thing, etc. which caused so many problems with labor in the past. In a lot of cases, the housing is contracted out to specialist "man camp" providers, who run the entire facility and charge a per-resident rent to the employers. This probably removes a lot of the perverse incentives. It's a great way to save on housing, commute, etc. if you're single/don't have a family. A lot of older people would maintain a home elsewhere and then do 2 weeks on, 2 weeks off type shifts, which doesn't save as much money, but does make work a lot more efficient. Corporate apartments, dorms, etc. wouldn't be unreasonable for someone doing a startup or tech company in a place where rentals are inefficient -- it's pretty easy to rent an apartment and have some roommates in silicon valley, but if you were doing a startup in a rural/suburban place where people usually bought vs. rented, maybe the company should work something out for them.
- teyc 15y ago+1 I lived in a company-provided mining quarters for a few years. I see no problems with dorms at all. A lot of readers tend to think about slavery because it makes them feel better about America but the reality is that structurally US could no longer execute this way. In particular, the old issues of class warfare that drives union rules as well as management techniques are outmoded and calls for some fresh thinking.
- Vivtek 15y agoSo what I read here is that because Americans desire more normal lives than having to get up at midnight with a pastry and coffee to meet a last-minute design decision, that work should not be in America. Quintessential Jobs, if you ask me. And not the way a world economy should be run.
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- jhuckestein 15y agoThe jobs aren't coming back. That doesn't mean manufacturing won't come back. Fully automated production in the US seems more viable than manual labor in the US. Perhaps it will be more viable than manual labor in other countries as well. I'd be curious to hear from anyone who has experience in this area if that is likely?
- mjwalshe 15y agoI hardly think fitting phone glass on a production line is a "mid level" skill
- droithomme 15y agoI don't agree with Jobs comment (to Obama, as quoted in the article) that the Chinese build higher quality products. The recent Apple products I have owned all start having hardware failures after the first year, and are completely broken down within 3 years. Japanese and Taiwanese laptops I have bought, which have similar hardware and similar price, simply do not have the same quality control problems, nor did the older Apple products I owned that were made in California. It's entirely an issue that Apple can make more profit per product by making low quality computers built by virtual slave labor in China with no enforced environmental laws. This works for them because they have managed their brand well, particularly with Ives lovely case designs. Certainly not because the electronics and quality is better, it just isn't.
- lizzard 15y agoI wish it were reasonable to suggest that a company perhaps NOT set it sights on maximizing its profits at the expense of all else about society's infrastructure.
- jeffool 15y agoUS manufacturing output has never been higher; the US is not losing manufacturing capabilities. We're losing jobs. We're hiring fewer people and making more product value than ever before.