Germany has mainly concentrated on premium goods, a bit like Apple. The premium paid helps pay the extra in wages. In fact not only wages but German factories have amazing social/sporting facilities even spas. They also seem to take over entire cities like Wolfsburg and get great loyalty from the staff.
Both German and Japanese car plants are much more productive than their US competitors, this is the reason for their ongoing success despite Chinese and Indian competition.
Similarly in the UK, Jaguar recently have had a sales boom (mainly to the Chinese). Premium products make the wages affordable. That premise obviously could be used for those arguing for Apple to produce in the US.
EDIT: This outlines the car plant productivity gap in 2007 (showing it narrowing after years of Japan being vastly more productive)
Actually this isn't true, what makes wages affordable is productivity. German industry is incredibly productive, even Italian industry is very productive though it focuses on extremely obscure things like machines to make cigarette filters or the like. Not all German made cars are premium products Opels are GM for example, and if you stop to think about it there is still a big American car industry - which is because especially in non-unionized plants it is still possible to manufacture cars in the USA with high productivity and so low unit labour costs.
The problem for Apple is that the best place to manufacture consumer electronics is China, even Japan can't compete - and it's not like Apple are the only ones to do this or were even the first - every single substantial consumer electronics firm manufactures in asia and most assemble in China.
A single firm, no matter how successful can't change that. America still has amazing clusters for biotech, for software, for finance etc. but it no longer has a consumer electronics cluster - and whining about Apple making a lot of money won't change that.
They have huge margins, huge cash reserves, and it's not because they manufacture in China, it's because they make better products.
Actually its both things.
Manufacturing in China gives them products at a lower cost which gives them a sizable margin on almost every product due to the higher than 'normal' pricing. The quality of the product creates value that justifies the higher price and entices folks to buy. Creating the income that, when paired with the lower production costs etc, creates the high cash reserves.
Actually this isn't true, what makes wages affordable is productivity. German industry is incredibly productive, even Italian industry is very productive though it focuses on extremely obscure things like machines to make cigarette filters or the like. Not all German made cars are premium products Opels are GM for example, and if you stop to think about it there is still a big American car industry - which is because especially in non-unionized plants it is still possible to manufacture cars in the USA with high productivity and so low unit labour costs.
The problem for Apple is that the best place to manufacture consumer electronics is China, even Japan can't compete - and it's not like Apple are the only ones to do this or were even the first - every single substantial consumer electronics firm manufactures in asia and most assemble in China.
A single firm, no matter how successful can't change that. America still has amazing clusters for biotech, for software, for finance etc. but it no longer has a consumer electronics cluster - and whining about Apple making a lot of money won't change that.
Hi Cloudgazer
I don't believe I have tried to make an argument either for or against Apple moving back production to the States. Merely presenting some thoughts and a couple of facts which I presented evidence for.
You neatly missed that I mentioned productivity in Germany as a reason and your use of Opel is strange as they had to take a massive bailout from the German government!.
And the company's factory in Rüsselsheim was transformed to one of the most modern plants in the world for €750 million, it started production in 2002 and yet they still went bust!. They just didn't have the margin to play with that BMW and VW had (They were only partly pulled down by the parent group).
Your claim about Italy being productive is very surprising considering all the evidence points otherwise.
In fact the decline has been so bad that there are many studies on it and it is one of the reasons Berlusconi is in so much trouble. To quote the study in the link:
The results suggest that the decline in productivity after 1995 has been widespread across sectors and regions
But of course I bow to your economic mastery.
EDIT: Also the following is interesting in your argument that Unionized plants are less productive.
"In fact, the latest industry data show members of the UAW and the Canadian Auto Workers (CAW) are already more efficient and productive than their nonunion counterparts."
At first, I was going to look for raw dollar figures. But then big countries could look like they have a lot of manufacturing, even if very little of their economy is based on it.
The point is that highly developed countries have a lot of maufacturing. Like Gemany and Japan.
If only the USA's economy was more like Japan's, things would be much better.
Yeah, let business run wild since they obviously have American's best interests at heart.
Yup, just like the gov't let banks run amok and it almost destroyed out entire economy. I'm not one for more government but some things do need regulation or oversight.
The easiest way to deal with the problems that flash and their lack of multi core support cause is to buy them and fix the problems adobe just doesn't care about.
Because not every job can be 'upper class'. We need manufacturing jobs. There's a reason 10% of the country is unemployed...
No we dont. We've for the most part we've moved from a manufacturing economy to a service economy. The problem is that the people who most purchase services (middle class) is dwindling.
I don't believe I have tried to make an argument either for or against Apple moving back production to the States. Merely presenting some thoughts and a couple of facts which I presented evidence for.
You neatly missed that I mentioned productivity in Germany as a reason and your use of Opel is strange as they had to take a massive bailout from the German government!.
And the company's factory in Rüsselsheim was transformed to one of the most modern plants in the world for ?750 million, it started production in 2002 and yet they still went bust!. They just didn't have the margin to play with that BMW and VW had (They were only partly pulled down by the parent group).
Your claim about Italy being productive is very surprising considering all the evidence points otherwise.
In fact the decline has been so bad that there are many studies on it and it is one of the reasons Berlusconi is in so much trouble. To quote the study in the link:
The results suggest that the decline in productivity after 1995 has been widespread across sectors and regions
But of course I bow to your economic mastery.
EDIT: Also the following is interesting in your argument that Unionized plants are less productive.
"In fact, the latest industry data show members of the UAW and the Canadian Auto Workers (CAW) are already more efficient and productive than their nonunion counterparts."
You neatly missed that I mentioned productivity in Germany as a reason and your use of Opel is strange as they had to take a massive bailout from the German government!.
And the company's factory in Rüsselsheim was transformed to one of the most modern plants in the world for €750 million, it started production in 2002 and yet they still went bust!. They just didn't have the margin to play with that BMW and VW had (They were only partly pulled down by the parent group).
Ok. VW then if you prefer. It's still not a 'luxury' or 'quality' brand, it's a mass market car. The UK car industry which you seemed to think was just Jaguar is in fact almost entirely Japanese manufacturers, and again they're making mass market vehicles here - nothing to do with luxury products - everything to do with low unit costs.
Quote:
Your claim about Italy being productive is very surprising considering all the evidence points otherwise.
The results suggest that the decline in productivity after 1995 has been widespread across sectors and regions
This may be hard for you to understand but if I say something is high, and you say it's dropping that is actually not proof that it isn't high. A thing can be high and simultaneously dropping, such as Nokia's market share. It's a complex concept though and I appreciate you may have trouble with it. In a similar fashion something can be low but rising, this isn't relevant to the topic at hand but it may help you in future life.
Yes Italian productivity is dropping, it has been since Euro accession back in the 95, because wage inflation hasn't adjusted to the new reality that they can no longer keep depreciating their currency. However, in spite of that, the level of industry in the economy is relatively high at 25% compared to 18% for the UK, 22% for the USA, 24% for France, and 24% for Spain. Germany is higher of course at 30%, but remember that the number for Italy is nationwide and the North-South gap is vast. (Figures from the CIA- world factbook)
So even with their dropping productivity they're still high enough that the Northern clusters are able to compete in some industries - those where their productivity was highest. And yes - it's dropping across all sectors (wage inflation and euro membership is economy wide), but that still means that things that started high, are higher than things that started low. Is that clear? Should I use smaller words?
Quote:
In fact the decline has been so bad that there are many studies on it and it is one of the reasons Berlusconi is in so much trouble.
You appear to have confused economic decline and sex with underage prostitutes.
Quote:
But of course I bow to your economic mastery.
I bow to your ability to link obscure academic papers that don't even prove your point
No we dont. We've for the most part we've moved from a manufacturing economy to a service economy. The problem is that the people who most purchase services (middle class) is dwindling.
Yes, but the middle class is supposedly growing in other countries, like India and China. Perhaps they will buy our services. In theory. \
Comments
How do Gemany and Japan do it?
Great chart Joseph!
Germany has mainly concentrated on premium goods, a bit like Apple. The premium paid helps pay the extra in wages. In fact not only wages but German factories have amazing social/sporting facilities even spas. They also seem to take over entire cities like Wolfsburg and get great loyalty from the staff.
Both German and Japanese car plants are much more productive than their US competitors, this is the reason for their ongoing success despite Chinese and Indian competition.
Similarly in the UK, Jaguar recently have had a sales boom (mainly to the Chinese). Premium products make the wages affordable. That premise obviously could be used for those arguing for Apple to produce in the US.
EDIT: This outlines the car plant productivity gap in 2007 (showing it narrowing after years of Japan being vastly more productive)
http://www.guardian.co.uk/business/2....lifeandhealth
It also gives other reasons for American manufacturers costs being higher as payroll and healthcare costs.
Premium products make the wages affordable.
Actually this isn't true, what makes wages affordable is productivity. German industry is incredibly productive, even Italian industry is very productive though it focuses on extremely obscure things like machines to make cigarette filters or the like. Not all German made cars are premium products Opels are GM for example, and if you stop to think about it there is still a big American car industry - which is because especially in non-unionized plants it is still possible to manufacture cars in the USA with high productivity and so low unit labour costs.
The problem for Apple is that the best place to manufacture consumer electronics is China, even Japan can't compete - and it's not like Apple are the only ones to do this or were even the first - every single substantial consumer electronics firm manufactures in asia and most assemble in China.
A single firm, no matter how successful can't change that. America still has amazing clusters for biotech, for software, for finance etc. but it no longer has a consumer electronics cluster - and whining about Apple making a lot of money won't change that.
come on, we all know about Reaganomics, trickledown means that workers are the urinal cakes, hoping for a little trickle...
Nice! And accurate!
They have huge margins, huge cash reserves, and it's not because they manufacture in China, it's because they make better products.
Actually its both things.
Manufacturing in China gives them products at a lower cost which gives them a sizable margin on almost every product due to the higher than 'normal' pricing. The quality of the product creates value that justifies the higher price and entices folks to buy. Creating the income that, when paired with the lower production costs etc, creates the high cash reserves.
Buy Spotify and Twitter and be done with it....
...and buy Messi from Barcelona and give him to Man Utd for free!
HA!!! good try
Actually this isn't true, what makes wages affordable is productivity. German industry is incredibly productive, even Italian industry is very productive though it focuses on extremely obscure things like machines to make cigarette filters or the like. Not all German made cars are premium products Opels are GM for example, and if you stop to think about it there is still a big American car industry - which is because especially in non-unionized plants it is still possible to manufacture cars in the USA with high productivity and so low unit labour costs.
The problem for Apple is that the best place to manufacture consumer electronics is China, even Japan can't compete - and it's not like Apple are the only ones to do this or were even the first - every single substantial consumer electronics firm manufactures in asia and most assemble in China.
A single firm, no matter how successful can't change that. America still has amazing clusters for biotech, for software, for finance etc. but it no longer has a consumer electronics cluster - and whining about Apple making a lot of money won't change that.
Hi Cloudgazer
I don't believe I have tried to make an argument either for or against Apple moving back production to the States. Merely presenting some thoughts and a couple of facts which I presented evidence for.
You neatly missed that I mentioned productivity in Germany as a reason and your use of Opel is strange as they had to take a massive bailout from the German government!.
http://www.spiegel.de/international/...608402,00.html
And the company's factory in Rüsselsheim was transformed to one of the most modern plants in the world for €750 million, it started production in 2002 and yet they still went bust!. They just didn't have the margin to play with that BMW and VW had (They were only partly pulled down by the parent group).
Your claim about Italy being productive is very surprising considering all the evidence points otherwise.
http://ideas.repec.org/a/gde/journl/..._p269-309.html
In fact the decline has been so bad that there are many studies on it and it is one of the reasons Berlusconi is in so much trouble. To quote the study in the link:
The results suggest that the decline in productivity after 1995 has been widespread across sectors and regions
But of course I bow to your economic mastery.
EDIT: Also the following is interesting in your argument that Unionized plants are less productive.
http://www.uaw.org/story/union-plant...ivity-rankings
Quote:
"In fact, the latest industry data show members of the UAW and the Canadian Auto Workers (CAW) are already more efficient and productive than their nonunion counterparts."
At first, I was going to look for raw dollar figures. But then big countries could look like they have a lot of manufacturing, even if very little of their economy is based on it.
The point is that highly developed countries have a lot of maufacturing. Like Gemany and Japan.
If only the USA's economy was more like Japan's, things would be much better.
Yeah, let business run wild since they obviously have American's best interests at heart.
Yup, just like the gov't let banks run amok and it almost destroyed out entire economy. I'm not one for more government but some things do need regulation or oversight.
Yeah and with the prices and quality that would bring there wouldn't any iPhone in the market place and no cash.
Stop dreaming and start buying what is already manufactured here, cars, food, etc. I bet some of you dreamers drive around in foreign cars...right?
Many of those "foreign cars" are built here, and many "American" cars aren't.
If only the USA's economy was more like Japan's, things would be much better.
Japan has suffered from stagnating growth, deflation and it has a national debt that is 225% of its GDP.
I think the problem is that the US economy is getting too much like Japan!.
It's apparently mostly in US T-Bills and short maturity bonds.
I've always read that much of that "cash" is stashed overseas, avoiding US taxes.
Because not every job can be 'upper class'. We need manufacturing jobs. There's a reason 10% of the country is unemployed...
No we dont. We've for the most part we've moved from a manufacturing economy to a service economy. The problem is that the people who most purchase services (middle class) is dwindling.
Hi Cloudgazer
I don't believe I have tried to make an argument either for or against Apple moving back production to the States. Merely presenting some thoughts and a couple of facts which I presented evidence for.
You neatly missed that I mentioned productivity in Germany as a reason and your use of Opel is strange as they had to take a massive bailout from the German government!.
http://www.spiegel.de/international/...608402,00.html
And the company's factory in Rüsselsheim was transformed to one of the most modern plants in the world for ?750 million, it started production in 2002 and yet they still went bust!. They just didn't have the margin to play with that BMW and VW had (They were only partly pulled down by the parent group).
Your claim about Italy being productive is very surprising considering all the evidence points otherwise.
http://ideas.repec.org/a/gde/journl/..._p269-309.html
In fact the decline has been so bad that there are many studies on it and it is one of the reasons Berlusconi is in so much trouble. To quote the study in the link:
The results suggest that the decline in productivity after 1995 has been widespread across sectors and regions
But of course I bow to your economic mastery.
EDIT: Also the following is interesting in your argument that Unionized plants are less productive.
http://www.uaw.org/story/union-plant...ivity-rankings
Quote:
"In fact, the latest industry data show members of the UAW and the Canadian Auto Workers (CAW) are already more efficient and productive than their nonunion counterparts."
Nice job. +1
we do have an imballance obviously but hey, one combine is equal to thousands of i-devices...
You neatly missed that I mentioned productivity in Germany as a reason and your use of Opel is strange as they had to take a massive bailout from the German government!.
http://www.spiegel.de/international/...608402,00.html
And the company's factory in Rüsselsheim was transformed to one of the most modern plants in the world for €750 million, it started production in 2002 and yet they still went bust!. They just didn't have the margin to play with that BMW and VW had (They were only partly pulled down by the parent group).
Ok. VW then if you prefer. It's still not a 'luxury' or 'quality' brand, it's a mass market car. The UK car industry which you seemed to think was just Jaguar is in fact almost entirely Japanese manufacturers, and again they're making mass market vehicles here - nothing to do with luxury products - everything to do with low unit costs.
Your claim about Italy being productive is very surprising considering all the evidence points otherwise.
http://ideas.repec.org/a/gde/journl/..._p269-309.html
The results suggest that the decline in productivity after 1995 has been widespread across sectors and regions
This may be hard for you to understand but if I say something is high, and you say it's dropping that is actually not proof that it isn't high. A thing can be high and simultaneously dropping, such as Nokia's market share. It's a complex concept though and I appreciate you may have trouble with it. In a similar fashion something can be low but rising, this isn't relevant to the topic at hand but it may help you in future life.
Yes Italian productivity is dropping, it has been since Euro accession back in the 95, because wage inflation hasn't adjusted to the new reality that they can no longer keep depreciating their currency. However, in spite of that, the level of industry in the economy is relatively high at 25% compared to 18% for the UK, 22% for the USA, 24% for France, and 24% for Spain. Germany is higher of course at 30%, but remember that the number for Italy is nationwide and the North-South gap is vast. (Figures from the CIA- world factbook)
So even with their dropping productivity they're still high enough that the Northern clusters are able to compete in some industries - those where their productivity was highest. And yes - it's dropping across all sectors (wage inflation and euro membership is economy wide), but that still means that things that started high, are higher than things that started low. Is that clear? Should I use smaller words?
In fact the decline has been so bad that there are many studies on it and it is one of the reasons Berlusconi is in so much trouble.
You appear to have confused economic decline and sex with underage prostitutes.
But of course I bow to your economic mastery.
I bow to your ability to link obscure academic papers that don't even prove your point
Apple could buy them all out, fire all their employees, demolish the buildings and plant trees in their stead. Hypothetically, of course.
Really, AI, if you're going to hypothesize, why limit yourself?
Or Apple could give me the $70 billiion. If you're going to hypothesize, why limit yourself?
No we dont. We've for the most part we've moved from a manufacturing economy to a service economy. The problem is that the people who most purchase services (middle class) is dwindling.
Yes, but the middle class is supposedly growing in other countries, like India and China. Perhaps they will buy our services. In theory.
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 expenses have outgrown whatever wage increases there have been so it doesn't really matter.