iPhone Manufacturer Foxconn Mulling $7 Billion U.S. Display Factory Investment With Apple

[M2M]

If not labor then what? Too many regulations?

If the cost of labor is meaningless why did so much manufacturing move to China?

Mostly lower (or non existent) regulations regarding environmental and workers protection plus the fact that you can get a plant/factory plus housing for workers running in less then a year. With the rise of the yuan, labor costs in china compared to for ex the US are more or less the same (for low or non trained factory workers).

Also China is a relatively safe and stable society in comparison to e.g. Mexico or other Middle / South American countries - that's why China is favoured even though the latter countries also don't have to high regulatory standards.

I lived in Shenzhen for 4 years and altogether in china for nearly 10 years.

 

[macsba]

Uh - the production will still be done by third-party companies, like Foxconn.

You don't think that Apple is going to run its own manufacturing plants for iPhones, do you? Seriously, do you ??!?? That's just not the way things work these days.

Of course Foxconn will be the employer. THAT is a given. Just that the US employees won't be much of a squealer. Apple is just a customer.

 

[Jakexb]

If this factory employs 50,000 I will eat my hat. The entire company of Ford has 50,000 factory workers total.

Foxconn is going to get a good deal and this factory is going to be largely automated.

 

[Rogifan]

Sorry don't believe it. Foxconn doesn't just decide to build a factory in the USA because of Trump who's only been President a couple days. Wouldn't be surprised if Steve Bannon or someone else in the White House is planting these stories.
[doublepost=1485148060][/doublepost]

Oh really?

This has nothing to do with slashing corporate taxes, cutting regulation and making an environment friendly to manufacturing?

This is going to be a loooooooooooooooooong 8 years with your guys making excuses every time manufacturers bring jobs back to the US.

Well none of that has happened yet. No company is going to do this on the promise that might happen in the future.

 

[vpndev]

Another thought, what city has 30-50,000 people available to work in this huge factory. Does any city in America have that many out of work at this time? This isn't 2008 when cities like Vegas literally had over 100,000 unemployment.
(Please don't quote me on the number), just for reference.
Oh yes, they said they would like to build in the middle of Pennsylvania. No way in gods green earth will they find 30 thousand much less than 50 thousand in the middle of that state.

You're right that they won't find 30-50K there. But the eastern half of PA is actually a very good place for industry. If the plant is highly automated - as it will have to be - then the numbers are manageable. And that area is full of light industry that's not dissimilar.

My mental model may be wrong but it's this:-
- a low automation factory with 500 - 100K lower-paid workers
- a highly-automated factory with ~ 5K higher-paid workers

The deciding factor may well be the "local supply chain" which is exceptionally good in China (because China concentrated on it, unlike the US). Without the supply chain, the other issue are moot.

As an example of the supply chain effect, consider the auto industry in the southern part of the US. The late 70's were a dark period for the US automakers. Several Japanese manufacturers realized that they needed to have US plants and the first to jump was Nissan, with a small-truck plant. Many states tried hard but Nissan eventually decided on a small town south-east of Nashville, TN. It was a HUGE success. A Ford glass plant in Nashville that had recently shut down, immediately reopened. And within a few years, all the parts suppliers (brakes, glass, shocks, electrical, etc etc) were located within a 100-mile radius.

THAT is what China has with iPhone production. And it is exactly that type of supply chain that will be needed for any serious attempt to make iPhones in the US. As all farmers and gardeners know - seed is not sufficient to produce a harvest, the ground must also be fertile.

 

[konqueror4u]

so $500 more with just displays and few other components manufactured in US??? So if every component is manufactured in US it might cost around $2000. I don't think many can afford iPhone at that cost. Even if they buy I don't they would like to upgrade it every year or every two years. I think buyers in future might prefer to use it for atleast 3 to 4 years at that price which means low iPhone sales for Apple. Mostly of the factory will be automated it is good that it might create one or two thousand jobs but $500 increase in the price for every iPhone sold in future is scary. I recollect Motorola's effort to manufacture phones in US which was not successful either. I think low iPhone sales cost lot of retail and store jobs so Jobs created = jobs lost(might be more loss)
[doublepost=1485148771][/doublepost]

Uh - the production will still be done by third-party companies, like Foxconn.

You don't think that Apple is going to run its own manufacturing plants for iPhones, do you? Seriously, do you ??!?? That's just not the way things work these days.

You will need to understand the concept of vendors. Many companies are not hiring the employees any more they just hire the vendors to get the job done. This is the highly successful practice adopted by the high tech industry to keep check on the input costs and allow companies to concentrate on their core operations.

 

[v0lume4]

They should put this in coal country and train the people there on 21st century jobs rather than 19th century ones. Win/win.

Good luck charging your American made iPhone without power.

 

[Rogifan]

If this factory employs 50,000 I will eat my hat. The entire company of Ford has 50,000 factory workers total.

Foxconn is going to get a good deal and this factory is going to be largely automated.

If it ever actually happens. The minute Trump gets elected everyone is miraculously bringing all these jobs to America and it's all because of him? Sorry the skepticism is a mile wide and deep here. Trump was a reality TV star and that's what his presidency will be. The west wing will have the biggest propaganda machine we've ever seen and anything bad that happens his minions will rush to Twitter and Fox to decry it as fake news and media bias. If he can lie about something as stupid as crowd size he can lie about anything. And companies will lie along with him if they think it will give them positive press.

 

[AdonisSMU]

I love the idea of more American jobs, but i do not like the idea of an even more expensive iPhone to make it happen. Ultimately bringing back these jobs to America will only work out if companies are willing to take less of a profit to keep prices the same, and not pass on the higher labor costs onto consumers.

Billionaires want to make another nickel.

 

[konqueror4u]

Don't do it... Apple is on the decline, you'll have a hard time recouping your investment

Apple can bounce back. But with higher costs volume of sales will be affected.
[doublepost=1485150003][/doublepost]

So, iPhone costs are going up to please a portion that refuses to understand menial jobs will be gone now and refused to learn the skills to pursue a high-paying job?

No, thanks. You can't go against technology advancement.

if you read the Gou's statement it also means something else. Americans will be paying $500 more for an iPhone compared to the Rest of the world.

 

[AdonisSMU]

As a Pennsylvanian sure they will. Plenty of people that want to work in the middle of PA. There's this little college in the middle of PA, maybe you've heard of it - Penn State. Has 46,000 students, employs about 26k people. I'd bet a lot of those graduates would be willing to stay in central PA if they had jobs.

But then again you're from the "Left Coast", the land of fruits and nuts.

Again where are you going to find 30k of educated people who can work those jobs. You have to train them, manage then etc... It's just not in the cards. The population isn't nearly enough to fill those jobs.
[doublepost=1485150261][/doublepost]

In short, it is cheaper to manufacture in China. Maybe saves 5% off total manufacturing cost. The consumer never sees this savings but it is 5% more income for the manufacturer. THAT is why companies manufacture in China... so they can be 5% more profitable... not to sell products at a lower price.

This is a good point. You should always charge the highest price the markets will support.

 

[Septembersrain]

Again where are you going to find 30k of educated people who can work those jobs. You have to train them, manage then etc... It's just not in the cards. The population isn't nearly enough to fill those jobs.
[doublepost=1485150261][/doublepost]
This is a good point. You should always charge the highest price the markets will support.

If that's the way everyone thinks, may as well go full automation and let everyone either live off the government or be rich by owning the factories. Give us the jobs.

 

[simonmet]

"The increase in demand for larger display panels makes local production a better solution than shipping from China to the U.S. market"

What the hell does this mean? It doesn't make any sense! Are they building the iPhone in the US now? Is anyone?

 

[alexgowers]

If anything this is a transparent ruse. Trump had given deals and tax breaks to companies to keep then in the country. Apple is setting him up they're going to leak they're moving production to the US only to strike a deal for tax breaks and never move anything to the US. Just watch, this is not a real intention to move anything, the costs are too high and the share holders would not allow it.

 

[stylinexpat]

Expenses and lawsuits would drive them to bankruptcy. Running a factory in America is not like running one in Asia. Much better to run one in Asia. You do not have hungry and greedy lawyers representing lawsuit people looking to get rich off of you.

 

[chr1s60]

I love the idea of more American jobs, but i do not like the idea of an even more expensive iPhone to make it happen. Ultimately bringing back these jobs to America will only work out if companies are willing to take less of a profit to keep prices the same, and not pass on the higher labor costs onto consumers.

Honestly with all the changes rumored to happen with the iPhone 8, I don't see a way we don't see a price hike anyway. Bringing jobs to America is important and relying less on foreign factories would be a big deal.

 

[canucksfan88]

"The increase in demand for larger display panels makes local production a better solution than shipping from China to the U.S. market"

What the hell does this mean? It doesn't make any sense! Are they building the iPhone in the US now? Is anyone?

im intrigued at that as well. the phones are assembled in china right?!

so unless they have plans to assemble the phones in the USA ... i don't get this

 

[DevNull0]

I love the idea of more American jobs, but i do not like the idea of an even more expensive iPhone to make it happen.

And this, ladies and gentlemen, sums up exactly how America got where it is today.

 

[konqueror4u]

Honestly with all the changes rumored to happen with the iPhone 8, I don't see a way we don't see a price hike anyway. Bringing jobs to America is important and relying less on foreign factories would be a big deal.

But the question is are we ready to pay $2000? How do we feel if the iPhone price is $2000 is US and the rest of the world gets it for $650? Foriegn factories are not going to be closed they are expanding as well if you observe the statement Foxconn is going to expand in china and it is planning to commence its operations in India. I see the only motive of this move is tax cuts and some corporate perks. Business is all about profits they are not doing charity.

 

[stylinexpat]

But the question is are we ready to pay $2000? How do we feel if the iPhone price is $2000 is US and the rest of the world gets it for $650? Foriegn factories are not going to be closed they are expanding as well if you observe the statement Foxconn is going to expand in china and it is planning to commence its operations in India. I see the only motive of this move is tax cuts and some corporate perks. Business is all about profits they are not doing charity.

Lol.. That is what they should do. Make the iPhones in America and charge $2000-3000 for each iPhone and make the MacBooks in America and charge $5000-7000 for them in America. Keep the prices the same for the rest of the world and make them in China for the rest of the world. See how the American Trump lovers would like that then lol.. Just watch how many lawsuits pop up within the first 6-12 months lol..

 

[MadeTheSwitch]

How exactly are you sure this has zero to do with Trump? I don't recall any rumors of US based iPhone component production prior to this election cycle.

There has been talk of Apple moving production to the U.S. for years. This is not new.

I think that a second term is becoming a safe bet. At this point Pence winning in 2024 is a possibility...

Based on what? Smoke and mirrors? Press releases? When tons of high paying jobs are brought to the U.S. we can talk. Until then, no. Is Trump even making his ties in the US yet? Or still China?

1. These factories will largely be robotic.

2. Train these people on what exactly? How to suddenly know how to work as hardware and software engineers and robot maintenance workers instead of digging coal from the ground? The talent would certainly need to come from outside the area, but the candidates wouldn't want to live there because it's a pit.

3. How many job would this create? 200?

Pit? Can't be trained? 200? Come on. That's so negative!

Liberalism is the equivalent of a mental disorder....

Sounds like a personal attack on liberals on this site, thus reported. You're welcome.

That's not insulting!

You're right. It's not insulting. Did you think that it was?

Except my understanding is those coal jobs Trump promised to bring back make well over $30/hr., and allows kids to drop out of high school at 16 and get such jobs without ever needing a high school diploma, as they will work them for the rest of their lives, buy homes, and raise families.

The Foxcon jobs won't pay anywhere nearly as much, even if workers are retrained. So it's not an acceptable substitute. It's my understanding Trump is bringing back the good jobs for those people.

How on earth do you think Trump is bringing back $30 hour jobs? Where? Doing what? Not going to happen.

Wrong! Executive order on TPP happened while everyone was arguing over crowd sizes lol. Keep focusing on the insignificant things and Trump will run circles around you. Everyone is about to get a hard lesson on how business operates in this country. Threat of tariffs, 15% corporate rate coming, Paris accord about to go bye bye. Do you want me to go on? Obamacare mandate most likely gone tomorrow, E-verify mandate coming (tomorrow), immigration executive order this week.

Funny how people raged about how wrong and awful executive orders were but now all of a sudden they are some great thing.

stop the insane flow of illegal newcomers

You don't want them going back? Because that's the direction the migration has been going for awhile now.

and hope he can steer clear of scandals or conflicts of interest that could tarnish his administration

So...steer clear of the things he already has? Good luck! You'll need Pence to take over to make that happen.

Good luck charging your American made iPhone without power.

What does that mean?

 

[konqueror4u]

Lol.. That is what they should do. Make the iPhones in America and charge $2000-3000 for each iPhone and make the MacBooks in America and charge $5000-7000 for them in America. Keep the prices the same for the rest of the world and make them in China for the rest of the world. See how the American Trump lovers would like that then lol.. Just watch how many lawsuits pop up within the first 6-12 months lol..

But he can do the other way if you observe his statements such as dollar is too strong and minimum wage is too high

 

[dilbert99]

Apple might make an expensive iPhone in the US for the US market and a less expensive iPhone for the rest of the world in China. Then you will have grey imports into the US from Canada...

How much extra would it be likely to cost to make the phone in the US? I have no idea

 

[chr1s60]

But the question is are we ready to pay $2000? How do we feel if the iPhone price is $2000 is US and the rest of the world gets it for $650? Foriegn factories are not going to be closed they are expanding as well if you observe the statement Foxconn is going to expand in china and it is planning to commence its operations in India. I see the only motive of this move is tax cuts and some corporate perks. Business is all about profits they are not doing charity.

Prices wouldn't be an extreme like that and Apple is never going to market a price in America that is greater than elsewhere. It just wouldn't make sense in any way. Even with rising production costs. The price hike would be fluid across the board, not in America only. Instead of your $2,000 in America and $650 foreign, it would be more like $900 across the board. I think there are just overall issues with relying strictly on foreign factories and doing some production on our own soil isn't a bad thing. What do you think will happen if the US has issues with China down the line? You think they will allow the US and our allies to continue to use them for cheap labor?

 

[wschutz]

I love the idea of more American jobs, but i do not like the idea of an even more expensive iPhone to make it happen. Ultimately bringing back these jobs to America will only work out if companies are willing to take less of a profit to keep prices the same, and not pass on the higher labor costs onto consumers.

It is not about numbers (what politicians sell), it is about quality and salary (what politicians don't tell).
What is the point of a (fake) 0% unemployment rate (the real one in US is around 10% if not more...) if most of those jobs are of low pay and part-time? It's rather funny how unemployment statistics are made to fit the needs of the politician. If a minimum salary and/or hours was to be considered most countries would be showing quite some nice creepy numbers...