Long story short, if Apple products were made in the US, in order for Apple to keep its profit margin, the prices of the items themselves would go up prohibitively too high to ever sell in the volume necessary to sustain the costs of making them.
yeah, bash the US union workers who wanted living wage so the they could buy home & a car, support their family, pay US & state taxes, & put money into a retirement system so they wouldn't be a burden to society later on (no government money needed nor accepted). However, since everyone wants to pay $400 for a $1200 TV, they feel US workers are too overpaid. US businesses tried to compete by eliminating pensions & healthcare for workers (working employees part time), but still can't compete. Unless we can get US workers to accept pay so low they they want to jump off buildings to relieve the stress of their existence and/or send their children to the factories, it ain't gonna happen. It will never happen in California where state laws & taxes have driven businesses out of the State. The few who remain, are being taxed out of existance to make the difference. The turnaround requires an individual committment to purchase US goods at a real, fair price or US infrastructure will continue to collapse. US people re making themselves poor. Let others buy the cheap goods. Make Apple stuff in the US & I will pay the higher price...for its actual value.
The market determines the price of the products. At a certain point, through automation, skill becomes less and less a necessity. You are simply being paid for not going insane doing a simple but repetative task. The only problem with the Union Workers was failing to see the shift from their previous skill or very dangerous contribution to more simple acts that they were simply being over paid to accomplish. And in the end, unfortunatley the Union cannot force a company to be successful or that the economy remain stable via a Collective Bargaining Agreement. Heavily Unionized Greece is now learning this.
Union's do serve a purpose but they can also keep a company from being quick to react to market conditions. That alone, has probably been more responsible for negatively affecting U.S. production than the higher wages ever did.
The U.S. needs to create an industrial zone exempt from minimum wage laws and anti-business bureaucracy. That would bring manufacturers back.
Really??? You want to pay workers LESS than minimum wage? Minimum wage practically puts you at the poverty line (assuming you're a family of one. If there's more people, you're below it). Do you really think it's ethical for highly profitable companies like Apple who sell luxury products to pay even the minimum wage? Where do you think workers who earn the minimum wage are going to live - in tents near the factories in which they work? You cannot live on a gross of $15,000 a year in the United States. Over 5.65% would go to Social Security and Medicare at the currently discounted rates and 8.67% would go to carfare at $5 per day. Now you're down to $12,850 and you haven't even paid for rent, food, clothing or any healthcare whatsoever yet. Spend just $12 a day for food and that's another 29%. Now you're down to below $8500. And that assumes you don't have to pay a penny in Federal, State or local taxes.
And there's no place in the U.S. that's sane that would want a factory filled with workers earning less than minimum wage. Do you know why? Because those workers will be lining up to get additional aid at every possible government service. So they'll clog public hospital emergency rooms, apply for food stamps, put their kids into free after-school programs (if any still exist), etc. And all because big companies have no ethics and only care about their executives and shareholders. That's no bargain for localities because the workers use up more public services than the locality gets back in taxes (which is usually zero anyway because they give the corporation a big tax emption to move in.)
The only thing that's going to bring manufacturing back to the U.S. is rising wages in China, rising transportation costs or if Americans started refusing to buy products made for sub-par wages. The latter won't happen. If rising wages in China happens, which is definitely going to happen over time, you'll see the factories first move to poorer parts of China and then move to India, Vietnam or Africa.
Having said that, recent reports claim that there's a lot more manufacturing in the U.S. than most people believe. I think I read recently that manufacturing is still something like 18% of GDP.
Apple does not have assembly plants anywhere. They hire contract manufacturing & assembly firms. That said, for Apple to move from Asia to US plants would require US contract firms. In the size that Apple requires, those do not exist here in the US. That's where the biggest hurdle lies. if any contract firms were to offer to Apple's scale, it would be in Mexico which, because of NAFTA, would be ideal as far as wage & location to the US, but it's still not benefiting the US employment base. Beyond that, why is Apple the sole focus here. What about the other American firms that outsource manufacturing & assembly to Asia, such as Motorola, certainly, Google could setup US assembly operations just as easily as Apple, right ?
Apple does not have assembly plants anywhere. They hire contract manufacturing & assembly firms. That said, for Apple to move from Asia to US plants would require US contract firms. In the size that Apple requires, those do not exist here in the US. That's where the biggest hurdle lies. if any contract firms were to offer to Apple's scale, it would be in Mexico which, because of NAFTA, would be ideal as far as wage & location to the US, but it's still not benefiting the US employment base. Beyond that, why is Apple the sole focus here. What about the other American firms that outsource manufacturing & assembly to Asia, such as Motorola, certainly, Google could setup US assembly operations just as easily as Apple, right ?
Cheers !
We're talking about Apple because this is an Apple forum and because Cook brought up the issue.
In an ethical world, you build products in many regions around the world so that they're built close to the markets they serve. You do that because it's better for the environment (less shipping) and because the societies of people who purchase the products should also have the benefit of the jobs that create the products. No one is saying that every unit of every Apple product has to be built in the U.S. No one is even saying that current Apple products have to be built in the U.S. - maybe it's some future product.
For those of you who say that's impossible, Brazil has already proven that it is possible. Brazil was very smart. They said that if Apple didn't build the products in Brazil, they would place such high import taxes on them, no one would buy them. And guess what? Apple magically found a way to start manufacturing in Brazil.
In addition, I was thinking today about Amazon. Amazon has numerous warehouses across the country. My understanding is that they pay about $15 an hour + benefits. While $30,000 is not fantastic, it's far better than minimum wage and especially if that's a second salary, quite livable in many parts of the country. Amazon is in a very short margin business - just a few percent. If Amazon could afford to pay warehouse workers that salary, I think Apple (and companies like it) can afford to pay that same amount to factory workers. The only difference between an Amazon warehouse and an Apple factory is that the latter has machinery and must handle raw materials. Maybe it's not even a manufacturing plant --- maybe it's just an assembly plant,
I also don't buy Cook's argument that there are no tool and die makers in the U.S. Who built the machines that run the new GM factory? Besides, there's nothing to say that the tool and dies have to also be built in the U.S., although that would be nice as well.
We're talking about Apple because this is an Apple forum and because Cook brought up the issue.
He didn't bring it up. He was asked a stupid question and he gave the only sensible answer.
Walt: There's been a lot of revival about the return of manufacturing in the US. You used to have factories and at least one in the US in Colorado somewhere. Do you ever see, as the most influential and biggest company in tech or any industry, and you're an operations expert. Will there be an Apple product made in the US?
Cook: I want there to be. The engines for the iPad and the iPhone are built in the US. Not just for the US, but for the world. In Austin. The glass is made in a plant in Kentucky. Not just in the US but for other markets too.
There are things that can be done in the US, not just for the US market, but can be exported.
There's an intense focus on the final assembly. They don't think about all of the parts underneath, where the significant value of the buildable material is. Can this be done in the US? I hope so, one day.
But how do you do it? I'm mostly reading about final assembly on forums. I've addressed this every time this has come in conversation and Cook addressed it with Mossberg. Why is the final assembly the only assembly people think matters? It's not even close to the most expensive cost. Where are the people who want everything to be done in house vying for Apple to find alternatives to essential technologies that are owned, designed and created outside the US? You simply don't see it because most people aren't looking at the big picture. They think of Santa's Workshop when they think of iPhones being made, not not the dozens of components being created in dozens of factories around the world before being sent to Foxconn for the final assembly.
I also don't buy Cook's argument that there are no tool and die makers in the U.S. Who built the machines that run the new GM factory? Besides, there's nothing to say that the tool and dies have to also be built in the U.S., although that would be nice as well.
The first part assumes that machines used in GM factories have been made in the US but then you acknowledge that machines could be built elsewhere and then shipped to the US. That seems very disjointed.
If they aren't built in the US then they are US made. Again, why the focus on final assembly and not any of the components or any of the machines used to make and assemble the other parts?
Personally, as an American, I think it's great that the world's largest public company is in the US, that they design all their stuff in the US, that's it's the most respected and highest quality product for a given price point, it's reasonably priced for Americans, and that's it a consumer electronic product. An actual product, not just a financial goliath that doesn't actually make anything.
The U.S. needs to create an industrial zone exempt from minimum wage laws and anti-business bureaucracy. That would bring manufacturers back.
a lot of people have quoted this, but it's amazing that no one mentioned the one thing this post failed to mention ... Just because minimum wage laws don't exist doesn't mean a factory could drop wages below minimum wage. In fact, if we look at many of the factory jobs in the USA, they pay quite a bit higher than minimum wage. Don't think for a second that this is because the companies are altruistic (although in some cases unions have pushed wages beyond what would otherwise be paid), it's because they wouldn't find enough competent workers willing to do the job at minimum wage. Just like the product market, the labor market can be boiled down to supply and demand. How many people do you know that would be willing to work 60 hour weeks for $5 an hour... Sure there are unemployed people in the USA... but even most of them value their labor far above minimum wage.
The people who will take minimum wage jobs (or low paying jobs in general in absence of minimum wage) are unskilled laborers who have very limited work experience (often teenagers), or people who are working second/third jobs, or working during school, and require VERY flexible work hours (in which case they value the flexibility of work around their schedule over the potential pay). In the first two cases, the people who work hard and are ambitious are unlikely to stay at the lowest wages, and those workers who value flexibility more than high wages would not be ideal candidates for these jobs. In my experience simply showing up on time, and working hard make you better than 95% of the low wage workers in the USA.
With this in mind it is clear that a company like apple could NOT get away with paying workers less than minimum wage in the USA regardless of whether the laws were on the books or not. Reliable and productive workers would simply refuse to work for them unless they paid significantly higher wages. Therefore, regardless of minimum wage laws, the effective minimum wage apple could pay people in the USA is MUCH higher than that in china. Part of globalization is to bring up all countries standards of living by letting people in each country do what they can do most efficiently. Taxing products made in china higher wouldn't necessarily mean more americans would have jobs, but it would ensure that americans would spend more money on everything they buy, and therefore they'd (by definition) have less money to buy other things.. Would the USA rather have hundreds of well-paid employees designing iOS, or thousands of low wage employees assembling iphones....
I'm not going to talk out of my ass and pretend to know something that I don't, </snip>.
Then stop talking, because that is exactly what you are doing with your repeated antagonism.
Quote:
Originally Posted by cameronj
I do know the facts - phones are not manufactured by robots. Thus it is not as good of an option as doing it by hand. Whatever the possible reasons are, we will CERTAINLY never know which is actually the cause.
And you have less than no idea why. So stop while you are only way behind.
Robotic assembly on a iPhone style scale just is not feasible yet because the devices are both small and not able to be assembled in a manner that is robotics friendly given the current state of the art in sensing and control. Plus outfitting the factory will cost a large fortune, large enough that the state of the art needs to be ready first.
Robots assemble parts of cars where a few microns of motion here and there in error is tolerable, a few microns here and there sliding an iPhone together can be catastrophic to the device. The self correcting, self learning modulation of the human hand-eye system is still at least a decade better than robotic systems when an entire assembly line cannot be controlled to single micron precision. It will happen, when will be longer than many will care to imagine, but when it does the swap over will happen at a dizzying pace that will probably cause plenty of social unhappiness where the cheap labor is today.
This is the main point that most of the posts above are missing. It's not about wages, environmental regulations, unions and such which are most small (less than 15% of US labor is unionized, for instance). There is no efficient supply chain that can achieve the scale, speed, and reliability that Asia has to sustain this type of manufacturing in the US.
I think that's the bottom line. That was Jobs' point, I think, in the quote I posted earlier. The jobs are gone because factories (that happen to be in China) are simply better at creating these devices now. If you could do as high quality work in the US, you'd certainly save on shipping, so we already know we can't get the same quality at (cost of China mfg + shipping) here in the US. I'm suspicious we can get the quality at all from current factories.
It's pretty realistic, short term, to say those jobs are gone.
Comments
Long story short, if Apple products were made in the US, in order for Apple to keep its profit margin, the prices of the items themselves would go up prohibitively too high to ever sell in the volume necessary to sustain the costs of making them.
No one wants to buy a $2000 iPad.
Quote:
Originally Posted by kellya74u
yeah, bash the US union workers who wanted living wage so the they could buy home & a car, support their family, pay US & state taxes, & put money into a retirement system so they wouldn't be a burden to society later on (no government money needed nor accepted). However, since everyone wants to pay $400 for a $1200 TV, they feel US workers are too overpaid. US businesses tried to compete by eliminating pensions & healthcare for workers (working employees part time), but still can't compete. Unless we can get US workers to accept pay so low they they want to jump off buildings to relieve the stress of their existence and/or send their children to the factories, it ain't gonna happen. It will never happen in California where state laws & taxes have driven businesses out of the State. The few who remain, are being taxed out of existance to make the difference. The turnaround requires an individual committment to purchase US goods at a real, fair price or US infrastructure will continue to collapse. US people re making themselves poor. Let others buy the cheap goods. Make Apple stuff in the US & I will pay the higher price...for its actual value.
The market determines the price of the products. At a certain point, through automation, skill becomes less and less a necessity. You are simply being paid for not going insane doing a simple but repetative task. The only problem with the Union Workers was failing to see the shift from their previous skill or very dangerous contribution to more simple acts that they were simply being over paid to accomplish. And in the end, unfortunatley the Union cannot force a company to be successful or that the economy remain stable via a Collective Bargaining Agreement. Heavily Unionized Greece is now learning this.
Union's do serve a purpose but they can also keep a company from being quick to react to market conditions. That alone, has probably been more responsible for negatively affecting U.S. production than the higher wages ever did.
Quote:
Originally Posted by jd_in_sb
The U.S. needs to create an industrial zone exempt from minimum wage laws and anti-business bureaucracy. That would bring manufacturers back.
Really??? You want to pay workers LESS than minimum wage? Minimum wage practically puts you at the poverty line (assuming you're a family of one. If there's more people, you're below it). Do you really think it's ethical for highly profitable companies like Apple who sell luxury products to pay even the minimum wage? Where do you think workers who earn the minimum wage are going to live - in tents near the factories in which they work? You cannot live on a gross of $15,000 a year in the United States. Over 5.65% would go to Social Security and Medicare at the currently discounted rates and 8.67% would go to carfare at $5 per day. Now you're down to $12,850 and you haven't even paid for rent, food, clothing or any healthcare whatsoever yet. Spend just $12 a day for food and that's another 29%. Now you're down to below $8500. And that assumes you don't have to pay a penny in Federal, State or local taxes.
And there's no place in the U.S. that's sane that would want a factory filled with workers earning less than minimum wage. Do you know why? Because those workers will be lining up to get additional aid at every possible government service. So they'll clog public hospital emergency rooms, apply for food stamps, put their kids into free after-school programs (if any still exist), etc. And all because big companies have no ethics and only care about their executives and shareholders. That's no bargain for localities because the workers use up more public services than the locality gets back in taxes (which is usually zero anyway because they give the corporation a big tax emption to move in.)
The only thing that's going to bring manufacturing back to the U.S. is rising wages in China, rising transportation costs or if Americans started refusing to buy products made for sub-par wages. The latter won't happen. If rising wages in China happens, which is definitely going to happen over time, you'll see the factories first move to poorer parts of China and then move to India, Vietnam or Africa.
Having said that, recent reports claim that there's a lot more manufacturing in the U.S. than most people believe. I think I read recently that manufacturing is still something like 18% of GDP.
Cheers !
Quote:
Originally Posted by Sandman619
...Beyond that, why is Apple the sole focus here.
We're focusing on Apple because this is the Apple Insider Forum. I would be grateful to any company bringing manufacturing jobs to the USA.
Quote:
Originally Posted by Sandman619
Apple does not have assembly plants anywhere. They hire contract manufacturing & assembly firms. That said, for Apple to move from Asia to US plants would require US contract firms. In the size that Apple requires, those do not exist here in the US. That's where the biggest hurdle lies. if any contract firms were to offer to Apple's scale, it would be in Mexico which, because of NAFTA, would be ideal as far as wage & location to the US, but it's still not benefiting the US employment base. Beyond that, why is Apple the sole focus here. What about the other American firms that outsource manufacturing & assembly to Asia, such as Motorola, certainly, Google could setup US assembly operations just as easily as Apple, right ?
Cheers !
We're talking about Apple because this is an Apple forum and because Cook brought up the issue.
In an ethical world, you build products in many regions around the world so that they're built close to the markets they serve. You do that because it's better for the environment (less shipping) and because the societies of people who purchase the products should also have the benefit of the jobs that create the products. No one is saying that every unit of every Apple product has to be built in the U.S. No one is even saying that current Apple products have to be built in the U.S. - maybe it's some future product.
For those of you who say that's impossible, Brazil has already proven that it is possible. Brazil was very smart. They said that if Apple didn't build the products in Brazil, they would place such high import taxes on them, no one would buy them. And guess what? Apple magically found a way to start manufacturing in Brazil.
In addition, I was thinking today about Amazon. Amazon has numerous warehouses across the country. My understanding is that they pay about $15 an hour + benefits. While $30,000 is not fantastic, it's far better than minimum wage and especially if that's a second salary, quite livable in many parts of the country. Amazon is in a very short margin business - just a few percent. If Amazon could afford to pay warehouse workers that salary, I think Apple (and companies like it) can afford to pay that same amount to factory workers. The only difference between an Amazon warehouse and an Apple factory is that the latter has machinery and must handle raw materials. Maybe it's not even a manufacturing plant --- maybe it's just an assembly plant,
I also don't buy Cook's argument that there are no tool and die makers in the U.S. Who built the machines that run the new GM factory? Besides, there's nothing to say that the tool and dies have to also be built in the U.S., although that would be nice as well.
Cook: I want there to be. The engines for the iPad and the iPhone are built in the US. Not just for the US, but for the world. In Austin. The glass is made in a plant in Kentucky. Not just in the US but for other markets too.
There are things that can be done in the US, not just for the US market, but can be exported.
There's an intense focus on the final assembly. They don't think about all of the parts underneath, where the significant value of the buildable material is. Can this be done in the US? I hope so, one day.
But how do you do it? I'm mostly reading about final assembly on forums. I've addressed this every time this has come in conversation and Cook addressed it with Mossberg. Why is the final assembly the only assembly people think matters? It's not even close to the most expensive cost. Where are the people who want everything to be done in house vying for Apple to find alternatives to essential technologies that are owned, designed and created outside the US? You simply don't see it because most people aren't looking at the big picture. They think of Santa's Workshop when they think of iPhones being made, not not the dozens of components being created in dozens of factories around the world before being sent to Foxconn for the final assembly.
The first part assumes that machines used in GM factories have been made in the US but then you acknowledge that machines could be built elsewhere and then shipped to the US. That seems very disjointed.
If they aren't built in the US then they are US made. Again, why the focus on final assembly and not any of the components or any of the machines used to make and assemble the other parts?
Personally, as an American, I think it's great that the world's largest public company is in the US, that they design all their stuff in the US, that's it's the most respected and highest quality product for a given price point, it's reasonably priced for Americans, and that's it a consumer electronic product. An actual product, not just a financial goliath that doesn't actually make anything.
Quote:
Originally Posted by jd_in_sb
The U.S. needs to create an industrial zone exempt from minimum wage laws and anti-business bureaucracy. That would bring manufacturers back.
a lot of people have quoted this, but it's amazing that no one mentioned the one thing this post failed to mention ... Just because minimum wage laws don't exist doesn't mean a factory could drop wages below minimum wage. In fact, if we look at many of the factory jobs in the USA, they pay quite a bit higher than minimum wage. Don't think for a second that this is because the companies are altruistic (although in some cases unions have pushed wages beyond what would otherwise be paid), it's because they wouldn't find enough competent workers willing to do the job at minimum wage. Just like the product market, the labor market can be boiled down to supply and demand. How many people do you know that would be willing to work 60 hour weeks for $5 an hour... Sure there are unemployed people in the USA... but even most of them value their labor far above minimum wage.
The people who will take minimum wage jobs (or low paying jobs in general in absence of minimum wage) are unskilled laborers who have very limited work experience (often teenagers), or people who are working second/third jobs, or working during school, and require VERY flexible work hours (in which case they value the flexibility of work around their schedule over the potential pay). In the first two cases, the people who work hard and are ambitious are unlikely to stay at the lowest wages, and those workers who value flexibility more than high wages would not be ideal candidates for these jobs. In my experience simply showing up on time, and working hard make you better than 95% of the low wage workers in the USA.
With this in mind it is clear that a company like apple could NOT get away with paying workers less than minimum wage in the USA regardless of whether the laws were on the books or not. Reliable and productive workers would simply refuse to work for them unless they paid significantly higher wages. Therefore, regardless of minimum wage laws, the effective minimum wage apple could pay people in the USA is MUCH higher than that in china. Part of globalization is to bring up all countries standards of living by letting people in each country do what they can do most efficiently. Taxing products made in china higher wouldn't necessarily mean more americans would have jobs, but it would ensure that americans would spend more money on everything they buy, and therefore they'd (by definition) have less money to buy other things.. Would the USA rather have hundreds of well-paid employees designing iOS, or thousands of low wage employees assembling iphones....
Phil
Quote:
Originally Posted by cameronj
I'm not going to talk out of my ass and pretend to know something that I don't, </snip>.
Then stop talking, because that is exactly what you are doing with your repeated antagonism.
Quote:
Originally Posted by cameronj
I do know the facts - phones are not manufactured by robots. Thus it is not as good of an option as doing it by hand. Whatever the possible reasons are, we will CERTAINLY never know which is actually the cause.
And you have less than no idea why. So stop while you are only way behind.
Robotic assembly on a iPhone style scale just is not feasible yet because the devices are both small and not able to be assembled in a manner that is robotics friendly given the current state of the art in sensing and control. Plus outfitting the factory will cost a large fortune, large enough that the state of the art needs to be ready first.
Robots assemble parts of cars where a few microns of motion here and there in error is tolerable, a few microns here and there sliding an iPhone together can be catastrophic to the device. The self correcting, self learning modulation of the human hand-eye system is still at least a decade better than robotic systems when an entire assembly line cannot be controlled to single micron precision. It will happen, when will be longer than many will care to imagine, but when it does the swap over will happen at a dizzying pace that will probably cause plenty of social unhappiness where the cheap labor is today.
Quote:
Originally Posted by anantksundaram
This is the main point that most of the posts above are missing. It's not about wages, environmental regulations, unions and such which are most small (less than 15% of US labor is unionized, for instance). There is no efficient supply chain that can achieve the scale, speed, and reliability that Asia has to sustain this type of manufacturing in the US.
I think that's the bottom line. That was Jobs' point, I think, in the quote I posted earlier. The jobs are gone because factories (that happen to be in China) are simply better at creating these devices now. If you could do as high quality work in the US, you'd certainly save on shipping, so we already know we can't get the same quality at (cost of China mfg + shipping) here in the US. I'm suspicious we can get the quality at all from current factories.
It's pretty realistic, short term, to say those jobs are gone.