I agree they will never do it, but wouldn't it be nice if Apple moved to Detroit and did build factories there?
Maybe. Or maybe it would be better if they moved to Detroit and built a beautiful, massive design, research and development center.
Quote:
Originally Posted by frankie
In terms of the unions, maybe they could make a deal, pay people a reasonable wage that doesn't completely devalue their life (like we do all over the rest of the planet)
First, the unions are part of the problem. Second, is the idea that the wage someone gets is a reflection on a person personally...a reflection of their value as a person. It's not...it is a reflection of the value of the work being done.
During the great depression FDR instituted wage controls. This left many owners of buildings with elevators with 2 options, upgrade to automated elevators or continue to employ the elevator operators. In the end it was more expensive to employ the elevator operators so they simple fired them all and upgraded their elevators. Now these elevator operators wanted to continue to work. They *wanted* their original wage but FDR said they couldn't. So their jobs just vanished in favor of the cheaper alternative.
So you end up with people who want to work and employees who want to hire people but FDRs mandate simple outsourced (to automation) those jobs.
We have 10% unemployment. I would gladly hire people in America but sadly there is no incentive to work nor are the wages that I would pay them be "acceptable" so I will continue to hire people in India.
Then there is the entire work ethic issue but that is another discussion entirely.
You mean there is no incentive to work at the third world wages you are paying people, at least not in the US. There is plenty of evidence of people queuing for jobs for normal US wages. The fact you outsource proves my point.
The lack of infrastructure, the impossibility of scaling to the extent companies like Foxconn have in less than a decade, and the absolute lack of any institutional knowledge on how to manufacture products like these at the scale the Chinese do is an absolute killer.
This is true. The price of outsourcing laptop production to Taiwan for so many years is that only the Taiwanese know how to produce laptops.
Even if Apple did move some manufacturing stateside, they'd almost certainly continue to use contract manufacturing rather than build and run their own factories.
Quote:
Originally Posted by addicted44
What the Chinese firms have is not just cheap labor (initially that was indeed the case) but rather 30+ years of investment in infrastructure (both in terms of the manufacturing facilities themselves, as well as government provided infrastructure, like easy access to plentiful and stable power and water) and over 30 years of experience and knowledge in building products at this scale.
The infrastructure provided by the Chinese government is effectively nonexistent. Foxconn literally had to build a city around its Shenzhen facility: roads, sewer, water and power are all built, paid for and maintained by Foxconn.
Furthermore, there's the problem that with labor, you tend to get what you pay for. Miserable people working punishing hours in dehumanizing conditions for table scraps are not going to do good work, no matter how you browbeat them. This translates to significantly lower productivity and lower quality and consistency. The real cost of labor is not the wage you pay them, but their wage divided by their useful output. US labor, including union labor, is high wage/high output. Chinese labor is low wage/low output[1]. There is a savings in moving factories to China, but between the lack of infrastructure, the lack of QA in raw materials (remember melamine?), the low productivity of the labor force and the need to ship everything across the world's largest ocean, it's not nearly as great a savings as you'd think.
The major issues are, quite simply, that: all the component manufacturing is on that side of the Pacific, and so is all the expertise in engineering those components into heavily miniaturized devices like laptops and phones, and therefore, so are all the contract manufacturers that Apple would be interested in working with.
The other thing to consider is that high US wages make Foxconn's low wages possible, because neither Foxconn nor any of its partners expect their workers to ever buy the products they build. We will, as long as we can afford to.
[1] At least within the parameters of this discussion. Obviously, the Chinese are as capable of high wage/high output labor as anyone else is.
Not true - the main reason to go to China is cheap labour not taxes, or whatever regulation you think is causing the problem. I doubt if most of Apple's tax is paid in the US, anyway.
I know the focus is on Apple in this article. But I find it interesting that Samsung's liquidity is also huge. They could purchase all the other mobile companies together save for HTC. Or just their next two closest rivals, HTC and Nokia if Taiwan and Finland allowed them to.
While it may appear that the "poor" control less wealth in terms of the overall percentage they control, the entire pie is a lot larger than it was 30 years ago.
The GDP in 1970 was ~1 trillion.
The GDP in 2010 was ~15 trillion.
~1 trillion in 1970 is ~5 trillion in 2010.
So as you see adjusted for inflation the GDP grew significantly.
And so has inflation as well as the number of people on the planet. This doesn't really mean anything.
They should just buy Samsung, fire everyone, and set their corporate headquarters ablaze. Then at the next WWDC, Jobs could show slides onstage and say they'll do the same to any other company that decides to duplicate rather than innovate.
Really? So you figure that manufacturing in the US would have cost them 70 billion over the last decade? I don't have their production costs, but looking at how Jobs set up the NeXT manufacturing, I'm not sure I buy that they'd have to fold up shop and just give away their money. They have huge margins, huge cash reserves, and it's not because they manufacture in China, it's because they make better products.
I buy your argument for commodity manufacturing companies, but that's about the last thing that Apple is or wants to be.
Apple can't leave china because there are more potential customers in china than anywhere else
P.S. The inflation tax is a direct result of the government protected monetary monopoly granted to The Fed.
Seriously, what is the growth in the median household income in the US relative to 1971 in constant dollars? What is the growth in the top 1%. What share did the top 1% have then. What do they have now?
As you see it [GDP] has gone up 3 fold (when adjusted for inflation) while the population only grew by 50%,
And what does the median guy earn now compared to then? Or are you saying all this growth has been distributed equally. because that is what is in dispute.
Given the very careful wording you used, I'll assume you understand that the economy itself has grown considerably in the past 30 years
There was a 15 fold increases in the GDP over the past 30 years.
What do you mean the economy hasn't grown?
Reading comprehension. Practice it. The ECONOMY itself has GROWN CONSIDERABLY.
But thanks for making my point. Given a 15 fold increase, the fact that the middle class hasn't actually gone backwards in real dollars is hardly an indictment of progressive ideals.
Seriously, what is the growth in the median household income in the US relative to 1971 in constant dollars? What is the growth in the top 1%. What share did the top 1% have then. What do they have now?
I don't have the numbers and links handy, but I was recently looking at this and, as it turns out, all income groups have increased (in real terms).
What advantage would ARM provide Apple? ARM is nothing but the owner of various intellectual properties which Apple can easily (and currently does) licence. (Interesting aside...ARM is essentially nothing more than what our favorite "open" fanbois like to call a "patent troll"). Buying ARM would give Apple no competitive advantage over what they have now.
The only way they could use it as a competitive advantage is if Apple stopped licencing ARM designs to other manufacturers, but that would put Apple into a legal and regulatory hell-hole which I doubt they want to enter.
I haven't a clue how you dreamt that up. ARM is certainly a lot more than just a patent licensor, they design CPU cores themselves, and license those designs. Where do you think these new ARM CPU designs are coming from? Thin air?
And what does the median guy earn now compared to then? Or are you saying all this growth has been distributed equally. because that is what is in dispute.
Who cares? If the pie is getting bigger and everyone is getting more pie, but some are getting even more...then the only issue is envy.
I know the focus is on Apple in this article. But I find it interesting that Samsung's liquidity is also huge. They could purchase all the other mobile companies together save for HTC. Or just their next two closest rivals, HTC and Nokia if Taiwan and Finland allowed them to.
Samsung is an absolutely massive company. A huge conglomeration, of the type not really seen in the West these days.
Comments
I agree they will never do it, but wouldn't it be nice if Apple moved to Detroit and did build factories there?
Maybe. Or maybe it would be better if they moved to Detroit and built a beautiful, massive design, research and development center.
In terms of the unions, maybe they could make a deal, pay people a reasonable wage that doesn't completely devalue their life (like we do all over the rest of the planet)
First, the unions are part of the problem. Second, is the idea that the wage someone gets is a reflection on a person personally...a reflection of their value as a person. It's not...it is a reflection of the value of the work being done.
And.....why is labor cheaper?
During the great depression FDR instituted wage controls. This left many owners of buildings with elevators with 2 options, upgrade to automated elevators or continue to employ the elevator operators. In the end it was more expensive to employ the elevator operators so they simple fired them all and upgraded their elevators. Now these elevator operators wanted to continue to work. They *wanted* their original wage but FDR said they couldn't. So their jobs just vanished in favor of the cheaper alternative.
So you end up with people who want to work and employees who want to hire people but FDRs mandate simple outsourced (to automation) those jobs.
We have 10% unemployment. I would gladly hire people in America but sadly there is no incentive to work nor are the wages that I would pay them be "acceptable" so I will continue to hire people in India.
Then there is the entire work ethic issue but that is another discussion entirely.
You mean there is no incentive to work at the third world wages you are paying people, at least not in the US. There is plenty of evidence of people queuing for jobs for normal US wages. The fact you outsource proves my point.
The lack of infrastructure, the impossibility of scaling to the extent companies like Foxconn have in less than a decade, and the absolute lack of any institutional knowledge on how to manufacture products like these at the scale the Chinese do is an absolute killer.
This is true. The price of outsourcing laptop production to Taiwan for so many years is that only the Taiwanese know how to produce laptops.
Even if Apple did move some manufacturing stateside, they'd almost certainly continue to use contract manufacturing rather than build and run their own factories.
What the Chinese firms have is not just cheap labor (initially that was indeed the case) but rather 30+ years of investment in infrastructure (both in terms of the manufacturing facilities themselves, as well as government provided infrastructure, like easy access to plentiful and stable power and water) and over 30 years of experience and knowledge in building products at this scale.
The infrastructure provided by the Chinese government is effectively nonexistent. Foxconn literally had to build a city around its Shenzhen facility: roads, sewer, water and power are all built, paid for and maintained by Foxconn.
Furthermore, there's the problem that with labor, you tend to get what you pay for. Miserable people working punishing hours in dehumanizing conditions for table scraps are not going to do good work, no matter how you browbeat them. This translates to significantly lower productivity and lower quality and consistency. The real cost of labor is not the wage you pay them, but their wage divided by their useful output. US labor, including union labor, is high wage/high output. Chinese labor is low wage/low output[1]. There is a savings in moving factories to China, but between the lack of infrastructure, the lack of QA in raw materials (remember melamine?), the low productivity of the labor force and the need to ship everything across the world's largest ocean, it's not nearly as great a savings as you'd think.
The major issues are, quite simply, that: all the component manufacturing is on that side of the Pacific, and so is all the expertise in engineering those components into heavily miniaturized devices like laptops and phones, and therefore, so are all the contract manufacturers that Apple would be interested in working with.
The other thing to consider is that high US wages make Foxconn's low wages possible, because neither Foxconn nor any of its partners expect their workers to ever buy the products they build. We will, as long as we can afford to.
[1] At least within the parameters of this discussion. Obviously, the Chinese are as capable of high wage/high output labor as anyone else is.
Not true - the main reason to go to China is cheap labour not taxes, or whatever regulation you think is causing the problem. I doubt if most of Apple's tax is paid in the US, anyway.
Yup. Agreed and true.
Given the very careful wording you used, I'll assume you understand that the economy itself has grown considerably in the past 30 years
There was a 15 fold increases in the GDP over the past 30 years.
What do you mean the economy hasn't grown?
Its pretty simple - the "rich" create wealth.
While it may appear that the "poor" control less wealth in terms of the overall percentage they control, the entire pie is a lot larger than it was 30 years ago.
The GDP in 1970 was ~1 trillion.
The GDP in 2010 was ~15 trillion.
~1 trillion in 1970 is ~5 trillion in 2010.
So as you see adjusted for inflation the GDP grew significantly.
And so has inflation as well as the number of people on the planet. This doesn't really mean anything.
And so has inflation as well as the number of people on the planet. This doesn't really mean anything.
He addressed that.
P.S. The inflation tax is a direct result of the government protected monetary monopoly granted to The Fed.
They should just buy Samsung, fire everyone, and set their corporate headquarters ablaze. Then at the next WWDC, Jobs could show slides onstage and say they'll do the same to any other company that decides to duplicate rather than innovate.
And so has inflation as well as the number of people on the planet. This doesn't really mean anything.
The US population increased 50% since 1970.
Inflation adjusted GDP
As you see it has gone up 3 fold (when adjusted for inflation) while the population only grew by 50%,
Really? So you figure that manufacturing in the US would have cost them 70 billion over the last decade? I don't have their production costs, but looking at how Jobs set up the NeXT manufacturing, I'm not sure I buy that they'd have to fold up shop and just give away their money. They have huge margins, huge cash reserves, and it's not because they manufacture in China, it's because they make better products.
I buy your argument for commodity manufacturing companies, but that's about the last thing that Apple is or wants to be.
Apple can't leave china because there are more potential customers in china than anywhere else
He addressed that.
P.S. The inflation tax is a direct result of the government protected monetary monopoly granted to The Fed.
Seriously, what is the growth in the median household income in the US relative to 1971 in constant dollars? What is the growth in the top 1%. What share did the top 1% have then. What do they have now?
As you see it [GDP] has gone up 3 fold (when adjusted for inflation) while the population only grew by 50%,
And what does the median guy earn now compared to then? Or are you saying all this growth has been distributed equally. because that is what is in dispute.
Given the very careful wording you used, I'll assume you understand that the economy itself has grown considerably in the past 30 years
There was a 15 fold increases in the GDP over the past 30 years.
What do you mean the economy hasn't grown?
Reading comprehension. Practice it. The ECONOMY itself has GROWN CONSIDERABLY.
But thanks for making my point. Given a 15 fold increase, the fact that the middle class hasn't actually gone backwards in real dollars is hardly an indictment of progressive ideals.
Seriously, what is the growth in the median household income in the US relative to 1971 in constant dollars? What is the growth in the top 1%. What share did the top 1% have then. What do they have now?
I don't have the numbers and links handy, but I was recently looking at this and, as it turns out, all income groups have increased (in real terms).
What advantage would ARM provide Apple? ARM is nothing but the owner of various intellectual properties which Apple can easily (and currently does) licence. (Interesting aside...ARM is essentially nothing more than what our favorite "open" fanbois like to call a "patent troll"). Buying ARM would give Apple no competitive advantage over what they have now.
The only way they could use it as a competitive advantage is if Apple stopped licencing ARM designs to other manufacturers, but that would put Apple into a legal and regulatory hell-hole which I doubt they want to enter.
I haven't a clue how you dreamt that up. ARM is certainly a lot more than just a patent licensor, they design CPU cores themselves, and license those designs. Where do you think these new ARM CPU designs are coming from? Thin air?
And what does the median guy earn now compared to then? Or are you saying all this growth has been distributed equally. because that is what is in dispute.
Who cares? If the pie is getting bigger and everyone is getting more pie, but some are getting even more...then the only issue is envy.
I know the focus is on Apple in this article. But I find it interesting that Samsung's liquidity is also huge. They could purchase all the other mobile companies together save for HTC. Or just their next two closest rivals, HTC and Nokia if Taiwan and Finland allowed them to.
Samsung is an absolutely massive company. A huge conglomeration, of the type not really seen in the West these days.
Who cares? If the pie is getting bigger and everyone is getting more pie, but some are getting even more...then the only issue is envy.
Yes but is the median earner getting more pie, or not, as a percentage of the pie.
( Pies were a bad tactic for you).