[bitek]

[HL]Why Apple gadgets can’t be made in the U.S.

By Jason D. O'Grady | January 22, 2012, 9:07pm PST

Summary: During Thursday night’s debate in South Carolina CNN host and moderator John King asked the four remaining GOP candidates their opinions about Apple Inc., which “has 500,000 employees in China” and (obviously) much fewer in the United States. A New York Times piece published Saturday discloses that President Obama also posed a similar question to Steve [...]

During Thursday night’s debate in South Carolina CNN host and moderator John King asked the four remaining GOP candidates their opinions about Apple Inc., which “has 500,000 employees in China” and (obviously) much fewer in the United States.

A New York Times piece published Saturday discloses that President Obama also posed a similar question to Steve Jobs at a dinner with Silicon Valley power brokers less than eight months before his death.

“What would it take to make iPhones in the United States?”

The NYT piece by Charles Duhigg and Keith Bradsher is a must-read for anyone that carries an iPhone in their pocket or has an iPad in their bag. It’s chock-full of insight into Apple’s decision to move its manufacturing offshore, after making its products exclusively in the United States up until the Macintosh in 1984.

It isn’t just that workers are cheaper abroad. Rather, Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that “Made in the U.S.A.” is no longer a viable option for most Apple products.

The article it loaded with anecdotes and some of the most surprising tidbits are about contract manufacturer Foxconn Technology which makes most of Apple’s hardware these days. It’s referred to in the article as Foxconn City because it employees more than 230,000 — many working six days a week, 12 hours per day, for less than $17 a day.

This is my current favorite:

The facility’s central kitchen cooks an average of three tons of pork and 13 tons of rice a day.

Wait, what?!

This is just sad that USA has such high unemployment rate and yet company like Apple pays people $17 a day so shareholders are happy. Apple products should be boycott by Americans and then Apple would bring jobs back.

http://www.zdnet.com/blog/apple/why-...e_skin;content

[SnoozerBold]

I read that NYT article and thought it was great. Fascinating how foxconn operates. Not saying I agree with it but its hard to compete with that and they said the wages of workers weren't even the biggest issue it was the infrastructure, shipping, and turn around times these places have. Its scary actually.
However its not just Apple the article made that clear. Not even RIM builds all their phones in Canada or the US.

There are lots of reasons I don't have an ipone but this isn't one of them.

[ADFXPro777]

Unfortunately, the article is correct. American workers, in simplicity, cost far more and don't really have much advantages to their foreign competitors.

[Tre Lawrence]

I can't pretend the selfish part of me does not want the jobs in the US, but the irony is not lost on me: Americans decrying unrestricted capitalism.

We want to buy cheap, and we want the companies we invest in to make money. Hmmm....

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[mjs416]

I'm actually surprised that the quality of the iPhones is decent coming out of this type of work ecology. Any parts or products I have seen come out of china (including castings and other machined parts) is complete crap.

[DannyAves]

You would have to pay American workers at least 5 times as much plus benefits and shortly even healthcare, so the iPhone would perhaps cost 3 or 4 times as much.

[mjs416]

You would have to pay American workers at least 5 times as much plus benefits and shortly even healthcare, so the iPhone would perhaps cost 3 or 4 times as much.

That assumes no economy of scale. And besides iFans would still pay that.

[wolfee48]

That assumes no economy of scale. And besides iFans would still pay that.

I agree 100%. It is sad.

[SnoozerBold]

You would have to pay American workers at least 5 times as much plus benefits and shortly even healthcare, so the iPhone would perhaps cost 3 or 4 times as much.

The original NYT article mentioned the added cost because of labour would be around $40 extra a phone if it was made in the US. However, as I said earlier the workers wages wasn't even the biggest reason it was a number of other things.
Like Jobs decided to change the screen from plastic to glass about a month before the original release of the iphone. China was able to make the change and still ship the iphone on schedule. Apparently in the US this wouldn't have been possible.

[anthogag]

Interesting article.

Business executives can talk all night but the fact is if they wanted to build in the US they could.

Apple could work with US industry to find ways to make their products in the US.
Maybe it involves new techniques, new methods, new technologies etc.

Apple is currently sitting on what...80 billion dollars 'in the bank'

Apple simply wants to go to Asia where it's 'easier' to do business.

The US is more than capable of training people to do the work. Currently China is simply open for business like no other country.

[LoganSix]

Business executives can talk all night but the fact is if they wanted to build in the US they could.

Unfortunately the Land of the Free is full of regulations that encourage companies to build elsewhere. Things from circuit board to light bulbs have rules that prevent them from being built here.

[_StephenBB81]

I'm actually surprised that the quality of the iPhones is decent coming out of this type of work ecology. Any parts or products I have seen come out of china (including castings and other machined parts) is complete crap.

That is completely dependent on management, and QC, We moved manufacturing over to China and drastically increased the quality of the product while bringing costs down,

Raw Materials are generally cheaper, labor is cheaper, electricity, and taxes are less, and restrictions are less. but Quality control CAN match or exceed that of North America for a fraction of the cost

[_StephenBB81]

The original NYT article mentioned the added cost because of labour would be around $40 extra a phone if it was made in the US. However, as I said earlier the workers wages wasn't even the biggest reason it was a number of other things.
Like Jobs decided to change the screen from plastic to glass about a month before the original release of the iphone. China was able to make the change and still ship the iphone on schedule. Apparently in the US this wouldn't have been possible.

We built a 300,000 square foot facility in about 13 months to a higher building code than we would have in North America due to flooding, and earthquake provisions, the same building built in the US was estimated at 24-30 months build time.

[SSMERK]

[HL]Why Apple gadgets can�t be made in the U.S.

By Jason D. O'Grady | January 22, 2012, 9:07pm PST

Summary: During Thursday night�s debate in South Carolina CNN host and moderator John King asked the four remaining GOP candidates their opinions about Apple Inc., which �has 500,000 employees in China� and (obviously) much fewer in the United States. A New York Times piece published Saturday discloses that President Obama also posed a similar question to Steve [...]

During Thursday night�s debate in South Carolina CNN host and moderator John King asked the four remaining GOP candidates their opinions about Apple Inc., which �has 500,000 employees in China� and (obviously) much fewer in the United States.

A New York Times piece published Saturday discloses that President Obama also posed a similar question to Steve Jobs at a dinner with Silicon Valley power brokers less than eight months before his death.

�What would it take to make iPhones in the United States?�

The NYT piece by Charles Duhigg and Keith Bradsher is a must-read for anyone that carries an iPhone in their pocket or has an iPad in their bag. It�s chock-full of insight into Apple�s decision to move its manufacturing offshore, after making its products exclusively in the United States up until the Macintosh in 1984.

It isn�t just that workers are cheaper abroad. Rather, Apple�s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that �Made in the U.S.A.� is no longer a viable option for most Apple products.

The article it loaded with anecdotes and some of the most surprising tidbits are about contract manufacturer Foxconn Technology which makes most of Apple�s hardware these days. It�s referred to in the article as Foxconn City because it employees more than 230,000 � many working six days a week, 12 hours per day, for less than $17 a day.

This is my current favorite:

The facility�s central kitchen cooks an average of three tons of pork and 13 tons of rice a day.

Wait, what?!

This is just sad that USA has such high unemployment rate and yet company like Apple pays people $17 a day so shareholders are happy. Apple products should be boycott by Americans and then Apple would bring jobs back.

Why Apple gadgets can’t be made in the U.S. | ZDNet

I agree with you a point, at the end of the day it is not apple's fault that people are getting paid $17 a day . it is the country where the item is being made they can not tell what the owner of manufacture hey you need you give these people a raise . also if all the sudden we start to demand people get paid more over seas prices of items coming from that country will jump, the wage increase in that country will also cause inflation of prices on food and other items because people are starting to make more. then you have an issue as to what happens to the other half of the people who are not making 17 dollars. i would love for people to make alot of money but when everyone makes money then everything goes up and then the raise looks like nothing. this is coming from a blackberry user i am not trying to defend apple i am trying to defend every business minded person who has the smarts and ability to manufacture over seas.

[anthogag]

Unfortunately the Land of the Free is full of regulations that encourage companies to build elsewhere. Things from circuit board to light bulbs have rules that prevent them from being built here.

It wouldn't be easy but if the President is asking why not then maybe it's the right time.

[TGR1]

I don't think a lot of people here actually read the whole article.

It isn't just about the labor or ability to build at the drop of a hat. It's that the factory that makes the screen is a hop away from the one that provides the screws, which is down the street from the factory making the case, etc. Corning is mentioned in the article as being easily able to make glass screens in the US. But with all other parts and assembly overseas shipping the glass there costs money and more importantly takes too much time. That is the reality of manufacturing today and why it cannot be brought back. Building such a closely knit manufacturing system like in Foxconn City is not possible in North America.

[si_chindo]

TGR1 is right. The article mentioned infrastructure and by that it means the closeness/access to supporting industries.

At this point in time, it will be difficult to beat Asia in manufacturing. The western world would have to focus more on services and design because they simply can not compete in manufacturing.

[emirozmen]

I will support both and wish RIM was better. I want some competition!

[mjs416]

That is completely dependent on management, and QC, We moved manufacturing over to China and drastically increased the quality of the product while bringing costs down,

Raw Materials are generally cheaper, labor is cheaper, electricity, and taxes are less, and restrictions are less. but Quality control CAN match or exceed that of North America for a fraction of the cost

What industry are you in? I know I read it somewhere but cant remember.

A local brake rotor manufacturer who supplied a lot of the aftermarket rotors for the big 3 closed up shop in the early 2000's and moved operations to China. Fast forward a decade and they are looking to bring operations back to the US. The issue now is that all those machinists have moved on to other lines of work (IT, nursing, etc) and they are struggling to find skilled machinists.

[Caymancroc]

So you won't support Apple (who's products are made where most everyone else's products are made) but want to support RIM, whose products are also not made in the USA? In other words you want Apple to make an iPhone under your ethical guidelines but give a green light to someone like Samsung in Korea to mfr wherever it sees fit? Who is going to police all these mobile phone mfrs within your ethical guidelines? The Pope or Dalai Lama perhaps? How do you know RIM workers work in better conditions?

The only thing that is shocking to me is that people are shocked about this article. Why do you think people kill themselves at Foxconn? Too much vacation?

You can try avoid buying stuff from China but everyone has something made from China. Those people have choices too. They choose to work for that wage.

The US didn't have all these child labor laws, safety regs (OSHAA), building regs, etc when it was booming during the industrial revolution. Those regs are precisely why Apple and about every other manufacturing company does not manufacture in the US. Those government bureaucracies cost $. A perfect example comes to mind where I read police officers are shutting down lemonade stands in the US because appropriate business licenses or permits are not had. Do you think the little boy or girl in China has to have a business permit for a lemonade stand? I don't know, but I would doubt it.

It seems to me that type of thought process is akin to the mafia style way of doing business. The only difference being instead of paying cash to the mob, you make a check out to some city clerk.

[xandermac]

What does the article have to do with the title of the thread? Either way you're supporting a company that out sources its manufacturing to foreign countries, in rims case China, Mexico etc. It also fails to address what labor unions have done to manufacturing in the United States. If you want to bring that back you have to get rid of unions. Personally I could care less where my products are made and I won't boycott any company for their choice if it means that company continues to thrive. While RIM are laying thousands off Apple are creating Jobs both at home and overseas, not sure that I see the problem here, Unless of course the OP just wants to see apple as uncompetitive as RIM.


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[T�nis]

... A local brake rotor manufacturer who supplied a lot of the aftermarket rotors for the big 3 closed up shop in the early 2000's and moved operations to China. Fast forward a decade and they are looking to bring operations back to the US. The issue now is that all those machinists have moved on to other lines of work (IT, nursing, etc) and they are struggling to find skilled machinists.

Precisely. When the US entered WWII, the automotive industry was retooled to make military equipment. What will a country do when the need arises, critical manufacturing sector has been scrapped to pay off bankers, and plant has been moved to maximize profits and "shareholder value"? Will it buy the military equipment from the enemy? It can take a generation to rebuild plant and bring back the specialized, skilled labor needed to run it.

What the free-traitors have connived for themselves are trade agreements that allow them to import products into the US duty free. America's framers didn't set up a laissez-faire form of capitalism where anything goes. They set up an American system whereby our economy can be protected by placing taxes on imports. I have no problem with a manufacturer setting up shop in a country whose living standards aren't up to ours so long as we put an import tax on their products to bring the price of their products up so high that it doesn't make sense for them to set up shop in the other place. They're still free to peddle their products in the markets where they are made and elsewhere in the world.

No, the free-traitors haven't passed on the savings to consumers. Prices aren't down, they're the same. What's up are the profits to line their pockets.

[brucep1]

You realize the RIM doesn't make all its phones in Canada, right?

[mjs416]

If you want to bring that back you have to get rid of unions.

Yes. What are they thinking wanting to make more than minimum wage and health benefits.

I do agree that unions have its issues but the quality of work is usually better (at least regarding trades). You can come visit me in northwestern PA and I will show you the buildings that were constructed by non-union trademen and the ones built by union tradesmen. You wont believe what you are seeing.

[anthogag]

I don't think a lot of people here actually read the whole article.

It isn't just about the labor or ability to build at the drop of a hat. It's that the factory that makes the screen is a hop away from the one that provides the screws, which is down the street from the factory making the case, etc. Corning is mentioned in the article as being easily able to make glass screens in the US. But with all other parts and assembly overseas shipping the glass there costs money and more importantly takes too much time. That is the reality of manufacturing today and why it cannot be brought back. Building such a closely knit manufacturing system like in Foxconn City is not possible in North America.

All of these things you describe about factories and part suppliers being close is obviously do-able in the US. It takes co-ordination and the will to do it.