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Overseas manufacturers earn holiday triple pay to meet Apple's schedule

post #1 of 52
Thread Starter 
Workers at Apple's overseas manufacturing partner Pegatron will reportedly work through China's Lunar New Year for triple the pay in order to build new products for iPhone maker.

According to DigiTimes, Pegatron's chairman decided to halt the company's holiday break and will triple employees' salaries during the holidays "in order to meet Apple's schedule." Though the report didn't specify, it was likely referring to China's most important holiday, the weeklong Lunar New Year. The holiday starts on Feb. 2 and ends Feb. 8.

The report also did not indicate what products employees are working to build, but noted that Pegatron recently landed orders for Apple's fifth-generation iPhone 5, with an initial order volume of "at least 10 million units." Apple typically updates its iPhone on an annual schedule, which would suggest the "iPhone 5" will go on sale in June.

Pegatron reportedly first received advance orders for Apple's soon-to-launch CDMA iPhone 4 in early 2010, with an initial volume of 10 million to 12 million units.

Because Apple has been expanding its orders, Pegatron plans to shift some of its iPhone manufacturing duties to its plants in Suzhou, China. Currently, the bulk of the manufacturer's iPhones are built in Shanghai.

Pegatron is confident in its 2011 outlook, thanks largely to secured contracts for the CDMA iPhone and the iPhone 5. The company also reportedly expects to have increased notebook orders from Toshiba and Acer, as well as strong tablet and LCD TV sales.

Another report this week claimed that overseas manufacturers will begin assembling the iPhone 5 in May, in time for a launch this summer. Production of the second-generation iPad is also expected to begin in February, according to China's Commercial Times.
post #2 of 52
Cool. The employees will now be earning $0.75 per hour instead of $0.25.....
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post #3 of 52
Awesome! Who cares about their silly week long holiday, all that matters is that our consumer needs be met on schedule. Pay them the extra 1.25.
post #4 of 52
Fear not, those irrepressible Apple customers will happily pay the premium...
post #5 of 52
Quote:
Originally Posted by xsamplex View Post

fear not, those irrepressible apple customers will happily pay the premium...

<---guilty
post #6 of 52
How subversive. More pay for less fun/happy/convenient work?
post #7 of 52
Yeah...pay them the extra money. Just let me get my iPad 2 ASAP Way to go Apple!
post #8 of 52
Quote:
Originally Posted by jragosta View Post

Cool. The employees will now be earning $0.75 per hour instead of $0.25.....

They make less than some and more than others. What is your point? What is their cost of living, their expectations of standard of living, their dependents, housing costs, etc? Just stating their pay rate doesn't mean anything.

How much more would you be willing to pay for your iPhone to provide higher wages in China?

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post #9 of 52
Apple drive hard bargain-
make lowly workers sweat thru New Year's firecrackers!
post #10 of 52
Quote:
Originally Posted by mstone View Post

How much more would you be willing to pay for your iPhone to provide higher wages in China?

Absolutely nothing.

I would, however, be happy to pay more for my device to be made on American soil in an American factory by American workers.

Then again, I must be one of those crazy xenophobic isolationists.
post #11 of 52
Quote:
Originally Posted by shadow415 View Post

Absolutely nothing.

I would, however, be happy to pay more for my device to be made on American soil in an American factory by American workers.

Then again, I must be one of those crazy xenophobic isolationists.


Ditto.
Why can't Apple do this, it would massively boost Americas economy.
post #12 of 52
Quote:
Originally Posted by Whozown View Post

Awesome! Who cares about their silly week long holiday, all that matters is that our consumer needs be met on schedule. Pay them the extra 1.25.


Are you Mr Scrooge!
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post #13 of 52
Quote:
Originally Posted by iLiver View Post

Apple drive hard bargain-
make lowly workers sweat thru New Year's firecrackers!

Are you sure? Pegatron is the one driving the workers to work on their most important holidays, Lunar New Year, more important then X'mas or New Year.
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post #14 of 52
Quote:
Originally Posted by MATTpgh View Post

Ditto.
Why can't Apple do this, it would massively boost Americas economy.

because then their price won't be competitive, when everybody else are building their stuff in China.

just be happy that a US company is leading the latest round of mobile revolution, not some Japanese, Chinese or Finnish company.
post #15 of 52
Quote:
Originally Posted by spiced View Post


Are you Mr Scrooge!

Scrooge - no.
American - yes.
If you haven't noticed we think inwardly and only care about our needs before that of others. And by we i mean the greater percentage of the average American consumer.
And if you scroll back up youll see there's a few others that would agree. The article didn't say it was mandatory for them to work but it didn't say it wasn't either we don't know, but theyre being compensated for it either way. So if it means them being paid more for a week so i can get what i want as scheduled....then let's go. Pay them.
post #16 of 52
Does anybody know approximately how many cell phones a worker can assemble in a day?
post #17 of 52
Quote:
Originally Posted by MATTpgh View Post

Ditto.
Why can't Apple do this, it would massively boost Americas economy.

And nobody would be able to buy those devices any longer. Yeah great plan.
post #18 of 52
Quote:
Originally Posted by MATTpgh View Post

Ditto.
Why can't Apple do this, it would massively boost Americas economy.

I agree. It's my only complaint against Apple. But I understand the economics of it.

20 years ago the USA had the lowest Corporate tax rates of the industrialized countries. Today, the US has the second highest tax rate. Not because we raised ours, but because they lowered theirs. Germany and Japan have a very expensive workforce but they have managed a lot better than the US in most cases.

I know there are a trillion dollars worth of "loopholes" in the 16,000 pages of the IRS tax code and the reality is the US corporations don't really pay the high tax rate because of said loopholes.

But nevertheless it creates a cumbersome business environment that large corporations like Apple don't experience in places like Singapore, Vietnam, China, etc. The experience a lot of other encumbrances, true, but paying a worker $1-$4/hr., more than makes up for it.

In America the auto-industry (including transplants) are paying about $28/hr., Mexico about $7hr., India about $4/hr. and China about $2/hr. If you were Buick/GM where would you build your next assembly plant? Case in point, GM is the biggest buyer of Viagra....b/c of the "Cadillac" health care GM employees "enjoy!" Absurd!

Also, a basic rule of thumb in America is if you pay someone, say $28/hr., your true out of pocket is usually double their hourly wage. B/c of government taxes, etc., etc.

Oh well!
post #19 of 52
Quote:
Originally Posted by jmmx View Post

Does anybody know approximately how many cell phones a worker can assemble in a day?

Depends- black phone or magical, mystical white?
post #20 of 52
Quote:
Originally Posted by shadow415 View Post

Absolutely nothing.

I would, however, be happy to pay more for my device to be made on American soil in an American factory by American workers.

Then again, I must be one of those crazy xenophobic isolationists.

That is what many people say. But when the chips are down they all run to the discount stores with the cheapest imports. This is what fueled the move to overseas labor. Those who did not move could not compete.

This is the model pioneered by Dell. Everyone else followed out of necessity.
post #21 of 52
This is OK. Children don't need a holiday anyway.
post #22 of 52
Quote:
Originally Posted by spiced View Post

Are you sure? Pegatron is the one driving the workers to work on their most important holidays, Lunar New Year, more important then X'mas or New Year.

Pegatron is manufacturing partner of Apple- iPuppet.
post #23 of 52
Quote:
Originally Posted by TBell View Post

This is OK. Children don't need a holiday anyway.


That's a good one.
post #24 of 52
Quote:
Originally Posted by ihxo View Post

because then their price won't be competitive, when everybody else are building their stuff in China.

Not to mention the long supply chain since many of the components would still be manufactured in Asia.
post #25 of 52
It's funny because they'll be missing their holidays to make enough for Apple to sell for a different holiday.
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post #26 of 52
This isn't true. First, Dell started off building computers in the US. Namely, in Dell's dorm room, then later in a Texas Manufacturing Plant. Dell's claim to fame was build to order. It got the parts cheap, and put the product together cheap in the US. Eventually it moved operations. Apple didn't build to order, but it did own the manufacturing. Apple did away with it's own manufacturing plants for a reason different to save on labor cost. Under accounting rules, Apple has to account for inventory it has on hand. When it owns the factories it has to count all the inventory even at the factory. Now Apple only has to count inventory it has actually received. It benefits Apple to have as little inventory on hand as possible.

Why everybody went overseas was all the rich people got to together and convinced the government to do away with tariffs that have been in place since the beginning of this Country. They did this in the richest economic times this Country has ever had. Namely the mid to late eighties. These tariffs were used to keep competition fair so Americans didn't have to compete with essentially slave labor in Countries like China. After the so called free trade agreements went into effect, hundreds of thousands of jobs went overseas, and both federal and local government have lost hundreds of millions of dollars in taxes from income and tariff related taxes. Now the Chinese get to keep those taxes, and are gracious enough to loan us Billions of dollars so the rich can get even more tax relief.

Yet, you are correct in the sense that people do often go with the lowest sticker price. Unfortunately, now that most manufacturing is in China the prices have not really come down for many products. It is just the manufacturers save money in taxes thereby making more profit.


Further, people pay more now because local governments are having to raise taxes and cut services to make up for the tax loss.


Quote:
Originally Posted by jmmx View Post

That is what many people say. But when the chips are down they all run to the discount stores with the cheapest imports. This is what fueled the move to overseas labor. Those who did not move could not compete.

This is the model pioneered by Dell. Everyone else followed out of necessity.
post #27 of 52
Quote:
Originally Posted by shadow415 View Post

Absolutely nothing.

I would, however, be happy to pay more for my device to be made on American soil in an American factory by American workers.

Then again, I must be one of those crazy xenophobic isolationists.

How much more?
post #28 of 52
Quote:
Originally Posted by MATTpgh View Post

Ditto.
Why can't Apple do this, it would massively boost Americas economy.

Ha!

Everyone should be forced to take Econ 101.
post #29 of 52
Given the pressure that FoxConn is putting on Pegatron in electronic manufacturing in the region, the pay rates are slowing increasing. To put these rates in perspective, consider the following reported/official statistics:

in the US according to the Bureau of Labor Statistics the avg hourly pay for US workers is $15.04.

Compare to Mexico's avg wage per hour of $2.34(in US dollars for convenience' sake),
Brazil avg wage per hour of $3.02 (US)
and Taiwan at $5.70 (US)

As you can see, the wages in Taiwan are climbing as cost of living and manufacturing demand pressure increases. With several companies employing assembly staff, there is increased wage competition as well. This situation is fairly dynamic, as national governments try to compete for manufacturing for global consumer demand, so while Taiwan for example has increasing wages - they will top out as other countries with lower wage bases draw off manufacturing by incentivising migration to their economies through tax breaks, government subsidy and so on.

This same situation will cycle in the rest of China, LatAm, Oceania and depending on global pressures continue as the ascendancy of China and AsiaPac region overtake Western hemisphere economies in the next several decades.
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post #30 of 52
Hmm... trollers are here in full force today.

Let's not take into consideration that Apple has nothing to do with this, but the manufacturers themselves offering their workers more of an incentive. How much more whining would come out from you had those same companies had their workers there during the holidays for regular pay?

How many of you will whine when Apple is unable to meet demand??
post #31 of 52
Quote:
Originally Posted by sflocal View Post

Hmm... trollers are here in full force today.

Let's not take into consideration that Apple has nothing to do with this, but the manufacturers themselves offering their workers more of an incentive. How much more whining would come out from you had those same companies had their workers there during the holidays for regular pay?

I would not be surprised if Apple is funding the additional hourly pay.
post #32 of 52
Quote:
Originally Posted by MATTpgh View Post

Ditto.
Why can't Apple do this, it would massively boost Americas economy.

Because American workers won't be able to creat the product fast enough, in high enough qualities, and make less trouble for the management.

If the factory was in US, you think the workers would suffer silently with hourly work quota of 8 devices or more (ipad line), 10-11 hour work day, 6 day week, crammed into prison like dorms, no benefits of any kind, all while making wages amount to 1% of the final retail price of the device? Apple would have to hire at least twice as many people, while paying each of them at very least 10 times as much in wages, and add another 50% in tax and benefit costs.
post #33 of 52
Quote:
Originally Posted by xsu View Post

Because American workers won't be able to creat the product fast enough, in high enough qualities, and make less trouble for the management.

If the factory was in US, you think the workers would suffer silently with hourly work quota of 8 devices or more (ipad line), 10-11 hour work day, 6 day week, crammed into prison like dorms, no benefits of any kind, all while making wages amount to 1% of the final retail price of the device? Apple would have to hire at least twice as many people, while paying each of them at very least 10 times as much in wages, and add another 50% in tax and benefit costs.

Not to mention the ridiculous assertion that having unskilled, overpaid factory workers would somehow "massively boost" an economy like ours. We already have plenty of those, they're called the UAW, and they managed to run our auto industry into the ground.
post #34 of 52
Quote:
Originally Posted by mstone View Post

How much more would you be willing to pay for your iPhone to provide higher wages in China?

I wouldn't pay any more money- Apple has HUGE profit margins, if Apple wants to, they could take 10% of their profit margin away, and i would guess (not sure how much labor etc goes into Iphone) but it wages are .25$ an hour, at least raise that to $1 an hour... i would preffer them being built in the USA, i would pay more... though once more i think Apple's prices should be lowered... but, they make it, i like it, a lot of people like it.

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post #35 of 52
Quote:
Originally Posted by nicolbolas View Post

I wouldn't pay any more money- Apple has HUGE profit margins, if Apple wants to, they could take 10% of their profit margin away, and i would guess (not sure how much labor etc goes into Iphone) but it wages are .25$ an hour, at least raise that to $1 an hour... i would preffer them being built in the USA, i would pay more... though once more i think Apple's prices should be lowered... but, they make it, i like it, a lot of people like it.

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post #36 of 52
Quote:
Originally Posted by cameronj View Post

Ha!

Everyone should be forced to take Econ 101.

First off, I'm glad to see you posting again ... I've not seen much of you lately ... welcome back. Secondly, I'd be interested in your view of a scenario that has been rolling around in my mind for a few years now.

I'm of the mind that we have to find a way to increase manufacturing in both of our countries. Not everyone is going to have the "smarts/education" to work in the high tech industry. The problem, as I see it, is that unless all manufacturers are willing to do it then the ones who don't will have an unfair advantage over those who "produce at home".

At the risk of being labeled a "communist or socialist" I would suggest that governments will have to place some serious import duties on that which is not manufactured at home. This would give all companies an option .... pay "our wages to our workers" .... or pay higher "taxes" to our governments .... and at the same time ensuring that no company would have an unfair price advantage. How do you feel about that kind of a solution?

Lastly, I love your signature tag .... the only change I would make is going from this: It is an extreme form of skepticism .... to this: It is an extreme form of arrogance. I don't know .... just seems to be more fitting for this site. Thoughts?
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post #37 of 52
Quote:
Originally Posted by cameronj View Post

Atlas Shrugged

Read it

I don't think anyone would disagree that intellect, creativity and motivation for profit are desirable attributes in our free market society, but I also believe we have possibly gone too far in depending on it exclusively. We can only give away so much of our industrial capital before we run into an imbalance. We cannot keep coming up with game changing technologies at the rate necessary to fuel our economy. The US gave away cameras, stereos, tvs, computers, auto, printing, textiles, steel, agriculture and a host of other lucrative businesses to concentrate on financial, academic and theoretical sciences, leaving our public education and blue collar industrial capabilities to die. Politics has a lot of responsibility in this social demise but to think this current model is sustainable is pure fantasy. It is a dead end and it is probably already too late to change course.

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post #38 of 52
Quote:
Originally Posted by xsu View Post

Because American workers won't be able to creat the product fast enough, in high enough qualities, and make less trouble for the management.

If the factory was in US, you think the workers would suffer silently with hourly work quota of 8 devices or more (ipad line), 10-11 hour work day, 6 day week, crammed into prison like dorms, no benefits of any kind, all while making wages amount to 1% of the final retail price of the device? Apple would have to hire at least twice as many people, while paying each of them at very least 10 times as much in wages, and add another 50% in tax and benefit costs.

There is a lot of issues in your comment...but the japanese were able to come to the US, build auto plants, use american workers and produce quality cars.

Granted iPods are different to cars but it could be done...rather than filling the skies with exhaust fumes from 747's delivering all our Mac gadgets....
post #39 of 52
Quote:
Originally Posted by fecklesstechguy View Post

Given the pressure that FoxConn is putting on Pegatron in electronic manufacturing in the region, the pay rates are slowing increasing. To put these rates in perspective, consider the following reported/official statistics:

in the US according to the Bureau of Labor Statistics the avg hourly pay for US workers is $15.04.

Compare to Mexico's avg wage per hour of $2.34(in US dollars for convenience' sake),
Brazil avg wage per hour of $3.02 (US)
and Taiwan at $5.70 (US)

As you can see, the wages in Taiwan are climbing as cost of living and manufacturing demand pressure increases. With several companies employing assembly staff, there is increased wage competition as well. This situation is fairly dynamic, as national governments try to compete for manufacturing for global consumer demand, so while Taiwan for example has increasing wages - they will top out as other countries with lower wage bases draw off manufacturing by incentivising migration to their economies through tax breaks, government subsidy and so on.

This same situation will cycle in the rest of China, LatAm, Oceania and depending on global pressures continue as the ascendancy of China and AsiaPac region overtake Western hemisphere economies in the next several decades.

first, does US statistics takes account of housing cost into the consideration? as far as i know, those chinese factory workers are provided with sort of free living. housing is a big chunk of living cost as i hope i can make this assumption.

second, it is true that wage is one of reasons that manufacture moves from taiwan to mainland china. another reason one has to consider and can not neglect is that the pool of skilled workers. taiwan has about 23million of people in total and let us say 20% of them doing manufacture work, it is only about 5 millions. just manufacturing is not enough, as it has to be a chain of industries: chip fab, component factories, etc. it might be that other countries might not be able to provide such steady source of workers in term of headcounts and skills at lower rate.

third, chinese gov. poured into hugh amount of effort in term of money incentives and free land usage, etc to encourage this massive manufacturing transformation. i don't think any other regions and countries have ever done it at this level. even japan in its old days can not match up to this level.

the only country who can catch up with china is india. but india has to spend hugh amount to build up its infrastructure frame work, such as power plants, roads, air transportation, etc. further government has to grand more incentives to manufacturing industry. the timing is critical because india does not enjoy the low material cost as china had over the past 20-30 years of development.
post #40 of 52
How much extra would manufacturing the iPhone in the US cost? I'd be willing to pay a premium if I knew that the workers were being treated well. I know that Nokia, Sony Ericsson, Samsung, LG, et al still all make at least some of their phones in their home country.
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