[PineappleUnderTheSea]

Building such a closely knit manufacturing system like in Foxconn City is not possible in North America.

Exactly right. Everything takes too long to happen in North America, mostly because we are not as backward integrated as newer facilities in China. Once China started giving permits for companies to build and expand, they did it right: everything was more or less closely located to each other, everything was well laid out with modern equipment, etc. etc. It's hard to compete with that. And on the environmental side, our new facility over there has environmental restrictions that can be more stringent than the ones in North America. So anyone here saying that all of China is loosy goosy with regulations has obviously not been around a modern manufacturing plant over there.

As well, my belief is that North America doesn't have enough of the right talent in Engineering and the Sciences, it seems to take forever to hire an engineer with all the right qualifications at our company. I'm not sure if the Sciences are no longer sexy or something, but scientists certainly seem more respected in China than they are here.

[nyc_rock]

"And on the environmental side, our new facility over there has environmental restrictions that can be more stringent than the ones in North America. So anyone here saying that all of China is loosy goosy with regulations has obviously not been around a modern manufacturing plant over there."

This is a recent development. I travel to china twice a year and the country is vile with pollution. The irony is that China is regulating themselves to a competitive disadvantage, just like we did here in the US. China is pushing new enviromental and social compliance regulations which is driving up thier costs. Manufacturing is already seeking new low cost countries to develop. Bangladesh is a perfect example of this. But guess what? Bangladesh will soon add thier own sets of regulations which in turn will drive up thier costs. Its a never ending cycle.

[iN8ter]

There are tons of issues with Unions, starting with the fact that you simply don't have a choice in many states and in many work places. I'll never want to join a Union, but working here I have no choice.

That's why I'm moving back down South in April. F that.

[mca312]

It's all wall streets fault for wanting more profit. But if my 401k goes down any more, I'm going to be pissed.

[palmless]

It's all wall streets fault for wanting more profit. But if my 401k goes down any more, I'm going to be pissed.

I was chuckling the entire time as I read through this thread with that thought in mind. That, and I REALLY wish public schools taught economics classes!!!

[lnichols]

There are tons of issues with Unions, starting with the fact that you simply don't have a choice in many states and in many work places. I'll never want to join a Union, but working here I have no choice.

That's why I'm moving back down South in April. F that.

There are tons of issues with SOME unions, not all. The biggest issue that I see that unions created were unwieldy pension systems, mostly the UAW, that simply weren't sustainable.

[avt123]

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

Yea, only fanboys would pay for an iPhone if it cost that much more. If I had to pay a few hundred extra for an iPhone just because it was made in the US, I wouldn't buy it.

[13echo4]

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

To me its not a matter of having an advantage of the foreign competitors. If nobody in America is getting paid to build it. Who in America can buy it? Got to have a job to make money. Gotta have money to buy. Its real simple math. When the embargo went away it doomed American companies.
Its not selfish to want your country to support it's self. Its not selfish having pride in the thing your hands built. The working man built this country and the rich and powerful is selling it off right out from under our feet.

[anthogag]

"And on the environmental side, our new facility over there has environmental restrictions that can be more stringent than the ones in North America. So anyone here saying that all of China is loosy goosy with regulations has obviously not been around a modern manufacturing plant over there."

This is a recent development. I travel to china twice a year and the country is vile with pollution. The irony is that China is regulating themselves to a competitive disadvantage, just like we did here in the US. China is pushing new enviromental and social compliance regulations which is driving up thier costs. Manufacturing is already seeking new low cost countries to develop. Bangladesh is a perfect example of this. But guess what? Bangladesh will soon add thier own sets of regulations which in turn will drive up thier costs. Its a never ending cycle.

There are large areas in US cities that are sitting empty, empty factories, and empty lots. Putting businesses together in one area is probably easier than it looks.

[avt123]

There are large areas in US cities that are sitting empty, empty factories, and empty lots. Putting businesses together in one area is probably easier than it looks.

Getting Americans to work for similar wages (extremely low) will not happen. And if it did happen, getting them to work as efficiently with that wage is the next problem.

[karaya1]

Exactly right. Everything takes too long to happen in North America, mostly because we are not as backward integrated as newer facilities in China. Once China started giving permits for companies to build and expand, they did it right: everything was more or less closely located to each other, everything was well laid out with modern equipment, etc. etc. It's hard to compete with that. And on the environmental side, our new facility over there has environmental restrictions that can be more stringent than the ones in North America. So anyone here saying that all of China is loosy goosy with regulations has obviously not been around a modern manufacturing plant over there.

As well, my belief is that North America doesn't have enough of the right talent in Engineering and the Sciences, it seems to take forever to hire an engineer with all the right qualifications at our company. I'm not sure if the Sciences are no longer sexy or something, but scientists certainly seem more respected in China than they are here.

Go to any major universities engineering graduation, it's one of the shorter graduations to watch. Try to pronounce half of their names better than the speaker, they are not homegrown students, that's for sure.
Now, go to a psychology, poly sci, sociology, ect graduation. Bring a grill and some beer, you will be here a long time and be able to pronounce all of the names.

It's sad.

That being said, all of my friends that graduated with an engineering degree got immediate jobs that all paid over 80k. (BP, Shell, Garmin, Exxon and Microsoft)

[anthogag]

Getting Americans to work for similar wages (extremely low) will not happen. And if it did happen, getting them to work as efficiently with that wage is the next problem.

They definitely won't work for low wages. I'm talking about work-smarter-not-harder.

And the article stated US wages would only ad $40 to the phone. They could 'find' that $40 in transportation or tax breaks

[tack]

Workers overseas do not work smarter and are not more skilled. They do work cheaper, and the scale is amazing. You could build Apple products in the USA / NA, and companies like RIM do it now with similar quality. The scale is the issue as well as the type of labor. A lot of people don't want to do those types of jobs and are not available in the numbers/concentration/density needed.

I have been to two of Foxconn's plants, and I was there supplying a part for an Apple product as well as ones that went into Dell, etc. First, the campus is huge and almost unimaginable. 50,000+ people in one city-like factory is crazy and surreal. There are full dormitories, etc.

Second, the security to get into this place was nuts. It took us 30 minutes the first time we went through the gates, and they searched everything, including the car itself. I had to empty pockets, etc. No cameras allowed in any form. It is easier to fly!

The technology and manufacturing scale is top notch. They are situated in cities of 10+million people. They could not be anywhere else.

Ultimately they copied our product, made it cheaper in house, and took the business. Welcome to China.

[palmless]

Because we have a reservation wage system, it's not possible to hire large numbers of unskilled or minimally skilled workers.

We did so during the post WWII industrial growth period, but then we gradually increased reservation wage to the point that a laborer taking a job assembling a product can demand a wage in excess of the value their assembly adds.

Thus, we won't be doing this type of work in the US anytime soon. If we are talking about a non-portable job, such as roofing, the price will float up to cover the labor increase. But not on an extremely portable product.

----

Brief explanation of reservation wage... why would someone rationally choose to work 40 hours per week for $10/hr when social benefits are available no questions asked to deliver more than $400 worth of goods and services. They should, of course, because the $10 job leads to the $11 job which leads to the $15 job, but very very large numbers will never accept that first job at, near or below the reservation wage.

[grover5]

They definitely won't work for low wages. I'm talking about work-smarter-not-harder.

And the article stated US wages would only ad $40 to the phone. They could 'find' that $40 in transportation or tax breaks

Really? BMW pays their South Carolina employees one quarter of what they pay their German employees...they love the cheap labor in the US. They also make massive profits from both locations, but the profits are obviously larger in the country that allows for fewer worker protections and rights. Germany has stricter regulations...South Carolina is China to BMW.

[pri79269]

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

You are absolutely right. I work for an EPC and even with added cost of QC/HSE management it is still sometimes significantly cheaper to source from China then right here in the US. Those cost also include the logistics.

I want the work here as well, but no business person in their right mind would bring it here unless it's financially beneficial. Sad, but true. Apple is in the business of making money just like everyone else.

[johncihak]

This is so sad for RIM. The number 1 forum topic is where iPhones are manufactured?

Just try to find a phone made in Canada or the USA. In fact almost every consumer product from toys to clothes to car parts is made in a country with low wages.

BBs certainly aren't made in Canada or the USA so quit whining.

[_StephenBB81]

Amen and well said about food - I couldn't agree more.

And certainly China may be better than it was 15 years ago but I don't think you can equate a country where our athletes were worried about breathing the air at the Olympics (2 years ago) - to the environmental standards we have here.

Finally it's a very broad brush you paint with regarding workers in America - I have been working since I was 15 and I have never one day not worried about the repercussions of not showing up to my job, speaking on my own behalf.

Oh I don't want it to be said that it is clean and rosey,

But the post I had quoted was blaming "job killing environmental regulations" and in China now there are more and more of those same "Job Killing regulations"

[aha]

Workers overseas do not work smarter and are not more skilled. They do work cheaper, and the scale is amazing.

Vast, fast factories overseas is why Apple can't make iPhones here | Seattle Times Newspaper

Quote:
Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone's screen at the last minute, forcing an assembly-line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company's dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing more than 10,000 iPhones a day.

"The speed and flexibility is breathtaking," the executive said. "There's no American plant that can match that."

End quote

[aha]

Vast, fast factories overseas is why Apple can't make iPhones here | Seattle Times Newspaper

Quote:
Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone's screen at the last minute, forcing an assembly-line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company's dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing more than 10,000 iPhones a day.

"The speed and flexibility is breathtaking," the executive said. "There's no American plant that can match that."

End quote

The competition is not only between corporations, but also between workforces. On the high end US still has the competitive advantage, but at the lower end US is losing.

Does anyone know how many of those Foxconn assembly workers holds college degrees?

[bitek]

This just came out in National Post today. This is the real reason why Apple moves its manufacturing to China. Any other reasons given by Apple are just bull*#+'. And yet apple is sitting on billions of dollars in cash. I am not sure if Steve Job should get as much respect given his company questionable ethics.



The New York Times has published a[external] long piece on working conditions inside the contractors that manufacture the parts for Apple�s high-tech gizmos (and puts them together, too). It�s an eye-opener, but not really surprising � it turns out being a labourer in China involves long hours, low pay, uncomfortable working conditions and even occasional industrial disasters. The piece is told partially through the experience of Lai Xiaodong, a young Chinese man who moved far from home to work in a factory that polished iPad cases so that he could save up enough money to marry his girlfriend. Despite there being published safety concerns about his factory, work continues, until a build up of aluminum dust (or so it�s thought) causes an explosion. Suffering from severe, gruesome burns, Mr. Lai lives for two days before succumbing.

It�s a hard-hitting report, and Apple execs will cringe when they read it (the Times says they showed Apple a summary and received no response). Particularly damning are comments by an unnamed Apple executive who essentially shrugs off the concerns by saying, in effect, that in order to sell the products it does for the prices they do, lousy working conditions are necessary � and that people care more about shiny new iPhones than they do blown up Chinese labourers. What makes these comments especially unfortunate is that the executive is almost certainly right.

The Times is clear that the problems aren�t limited to Apple � most electronics manufacturers either assemble their products in China, or procure the parts there. It�s essentially a necessity. And these companies, Apple included, have developed Codes of Conduct for contractors, and even the contractors that supply the contractors. Violators can be subjected to fines, withheld payments, and even, in theory, the cancellation of a contract. But the article makes clear that that never happens, and probably couldn�t. These contractors are desperate for the big-name deals, but also have a card to play against Apple and the others � even running at full-tilt, the supply chain is tight. Any disruption will hurt the Western electronics giant as much as the small contractor.

Mutual dependency, in other words, and while Apple has its code of conduct for its contractors, it also can�t do very much. According to interviews the Times did with dozens of former and current workers, conditions have been generally improving, but not always by much, and as Mr. Lai�s family can attest to, not always on time. Change always takes time, of course, but a former Apple exec makes a biting observation about the company�s ability to demand changes from its contractors, even in the face of the co-dependency: �We�ve known about labour abuses in some factories for four years, and they�re still going on � Suppliers would change everything tomorrow if Apple told them they didn�t have another choice. If half of iPhones were malfunctioning, do you think Apple would let it go on for four years?�

He�s right. Whatever unease people might feel at the prospect of Chinese factory workers standing at their workstations for so long that their legs swell, it would pale compared to the outrage they�d feel if the iPhone they�d just plunked down $500 bucks for went on the fritz. They�d demand Apple fix the phone, or replace it. Apple, known for its excellent customer service (something I myself have experienced � it�s fantastic), would comply, but would need to make up the money somewhere. It�s not the consumer. It�s not Apple. It�s gotta be the labourer. People understand this, intuitively, if not consciously. And they go along with it.

Apple gets this, which is why they don�t particularly feel like they have to enforce their safety codes so much as have them. A current Apple executive put it this way: �[Apple] can either manufacture in comfortable, worker-friendly factories, or [we] can reinvent the product every year, and make it better and faster and cheaper, which requires factories that seem harsh by American standards. And right now, customers care more about a new iPhone than working conditions in China.�

It�s blunt, but refreshingly so. It�s up to consumers to educate themselves on the products they purchase � something that�s ironically made easier by Apple�s devices and the Internet connectivity they confer � I originally read The New York Times piece on my iPad. Pressure can force companies to change their practices � who can forget the outrage over sweatshop sneakers and soccer balls � but when it comes down to getting their hands on the latest consumer gadgets, Apple understands its customers. So long as their devices stay �amazing,� the people who put them together will remain a distant concern.

National Post

[anon3396357]

It is easy to get emotions riled up especially when reading about articles which speak directly to our conscience, and I don't blame anyone for rashly taking sides or going on crusades. Just want to point out that there are always two sides to a story, and no matter how insignificant the other side may seem, it's always worth your time to check it out before passing judgment. Here's some:

Questions for Li Qiang of China Labor Watch - NYTimes.com

Foxconn is not good. But if we compare all industries, electronics, textile, toys, Foxconn is one of the best. The biggest problem for Foxconn is the workers are working under a lot of pressure. They�re standing 10 to 11 hours a day. Foxconn treats the workers like they are machines.

They think about how many products they can produce, not about giving the workers a rest. But in the electronics industry all the companies are the same.

They say they�ve increased salaries, but Foxconn doesn�t say the workers have to produce more products per hour. So they have to work even harder. And the worst thing is that Foxconn is the biggest company in the industry. So they set the standard in the industry. And the working intensity has already been audited by the multinational companies, thus meeting the standards set by Foxconn�s clients.

Chinese Readers on the 'iEconomy' - NYTimes.com

Tons of interesting comments to read on this one, but I'll just point this out to pique your interest:

If not to buy Apple, what�s the substitute � Samsung? Don�t you know that Samsung�s products are from its OEM factory in Tianjin? Samsung workers� income and benefits are even worse than those at Foxconn. If not to buy iPad � (do you think) I will buy Android Pad? Have you ever been to the OEM factories for Lenovo and ASUS? Quanta, Compaq � factories of other companies are all worse than those for Apple. Not to buy iPod � (do you think) I will buy Aigo, Meizu? Do you know that Aigo�s Shenzhen factory will not pay their workers until the 19th of the second month? If you were to quit, fine, I�m sorry, your salary will be withdrawn. Foxconn never dares to do such things. First, their profit margin is higher than peers as they manufacture for Apple. Second, at least those foreign devils will regularly audit factories. Domestic brands will never care if workers live or die. I am not speaking for Foxconn. I am just speaking as an insider of this industry, and telling you some disturbing truth.

[AlienSlacker]

I wonder what all the greedy corporations will do when they have run out of governments willing to let them abuse their indigenous populations?

http://www.nytimes.com/2012/01/26/bu...ewanted=7&_r=1