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Apple's overseas manufacturing operations offer flexibility, not just savings - report

post #1 of 148
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An in-depth report on Apple's manufacturing operations details the gains in flexibility, diligence and skilled labor availability that the company gains from producing its devices overseas, while offering rare commentary from its current and former executives.

The New York Times presented on Saturday a close look at the Cupertino, Calif., company's move toward foreign production. The article was based on more than three dozen interviews with current and former Apple employees and contractors, as well as talks with "economists, manufacturing experts, international trade specialists, technology analysts, academic researchers, employees at Apple’s suppliers, competitors and corporate partners, and government officials."

According to the report, Apple holds a "central conviction" that overseas production facilities offer scale, flexibility, diligence and skilled workers that U.S. factories are no longer able to match.

Authors Charles Duhigg and Keith Bradsher related an anecdote from a dinner last February with President Barack Obama, Apple co-founder Steve Jobs, and several other tech luminaries. Obama reportedly asked Jobs why Apple is unable to to bring is manufacturing back to the U.S.

A guest at the dinner noted that Jobs candidly replied, "Those jobs aren't coming back."

Though Apple employs 43,000 people in the U.S., twice as many as it does overseas, some have criticized the company for not creating more jobs in its home country. The report noted that an additional 700,000 people work on Apple's products via the company's network of contractors, but most of them are located outside of the U.S.

“Apple’s an example of why it’s so hard to create middle-class jobs in the U.S. now,” said Jared Bernstein, a former economic adviser to the White House.


Jobs and President Obama at a dinner last year.


But, the company's executives have indicated that moving work overseas is their only option. A former executive recounted an instance prior to the launch of the original iPhone where 8,000 employees were woken up in the middle of the night to begin outfitting glass screens, a last-minute addition for the handset. Within just a few days, the factory was producing more than 10,000 iPhones a day.

“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”

Sources revealed that the last-minute adjustment came about because Jobs demanded a change in the iPhone just weeks before its scheduled launch. He had reportedly noticed that the keys in his pockets had scratched a prototype device he had been testing.

“I won’t sell a product that gets scratched,” Jobs was noted as saying. “I want a glass screen, and I want it perfect in six weeks.”

One Apple executive left the meeting and quickly booked a flight to Shenzhen, China to address the issue, according to the report.

Betsey Stevenson, the Labor Department's chief economist until last year, said U.S. companies used to prioritize American workers even when it meant higher costs. “That’s disappeared," she said. "Profits and efficiency have trumped generosity.”

But, others took issue with the claim, noting that workers with the mid-level skills required for factory work are in short supply in the U.S.

One Apple executive defended Apple's decision to produce iPhones overseas by noting that the device is sold in more than a hundred countries. “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible,” the executive said.

“We shouldn’t be criticized for using Chinese workers,” one current Apple executive told the publication. “The U.S. has stopped producing people with the skills we need.”

The company did, however, used to pride itself on making its products at home. For instance, Jobs told the Times in 1984 that the first Macintosh was "a machine that is made in America."

Tim Cook, Apple's former chief operations officer and current chief executive officer, has been credited with developing Apple's overseas supply chain. One former high-ranking executive said that Cook decided to move much of its manufacturing to Asia because it can "scale up and down faster" and "Asian supply chains have surpassed what's in the U.S."

“The entire supply chain is in China now,” said a different former 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.”

Apple manufacturing partner Foxconn has risen to become a giant in the industry. The company is estimated to assemble 40 percent of the world's consumer electronics.

“They could hire 3,000 people overnight,” said Jennifer Rigoni, who served as Apple’s worldwide supply demand manager until 2010. “What U.S. plant can find 3,000 people overnight and convince them to live in dorms?”

"Apple’s executives had estimated that about 8,700 industrial engineers were needed to oversee and guide the 200,000 assembly-line workers eventually involved in manufacturing iPhones," the report read.

The effort took just 15 days in China, compared to estimates by Apple's analysts that it would take nine months to find the necessary workers in the U.S.

Economists expect that the U.S. economy will adapt and find a way to replace some of the middle-class jobs it has lost overseas, but they warn that some workers, especially older ones, could be left behind during the transition.

“New middle-class jobs will eventually emerge,” said Lawrence Katz, a Harvard economist. “But will someone in his 40s have the skills for them? Or will he be bypassed for a new graduate and never find his way back into the middle class?”

For its part, Apple has lobbied the government to allow a tax holiday that would allow it and other American corporations to bring home overseas cash. The WIN America lobbying group, which Apple supports, argues that doing so would allow the companies to create more jobs in the U.S. Two-thirds of the iPhone maker's $81 billion cash hoard is currently located overseas.
post #2 of 148
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Originally Posted by AppleInsider View Post




maybe wrong link
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post #3 of 148
Seriously there are good reasons to wake somebody in the middle of the night, sticking screens on iPhones isn't one of them. I smell a workers revolt coming to China.

They are right about one thing though, it would be very hard to find Americans willing to work with those sorts of expectations. Who would want to be packed in a dorm just to have a job.
post #4 of 148
If Apple could first create assembly factories in the USA and then gradually move the parts manufacturing here it would get the ball rolling. If they started the assembly here, local companies would spring up to supply parts. That is how it works. That is how it works in China too. Apple could take the first step by assembling iPods here and then other products.

It would take much less money to ship containers of parts to the USA than individually boxed products. In time those parts would be coming from within the USA.

All of the benefits Apple claims are in China would become the norm in the USA in time.

From the article:
"One Apple executive defended Apple's decision to produce iPhones overseas by noting that the device is sold in more than a hundred countries. We dont have an obligation to solve Americas problems. Our only obligation is making the best product possible, the executive said."


It is true that there is no morality requirement within any corporate structure. That comes form leadership. Leaders show us their morality in the ways they operate their businesses. Apple claims a moral high ground every time they proclaim how environmentally friendly their products are made. They do that also when they look into labor practices in China and publicize it. So when an Apple executive says they don't have an obligation to solve Americas problems, it is a lapse in moral judgement.

If Apple wants to play the morals game, then they should be all in and start helping the nation where they sell their products. I know that China is the new market that will dwarf the US market soon. If they want to abandon the USA then they might as well move all of Apple to China. At least that way they can claim to be supporting their home country. I wonder what the Chinese government would do to Apple if it were based there. Would they start ordering Apple to make products for the government for free? Would they tell Apple it could no longer sell the good products to the foreign markets? Who knows what a communist government would do to them.

Apple has freedom in the USA. They should support that freedom by manufacturing products in the USA.
post #5 of 148
Quote:
Originally Posted by Smallwheels View Post

So when an Apple executive says they don't have an obligation to solve Americas problems, it is a lapse in moral judgement.

When someone thinks that solving America's problems is more important than caring about problems all around the world, ignoring the problems of Chinese workers who might become equally as unemployed, for instance, or the benefits Apple has given to those people who are generally worse off than the residents of Flint, Michigan, then I think there has been a lapse of moral judgment. If you want to talk about patriotism, go right ahead. If you want to talk about morality, however, I think you're missing something.
post #6 of 148
Just suggesting that other countries have more skill to produce stuff then other countries is plain racism. Its ok as long as the racism is against "western" countries.

There is nothing that the chinese can manufacture that US/EU can't manufacture at the same/better quality. The problem is regulations and corrupt governments that are in the corporations pockets.

Outsourcing is one of the most destructive things to western countries. Just look at the rise of Samsung and HTC. Both companies started as OEMs to westerns companies. Then they figured out that they could use the same devices and put their own brand in on them. They have no culture of innovation, but great culture of OEMing.

The people who write these reports show the same self hate as many other seems to have.
These kinds of reports would never be published in non western countries. Not even in countries that are in the stone age.

Nationalism is good. Its time to bring back EU/USA jobs home. Our politicians job is to make it possible. Education/taxes/permits. Instead our politicians are today like Football teams. Some cheer for one team, and others for the other. Almost like religion. *hint* No politic ideology is 100% right, every single issue should be addressed by facts and evidence. Not team ideology like today. That is why no one should have a "party" that they vote for.
post #7 of 148
Quote:
Originally Posted by AppleInsider View Post

...


Jobs and President Obama at a dinner last year.

...

Wow, that dinner looks like... like a disaster...
post #8 of 148
Quote:
Originally Posted by shompa View Post

Just suggesting that other countries have more skill to produce stuff then other countries is plain racism. Its ok as long as the racism is against "western" countries.

There is nothing that the chinese can manufacture that US/EU can't manufacture at the same/better quality. The problem is regulations and corrupt governments that are in the corporations pockets.

Outsourcing is one of the most destructive things to western countries. Just look at the rise of Samsung and HTC. Both companies started as OEMs to westerns companies. Then they figured out that they could use the same devices and put their own brand in on them. They have no culture of innovation, but great culture of OEMing.

The people who write these reports show the same self hate as many other seems to have.
These kinds of reports would never be published in non western countries. Not even in countries that are in the stone age.

Nationalism is good. Its time to bring back EU/USA jobs home. Our politicians job is to make it possible. Education/taxes/permits. Instead our politicians are today like Football teams. Some cheer for one team, and others for the other. Almost like religion. *hint* No politic ideology is 100% right, every single issue should be addressed by facts and evidence. Not team ideology like today. That is why no one should have a "party" that they vote for.

So the steps to create your utopia would be to:

1) Remove the minimum wage.
2) Create general poverty and massive unemployment so that there is not just a labor glut in the US but a labor crisis forcing people to either work for a dollar a day, or face starvation.
3) Deregulate so that companies don't have to provide their workers with safe working environments, fair labor standards, or fair benefits.
4) Move the jobs back to the US.

What you don't understand is that while labor conditions in China have improved greatly due to the impact of international business, those labor conditions are still massively worse than anything that's acceptable in the US. This is not a problem with the US. It's a result of the success of the US system. This is why labor is so much cheaper in China, and why efficiency is also so much better.

Eventually, as China becomes more modern socially and politically, labor conditions, and expense, will continue to increase in China. Then labor will move somewhere else that has terrible and cheap conditions, where those places can be given an opportunity to improve (this is a good thing, morally speaking). This kind of labor will never return to the US, thank God, for it to do so would mean that the US has sunk to third world economic status.

Of course if the Republicans have their way, that might just happen. A good number of people might just become so poor that we are forced to cut the minimum wage and allow companies to hire people for $1 a day. Then I guess you could say the Republicans were responsible for the return of manufacturing jobs to the US! Yay!
post #9 of 148
Quote:
Originally Posted by tonton View Post

So the steps to create your utopia would be to:


What you don't understand is that while labor conditions in China have improved greatly due to the impact of international business, :

Eventually, as China becomes more modern socially and politically, labor conditions, and expense, will continue to increase in China. Then labor will move somewhere else that has terrible and cheap conditions, where those places can be given an opportunity to improve (this is a good thing,

Of course if the Republicans have their way, that might just happen. A good number of people might just become so poor that we are forced to cut the minimum wage and allow companies to hire people for $1 a day. Then I guess you could say the Republicans were responsible for the return of manufacturing jobs to the US! Yay!



:Indeed!

Germany ( which fears China will knock out its industrial output ) is trying to do the same thing in the southern european countries ( austerity is to punish and impoverish ). But it will be still impossible to catch up with Brazil, India and China massive soon-to-be-lift-out of poverty workforce.
post #10 of 148
And cheaper labour + higher quality.

Meanwhile, I don't want to talk about Obama as it will only make me angry.
Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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post #11 of 148
Quote:
Originally Posted by shompa View Post

Outsourcing is one of the most destructive things to western countries. Just look at the rise of Samsung and HTC. Both companies started as OEMs to westerns companies. Then they figured out that they could use the same devices and put their own brand in on them. They have no culture of innovation, but great culture of OEMing.

Wrong ref Samsung, they have a long history of internal supply and innovation before they even took an order outside their own country. They also have a significant number of patents and history of innovation (37 awards at CES this year alone). Don't believe the hype which is often highly offensive to the highly qualified engineers they have at Samsung...

Top-50 US Patent Assignees in 2010 (As reported by IFI)
International Business Machines Corp\t5896
Samsung Electronics Co Ltd (Korea)\t 4551

Fact is factories (i.e. workers) in China/Vietnam/Taiwan/South Korea/etc are significantly more flexible in their attitude and are willing to do work which the West has long since lost interest in doing. That's based on 20 plus years of dealing with factories in Europe, US and Asia. The real issue for the West now is that the middle class is growing, particularly in China, and the ability to hire worker as described in the article is becoming harder and harder. Put simply less people in Asia want to work in factories.
post #12 of 148
Having manufactured and sourced products from around the world, I have experience on both sides of this topic. The truth is that neither extreme is fully correct - the truth is somewhere in between.

Is it true to say that it's impossible to get the work force needed in the U.S.? No. There are workers in the U.S. who will do what is needed. To cite one example, I managed a company that averaged just over $1 M in shipments per month. We got an emergency order one Friday for product that required us to ship $600 K worth of product the following Monday. We were able to accomplish that by bringing in people over the weekend. It CAN be done.

OTOH, the work ethic here is different than it is in China and other developing countries. In many parts of the world, survival depends on doing everything your employer asks of you. If they want you to come in in the middle of the night to cut glass screens, you do it. In the U.S., the more common response would be "I'll be there in the morning" because of overtime laws and because people figure they can get another job. Plus, there is a belief in work-life balance here that just doesn't exist elsewhere.

It's a self-correcting phenomenon. When I was younger, Japan was much as China is today. Employees worked 70 or 80 hours. Taking vacation was frowned upon. Labor rates were low. Today, employers WANT you to take your vacation and work week is more in line with global standards. Salaries are easily comparable to developed countries. The same thing is happening in China.

In addition, there are structural differences that are probably more important than the labor rates:
- Health and safety rules. These cost American manufacturers billions of dollars. I'm not arguing that they should be eliminated, but it is clear that they add cost to U.S. manufactured product.
- Environmental rules
- Legal liability
- Tax rates
- Overheads (facility costs, indirect costs)
- Workplace rules on what employees will do (ask a plant manager to add 'toilet cleaning' to his list of job responsibilities and see what happens).
- And the big one -- currency manipulation. A MAJOR factor in China's rise to its huge role in global manufacturing is the fact that they artificially manipulated the value of the yuan over the last 30 years.
And so on

The only way to level the playing field would be for countries to implement tariffs to adjust for those societal standards. For example, if we require that an item be produced in a safe, environmentally clean manner, we should require the same thing whether it is produced domestically or imported. If the importer refuses to do so, there should be a tariff to make up for that cost advantage. Similarly, we should not tolerate currency manipulation from foreign governments - although this would have been easier if we had taken action 20 years ago in the case of China.

Unless we address these issues on a macro scale, it is entirely unreasonable to expect individual companies to simply ignore them and pretend that they're not at a disadvantage when they manufacture something in the U.S.

Now, that is not to say that there is no place for U.S. manufacturing. Just that it's harder. For example, I had one job where our product was an essential safety product and delivery times were critical. Well over 10% of our deliveries had to be shipped in under a day (sometimes the same day). If you have to add a full day in travel time, that would make the product impractical - so Chinese production was not an issue for this particular market. Being successful as a U.S. manufacturer isn't easy, but it can be done.
"I'm way over my head when it comes to technical issues like this"
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"I'm way over my head when it comes to technical issues like this"
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post #13 of 148
Quote:
Originally Posted by lukei View Post

Fact is factories (i.e. workers) in China/Vietnam/Taiwan/South Korea/etc are significantly more flexible in their attitude and are willing to do work which the West has long since lost interest in doing. That's based on 20 plus years of dealing with factories in Europe, US and Asia. The real issue for the West now is that the middle class is growing, particularly in China, and the ability to hire worker as described in the article is becoming harder and harder. Put simply less people in Asia want to work in factories.

This is because these (together with Eastern Europe, India and to some extent Latin America) are emerging economies. Once they have completed "emerging", they will no longer have the economic appetite for this type of mass labor. These jobs will move to the new emerging economies. India is the last of these economies which will rise, and some will rise faster than others. China has been rising quickly, and will continue to do so, but there are a lot of regions in China that remain untapped in terms of labor migration, so they have a long way to go. That's why China remains a great place to do business.

Assuming no political or other economic disasters in the current and future emerging economies, within 20 years, it will no longer be cost effective to manufacture in China. Within 30 years it will no longer be cost effective to manufacture in India. After that, Africa will be the next Asia, assuming governments settle down to become stable enough to allow for long-term outside investment. Savvy investors will take note and make billions.

But we don't want those jobs back in the US, jobs which are only suitable for emerging economies.
post #14 of 148
Quote:
Originally Posted by wizard69 View Post

Who would want to be packed in a dorm just to have a job.

A lot of people in China, or so it would appear.

It wasn't that long ago that China was a developing country. Some parts are now very advanced. Some parts might compare with 1950s Appalachia in the US. China has maybe 4x the people that the US does.

When you get very hungry for a job (and 3 square meals and a roof over your head) you might be surprised what you would do.
post #15 of 148
Quote:
Originally Posted by jragosta View Post

Now, that is not to say that there is no place for U.S. manufacturing. Just that it's harder. For example, I had one job where our product was an essential safety product and delivery times were critical. Well over 10% of our deliveries had to be shipped in under a day (sometimes the same day). If you have to add a full day in travel time, that would make the product impractical - so Chinese production was not an issue for this particular market. Being successful as a U.S. manufacturer isn't easy, but it can be done.

Luxury manufacturing is a different market. By luxury manufacturing, I'm referring to high cost, high skill, high detail manufacturing like quality cars and boats, artisan goods, German and Japanese heavy machinery, Italian leather goods and textiles, or even American textbooks (manufacturing of which costs 5x as much as printing and binding in Asia due to durability requirements). Not necessarily manufacturing of luxury products, much of which can be made using the same cheap labor as the stuff sold in Walmart.

There is a market for American luxury manufacturing. A small part of the Auto industry, for example. Textbooks, as I mentioned. Aircraft. I hate to say it, but weapons (a market that I personally wish would disappear). Artisan quality furnishings and clothing.

If we want more luxury manufacturing in the US, we need to produce more goods in the US that require it. When was the last time a good quality printing press was made in the US? The Germans and Japanese have had that market for ages. Eventually, the Chinese will make a great printing press, and the Germans and Japanese will lose market share (and jobs). That's just how it goes.

Cars were our market for a while. The Germans maintained high quality, partly due to postwar rebuilding. The Japanese exploded onto the market in the 70's and haven't looked back, but now China is taking over that market as well. The only way the US, the Germans and the Japanese can stay in that market is to innovate and demand only the best in quality of design, engineering, artisanship and quality, with premium pricing to match.

So what's the next product that needs luxury manufacturing? That's what the US needs to concentrate on building, and that's where the only manufacturing jobs will be.
post #16 of 148
Quote:
Originally Posted by shompa View Post

Nationalism is good. Its time to bring back EU/USA jobs home. Our politicians job is to make it possible. Education/taxes/permits.

This has zero to do with education/taxes/permits. It is called Capitalism. The foundation of Capitalism is worker exploitation. What you are suggesting is we roll back worker rights. Do you want to be forced to work 12+ hour days, seven days a week, no paid overtime, no vacation, no sick days, live is a dormitory next to the factory so you can be called to work 24 hours a day, no rights, no breaks, get paid one USD a day, etc...

People in the USA work too much for too little today. that is the real problem. The rich have sucked so much money from the lower 99%, that there is little money available to buy goods. If no one is buying anything, no companies hire because there is no demand. Thus you have a cycle of no growth...a recession.
post #17 of 148
It seems to me that rousing people at night for a project with a six week time line is more a show of force than actually getting something productive done in itself. Doing fine work while tired isn't a recipe for success. Work to fix mistakes made while exhausted might as well been avoided by doing it after a good night's sleep.

The recent documentary on Foxconn was a little disturbing, having roommates (8 to a room there) isn't necessarily terrible if you're single, colleges, the military, campgrounds do it to varying degrees. Big name music acts have 12 people bunking in a bus. However, it's definitely not a lifestyle for extended periods of time. What's worse is that people often didn't know the names of any of their roommates.
post #18 of 148
What's with the demolished house? Not the inclusion of the pic, but I wonder why Steve was so adamant about fighting for the land when he knew he wasn't going to be around to enjoy it. Because his wife wanted it? Because he simply wanted to win?


Quote:
Originally Posted by JeffDM View Post

What's worse is that people often didn't know the names of any of their roommates.

That's the part that bothered me about.

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post #19 of 148
Quote:
Originally Posted by tonton View Post

Assuming no political or other economic disasters in the current and future emerging economies, within 20 years, it will no longer be cost effective to manufacture in China. Within 30 years it will no longer be cost effective to manufacture in India. After that, Africa will be the next Asia, assuming governments settle down to become stable enough to allow for long-term outside investment. Savvy investors will take note and make billions.

But we don't want those jobs back in the US, jobs which are only suitable for emerging economies.

I'd agree in the main with what you are saying but I don't think it will be as long as 20 years. There is a significant compression of the timeline from developing to developed nation. I'd give China another 10 years maximum before it starts to see mass movement of manufacturing elsewhere. In certain industries (for example textiles) when you consider shipment times, cost of warehousing and include labour many Eastern European countries are close to the same cost as China, can't speak about the US market only Europe. I'm not so sure about Africa, there are lots of cultural differences and as you highlight lots of political 'issues' but you are right that in certain categories it is already starting to happen there, mainly under Chinese management/ownership.

Once the factories are gone from China a highly educated multi-lingual nation will take on a lot of our professional services businesses. The whole thing is a big challenge. My job is reasonably senior (C level) and in the main can be done from pretty much anywhere in the world save for what I view as an essential part which is site visits.

With that in mind and with the increasing better education in China/India/etc what jobs will we in the West do?
post #20 of 148
I've said this many times before: these jobs are not coming back to the US.

Its not just about bulding a plant and finding some workers (both if which will take ages in the US). We lack the component supply chain, the training facilities, the worker discipline, the supervisory capabilities, the quality mentality, and hunger for achievement (that we once had).
post #21 of 148
Quote:
Originally Posted by wizard69 View Post

Seriously there are good reasons to wake somebody in the middle of the night, sticking screens on iPhones isn't one of them. I smell a workers revolt coming to China.

They are right about one thing though, it would be very hard to find Americans willing to work with those sorts of expectations. Who would want to be packed in a dorm just to have a job.

There's more to the story than that. According to the NYT:

"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."


A biscuit and a cup of tea, and then a 12 hour shift. The American worker cannot compete.
post #22 of 148
Apple has created jobs and entrepreneurs around their products.. Developers, accessory makers, appcessories, even business that centers around Apple products. Apple has even created jobs at FedEx just to meet demands of shipping Apple products.. Not a lot of people realize all these.. Despite more and more companies doing so, Apple has not move their call center overseas..

Bring those manufacturing jobs back home isn't something Apple can do by itself despite its billions. The government needs to act on it as well.
post #23 of 148
Quote:
Originally Posted by cycomiko View Post

maybe wrong link




I think that is a photo of a piece of American History being destroyed. It is going to be replaced with a glass cube where the kids of a wealthy man will reside.
post #24 of 148
The US has many infrastructure differences (not problems) that differs from China, and this NYT article (which is one of the best articles written in recent memory) reflects that.

There is no question that dormitories at factories as described are a no-go in the US and rightfully so. So is, as should be the "company town", as existed in the "coal country". For a great memoir, "Rocket Boys" by Homer Hickam.

As far as describing that lack of dedication and hard work which Americans are unwilling and unable put out, that is patently false.

Having worked over the years for state government, I know from personal experience that our/we state workers have put in 60-80 our weeks, on short notice, to deal with projects that are at risk, or under significant time constraints, or under emergency conditions.

Such workloads are not uncommon in IT. Servers are down, communication lines failed, database corrupted, failure of payroll/benefits.

Lawyers and paralegals preparing for upcoming trials, accountants preparing for tax deadlines, surgeons preparing for and performing 12-16 hour surgeries, work very long hours.

I heard that Michael Phelps prepares by swimming 12 hours per day during training. Any dedicated athlete does the same. Dedicated college students, especially in the sciences and engineering, put in 60-80 hour weeks. As a law student, putting in 60-80 weeks was routine. As a computer science grad, putting in 60-80 hours per week was not uncommon. College professors put that same kind of time in routinely, writing grants, writing papers for publication, guiding students and post-grads, serving on committees.

It happens all the time, every week. Masses of Americans are putting in, and are flexible. ER personnel put in 12 hour days, at least. Broken water mains and downed electrical lines bring in people all hours of the night and day to repair. Crews that fought the fires in Texas and the southwest just this last year? Remember Katrina? How about 9/11?

It is routine that owners/managers of restaurants and bars put in 12 hour days routinely, as do most successful Ma/Pa enterprises. People who need to work 2-3 jobs to make ends meet, for little pay, put in many hours, if they can find them, and may need to travel considerable distances to do so.

Long haul truckers, taxicab drivers put in 12-16 hour days.

Steve Jobs might have been a brilliant CEO, but he was as clueless as any other CEO making their millions.
post #25 of 148
Quote:
Originally Posted by waldobushman View Post

The US has many infrastructure differences (not problems) that differs from China, and this NYT article (which is one of the best articles written in recent memory) reflects that.

There is no question that dormitories at factories as described are a no-go in the US and rightfully so. So is, as should be the "company town", as existed in the "coal country". For a great memoir, "Rocket Boys" by Homer Hickam.

As far as describing that lack of dedication and hard work which Americans are unwilling and unable put out, that is patently false.

Having worked over the years for state government, I know from personal experience that our/we state workers have put in 60-80 our weeks, on short notice, to deal with projects that are at risk, or under significant time constraints, or under emergency conditions.

Such workloads are not uncommon in IT. Servers are down, communication lines failed, database corrupted, failure of payroll/benefits.

Lawyers and paralegals preparing for upcoming trials, accountants preparing for tax deadlines, surgeons preparing for and performing 12-16 hour surgeries, work very long hours.

I heard that Michael Phelps prepares by swimming 12 hours per day during training. Any dedicated athlete does the same. Dedicated college students, especially in the sciences and engineering, put in 60-80 hour weeks. As a law student, putting in 60-80 weeks was routine. As a computer science grad, putting in 60-80 hours per week was not uncommon. College professors put that same kind of time in routinely, writing grants, writing papers for publication, guiding students and post-grads, serving on committees.

It happens all the time, every week. Masses of Americans are putting in, and are flexible. ER personnel put in 12 hour days, at least. Broken water mains and downed electrical lines bring in people all hours of the night and day to repair. Crews that fought the fires in Texas and the southwest just this last year? Remember Katrina? How about 9/11?

It is routine that owners/managers of restaurants and bars put in 12 hour days routinely, as do most successful Ma/Pa enterprises. People who need to work 2-3 jobs to make ends meet, for little pay, put in many hours, if they can find them, and may need to travel considerable distances to do so.

Long haul truckers, taxicab drivers put in 12-16 hour days.

Steve Jobs might have been a brilliant CEO, but he was as clueless as any other CEO making their millions.

These are all valid points, however it would be difficult to find an American willing to work 12 hour shifts for a wage that can't sustain a single person household.
post #26 of 148
Your headline paints this story as some sort of positive for Apple. It's a scathing review of what Apple does to increase profits. While the facts are portrayed more correctly in your full article, I don't see why you try to foist this off as a positive story.

Read the comments on the NYT website to the article. Not pretty for Apple.
post #27 of 148
I have long complained about the US trade deficit and have always gone to great lengths to buy American made stuff (not an easy task these days). I do not blame these companies for what they do. Their goal is to make money, not to make up for the failure of the American government.

I also blame a majority of Americans who have no clue where stuff is made. They want things cheap. They consume way too much crap, and do not put any emphasis on engineering and substance. Image is all that American's care about. We have gotten way too fat and lazy and lag behind many countries.

Germany has always been my idol. They are 1/5 the population of the US yet still export more manufactured good goods than the USA. They are great engineers and study hard. They make the machine that makes the stuff that China builds, and the stuff that makes the stuff that we build.

We still live in this delusion that we are inherently the best and anyone that questions America is unpatriotic. I believe the opposite. It is unpatriotic not to question everything.

We need to wake up, educate our kids, stop blaming others for our own failures, reform our government, fix our education system and change our priorities in this world.
post #28 of 148
Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

I think that is a photo of a piece of American History being destroyed. It is going to be replaced with a glass cube where the kids of a wealthy man will reside.

which will then be a part of American history.
post #29 of 148
Thanks to all for your generally reasonable and thoughtful contributions. When I read this article on the NYT website yesterday, I was all but certain that we'd see a number of trite rants on AI today about "evil furriners", runaway American manufacturers and "it's all the President's fault" (although what's happened took place over decades and numerous administrations). A few knuckleheads have posted so far, but not many.

But the problem is too serious. The NYT article is the best example yet of the canary in the mineshaft, fluttering and gasping for the air it needs to survive.

A very timely piece. Expect it to generate huge national attention in these days leading up to a State of the Union address that we've been told will focus on our economy and jobs.

I admit to being a Fanatical Moderate. I Disdain the Inane. Vyizderzominymororzizazizdenderizorziz?

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I admit to being a Fanatical Moderate. I Disdain the Inane. Vyizderzominymororzizazizdenderizorziz?

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post #30 of 148
Quote:
Originally Posted by AppleInsider View Post

According to the report, Apple holds a "central conviction" that overseas production facilities offer scale, flexibility, diligence and skilled workers that U.S. factories are no longer able to match.

A guest at the dinner noted that Jobs candidly replied, "Those jobs aren't coming back."

But, the company's executives have indicated that moving work overseas is their only option. A former executive recounted an instance prior to the launch of the original iPhone where 8,000 employees were woken up in the middle of the night to begin outfitting glass screens, a last-minute addition for the handset. Within just a few days, the factory was producing more than 10,000 iPhones a day.

The speed and flexibility is breathtaking, the executive said. Theres no American plant that can match that.

Sources revealed that the last-minute adjustment came about because Jobs demanded a change in the iPhone just weeks before its scheduled launch. He had reportedly noticed that the keys in his pockets had scratched a prototype device he had been testing.

I wont sell a product that gets scratched, Jobs was noted as saying. I want a glass screen, and I want it perfect in six weeks.

One Apple executive defended Apple's decision to produce iPhones overseas by noting that the device is sold in more than a hundred countries. We dont have an obligation to solve Americas problems. Our only obligation is making the best product possible, the executive said.

One former high-ranking executive said that Cook decided to move much of its manufacturing to Asia because it can "scale up and down faster" and "Asian supply chains have surpassed what's in the U.S."

They could hire 3,000 people overnight, said Jennifer Rigoni, who served as Apples worldwide supply demand manager until 2010. What U.S. plant can find 3,000 people overnight and convince them to live in dorms?

I can't help but draw some parallels between these actions and the ones described by Ayn Rand in her Objectivist philosophy. In many ways, I agree with the general philosophy in that the overriding purpose of life appears to be the pursuit of your own rational self-interest. However, the extension to unregulated practices being a necessity is a step too far. You can see what deregulation has done to our financial system, while the beneficiaries claim they are only engaging laissez-faire trade, which everyone has a fundamental right to and capability of and trying to assert that their success in contrast to others' failure is simply evidence of their superiority and yet somehow their own failure comes with no accountability.

The examples given of the great business leaders in Atlas Shrugged were of greedy, selfish individuals who made themselves out to be oppressed by regulations and incapable of realising their visions so subsequently they burned factories, destroying jobs and moved away from territories that the governments controlled to a retreat occupied by John Galt who persuaded the followers to rally against collectivism/socialism and being forced to work under the mantra 'From each according to his ability, to each according to his need'.

Society shouldn't embrace mediocrity but we shouldn't strive towards the lowest common denominator either. If worker A does a job for Salary X and worker B does the same job for a lower Salary Y but has to sacrifice personal freedoms in order to make it feasible thus requiring worker A to comply or lose their job, it is a moral responsibility not to support this to avoid reducing the standard of living that generations have worked and died to improve. The success of the individual depends on the work of the masses so their own self-interest becomes mutual.

There's no denying that a gap has widened between Western and Eastern working cultures and Eastern countries pull off some impressive feats that are arguably difficult to match:

http://www.youtube.com/watch?v=Hdpf-MQM9vY

But at the same time, there's no denying that there's a huge gap in working conditions, education standards, healthcare and standard of living too and those can't be dismissed. I'm certain that Steve Jobs wouldn't have liked to be awoken in the middle of the night to do work at someone else's request nor would he have liked to share a dorm room with multiple strangers so why expect it of others, especially people whose skills you admire?

The solution to this problem is not an easy one. I think it has to start with the poor workers in Eastern countries. They've already started taking measures like threatening mass suicide:

http://articles.cnn.com/2012-01-11/a...son?_s=PM:ASIA
http://news.sky.com/home/world-news/article/16146955

and it's no wonder in light of the reports:

http://blog.aflcio.org/2012/01/18/wh...hinas-foxconn/

There ought to be a global standard for minimum quality of living for the working class and if companies or governments don't comply, it's up to the oppressed to take to action until they do. If the minimum standard of living in Eastern countries equalled the standard in Western countries and they still far outclass them, that's fine. What's not fine is paying an overcrowded population 31c an hour and giving them longer than multiple day shifts with student accommodation and claiming that until Western countries can match the volumes that setup allows, this is how it's going to be.
post #31 of 148
Quote:
Originally Posted by Smallwheels View Post

If Apple could first create assembly factories in the USA and then gradually move the parts manufacturing here it would get the ball rolling. If they started the assembly here, local companies would spring up to supply parts. That is how it works. That is how it works in China too. Apple could take the first step by assembling iPods here and then other products.

I think this point is spot on. Much of what the NYT story described is the advantage of having a lot of related manufacturing facilities located close to one another and to the appropriately skilled labor. When people talk about a "manufacturing base", that's what they are talking about. A similar situation exists in Silicon Valley for highly skilled labor in the computer industry or in the upper midwest for the auto industry or in NYC for the financial industry.

All the stuff about how Chinese workers are so dedicated is not the differentiating factor. As someone else pointed out in this thread, there are plenty of Americans across all industries, both private and public, who work very hard.

So the question then becomes, how did all of this stuff become located in China? I think it basically comes down to two things. First, the Chinese government kept their currency artificially weak for a long time. This matters a great deal. Second, the Chinese government had an industrial policy to do whatever it took to create a manufacturing base. The closest example of that type of policy that we've seen in the US in recent times was the rescue of GM by the federal government. If that rescue had not taken place the manufacturing base of the upper midwest may have collapsed completely, and in another decade we'd have a similar story appearing in the NYT explaining why no cars are manufactured in the US anymore. (to the usual Obama-hating libertarian types -- your bankrupt ideology is heading for the same ash heap of history that contains communism, so whine all you want, but know that your time is ending).

There are other aspects of Chinese industrial policy that libertarians lust after but that we do not need to emulate, such as massive environmental degradation and exploitation of workers. But those things aren't necessary for us (it's questionable whether they were even necessary for China). What's necessary is having the web of interconnected industries and supporting government institutions (schools, research facilities) located within a single geographical area.

So how do we re-create that type of manufacturing base in the US? I think it's misguided to think that we just need strong moral leaders at companies like Apple to make this happen. Creating the needed interconnected web of industry and supporting institutions is beyond the capability of any one company, no matter how big. We're talking about government policy that is made in cooperation with BOTH business and labor leaders (you cannot ignore either of those groups).
post #32 of 148
Quote:
Originally Posted by scott6666 View Post

Your headline paints this story as some sort of positive for Apple. It's a scathing review of what Apple does to increase profits. While the facts are portrayed more correctly in your full article, I don't see why you try to foist this off as a positive story.

Read the comments on the NYT website to the article. Not pretty for Apple.

As an entrepreneur with an economics degree I read this as a positive article. Why would I use the reaction of uneducated idiots on the nytimes page to gauge what kind of an article it was?
post #33 of 148
A lot of naïveté in this thread.
post #34 of 148
Quote:
Originally Posted by cycomiko View Post

maybe wrong link

Nah. The story did state Obama was there.

It was overheard from Steve Jobs, "This is another fine mess you have gotten us into!"

See the photo seconds before...

(hey, sooner or later, you know someone was gonna say it.)
/
/
/

Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

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Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

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post #35 of 148
Quote:
Originally Posted by PBRSTREETG View Post

These are all valid points, however it would be difficult to find an American willing to work 12 hour shifts for a wage that can't sustain a single person household.

I think you're misunderstanding many of the economic issues involved.

First, the wages that Chinese manufacturing workers receive are actually fairly comfortable wages by their standards. A Foxconn worker, for example, is solidly middle class.

Second, you can't compare currencies directly. To say that they make the equivalent of $1 per day (or whatever) is a meaningless number unless you compare the cost of living, as well. Given the massive currency manipulation that the Chinese Government has done, it's nearly impossible to do a direct comparison.

Bottom line is that Chinese workers were lined up for those jobs. As the number of factory jobs has skyrocketed, the lines have dropped off - and there are even shortages of skilled workers in some places in China. Because of that, wages are increasing - and some manufacturers are building their new facilities in other parts of China - or even elsewhere in Asia. Supply and demand works in China, too.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #36 of 148
Quote:
Originally Posted by scott6666 View Post

Your headline paints this story as some sort of positive for Apple. It's a scathing review of what Apple does to increase profits. While the facts are portrayed more correctly in your full article, I don't see why you try to foist this off as a positive story.

Read the comments on the NYT website to the article. Not pretty for Apple.

The comments are mostly shallow, emotional, knee-jerk responses of the "I don't think I'll buy Apple again" variety.

All typed on their US-made computers, I'll bet. /sarcasm

Hypocrites.
post #37 of 148
Quote:
Originally Posted by anantksundaram View Post

The comments are mostly shallow, emotional, knee-jerk responses of the "I don't think I'll buy Apple again" variety.

All typed on their US-made computers, I'll bet. /sarcasm

Hypocrites.

My bigger beef with people like that isn't so much that they are hypocrites as that they are soft-headed.

The ideal person is soft-hearted but hard-headed.

It used to be that Republicans were hard-headed and hard-hearted while Democrats were soft-headed and soft-hearted. That created a real dilemma for someone like me -- do I support smart a-holes or lovable morons?

As I see it, Republicans have become soft-headed and hard-hearted, the worst possible combination. Among Democrats we now have a mix -- hard-headed+soft-hearted (I'd put the Obama administration in this new, awesome group) and the old soft-headed+soft-hearted.

My hope is that the Obama-style Democrats eventually crowd out the old school soft-headed group that posts stupid things on NYT comment boards, but we shall see.
post #38 of 148
Quote:
Originally Posted by wizard69 View Post

Seriously there are good reasons to wake somebody in the middle of the night, sticking screens on iPhones isn't one of them.

While I agree with you on the one hand, I suspect that they agree to such things when they take the job and if they agree to it then Apple can hardly be blamed for it.

The blame goes to the Foxconn bosses that didn't return fire (if you will) on Apple and just say that while they get that Apple wants to use the best parts and thus they are delaying the start of assembling for new screens to be made, rushing assembling could result in faulty assembling and that isn't something Apple would want either. So while they can have the promised X units a day after delivery, it will have to be on the typical schedule and they will be short the units for the days their decision to change from plastic to glass delayed the start. Unfortunately for the workers, that sort of thing isn't in the Asian culture. If they promised to deliver X units by Y date, they will deliver at all costs. And the workers agree to this even if it means night shifts and being woken up at 1am etc.


Quote:
Originally Posted by tonton View Post

When someone thinks that solving America's problems is more important than caring about problems all around the world, ignoring the problems of Chinese workers who might become equally as unemployed, for instance, or the benefits Apple has given to those people who are generally worse off than the residents of Flint, Michigan, then I think there has been a lapse of moral judgment. If you want to talk about patriotism, go right ahead. If you want to talk about morality, however, I think you're missing something.

I think you can call a spade a spade both directions. If this exec was actually quoted correctly (and I suspect he wasn't. or at least not fully), you could argue that perhaps he should have said it as 'Apple alone isn't responsible for fixing these problems'. And he would be correct. what are the other companies doing. Corning is a US company isn't it. But they make the glass in Asia. They argue that it takes too long and is too risky to ship to the US for assembly. So where are the demands that they build a factory in the US to ship to the US assembly plants. There's a valid argument that perhaps there should be more than one set of parts and assembly plants so that every region can benefit from local work. So Asia builds for Asia, US for US (or at least North America for North America), Europe for Europe and so on. But while folks toss these ideas out at Apple they rarely give the same cry for every other company and industry.

And what is the government doing to help not hinder with such things. Folks screamed about Apple getting a tax rate cut on the Data Center in North Carolina as evil but NC did that likely do to math that showed that even charging half the rate they were before they were getting more money due to the higher value on the land. Win win. The government doesn't want to give a holiday for Apple et al to bring money back from over seas but look at the math. How much are they still making if Apple pays a 5-10% rate and brings back a few billion versus leaving it out there. If the US just agreed to dropping it to say 15-18% Apple would probably bring back some of the money they were considering and the Govt would make bank.

The recent Education event has brought up some of the same talk. Jobs said that tossing tech at schools wasn't the way to fix the issue back in 1996 but that's a little what Apple is doing now. But not by just giving an iPad to every kid for school and free textbooks. They are making money on it. Not much but some. Shame on them. How dare they. But what are the other companies doing. Has Samsung started shipping their tablets to rural schools and hospitals at no costs. Has Microsoft started shipping computers or free internet service. And I mean totally free not "we'll give it to you cause you are giving us a tax break etc".


Quote:
Originally Posted by shompa View Post

Just suggesting that other countries have more skill to produce stuff then other countries is plain racism.

In this case not really. Asian countries are actually better. Not because they are Asian but because they have trained themselves to be better. Which is not racist but simply a fact.

Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

There's more to the story than that. According to the NYT:

"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.".

ANd a lot of folks have been dissing on that statement. But consider a few facts not mentioned in the story. Like do they typically just have tea and a biscuit before starting any shift. Or were they rotated out to eat a fuller breakfast in an hour or so in, after the kitchen staff (who were also asleep) had been roused to start cooking for them.

Quote:
Originally Posted by anantksundaram View Post

The comments are mostly shallow, emotional, knee-jerk responses of the "I don't think I'll buy Apple again" variety.

All typed on their US-made computers, I'll bet.

Of course, with all US made parts. Or they were using their fully US smart phones.

Apple gets a ton of press for everything they do but often one has to ask "what about everyone else, aren't they doing the same thing, the same way". So why don't we hear about it. Simple. Hits. Apple gets page hits way more than the other guys. Especially if its a bad article about Apple cause then the haters come to hate and the fans and more reasonable folks come to counter the haters. And the site gets ad money. Win all around.

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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post #39 of 148
[QUOTE=shompa Just look at the rise of Samsung and HTC. Both companies started as OEMs to westerns companies. Then they figured out that they could use the same devices and put their own brand in on them. They have no culture of innovation, but great culture of OEMing.
[/QUOTE]

Kindly tell it to the people who buy Samsung phones and yes there is a new word in town known as samsung'd, the US being samsung'd by these droids users who send boatloads of cash to Korea and they were proud of it especially those bloggers who praised the first ad by Samsung which mocked the people queuing for an iPhones. Yes, they said the ad was brilliant.
post #40 of 148
Quote:
Originally Posted by DrDoppio View Post

Wow, that dinner looks like... like a disaster...

No kidding! Those guys seriously tore the roof of the mother sucker. I want to party with those nerds.
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