We (Americans) sold our souls to China decades ago. China now has the technology edge. They can manufacture electronic gadgets by the billions. They have the technology and they have the workforce and they have the experience. It took a pandemic for some of us to realize ALL of our drugs, ALL our PPE, most healthcare hardware, comes from China because they can build it faster and cheaper. Search Amazon for non-essential surgical masks, hand sanitizer, etc. It’s ALL from China, not a single U.S. manufacturer to be found. Wow, Apple, GM, started making PPE shit. What happens when the crisis is abated? What happens to all those ventilators being cobbled together? Will they be stored in a gigantic Raiders of the Lost Ark warehouse somewhere in New Mexico?
The U.S. Treasury is borrowing $3 Trillion to cover the various stimulus legislation. How does the Treasury borrow money? They sell U.S. Treasury notes, that’s how. Any guesses as to who has been buying most of those treasury notes the past few decades? Come on now, you should know this. It’s CHINA of course. China owns big chunk of our debt these days, second only to Japan as of 2019. The U.K. owns a lot of it too. And a lot of Arab sheiks own a bunch. When will we be labeled as a credit risk?
When the US currency stops being the reserve currency of the world.
Wouldn't businesses be more compelled to move to countries with consistently predictable government? The USA has been experiencing an unusual amount of political instability in the last few years, what is the business case to heavily invest in a country where the tables may be flipped on you on a moments notice.
Few years... Since 1776. Jeez, read a book.
Good thing the high electronics industry didn’t kick off for 2 more centuries..
We (Americans) sold our souls to China decades ago. China now has the technology edge. They can manufacture electronic gadgets by the billions. They have the technology and they have the workforce and they have the experience. It took a pandemic for some of us to realize ALL of our drugs, ALL our PPE, most healthcare hardware, comes from China because they can build it faster and cheaper. Search Amazon for non-essential surgical masks, hand sanitizer, etc. It’s ALL from China, not a single U.S. manufacturer to be found. Wow, Apple, GM, started making PPE shit. What happens when the crisis is abated? What happens to all those ventilators being cobbled together? Will they be stored in a gigantic Raiders of the Lost Ark warehouse somewhere in New Mexico?
The U.S. Treasury is borrowing $3 Trillion to cover the various stimulus legislation. How does the Treasury borrow money? They sell U.S. Treasury notes, that’s how. Any guesses as to who has been buying most of those treasury notes the past few decades? Come on now, you should know this. It’s CHINA of course. China owns big chunk of our debt these days, second only to Japan as of 2019. The U.K. owns a lot of it too. And a lot of Arab sheiks own a bunch. When will we be labeled as a credit risk?
Where products are made has not been the root problem.
The problem was a massive spike in demand that could not be met.
One of the biggest problems was that many countries were not ready for this situation. Protocols were not really appropriate, stocks were not high enough etc.
I expect that to change radically as a result of what we've been through and as part of the solution we should see improvements across the board and countries will be accountable for their preparedness.
Expect to see regional manufacturing hubs with manufacturers able to switch their production lines from non-emergency use to emergency use in very short times. Expect to see warehouses spring up with far more supplies on hand than before. Expect more companies to improve tele work options. Expect field hospitals to pop-up and become fully operational at the drop of a hat.
Of course, these changes will have to be plumbed into some geographical framework to ensure that demands on varying supply chains can be met with agility.
The bulk of our needs can still be sourced in China if necessary as long as demand can be met while the system is under stress.
For that to happen, we have to make some big changes in how we do things but I'm sure we will learn.
When it comes to essential items (PPE, medical hardware, drugs, etc.), where they are made is the root of the problem and the massive spike in demand exposed a huge crack in the underlying problem. These items need to be made local to allow nations to be more flexible in times like this.
Not at all. For basic (non emergency supply) price is going to be a guiding factor and that inevitably means China. That really isn't a problem.
The problem is when initial emergency demand spikes to a point where it cannot be met over the short term, causing supply stops, logistics problems and extreme price fluctuations. It is unrealistic to expect China to satisfy the demands of the whole world with only weeks notice.
In those cases, countries should have stockpiles of disposable and non-disposable supplies but also the capacity to manufacture their own supplies in times of emergency even though costs will obviously be higher.
We have been caught severely lacking on this occasion. Seeing front line medical staff improvising PPE material out of rubbish bags is just unacceptable. This pandemic should not have left front line workers exposed like it did. There is no reason they should have gone through that. We are supposed to be disaster ready and we were not, and at every step of the way from admittance to medical facilities right through to post mortem and beyond. Even the administrative side of registering cases has proved to be inadequate.
The pandemic should not have affected our systems the way it did and I'm convinced we have learnt many simple lessons across the entire response and administrative spectrum.
There is no problem in using refrigerated trucks or ice rings etc as temporary morgues when funeral services are beyond capacity but it must be done following planned protocols and implemented as such, not in an improvised manner.
We (Americans) sold our souls to China decades ago. China now has the technology edge. They can manufacture electronic gadgets by the billions. They have the technology and they have the workforce and they have the experience. It took a pandemic for some of us to realize ALL of our drugs, ALL our PPE, most healthcare hardware, comes from China because they can build it faster and cheaper. Search Amazon for non-essential surgical masks, hand sanitizer, etc. It’s ALL from China, not a single U.S. manufacturer to be found. Wow, Apple, GM, started making PPE shit. What happens when the crisis is abated? What happens to all those ventilators being cobbled together? Will they be stored in a gigantic Raiders of the Lost Ark warehouse somewhere in New Mexico?
The U.S. Treasury is borrowing $3 Trillion to cover the various stimulus legislation. How does the Treasury borrow money? They sell U.S. Treasury notes, that’s how. Any guesses as to who has been buying most of those treasury notes the past few decades? Come on now, you should know this. It’s CHINA of course. China owns big chunk of our debt these days, second only to Japan as of 2019. The U.K. owns a lot of it too. And a lot of Arab sheiks own a bunch. When will we be labeled as a credit risk?
Where products are made has not been the root problem.
The problem was a massive spike in demand that could not be met.
One of the biggest problems was that many countries were not ready for this situation. Protocols were not really appropriate, stocks were not high enough etc.
I expect that to change radically as a result of what we've been through and as part of the solution we should see improvements across the board and countries will be accountable for their preparedness.
Expect to see regional manufacturing hubs with manufacturers able to switch their production lines from non-emergency use to emergency use in very short times. Expect to see warehouses spring up with far more supplies on hand than before. Expect more companies to improve tele work options. Expect field hospitals to pop-up and become fully operational at the drop of a hat.
Of course, these changes will have to be plumbed into some geographical framework to ensure that demands on varying supply chains can be met with agility.
The bulk of our needs can still be sourced in China if necessary as long as demand can be met while the system is under stress.
For that to happen, we have to make some big changes in how we do things but I'm sure we will learn.
lkrupp is right and avonb7 isn't understanding how the US is operating. The US hasn't had any major manufacturing in many years because it's not profitable and that's all that matters to Wall Street. If you want someone to yell at, quit yelling at Apple or even GM because they're not the real problem. Look at all the funds that hold massive shares of AAPL. It is their responsibility to make money for their shareholders. They don't care where things are made they only care about making money. Even DJT doesn't care if companies actually bring manufacturing back to the US unless he can make money on it while dropping taxes for the rich. He's not the only one. The corporate Democrats want the same thing. All that matters is money along with making people think they really care about American workers. You won't see US companies change to be more flexible on what they make, this is a one time (hopefully) event. If it happens again, the US will collapse and when that happens, all those foreign investors will lose money causing a ripple effect throughout the world. If you look at ancient history, you'll see the collapse of civilizations along with groups of people starting all over again but they won't remember, or know, what happened before so they'll commit the same problems again and again. The earth is very old but the current civilization isn't much older than maybe 150 years old. In fact, look at everything that's been invented and produced in the last 100 years. It's more than in the previous 100,000 years.
We won't learn from what's happening now because we haven't learned from any of our previous mistakes.
I think both the U.S government and Wall St will see (and comprehend) the impact of this pandemic and improve many things precisely because not being well prepared for this has cost them trillions and when things hit your bottom line you take notice.
The U.S has enough capacity to manufacture. That isn't the root problem.
It can manufacture but not competively at certain scales so it makes sense to use the global supply chain.
However, when things go haywire (like with COVID-19) new priorities come into play.
Firstly you need to contain. You need to protect your health system from overload which invariably means confinement of varying degrees. You need to ultimately consider expanding your health system's capacity through emergency measures (commisioning private healthcare, field hospitals, leveraging retired medical personnel etc) and of course you need to keep your supply lines open and well fed. Every stage of a crisis situation has protocols to deal with various scenarios, we need to review them as a result of this crisis. Of course, they are already under review as I write.
Stockpiles need to be managed and are supposed to act as buffer zones to absorb spikes in demand which in turn allows traditional manufacturing to increase output in an orderly fashion and to see if future demand can be met.
Depending on that demand, a third line of response is available through transformation of local manufacturing and logistics hubs.
It is relatively easy for local manufacturing to change track in case of emergency but they need to be prepared.
In this pandemic there was a shortfall in ventilators but that was through lack of preparation more than anything else.
Here in Spain we have some companies that were able to switch manufacturing to the production of ventilators but it took a while to ramp up production and get the relevant health approval for the devices. Had these companies been part of an emergency plan the whole process would have been more streamlined, right down to the approval process by the relevant authorities.
Even China has made some important changes. There is no point in sourcing from China if the finished product doesn't meet requirements. Some products from China didn't meet the medical requirements needed. As governments turned to China for material, many of them ended up going through intermediaries to try and fast track deliveries. As a result, a lot of material flowed out of companies that weren't really up to the task. China has now improved this aspect by requiring licences. Any government that goes through intermediaries and uses unlicensed companies, now has no excuse.
The U.S is no different with regards to manufacturing and logistics.
It can use China for global supply and economic reasons, but has to be better prepared for health emergencies like this one.
The TSMC situation is completely different as it pertains to national security issues. The desire is reasonable but the government should not be pressuring foreign companies to do anything. If TSMC does not want to increase activity on U.S soil, the U.S knows what it has to do but that will require a lot of hard cash.
I've posted this before, but I'll post it again: manufacturing OUTPUT in the United States is DOUBLE what it was back in the 1980s. However, there are only 1/3 the number of manufacturing JOBS today vs the 1980s. Automation reducing the number of paying jobs has been the biggest issue, not output. Also, people should remember that a lot of the manufacturing that was moved to foreign countries was NOT done to lower PRICES. It was done to increase PROFIT. So manufacturing something in the United States isn't about not being able to offer the same price as companies that manufacture in a foreign country, it's about not being able to have the same profit. That's what a business actually means when they say they can't be COMPETITIVE by manufacturing in the United States...competitive for profit, not price.
Apple themselves have always said that the limited amount of manufacturing done in the U.S. is more about the lack of infrastructure to do it than anything else.
Wouldn't businesses be more compelled to move to countries with consistently predictable government? The USA has been experiencing an unusual amount of political instability in the last few years, what is the business case to heavily invest in a country where the tables may be flipped on you on a moments notice.
Few years... Since 1776. Jeez, read a book.
Bush, Clinton, W, Trump, the swings are getting more extreme evert iteration. Looks like an oscillating feedback amplification loop.
1804, the sitting VP shot to DEATH the former Sec of State and father of the first US bank causing his death in an illegal duel and was never prosecuted. And you say 41? Yes, lets look to stable governments in China where doctors and journalists are vaporized. I mean democracy, right? King George VI much? The governing document and system of laws in the US is from 1789. Find me one older and more stable.
Every empire in all of history has pointed to its longevity as evidence that it was stable and would be around forever, just before they collapsed.
They have 17 fabs, only 1 is in the US. This could change with increased demand (they have two major customers currently publicly vying for capacity) AND ONLY if they can do it at the same or lower cost. If it were cheaper through tax forgiveness, that would be a major piece, but the US has to know what they're getting for that cost.
Foxconn was supposed to do this in WI. They haven't built a single display panel, haven't even tooled up. They are now using the unused facility to make surgical masks for Sharp and may make ventilators for Medtronic. All for $500K cost to the government per job if they ever get to 13K employees.
Wouldn't businesses be more compelled to move to countries with consistently predictable government? The USA has been experiencing an unusual amount of political instability in the last few years, what is the business case to heavily invest in a country where the tables may be flipped on you on a moments notice.
Few years... Since 1776. Jeez, read a book.
Bush, Clinton, W, Trump, the swings are getting more extreme evert iteration. Looks like an oscillating feedback amplification loop.
1804, the sitting VP shot to DEATH the former Sec of State and father of the first US bank causing his death in an illegal duel and was never prosecuted. And you say 41? Yes, lets look to stable governments in China where doctors and journalists are vaporized. I mean democracy, right? King George VI much? The governing document and system of laws in the US is from 1789. Find me one older and more stable.
Every empire in all of history has pointed to its longevity as evidence that it was stable and would be around forever, just before they collapsed.
Your assertion is that the US in an empire and you’re one vote for the collapse because I said it Is currently the oldest and most stable but did NOT say “around forever”
Correlation is not causation. I’ll be holding my breath for your citations demonstrating “every”. Thanks for playing.
Most of Intel's chip manufacturing facilities are already in the United States (Oregon and Arizona) so I am not sure what they are talking about. TSMC (aka Taiwan Semiconductor Manufacturing Company) has manufacturing facilities in Taiwan, Mainland China and the United States. While I believe we all want more manufacturing in the United States, there are a couple of issues to keep in mind 1) Since Taiwan, China, South Korea, and Singapore have done a MUCH better job of containing the spread of Coronavirus than the United States what benefit would there be if all these facilities existed in the US? It might even cause more supply chain disruption. 2) These are well-established Asian facilities which would take years to bring back IF even feasible from a financial and logistical standpoint. There is a reason why companies like Apple Manufacturer most of their product in Asia. Who wants to pay $2,500 for an iPhone?
Protectionism and economic populism may appeal to parts of the country that have lost significant manufacturing jobs, but this is not something I believe most tech multinationals would see as in the best interests of their shareholders and customers. Capitalism isn't a sentimental system. It's a system that maximizes shareholder value while delivering the best innovative products at the lowest possible prices. That's the stark reality and unless the US embraces 'state capitalism' (as the Chinese Communist Party as done) I don't see this happening. Not trying to make a political argument. Just an observation based on reality.
National Security reasons are sufficient to bring fabs to the West.
COVID19 just uncovered the fact that the West had many products, especially PPE, majority manufactured in China. That the supply chain failed for PPE is one of the reasons that the West is looking at incentives and regulations to change that. China didn't help this by having Chinese companies, operating around the world, buying up PPE; hence, shortages that wouldn't have occurred otherwise.
Even if many more PPE companies resided in the US, we would still be screwed without planning and foresight. Companies can't just instantly up their production by several orders of magnitude. The free market is more about just-in-time than just-in-case. That's what government is for. Would your concern about "supply chain failure" be the same if Washington waited until attacking squadrons were overhead, before seeing if anyone could sell us fighter planes?
The link is wrt strategic stockpiles, which were intended to provide a buffer until production could be ramped up, but the issue today is, that most of the production of PPE and pharmaceuticals is overseas, and worse, most is produced by an authoritarian adversary.
Apple sure doesn't see them as an adversary. And China would certainly have made all the PPE we could want if we had stockpiled in advance, and couldn't possibly have made it at the last moment. Finally, one sign that the wrong people were in charge of preparedness is the pessimal early response to urgent requests to get US companies to make more PPE in January and February.
Most of Intel's chip manufacturing facilities are already in the United States (Oregon and Arizona) so I am not sure what they are talking about. TSMC (aka Taiwan Semiconductor Manufacturing Company) has manufacturing facilities in Taiwan, Mainland China and the United States. While I believe we all want more manufacturing in the United States, there are a couple of issues to keep in mind 1) Since Taiwan, China, South Korea, and Singapore have done a MUCH better job of containing the spread of Coronavirus than the United States what benefit would there be if all these facilities existed in the US? It might even cause more supply chain disruption. 2) These are well-established Asian facilities which would take years to bring back IF even feasible from a financial and logistical standpoint. There is a reason why companies like Apple Manufacturer most of their product in Asia. Who wants to pay $2,500 for an iPhone?
Protectionism and economic populism may appeal to parts of the country that have lost significant manufacturing jobs, but this is not something I believe most tech multinationals would see as in the best interests of their shareholders and customers. Capitalism isn't a sentimental system. It's a system that maximizes shareholder value while delivering the best innovative products at the lowest possible prices. That's the stark reality and unless the US embraces 'state capitalism' (as the Chinese Communist Party as done) I don't see this happening. Not trying to make a political argument. Just an observation based on reality.
National Security reasons are sufficient to bring fabs to the West.
COVID19 just uncovered the fact that the West had many products, especially PPE, majority manufactured in China. That the supply chain failed for PPE is one of the reasons that the West is looking at incentives and regulations to change that. China didn't help this by having Chinese companies, operating around the world, buying up PPE; hence, shortages that wouldn't have occurred otherwise.
Even if many more PPE companies resided in the US, we would still be screwed without planning and foresight. Companies can't just instantly up their production by several orders of magnitude. The free market is more about just-in-time than just-in-case. That's what government is for. Would your concern about "supply chain failure" be the same if Washington waited until attacking squadrons were overhead, before seeing if anyone could sell us fighter planes?
The link is wrt strategic stockpiles, which were intended to provide a buffer until production could be ramped up, but the issue today is, that most of the production of PPE and pharmaceuticals is overseas, and worse, most is produced by an authoritarian adversary.
Apple sure doesn't see them as an adversary. And China would certainly have made all the PPE we could want if we had stockpiled in advance, and couldn't possibly have made it at the last moment. Finally, one sign that the wrong people were in charge of preparedness is the pessimal early response to urgent requests to get US companies to make more PPE in January and February.
I agree that Apple doesn't see China as an adversary, but China is certainly an adversary to the West. If you can't find links and sources for that, I would be happy to provide you them. Start with the South China Sea, militarization by China. That's always a good start. Hacking by China will surely turn up plenty of links and sources.
So, China ended up buying up 2 billion masks from around the globe during the crisis in Wutan, via Chinese companies, in a addition to other PPE, and it was shipped back, leaving many countries with limited supplies. During that time, Chine restricted export of that same PPE. You can make an argument that this is Capitalist behavior, where buyer and seller are just making a transaction, but one of the problems is that China buried the epidemic for most of January, and continued with aggressive efforts to maintain air travel to other countries during that time.
Of course, I realize that the U.S. did essentially nothing until March, and is still way behind the power curve, but a lot of countries responded really well, such as Taiwan, South Korea, New Zealand, and Australia, and they certainly remember those supplies exiting their respective countries.
Now the Chinese Government is trying to portray itself as a very good source of humanitarian aid in a crisis, but in fact, most countries aren't buying it, and want answers to the origin of the epidemic, an origin which China has attempted to bury. Other countries that received aid were pressured to state nice things about China, and have come clean on that just recently.
China isn't a friend to the West.
My own opinion is that Apple should exit China due to China's continuing human rights violations, but even a smaller manufacturing presence in China is an improvement, if that is the best that Apple will do.
Comments
The problem is when initial emergency demand spikes to a point where it cannot be met over the short term, causing supply stops, logistics problems and extreme price fluctuations. It is unrealistic to expect China to satisfy the demands of the whole world with only weeks notice.
In those cases, countries should have stockpiles of disposable and non-disposable supplies but also the capacity to manufacture their own supplies in times of emergency even though costs will obviously be higher.
We have been caught severely lacking on this occasion. Seeing front line medical staff improvising PPE material out of rubbish bags is just unacceptable. This pandemic should not have left front line workers exposed like it did. There is no reason they should have gone through that. We are supposed to be disaster ready and we were not, and at every step of the way from admittance to medical facilities right through to post mortem and beyond. Even the administrative side of registering cases has proved to be inadequate.
The pandemic should not have affected our systems the way it did and I'm convinced we have learnt many simple lessons across the entire response and administrative spectrum.
There is no problem in using refrigerated trucks or ice rings etc as temporary morgues when funeral services are beyond capacity but it must be done following planned protocols and implemented as such, not in an improvised manner.
The U.S has enough capacity to manufacture. That isn't the root problem.
It can manufacture but not competively at certain scales so it makes sense to use the global supply chain.
However, when things go haywire (like with COVID-19) new priorities come into play.
Firstly you need to contain. You need to protect your health system from overload which invariably means confinement of varying degrees. You need to ultimately consider expanding your health system's capacity through emergency measures (commisioning private healthcare, field hospitals, leveraging retired medical personnel etc) and of course you need to keep your supply lines open and well fed. Every stage of a crisis situation has protocols to deal with various scenarios, we need to review them as a result of this crisis. Of course, they are already under review as I write.
Stockpiles need to be managed and are supposed to act as buffer zones to absorb spikes in demand which in turn allows traditional manufacturing to increase output in an orderly fashion and to see if future demand can be met.
Depending on that demand, a third line of response is available through transformation of local manufacturing and logistics hubs.
It is relatively easy for local manufacturing to change track in case of emergency but they need to be prepared.
In this pandemic there was a shortfall in ventilators but that was through lack of preparation more than anything else.
Here in Spain we have some companies that were able to switch manufacturing to the production of ventilators but it took a while to ramp up production and get the relevant health approval for the devices. Had these companies been part of an emergency plan the whole process would have been more streamlined, right down to the approval process by the relevant authorities.
Even China has made some important changes. There is no point in sourcing from China if the finished product doesn't meet requirements. Some products from China didn't meet the medical requirements needed. As governments turned to China for material, many of them ended up going through intermediaries to try and fast track deliveries. As a result, a lot of material flowed out of companies that weren't really up to the task. China has now improved this aspect by requiring licences. Any government that goes through intermediaries and uses unlicensed companies, now has no excuse.
The U.S is no different with regards to manufacturing and logistics.
It can use China for global supply and economic reasons, but has to be better prepared for health emergencies like this one.
The TSMC situation is completely different as it pertains to national security issues. The desire is reasonable but the government should not be pressuring foreign companies to do anything. If TSMC does not want to increase activity on U.S soil, the U.S knows what it has to do but that will require a lot of hard cash.
Apple themselves have always said that the limited amount of manufacturing done in the U.S. is more about the lack of infrastructure to do it than anything else.
Foxconn was supposed to do this in WI. They haven't built a single display panel, haven't even tooled up. They are now using the unused facility to make surgical masks for Sharp and may make ventilators for Medtronic. All for $500K cost to the government per job if they ever get to 13K employees.
Correlation is not causation. I’ll be holding my breath for your citations demonstrating “every”. Thanks for playing.
So, China ended up buying up 2 billion masks from around the globe during the crisis in Wutan, via Chinese companies, in a addition to other PPE, and it was shipped back, leaving many countries with limited supplies. During that time, Chine restricted export of that same PPE. You can make an argument that this is Capitalist behavior, where buyer and seller are just making a transaction, but one of the problems is that China buried the epidemic for most of January, and continued with aggressive efforts to maintain air travel to other countries during that time.
Of course, I realize that the U.S. did essentially nothing until March, and is still way behind the power curve, but a lot of countries responded really well, such as Taiwan, South Korea, New Zealand, and Australia, and they certainly remember those supplies exiting their respective countries.
Now the Chinese Government is trying to portray itself as a very good source of humanitarian aid in a crisis, but in fact, most countries aren't buying it, and want answers to the origin of the epidemic, an origin which China has attempted to bury. Other countries that received aid were pressured to state nice things about China, and have come clean on that just recently.
China isn't a friend to the West.
My own opinion is that Apple should exit China due to China's continuing human rights violations, but even a smaller manufacturing presence in China is an improvement, if that is the best that Apple will do.