Apple's overseas manufacturing operations offer flexibility, not just savings - report - Page 2

The average Foxconn worker can't even afford an iPhone or an iPad. People in the US who can't even afford the data plan for an iPhone have them. There is a reason why manufacturing is done in China. It can be done cheaper at wages and rates that American workers are unwilling to accept.

Well, they're already packed in dorms but we call them public housing projects here don't we. Why not produce some work in order to get that check every month instead of sitting on the stoop watching the world go by.

I do not really get the problem. Aren't phone assembly lines supposed to be fully automated? Or do they still require manual labor? Do these 100000 Foxconn workers really use screwdrivers?

Rabid partisanship encourages us to manufacture straw men arguments that distort the real arguments so we can deepen our divisions without actually moving toward a solution. Please stop. Unions did some good, but they also did a lot to price their workers out of the competitive world market. Sometimes you can do so good a job at ensuring good wages for your people that you put them out of work. A worker's minimum hourly wage becomes very theoretical when they aren't able to actually earn it. As a few people in Detroit and Pittsburg might tell you. Such losses are very hard to get back, since they represent loss in both the physical manufacturing capacity (factories with state of the art technology) plus manpower (skilled and semi-skilled workers knowledgable about those factories).

You imagine these people just sitting there, watching machines do everything? 100,000 workers, even in China, have to get paid. Foxconn would fire them in an instant if they weren't a genuine part of the production process.

In fact, Nationalism is *never* good. The entire history of the world is against you on that one.

Almost every example of overt nationalism in history leads to war, privation, starvation, etc. Nationalism is also at the very root of racism which is never good. People wave a flag on whatever national day of celebration they have and think "this is great!", but the truth is that Nationalism is the main cause of most of the world's problems.

That is true, but you need to qualify that statement with "in an industrial country".

The standard of living in China is different.

The social safety net (or lack thereof) in China is different.

You work, or potentially you starve. In the US (and most industrial countries) you would have many last options before you starved. I'm not so sure that those same options exist in China.

It is very different to compare 1000 skilled workers in China to 1000 skilled workers in the US.

No, it's a picture of a tacky Spanish-American mini-mansion being destroyed.

It's going to be replaced by an architectural wonder that will eventually become a tourist attraction as a piece of American History.

1) Loving one's country should not be confused with an extreme feeling of superiority over other other nations.

2) Being patriotic does not lead to this excessive irrational behaviour.

3) Being patriotic is not the foundation of of racism.

You are making a false comparison here. The money they make in China wouldn't sustain an American single person family, but it does so in China easily.

The workers in Apple's factories in China are actually well-paid relative to the Chinese economy which is the only rational measure.

The problem with using Apple as an example of the retreat to China, is that Apple is one company that could actually make their products in the US (absent other infrastructure issues).

Apple is a premium quality brand. And there are enough, but a significant minority of, people in the US and other places willing to purchase their products at premium prices. The wages that Apple would pay in the US would decrease their margins but would still allow them to make a very healthy profit.

This is not true for the Dell's of the world. Very low margins, low quality, and cheap, cheap, cheap.

The key issue, seems to me, is that all the components used in our new toys are made in the East, and those companies are very low margin as well. But, the East has a virtual monopoly on production. In fact, the US no longer has a manufacturing infrastructure, and it's not clear if the US could recreate one in the foreseeable future.

The last factory manufacturing metal "silverware" in the US, closed it's doors last year. And we don't have any manufacturers of clothing or material in the US.

The US is quite doomed even as a consumer/service society. The US is in a spiraling decline. It doesn't look that way on the surface because the GDP is high. But that is a fake statistic.

The cost of health care and drugs has skyrocketed, and that income/cost is reflected in the GDP growth. Bring down health care costs and the GDP will plummet.

The financial sector accounts for 40% of GDP, but they don't make anything but money. The housing bubble was just the latest symptom of a fake economy. Historically, the financial sector invested in productive enterprises, rather than creating financial instruments to invest in, and then the financial industry accounted for about 5% of GDP. Bring the fake financial sector back down to the historic 5% , and with control of health care costs, the GDP would properly reflect a real GDP of between 1/3 to 1/2 of current GDP.

The lack of manufacturing in the US is reflected primarily in the lack of investment in productive capital, not in the inability of people to perform the jobs. Money is being drained out of production because the financial sector can make at least 18% on debt, 12% to 20% on fake financial instruments. Why invest in new productive enterprises which will only give you 3%-5% return, when you can make triple that investing in money. Compare our banking system with the highly government controlled banking system in China. China's banks are required to invest in productive and infrastructure enterprises, that's why the factories are there.

The NYT article is eye-opening but fundamentally misses the critical problem the US has.

I am Indian, so I know what i'm talking about. When you say it will no longer be cost effective to manufacture in India in 30 years, it will be ATLEAST 50 years before it becomes a problem for anybody. India is an extremely impoverished country. I was just there in December and there are PLENTY of people to provide that low cost labour for many generations to come. They can all be trained to provide a service for a bowl of rice everyday. China is the same way, plenty of poor people that can easily be trained from youth to provide a low cost service. It will be atleast half a century before that thought even enters anybody's mind.

So Apple is a premium brand already sold at premium prices, even though competitive with other companies selling comparable product, yet you think Apple could produce everything in the US and still make the same profit because people are willing to pay for American produced goods at highly inflated costs? WHere is the evidence to support this? How much more are you willing to spend for Apple's products? it isn't about manufacturing in the US, but.. every...single... component... made all over the world that would have to be made in the US. As much as I love my iPhone I will not spend thousands of dollars just to get it stamped with Made in the USA. What about other countries? Do they care about their Apple products being made in the US? Are they willing to pay the price for a US made Apple products? What about other products that you want? Do you expect them to create everything within US borders? What about world trade? Is that no longer important? SHould the US have a closed door policy on goods? How would this help the nation with the highest GDP?

... this country is for the benefit of the People in it. Not Apple. Not Microsoft. Not British Petroleum.

Apple "can't" bring the manufacturing back, until of course we change the economics of the calculation every business has to make. No business can compete if the DON'T screw the American worker -- in capitalism, the lowest common denominator always wins.

The Manufacturing facilities and workers aren't as good, perhaps because we don't really manufacture anymore, and people here have a more expensive, complicated life where they can't fetch and get it at 3am in the morning when they can't afford to have someone else look after their kids.

Give us time, maybe we'll have three generations back in the home, and compete with those $3 a day jobs.

Sorry to talk politics -- but there is no other solution than to DICTATE the right outcome. Corporations either can't change this trend or are part of the problem actually paying to make it worse.

.... INSTEAD, let's propose we kick the US Chamber of Commerce out on it's outsourcing ass -- there is no shortage of self-serving people to become CEOs around the world, so what are they doing here while the labor is step and fetching over their?

2nd, we raise Tariffs on imports like Apple Computers and ANYTHING ELSE because China has these tariffs on our goods -- and it doesn't seem to be hurting THEM.

3rd, Smack every Supply-sider economist, Chicago School shill, and Global Competition guru in the mouth for being such an asshole all these years -- selling out the country that gave them the opportunity to spout their nonsense.

4th make it illegal for anyone to donate corporate money of any kind via any means, and donations have to be limited to $250 with the name of the individual on the check. Scratch that - make elections 100% taxpayer funded and the barrier to entry is getting enough signatures on a petition. Commercial TV will not be allowed to carry political ads or infomercials about candidates. Only public TV and under strict rules. Along these lines, end Political parties as well -- they make absolutely no sense that someone you voted as a representative is parlaying with another jerk to bargain away your best interests.

5th -- term limits are nonsense. It's a revolving door of corruption. If you close the hole for BENEFITS and stock trading and being a "consultant" like Newt for the industries they regulate, the only thing term limits does is make the election consultants and lobbyists MORE powerful. The Law needs to be, that if you take office, you cannot EVER work for a company that you were in a committee regulating or providing oversight on. Your spouses cannot either. Any income not from your job as a representative is strictly monitored -- in exchange we should pay them MORE money. They have to divest themselves of stocks and investments and the VALUE of these go into a trust that is held by all politicians and they just take the dollar equivalent of its increased value (if any). If you cannot accept this limit on your future wealth, Mr. Millionaire politician -- save the job for someone who gives a crap about the country.


The free market is selling us the rope right now to hang ourselves. This candor from Steve Jobs should be seen not as a recrimination of American workers -- but as a wakeup call. The Chinese will eventually have a very prosperous middle class -- and THEY will get screwed by the Supply-Side Globalist / Parasites who start preaching to them how to "be competitive." For 30 years we've increased productivity -- but what it really means is that you and I do more for less.

Maybe we should go back to mercantilism -- I don't know. All I know is that I won't be able to afford college for my kids -- and Why they Hell would I tell them to PAY for college if it's on their dime? We are better off economically hiring an educated Chinese college student who got trained on someone else's dime and acting like an employer than we are taking an investment risk with no guaranteed payout.

I haven't read all the comments yet -- but I EXPECT to read excuses why we can't make Apple Computers here because all of a sudden they would cost more.

.. I haven't met anyone yet, who was totally sold out to Capitalism, who really understood markets -- it's some kind of faith-based nonsense.

The price of a product is the MOST the market will bare. It has NOTHING to do with costs unless those costs exceed the price it can be sold at -- in which case the product doesn't get made unless it's a loss leader from a deep pocket company.

All money that doesn't go to paying workers and building and advertising and the piddling sum to taxes goes to profits.

>> The COST of INSOURCING is usually only around 10-15%, as the cost of construction is NOT the biggest ticket item.

If more products were forced to either be a LOT more expensive (import fees) or locally created, then more Americans could afford to buy them. Right now we are in a downward economic spiral because we cannot take out 2nd mortgages to rent our lifestyle. The Consumer has no more blood to give.

Thank you to China's workers for their sacrifice in assembling my iPhone.

Really the 1% argument??

Jobs was one of the 1%, as were almost every historic figure you can remember. They did not all start as 1% ers, they rose to that point. Read Jobs biography for his specifics.

Consider this: a sci- fi novel had a theme that space travel and colonization killed the earth, by taking the 1% off the earth the colonies thrived on the innovation of the 1% , the 99% doomed the earth to stagnation, and inability to change fast enough to overcome population growth.

I personally think that the 1% should be treasured, as they save the world, and no I'm not one of them.

Some new innovator will come along and find ways to solve manufacturing, energy and other problems if we reward the process and let the invention to product market work.
My opinion YMMV

The American worker is obese.

Thanks for the incorrect generalization.

If you really believe what you wrote then you have the mentality of a perfect slave.

You said a lot of soft, uninformed things in this post. But saying the financial sector accounts for 40% of GDP is a very hard and very wrong stat. Let's see where you got that number?

Take a breath! A waste of the terrible mind thing.

[insult removed]

Other than our illegal Mexican farmworker labor force, what workers in the U.S. can work flexibly, diligently, and hard and in mass quantities and with the willingness to work in hardship like the Chinese workers can.

There is no LARGE group of U.S. workers that will work 6 days a week, be up at any time of the day, that would live in dormatories, that would be willing to give up family and social life to create iPhones.

There is no LARGE group of U.S. workers that have the mental flexibility to change plans and production at a moment's notice like the Chinese. If the job had to change suddenly, workers in the U.S. would complain. Chinese workers would say, yes sir and it will be done immediately.

Again, other than our illegal Mexican farmworker labor force, who can do this in the U.S.? No one.

Unfortunately, U.S. workers are use to having a lot of luxuries that Chinese workers don't even dream of. They wouldn't give up these luxuries to work like slaves.

Yes I do believe that some of the 1% are national treasures. I think Jobs was, Stephen Hawking is, as was Einstein, one could argue that Rockefeller Ford, and those who built the infrastructure of the 20th century were as well.

It takes too much energy for me to hate or envy any of these people.

To be clear this is not talking about the Bernie Madoffs of the world, they are criminals, and should be treated as such. Some of the historic 1%ers like Carniege, certainly have a mixed record, remember he single handedly was responsible for the creation of unions (wink wink).



Berners-Lee, Page, Brin, Zuckerberg, etc. are building the 21st century infrastructure, they are 1%ers should we hate them too? These people break a lot of eggs, but they sure do make a bunch of omelets. The jobs will come back to the US and developed countries when we evolve our social structures to figure it out, in the mean time the standard of living in other countries is rising, and that is a good thing.

Be happy to take this to another forum, just name it.

No need to take this further, as long as you clearly realize that the top 1% according to affluence has nothing to do (or, isn't highly correlated) with the top 1% in regard to creativity, inventiveness, hard work and solid morals.

Further, this is to the several posters who suggested that outsourced jobs could not come back to the US due to some shortcoming of american workers, this is pure BS. If you put Americans under the same conditions that workers in Asia have, they would work just as disciplined, hard, and underpaid. Luckily Western societies have for the most part evolved to the degree where people do not need to work 12 hour shifts on a biscuit. And those that claim that Asian workers earn enough, stop comparing them to the rest of the starving population, that's just unfair. Compare them to what the middle class in the west can afford -- not only in terms of providing for one's family, but also in terms of ability to develop personal interests, travel, save for retirement, take good care of one's health...

Very political thread... the mixed-up picture didn't help...

How much looting and rioting happened in Japan during the last nuclear crisis? How has our entitlement society created better workers?

There are so many variables to consider when discussing standards of living and keeping manufacturing jobs here.

Don't forget that when Apple manages to make a world-class product such as an iPad cheaply, millions of Americans buy it and benefit. Our standard of living goes up, even if it's not reflected in wages, per se.

Compare how someone in the middle class lived in the 1970s to 2012. Modern conveniences and all kinds of goods that increase our leisure time enjoyment.

Many of our poor are obese. Our GDP continues to increase, year after year, even after adjusting for inflation. Our consumerism drives innovation. It's a huge, virtuous circle.

Jobs is right. Those jobs that demand long hours - in addition to being monotonous and likely unfulfilling - are not the kind of jobs that are easy to fill here. They are not coming back.

"Be careful what you wish for" is appropriate for those wanting these jobs in the US because the state this country would have to be in in order to get these jobs to come to America is not something a sane American would want to deal with.

Technology has created a global economy. In order to compete with the world for jobs, we, as Americans and as a country, must be willing to make the same quality product in the same volume for the same price. American workers are just too lazy and spoiled to do that. Hate to say it but it's true, I'm an American employer and, sadly, I see it everyday.

Our time was post WWII until the 1970s. We were hungry and had the mentality that hard work brought good things in life. We've lost that hunger and now it's someone else's turn to feed and get fat....like us.

edit: uhuh!

No need to clean the dishes. Just bring in the bulldozers!

My dear Mr. President, I am speechless.

Flexibility, speed, savings, jobs perfection. Is that what this is about?

This is a red pill/blue pill moment:

http://www.thisamericanlife.org/radi...-apple-factory

We can face Mike Daisey's visit to Foxconn, or we can turn away.

The American press, AppleInsider included, has largely chosen to clap its collective hands over its myriad ears and sing "la la la la," but each of us can make our his or her own personal choice. It's analogous to the old saw about people who love sausage best avoiding its manufacture, with the exception that sausage, unlike our electronics, isn't made from human beings. (Though having said that, I'm recalling my high school reading of Sinclair Lewis' "The Jungle.")

In that I really would like the world to be a better place for everyone and not just a cooler place for a few, I don't know what I'll do when the new iPad is released. I was planning on getting one, but I don't know if I'll be able to live with it or myself if I do.

Mike Daisy has invited us all to join him on a tour of the sausage factory. Personally, I don't know if I can go on smacking my lips over this tasty stuff, knowing what I know. I'm afraid that - all alone - I'm about to find out that I can. I imagine joining the March of the Fanbois on its way to occupy Cupertino, but we're not going to do that, are we? Are we going to do anything, anything at all?

While regurgitating neocon kant about the welfare state without consideration, analysis, or facts, you're also envying a culture that regards people as disposable cogs in the wheels of the powerful, to be used with consideration of their rights, dignity, or humanity.

And watch what you pray for - America is following in their footsteps. Increasingly, that which is produced by grim slave labor elsewhere is being sold by the same here. The difference between Foxconn and Walmart narrows every day.

In the voice of Foghorn Leghorn...

Da's a whole lotta' pontificatin' goin' on out dare...

The cheap labor will meet their doom with the next generation of Robotics that is coming and you'll will see the bulk of manufacturing be done in shifts by drones of robots and only small groups of engineers overseeing their work.

China's economy will see a huge recession because of it.

Yes, except where management has determined that forcing them to use their teeth will increase profits.

Here's everything you need to know, first hand, with no ranting:

http://www.thisamericanlife.org/radi...-apple-factory

Rumors about the wonders of automated manufacturing are what corporations who outsource their labor to wrecked economies and despotic regimes circulate to help us assuage our collective guilt. The quick answer to your question is that anything manufactured in China is made entirely by hand under conditions that make American prisons look like exclusive resorts.

Robots are costly to build, difficult to maintain, and can't simply be thrown away the instant a problem occurs. Automated factories are very expensive, and exist only in places where it's not possible to treat human beings worse than robots. When human beings are literally a dime a dozen, have no rights, no legal recourse, and few choices, people are the robots.

I agree these issues should be looked at but it seems unfair to put the whole blame on Apple when they are the only company (that I know of) that is insisting on higher standards from the companies they do business with. If you're inclined to not buy an iPad for these reasons then you probably shouldn't look into the manufacturing of most of the items for sale in any store. You'll end up naked since there's a good chance you're clothes are made in china. Hungry too since you're kitchen appliances were probably made there. Ditto your tv.
Again I think we have an obligation to look into these issues but it seems to me we should pressure more companies to do audits on their suppliers like Apple does. I think the audits are a good first step and I hope they keep it up.
It seems odd to blame the company that is doing the most to address the issue(in comparison to other companies).

You couldn't be more wrong. When there are millions of people desperate for work and no legal restrictions on how they are used, automated manufacturing can't complete.

Think of it this way In collapsing economies and despotic regimes, life is quite literally cheap. Under such circumstances, why would the 1% invest in expensive steel robots when flesh ones cost almost nothing? Flesh is the perfect machine - the companies that use it pay nothing for its reproduction, it's self repairing to some extent, and perfectly disposable. Under the right social circumstances, flesh robots are self-training, monitor each other for defects, and dispose of themselves automatically when they become obsolete.

A desperate human being with no rights, no protections, no legal recourse, who may be used with no regard for his or her welfare is already management's perfect wet dream of a robot, no steel, hydraulics, computerization, or electricity required.

You need a very, very long spoon when you dine with the devil.

IMO, being able to corral 3000 people into a dorm with the carrot of a job is nothing to crow about. That ex-Apple spokeswoman might want to rethink saying something like that.

Having said this, there's no question there are tremendous advantages to using Chinese shops for a variety of manufacturing jobs. I can get machining done faster and often better in China, not to mention more cheaply. There is a plethora of Chinese machine shops willing to take on one-off (or 5-offs) jobs. The next time around, they will automatically lower the price without being asked (because they have the fixtures already). Meanwhile, North American machine shops need a few more weeks to get the same jobs done, even though they don't have to ship the parts across the ocean. It's getting harder to be loyal to local suppliers.