Personally, I would gladly pay 25% more for Apple products if I knew that the workers in their factories were treated decently and/or some of those jobs were brought back to the West. My personal opinion (for all manufacturers) is that ideally, products should be made close to the markets that they serve. That way, communities who buy the products can also benefit from the jobs created. I really don't feel very good knowing that the products I love from a company I love are made by people working under poor conditions and earning just a few dollars a day.
I agree with you that Apple should be proactive here. It's ultimately better for their manufacturing, better for their image, and better for their shareholders. BUT it's not just about you or I paying more to cover Apple's lost margins from doing what you suggest. Moving manufacturing away from China comes with a large amount of loss in productivity on the manufacturing line. One thing China has that the US doesn't is an abundance of people in certain urban areas. Yeah, the US is hurting for jobs at home, but Apple would need to build several dozens of plants all over the country to employ the necessary manpower and churn out the product numbers they get from Foxconn. That's a huge expenditure. As I said above, I would love to see Apple stamping "Designed and Built by Apple in California" on their products, but it just isn't going to happen.
Also, you think it's already hard enough dispelling the "Apple tax" myth now, just wait until you're asking people to shell out $250 instead of $200 for an iPhone, or $625 instead of $500 for an iPad, or $1250 instead of $1000 for a MBA. I'd rather Apple keeps it's prices low and be a force for good in the otherwise murky world of Chinese labor practices.
I lived at a factory for six months. I visited the workers' dorms. I was friends with workers. I watched their work on a daily basis. I saw how they were treated.
Factory workers in China are generally much happier than the general population in China. They are treated well, but they are expected to do the job they are hired for. They are fed, clothed and housed, and most of them send their earnings home to family. It's a pretty good situation for them.
The workers at factories like Foxconn factories are paid more than most factory workers, and their jobs are correspondingly harder. Their living conditions are better, but their stress levels are higher.
So a next question might be - if we accept that these workers are largely better off than their compatriots, even if they may be worse off than similar workers in the West - what obligation does that place on companies like Apple? Should they rejoice because they have contributed to improving the lives of the workers, or should they not be satisfied until they have raised the standards there to a level comparable with the West?
I lived at a factory for six months. I visited the workers' dorms. I was friends with workers. I watched their work on a daily basis. I saw how they were treated.
Factory workers in China are generally much happier than the general population in China. They are treated well, but they are expected to do the job they are hired for. They are fed, clothed and housed, and most of them send their earnings home to family. It's a pretty good situation for them.
The workers at factories like Foxconn factories are paid more than most factory workers, and their jobs are correspondingly harder. Their living conditions are better, but their stress levels are higher.
Great you witnessed the situation. But you're not addressing the accusations though, just like Tim and Apple. It's about safety/health of the employees, the tradeoff between that and the high production volume, high margin of Apple. Not about whether these people are 'better off' than if they don't get a job at Foxconn things like that.
the same stock response that every apple fanboy uses?
"DELL, HP, SAMSUNG are all just as bad!!"
except, those are never ever linked directly with any criticism, or specific reports of incidents. only apple is, at apple only facilities. which is kinda odd, don't you think.
that's not to say the great work in safety that apple are doing isn't a good thing, but sadly, to have to invest so heavily in work to remedy a problem is not only an admission of guilt, it's a PR nightmare.. which is why Tim is having to get involved.
still, and improvement is an improvement. keep it up guys.
It's because apple is the top dog. America loves when an underdog becomes top dog but at the same time loves to knock down the top dog a few rungs. Just because the media doesn't report incidents at HP, Samsung, Dell plants doesn't mean it doesn't happen.
Yeah, let's take the word of a poorly written and VERY boring essay on a lone archaeologist who found what he *thinks* were the workers' living quarters and interpolating finding large amounts of food into believing they weren't slaves but prized workers... despite not finding the right amount of sleeping arrangements, etc. Oh, and he just found it too. Who's to say there's not another site down the road so to speak, buried in history, where the slaves lived? Who's to say what he found wasn't the city for the foremen and leaders?
Why are people so quick to discount what was recorded by eyewitnesses in historical documents simply because they don't wish to subscribe to believing in the holy book that contains them? Obviously we don't know if said slave labor built the pyramids, but ancient Egypt did employ slaves and they weren't always treated the best.
I can provide lots of cites that back up the notion that the pyramids were not built by slaves. The history you cite is simply wrong.
How about this cite from a very reputable archeologist.
Here is another cite with lots of cites backing him up:
Quote:
We also know quite a lot about the labor force that built the pyramids. The best estimates are that 10,000 men spent 30 years building the Great Pyramid. They lived in good housing at the foot of the pyramid, and when they died, they received honored burials in stone tombs near the pyramid in thanks for their contribution. This information is relatively new, as the first of these worker tombs was only discovered in 1990. They ate well and received the best medical care. And, also unlike slaves, they were well paid. The pyramid builders were recruited from poor communities and worked shifts of three months (including farmers who worked during the months when the Nile flooded their farms), distributing the pharaoh's wealth out to where it was needed most. Each day, 21 cattle and 23 sheep were slaughtered to feed the workers, enough for each man to eat meat at least weekly. Virtually every fact about the workers that archaeology has shown us rules out the use of slave labor on the pyramids.
Sure, I'd loved to see "Designed and Built by Apple in California" stamped on my next iPhone, but I'm a realist. Imagine the cost of a truly "American made" iPhone.
The New York Times article said the added cost would be $46 per iPhone, if it were manufactured in the US instead of China. Manufactured in the USA by people with decent jobs and benefits. Hmmm.
In Q1/2012 Apple made a gross margin of 45% (before overhead, etc) on all their products combined, and for the iPhone it is probably more than that. So instead of a gross margin of about $300 per iPhone, it would be $244 if they made them here and sold them at the same price.
So on the basis of cost at least, it is by no means "impossible" to manufacture iPhones in the USA.
If Brazil can force Apple to manufacture all the iPads and iPhones sold in Brazil in Brazil, creating lots of manufacturing jobs, surely a powerful country like USA (with the biggest consumer sector in the world) could do so. But we don't.
Our government is owned by people who don't give a damn about good jobs for the 99%. And they have convinced most us that these free-market, job-aborting policies are "right." So we all suffer unemployment and poor job opportunities, and worry that our kids will be trying to live on $8/hr for the rest of their lives.
Things will only change when there are no middle class jobs left, and people have nothing left to lose.
The letter was very likely written by the same flak who used to write Steve's stuff, so I find it unsurprising that it sounds similar to official corporate statements from the past.
1. Who's writing your stuff? You sound exactly like the late ConradJoe.
2. Do you have even the slightest bit of evidence that Tim Cook did not write this email? It sounds exactly like him.
Great you witnessed the situation. But you're not addressing the accusations though, just like Tim and Apple. It's about safety/health of the employees, the tradeoff between that and the high production volume, high margin of Apple. Not about whether these people are 'better off' than if they don't get a job at Foxconn things like that.
The New York Times article said the added cost would be $46 per iPhone, if it were manufactured in the US instead of China. Manufactured in the USA by people with decent jobs and benefits. Hmmm.
I find that very, very hard to believe. First off, Apple doesn't release costs, so any starting cost is pure speculation. Second, western overhead is much, much higher than the equivalent in China. That made up number likely isn't burdened.
Apple also would have to invest in massive production facilities, as their is no U.S. plant that can handle the volume Apple needs. China has spent the last decades ramping up for massive production; Apple can just snap its fingers and duplicate that? There would also be unions, and union dues, and all the other hidden costs that make U.S. production so unrealistic.
Lastly, how many people would want to actually work there? I don't think it's a fun job, and Apple would have to pay more than minimum wage to attract people. Already, many Americans are more content to leave the unsavory jobs to the illegals.
Personally, I would gladly pay 25% more for Apple products if I knew that the workers in their factories were treated decently and/or some of those jobs were brought back to the West.
I'd bet that it would not add anywhere near 25% to the costs.
I wonder if Apple paid 10 cents more per major process, how much that might change things? If there were 100 major steps in (sub)assembling the product, that would add only $10 in manufacturing costs.
As an avowed fanboy and Apple stock holder, I think it's in my interest to propose a few solutions. Yeah, I know the problem is bigger than this, but how about we start here?
Apple needs to:
1) Increase margins to suppliers by 2% across the board, not to be spent on labor. The manufacturers feel squeezed and this is a good faith gesture.
2) Demand very specific improvements in facilities that directly impact the workers (positively, of course). You know, chairs with backs, better lighting, ergonomic work surfaces, better ventilation, etc. Fund 75% of the improvements, the rest coming from the manufacturers.
3) Double the living space per person in the Apple-associated dormitories (decrease the density by half) and pay for those improvements.
4) Increase the pay for "our" workers by 20%, but do not under any circumstances allow overtime. Ever. (That’s an effective raise while still staying within custom and law in China.)
5) Demand that line workers be rotated every few hours to different jobs to eliminate or at least reduce repetitive motion injuries.
6) Hire American employees to inspect and audit all supplier facilities on a non-scheduled surprise basis. No advance notice. Rotate the inspectors into and out of China randomly to obviate the possibility of payoffs or collusion. (Yes, that requires training on this end.)
7) Reward managers and manufacturers that pass all audits and inspections. Give them incentives to stay "clean".
8) Increase prices on major Apple products by 25 dollars. (It will defray a bit of the cost of these improvements and symbolize the fact that we Apple users are willing to pay a bit more. These improvements won’t necessitate anywhere near a 25% price hike if you look at present labor costs and Apple’s margins.))
9) Last, Apple needs to hold its corporate head high and say, "We're trying. Anybody else on board?"
Why? Why should Apple do any of this? They don't owe it to anybody. They didn't kidnap these people and force them to work. Just like in the U.S., people choose to work or not. During CNY, many plants have high turnover as workers leave to work at the family farm, or get a different job. Their not conscripts. They get paid a wage in exchange for labor. If they didn't feel it was just, they'd work someplace else. If you feel the whole system needs to get changed, then that's an issue left for China's government, the government the people formed. Not some outside corporation.
Quote:
Originally Posted by zoetmb
I really don't feel very good knowing that the products I love from a company I love are made by people working under poor conditions and earning just a few dollars a day.
They don't make a few dollars a day. They're not paid in dollars. They're paid in yuan. Even though exchanged it may be equivalent to a "few dollars", that's over simplifying it, as costs of living are much, much lower.
I find that very, very hard to believe. First off, Apple doesn't release costs, so any starting cost is pure speculation. Second, western overhead is much, much higher than the equivalent in China. That made up number likely isn't burdened.
Apple also would have to invest in massive production facilities, as their is no U.S. plant that can handle the volume Apple needs. China has spent the last decades ramping up for massive production; Apple can just snap its fingers and duplicate that? There would also be unions, and union dues, and all the other hidden costs that make U.S. production so unrealistic.
Lastly, how many people would want to actually work there? I don't think it's a fun job, and Apple would have to pay more than minimum wage to attract people. Already, many Americans are more content to leave the unsavory jobs to the illegals.
Well, I am sure you did much more research than the NYT to reach your conclusion.
Most of the cost of an iPhone 4S is NOT labor. And some of the components already come from the USA (like the A5 made by Samsung in Texas). The A5 is, what, 25% of the cost of the phone? And the screen is a big part of the rest. So the Chinese labor is mostly assembing the iPhone - for a labor cost of under $10. Which would be something like $50 here.
It's a brilliant 2-hour show that retells first-hand accounts of what happens in the factories where the iPhone is produced, in even more vivid detail than the damning NY Times article.
You've seen a movie. Well then, I cede the floor to you.
I find that very, very hard to believe. First off, Apple doesn't release costs, so any starting cost is pure speculation. Second, western overhead is much, much higher than the equivalent in China. That made up number likely isn't burdened.
Apple also would have to invest in massive production facilities, as their is no U.S. plant that can handle the volume Apple needs. China has spent the last decades ramping up for massive production; Apple can just snap its fingers and duplicate that? There would also be unions, and union dues, and all the other hidden costs that make U.S. production so unrealistic.
Lastly, how many people would want to actually work there? I don't think it's a fun job, and Apple would have to pay more than minimum wage to attract people. Already, many Americans are more content to leave the unsavory jobs to the illegals.
MOST jobs are not fun. And fun is irrelevant if you don't have one.
MOST jobs are not fun. And fun is irrelevant if you don't have one.
I was being sarcastic about "fun"; it would be grueling, mind-numbing, repetitive work, and many American's already choose to go unemployed rather than take a minimum wage job.
Well, I am sure you did much more research than the NYT to reach your conclusion.
Most of the cost of an iPhone 4S is NOT labor. And some of the components already come from the USA (like the A5 made by Samsung in Texas). The A5 is, what, 25% of the cost of the phone? And the screen is a big part of the rest. So the Chinese labor is mostly assembing the iPhone - for a labor cost of under $10. Which would be something like $50 here.
I'm speaking with experience calculating overhead and seeing the cost changes between U.S. production and Chinese production. You think the Chinese make a 1/5th of what an American makes? Try 1/20th.
Also, you don't address the issue of Apple building plants in the U.S. You know how big Foxconn is? For Apple to duplicate that would take billions and billions, years, and a dramatic increase in overhead. It's not like Apple is sitting on a massive plant that's just sitting there, not being used.
So in addition to the increased labor costs, you'd have dramatically increased overhead, as well as more administration costs.
Plus, Apple would still be forced to use Chinese vendors, so what would that solve? Or do you mean Apple would also make the chips, glass, etc. in house?
Rubbish. Working conditions in US factories were improving at a faster rate in the late 19th century and very early 20th century before the legalization of unions. The introduction of unions in the US put the brakes on and dramatically slowed down the rate of improvement in factory working conditions. The unions were corrupt and controlled by the mafia before the first strike. Unions have never been anything other than a protection racket, sucking union dues from the workers, so that the mafia fat-cats who run the unions can live high on the hog. The last thing Chinese workers need is US-style labor unions.
That does it, I'm resurrecting the spirit of Upton Sinclair.
The New York Times article said the added cost would be $46 per iPhone, if it were manufactured in the US instead of China. Manufactured in the USA by people with decent jobs and benefits. Hmmm.
In Q1/2012 Apple made a gross margin of 45% (before overhead, etc) on all their products combined, and for the iPhone it is probably more than that. So instead of a gross margin of about $300 per iPhone, it would be $244 if they made them here and sold them at the same price.
So on the basis of cost at least, it is by no means "impossible" to manufacture iPhones in the USA.
Fine, let's assume on a cost basis Apple COULD build an iPhone stateside ... but that doesn't address the issue of scale. Where are they going to find the workforce and factory capacity to churn out 15 - 40 M iPhones every three months? I highly doubt the NYT's $46 number too. It comes with no explanation and absolutely no knowledge of Apple's material, labor, or overhead costs associated with their manufacturing lines. Only Apple knows for sure what those numbers are and they're not telling.
Quote:
Originally Posted by JONOROM
If Brazil can force Apple to manufacture all the iPads and iPhones sold in Brazil in Brazil, creating lots of manufacturing jobs, surely a powerful country like USA (with the biggest consumer sector in the world) could do so. But we don't.
We could, but that defeats the whole concept of free enterprise. From a strictly political standpoint, if you require Apple to do that, you're going to have to require every other company to do that as well. I'm not so sure a lot of foreign companies are going to be thrilled being made to build new factories in the US, pay higher wages to US workers, interact with US labor unions, be subjected to US environmental standards, etc. You risk a lot of companies with much lower profit margins than Apple abandoning the US market for emerging markets in Asia and South America. I would hate to live in a country where it's okay to be entrepreneurial, but not okay to become TOO successful, lest the government tell you what to do with your money.
Quote:
Originally Posted by JONOROM
Our government is owned by people who don't give a damn about good jobs for the 99%. And they have convinced most us that these free-market, job-aborting policies are "right." So we all suffer unemployment and poor job opportunities, and worry that our kids will be trying to live on $8/hr for the rest of their lives.
Things will only change when there are no middle class jobs left, and people have nothing left to lose.
Off topic, but I'll bite. Apple is not responsible for digging the US out of unemployment and economic recession. They already employ thousands of engineers, designers, admin personnel, support staff, programmers, etc. in Cupertino. They already employ an enormous retail workforce in the US. They've spawned secondary job creation with the iTunes and Mac App Stores. They've helped give indie musicians an avenue to profit from their work rather than starve or face indentured servitude with a major record label. They already help prop up their own suppliers and their telecom partners here at home. How exactly is that a policy of "job-aborting"?
[QUOTE=Pendergast;2033047]Why? Why should Apple do any of this? They don't owe it to anybody. They didn't kidnap these people and force them to work. Just like in the U.S., people choose to work or not. During CNY, many plants have high turnover as workers leave to work at the family farm, or get a different job. Their not conscripts. They get paid a wage in exchange for labor. If they didn't feel it was just, they'd work someplace else. If you feel the whole system needs to get changed, then that's an issue left for China's government, the government the people formed. Not some outside corporation.
The real question is why shouldn't Apple do it. Apple (yes, "my" company because I'm a shareholder) has a huge hoard of cash and can afford to do the things I mentioned.
Apple can raise the bar for all other companies and raise the living standard of these HUMAN BEINGS. What is the down side? A slight blip in the bottom line?
To say "they didn't kidnap these people" is not the point. People will go to where the jobs are (and yes, that's true in North America too, in case you've missed the immigration issue) because they need to live. Is it not the employers' responsibility to provide decent living and working conditions? Apple can easily do this and should, ethically. The bottom line will be almost unaffected. And, by raising the bar, other tech companies will get in line or suffer the poor PR that will surely follow.
By the way, why not offer bonuses to workers for longevity and loyalty, too. Solves the turnover problem to which you refer...
Comments
[...]
Personally, I would gladly pay 25% more for Apple products if I knew that the workers in their factories were treated decently and/or some of those jobs were brought back to the West. My personal opinion (for all manufacturers) is that ideally, products should be made close to the markets that they serve. That way, communities who buy the products can also benefit from the jobs created. I really don't feel very good knowing that the products I love from a company I love are made by people working under poor conditions and earning just a few dollars a day.
I agree with you that Apple should be proactive here. It's ultimately better for their manufacturing, better for their image, and better for their shareholders. BUT it's not just about you or I paying more to cover Apple's lost margins from doing what you suggest. Moving manufacturing away from China comes with a large amount of loss in productivity on the manufacturing line. One thing China has that the US doesn't is an abundance of people in certain urban areas. Yeah, the US is hurting for jobs at home, but Apple would need to build several dozens of plants all over the country to employ the necessary manpower and churn out the product numbers they get from Foxconn. That's a huge expenditure. As I said above, I would love to see Apple stamping "Designed and Built by Apple in California" on their products, but it just isn't going to happen.
Also, you think it's already hard enough dispelling the "Apple tax" myth now, just wait until you're asking people to shell out $250 instead of $200 for an iPhone, or $625 instead of $500 for an iPad, or $1250 instead of $1000 for a MBA. I'd rather Apple keeps it's prices low and be a force for good in the otherwise murky world of Chinese labor practices.
I lived at a factory for six months. I visited the workers' dorms. I was friends with workers. I watched their work on a daily basis. I saw how they were treated.
Factory workers in China are generally much happier than the general population in China. They are treated well, but they are expected to do the job they are hired for. They are fed, clothed and housed, and most of them send their earnings home to family. It's a pretty good situation for them.
The workers at factories like Foxconn factories are paid more than most factory workers, and their jobs are correspondingly harder. Their living conditions are better, but their stress levels are higher.
So a next question might be - if we accept that these workers are largely better off than their compatriots, even if they may be worse off than similar workers in the West - what obligation does that place on companies like Apple? Should they rejoice because they have contributed to improving the lives of the workers, or should they not be satisfied until they have raised the standards there to a level comparable with the West?
I lived at a factory for six months. I visited the workers' dorms. I was friends with workers. I watched their work on a daily basis. I saw how they were treated.
Factory workers in China are generally much happier than the general population in China. They are treated well, but they are expected to do the job they are hired for. They are fed, clothed and housed, and most of them send their earnings home to family. It's a pretty good situation for them.
The workers at factories like Foxconn factories are paid more than most factory workers, and their jobs are correspondingly harder. Their living conditions are better, but their stress levels are higher.
Great you witnessed the situation. But you're not addressing the accusations though, just like Tim and Apple. It's about safety/health of the employees, the tradeoff between that and the high production volume, high margin of Apple. Not about whether these people are 'better off' than if they don't get a job at Foxconn things like that.
the same stock response that every apple fanboy uses?
"DELL, HP, SAMSUNG are all just as bad!!"
except, those are never ever linked directly with any criticism, or specific reports of incidents. only apple is, at apple only facilities. which is kinda odd, don't you think.
that's not to say the great work in safety that apple are doing isn't a good thing, but sadly, to have to invest so heavily in work to remedy a problem is not only an admission of guilt, it's a PR nightmare.. which is why Tim is having to get involved.
still, and improvement is an improvement. keep it up guys.
It's because apple is the top dog. America loves when an underdog becomes top dog but at the same time loves to knock down the top dog a few rungs. Just because the media doesn't report incidents at HP, Samsung, Dell plants doesn't mean it doesn't happen.
Yeah, let's take the word of a poorly written and VERY boring essay on a lone archaeologist who found what he *thinks* were the workers' living quarters and interpolating finding large amounts of food into believing they weren't slaves but prized workers... despite not finding the right amount of sleeping arrangements, etc. Oh, and he just found it too. Who's to say there's not another site down the road so to speak, buried in history, where the slaves lived? Who's to say what he found wasn't the city for the foremen and leaders?
Why are people so quick to discount what was recorded by eyewitnesses in historical documents simply because they don't wish to subscribe to believing in the holy book that contains them? Obviously we don't know if said slave labor built the pyramids, but ancient Egypt did employ slaves and they weren't always treated the best.
I can provide lots of cites that back up the notion that the pyramids were not built by slaves. The history you cite is simply wrong.
How about this cite from a very reputable archeologist.
Here is another cite with lots of cites backing him up:
We also know quite a lot about the labor force that built the pyramids. The best estimates are that 10,000 men spent 30 years building the Great Pyramid. They lived in good housing at the foot of the pyramid, and when they died, they received honored burials in stone tombs near the pyramid in thanks for their contribution. This information is relatively new, as the first of these worker tombs was only discovered in 1990. They ate well and received the best medical care. And, also unlike slaves, they were well paid. The pyramid builders were recruited from poor communities and worked shifts of three months (including farmers who worked during the months when the Nile flooded their farms), distributing the pharaoh's wealth out to where it was needed most. Each day, 21 cattle and 23 sheep were slaughtered to feed the workers, enough for each man to eat meat at least weekly. Virtually every fact about the workers that archaeology has shown us rules out the use of slave labor on the pyramids.
And this guy too...
I can go on and on here.
Sure, I'd loved to see "Designed and Built by Apple in California" stamped on my next iPhone, but I'm a realist. Imagine the cost of a truly "American made" iPhone.
The New York Times article said the added cost would be $46 per iPhone, if it were manufactured in the US instead of China. Manufactured in the USA by people with decent jobs and benefits. Hmmm.
In Q1/2012 Apple made a gross margin of 45% (before overhead, etc) on all their products combined, and for the iPhone it is probably more than that. So instead of a gross margin of about $300 per iPhone, it would be $244 if they made them here and sold them at the same price.
So on the basis of cost at least, it is by no means "impossible" to manufacture iPhones in the USA.
If Brazil can force Apple to manufacture all the iPads and iPhones sold in Brazil in Brazil, creating lots of manufacturing jobs, surely a powerful country like USA (with the biggest consumer sector in the world) could do so. But we don't.
Our government is owned by people who don't give a damn about good jobs for the 99%. And they have convinced most us that these free-market, job-aborting policies are "right." So we all suffer unemployment and poor job opportunities, and worry that our kids will be trying to live on $8/hr for the rest of their lives.
Things will only change when there are no middle class jobs left, and people have nothing left to lose.
The letter was very likely written by the same flak who used to write Steve's stuff, so I find it unsurprising that it sounds similar to official corporate statements from the past.
1. Who's writing your stuff? You sound exactly like the late ConradJoe.
2. Do you have even the slightest bit of evidence that Tim Cook did not write this email? It sounds exactly like him.
Great you witnessed the situation. But you're not addressing the accusations though, just like Tim and Apple. It's about safety/health of the employees, the tradeoff between that and the high production volume, high margin of Apple. Not about whether these people are 'better off' than if they don't get a job at Foxconn things like that.
Apple's high margin has nothing to do with this.
1. Who's writing your stuff? You sound exactly like the late ConradJoe.
He is. Same IP address as ConradJoe's last posts. Now will you agree with me that he's a dupe account, other mods? We have an outside opinion now.
The New York Times article said the added cost would be $46 per iPhone, if it were manufactured in the US instead of China. Manufactured in the USA by people with decent jobs and benefits. Hmmm.
I find that very, very hard to believe. First off, Apple doesn't release costs, so any starting cost is pure speculation. Second, western overhead is much, much higher than the equivalent in China. That made up number likely isn't burdened.
Apple also would have to invest in massive production facilities, as their is no U.S. plant that can handle the volume Apple needs. China has spent the last decades ramping up for massive production; Apple can just snap its fingers and duplicate that? There would also be unions, and union dues, and all the other hidden costs that make U.S. production so unrealistic.
Lastly, how many people would want to actually work there? I don't think it's a fun job, and Apple would have to pay more than minimum wage to attract people. Already, many Americans are more content to leave the unsavory jobs to the illegals.
Personally, I would gladly pay 25% more for Apple products if I knew that the workers in their factories were treated decently and/or some of those jobs were brought back to the West.
I'd bet that it would not add anywhere near 25% to the costs.
I wonder if Apple paid 10 cents more per major process, how much that might change things? If there were 100 major steps in (sub)assembling the product, that would add only $10 in manufacturing costs.
As an avowed fanboy and Apple stock holder, I think it's in my interest to propose a few solutions. Yeah, I know the problem is bigger than this, but how about we start here?
Apple needs to:
1) Increase margins to suppliers by 2% across the board, not to be spent on labor. The manufacturers feel squeezed and this is a good faith gesture.
2) Demand very specific improvements in facilities that directly impact the workers (positively, of course). You know, chairs with backs, better lighting, ergonomic work surfaces, better ventilation, etc. Fund 75% of the improvements, the rest coming from the manufacturers.
3) Double the living space per person in the Apple-associated dormitories (decrease the density by half) and pay for those improvements.
4) Increase the pay for "our" workers by 20%, but do not under any circumstances allow overtime. Ever. (That’s an effective raise while still staying within custom and law in China.)
5) Demand that line workers be rotated every few hours to different jobs to eliminate or at least reduce repetitive motion injuries.
6) Hire American employees to inspect and audit all supplier facilities on a non-scheduled surprise basis. No advance notice. Rotate the inspectors into and out of China randomly to obviate the possibility of payoffs or collusion. (Yes, that requires training on this end.)
7) Reward managers and manufacturers that pass all audits and inspections. Give them incentives to stay "clean".
8) Increase prices on major Apple products by 25 dollars. (It will defray a bit of the cost of these improvements and symbolize the fact that we Apple users are willing to pay a bit more. These improvements won’t necessitate anywhere near a 25% price hike if you look at present labor costs and Apple’s margins.))
9) Last, Apple needs to hold its corporate head high and say, "We're trying. Anybody else on board?"
Why? Why should Apple do any of this? They don't owe it to anybody. They didn't kidnap these people and force them to work. Just like in the U.S., people choose to work or not. During CNY, many plants have high turnover as workers leave to work at the family farm, or get a different job. Their not conscripts. They get paid a wage in exchange for labor. If they didn't feel it was just, they'd work someplace else. If you feel the whole system needs to get changed, then that's an issue left for China's government, the government the people formed. Not some outside corporation.
I really don't feel very good knowing that the products I love from a company I love are made by people working under poor conditions and earning just a few dollars a day.
They don't make a few dollars a day. They're not paid in dollars. They're paid in yuan. Even though exchanged it may be equivalent to a "few dollars", that's over simplifying it, as costs of living are much, much lower.
I find that very, very hard to believe. First off, Apple doesn't release costs, so any starting cost is pure speculation. Second, western overhead is much, much higher than the equivalent in China. That made up number likely isn't burdened.
Apple also would have to invest in massive production facilities, as their is no U.S. plant that can handle the volume Apple needs. China has spent the last decades ramping up for massive production; Apple can just snap its fingers and duplicate that? There would also be unions, and union dues, and all the other hidden costs that make U.S. production so unrealistic.
Lastly, how many people would want to actually work there? I don't think it's a fun job, and Apple would have to pay more than minimum wage to attract people. Already, many Americans are more content to leave the unsavory jobs to the illegals.
Well, I am sure you did much more research than the NYT to reach your conclusion.
Most of the cost of an iPhone 4S is NOT labor. And some of the components already come from the USA (like the A5 made by Samsung in Texas). The A5 is, what, 25% of the cost of the phone? And the screen is a big part of the rest. So the Chinese labor is mostly assembing the iPhone - for a labor cost of under $10. Which would be something like $50 here.
More than you, I suspect.
Have you seen The Agony and Ecstasy of Steve Jobs? I have.
http://www.slate.com/articles/arts/c...viewed_.3.html
It's a brilliant 2-hour show that retells first-hand accounts of what happens in the factories where the iPhone is produced, in even more vivid detail than the damning NY Times article.
You've seen a movie. Well then, I cede the floor to you.
I find that very, very hard to believe. First off, Apple doesn't release costs, so any starting cost is pure speculation. Second, western overhead is much, much higher than the equivalent in China. That made up number likely isn't burdened.
Apple also would have to invest in massive production facilities, as their is no U.S. plant that can handle the volume Apple needs. China has spent the last decades ramping up for massive production; Apple can just snap its fingers and duplicate that? There would also be unions, and union dues, and all the other hidden costs that make U.S. production so unrealistic.
Lastly, how many people would want to actually work there? I don't think it's a fun job, and Apple would have to pay more than minimum wage to attract people. Already, many Americans are more content to leave the unsavory jobs to the illegals.
MOST jobs are not fun. And fun is irrelevant if you don't have one.
MOST jobs are not fun. And fun is irrelevant if you don't have one.
I was being sarcastic about "fun"; it would be grueling, mind-numbing, repetitive work, and many American's already choose to go unemployed rather than take a minimum wage job.
Well, I am sure you did much more research than the NYT to reach your conclusion.
Most of the cost of an iPhone 4S is NOT labor. And some of the components already come from the USA (like the A5 made by Samsung in Texas). The A5 is, what, 25% of the cost of the phone? And the screen is a big part of the rest. So the Chinese labor is mostly assembing the iPhone - for a labor cost of under $10. Which would be something like $50 here.
I'm speaking with experience calculating overhead and seeing the cost changes between U.S. production and Chinese production. You think the Chinese make a 1/5th of what an American makes? Try 1/20th.
Also, you don't address the issue of Apple building plants in the U.S. You know how big Foxconn is? For Apple to duplicate that would take billions and billions, years, and a dramatic increase in overhead. It's not like Apple is sitting on a massive plant that's just sitting there, not being used.
So in addition to the increased labor costs, you'd have dramatically increased overhead, as well as more administration costs.
Plus, Apple would still be forced to use Chinese vendors, so what would that solve? Or do you mean Apple would also make the chips, glass, etc. in house?
Rubbish. Working conditions in US factories were improving at a faster rate in the late 19th century and very early 20th century before the legalization of unions. The introduction of unions in the US put the brakes on and dramatically slowed down the rate of improvement in factory working conditions. The unions were corrupt and controlled by the mafia before the first strike. Unions have never been anything other than a protection racket, sucking union dues from the workers, so that the mafia fat-cats who run the unions can live high on the hog. The last thing Chinese workers need is US-style labor unions.
That does it, I'm resurrecting the spirit of Upton Sinclair.
The New York Times article said the added cost would be $46 per iPhone, if it were manufactured in the US instead of China. Manufactured in the USA by people with decent jobs and benefits. Hmmm.
In Q1/2012 Apple made a gross margin of 45% (before overhead, etc) on all their products combined, and for the iPhone it is probably more than that. So instead of a gross margin of about $300 per iPhone, it would be $244 if they made them here and sold them at the same price.
So on the basis of cost at least, it is by no means "impossible" to manufacture iPhones in the USA.
Fine, let's assume on a cost basis Apple COULD build an iPhone stateside ... but that doesn't address the issue of scale. Where are they going to find the workforce and factory capacity to churn out 15 - 40 M iPhones every three months? I highly doubt the NYT's $46 number too. It comes with no explanation and absolutely no knowledge of Apple's material, labor, or overhead costs associated with their manufacturing lines. Only Apple knows for sure what those numbers are and they're not telling.
If Brazil can force Apple to manufacture all the iPads and iPhones sold in Brazil in Brazil, creating lots of manufacturing jobs, surely a powerful country like USA (with the biggest consumer sector in the world) could do so. But we don't.
We could, but that defeats the whole concept of free enterprise. From a strictly political standpoint, if you require Apple to do that, you're going to have to require every other company to do that as well. I'm not so sure a lot of foreign companies are going to be thrilled being made to build new factories in the US, pay higher wages to US workers, interact with US labor unions, be subjected to US environmental standards, etc. You risk a lot of companies with much lower profit margins than Apple abandoning the US market for emerging markets in Asia and South America. I would hate to live in a country where it's okay to be entrepreneurial, but not okay to become TOO successful, lest the government tell you what to do with your money.
Our government is owned by people who don't give a damn about good jobs for the 99%. And they have convinced most us that these free-market, job-aborting policies are "right." So we all suffer unemployment and poor job opportunities, and worry that our kids will be trying to live on $8/hr for the rest of their lives.
Things will only change when there are no middle class jobs left, and people have nothing left to lose.
Off topic, but I'll bite. Apple is not responsible for digging the US out of unemployment and economic recession. They already employ thousands of engineers, designers, admin personnel, support staff, programmers, etc. in Cupertino. They already employ an enormous retail workforce in the US. They've spawned secondary job creation with the iTunes and Mac App Stores. They've helped give indie musicians an avenue to profit from their work rather than starve or face indentured servitude with a major record label. They already help prop up their own suppliers and their telecom partners here at home. How exactly is that a policy of "job-aborting"?
The real question is why shouldn't Apple do it. Apple (yes, "my" company because I'm a shareholder) has a huge hoard of cash and can afford to do the things I mentioned.
Apple can raise the bar for all other companies and raise the living standard of these HUMAN BEINGS. What is the down side? A slight blip in the bottom line?
To say "they didn't kidnap these people" is not the point. People will go to where the jobs are (and yes, that's true in North America too, in case you've missed the immigration issue) because they need to live. Is it not the employers' responsibility to provide decent living and working conditions? Apple can easily do this and should, ethically. The bottom line will be almost unaffected. And, by raising the bar, other tech companies will get in line or suffer the poor PR that will surely follow.
By the way, why not offer bonuses to workers for longevity and loyalty, too. Solves the turnover problem to which you refer...
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