New York Times Article Explores Apple's Failed Attempt to Build the Macintosh in California

[abhibeckert]

I could be totally wrong, but my understanding is that in order to have the levels of staffing required to produce the devices, yet have wages sufficiently low for the goods to be saleable, you need to set up in these countries were people are paid a pittance for their work.

They're not paid a pittance. The median income per household in China is around 18,000 Yuan. Cost of living is low enough to live very comfortably on that income.

If both parents had a job at foxconn, the household would earn about 66,000 Yuan per year. That's not enough to live comfortably in the USA, but it's more than triple the typical income in China.

Sure, they'd need to be paid more in the USA but it's such a small percentage of the cost that paying workers more wouldn't impact the final pricing all that much at all. Maybe prices for a thousand dollar phone would go up by $20. So what.

The real problem with manufacturing in the USA is finding suitably trained employees. The larger Foxconn factories have millions of workers, and the USA can't supply that. Western schools simply don't teach those skills and haven't for a long time. We teach our students how to write software, we don't teach them how to operate a CNC machine.

 

[partsofspeech]

If US government taxes share holders’ dividends, proportionally to wage-cost-reduction by oversea outsourcing, manufacturing of Apple computers will be moved back to US.

 

[citysnaps]

Well, bottom line, it’d be nice if more stuff was made here in the USA. Hard to argue that. There’s plenty of profit there already.

For sure it would be nice.

But...the infrastructure and labor force needed to manufacture, test, and ship more than 600,000 iPhones a day (much more for a product release) on average, and turn-on-a-dime when necessary, simply does not exist in the United States.

 

[4jasontv]

We teach our students how to write software, we don't teach them how to operate a CNC machine.

Here is my take on this. Writing software takes creativity and comprehension of a foreign language. It's a thinking job - and the US sees thinking jobs as better than manual labor jobs. Operating a CNC machine requires reading a manual. Therefore, people who write code are better than those who watch a machine cut shapes. Only problem with what I just wrote is that none of that holds true. Coding can be hard, but there is so much support and languages you can plug and play code to build your "custom" software. Meanwhile, the average build-it enthusiast does more planning, evaluating, and revising than many medical professionals. Point is, we should be encouraging people to improve at things they enjoy. I think that there are a lot of people who would be happier if they thought they could change careers. /ramble

 

[citysnaps]

A.K.A Apple is too cheap to pay factory workers in America.

See post #28, above.

 

[mozumder]

More of the 'siren song' of Globalism from the New York Times. What a surprise. American manufactured goods are considered the best. It's just that we don't pay slave wages. So no obscene profits for the upper executive team. And Tim is an expert in slave labor - that's where the profits are.

Chinese manufactured goods are considered the best. Example: iPhone.

American manufactured goods aren't good. Example: GM

Do you think the corporate executives would earn less profits if they paid higher wages? lol, they'll just raise the prices even more. This is why the Bernie/Trump theory of economics fails.

And why would you pay more for a product than you have to? If you want to donate to those workers, send a separate donation. You don't need to make the product prices higher in order to protect uncompetitive people.

 

[danckwerts]

Good points. I know with cars the major hang up with making cars here is that the UAW is a huge cost burden for GM, Ford, etc and Toyota, Kia, etc do not/will not use union labor. They pay good wages/benefits but the avoid the union bloat which saves a ton of money. And Im sure that location has something to do with it too.

Rightly or wrongly cars made in the US have a terrible reputation for design and quality control in Europe, whereas cars made by US companies in Europe are well-regarded. Also, US car companies have the burden of expensive health plans whereas European manufacturers don't really need them thanks to state healthcare arrangements. And, if you think that's too expensive, the UK government spends less on public healthcare per capita than the US government.

 

[BornAgainMac]

As much as I would like to see building products in the U.S., maybe that labor force could be redirected to other things.

 

[Rafterman]

You all had a fit about Apple overpricing their stuff as it is.

"What!? $1700 for an iPad? Well I never!"

But now you would suddenly be OK with another 15 percent price increase, just to have it made here?

 

[s2mikey]

Companies never took care of employees first, and if a company put employees ahead of shareholders that would be a breach of their fiduciary duty to those shareholders. Moreover, maximizing profit is putting employees first (most companies don't stay in business long by minimizing profit simply so they can hire more employees). If you owned a business I doubt you would follow your own absurd logic.

Spoken like one of those grumpy investors!

Actually, before companies and employers HATED each other, it used to be an unwritten "thing" that employees got taken care of. A happy workforce is a loyal workforce - and more productive. That generates profit. Besides, when workers get paid wel, guess what happens? They spend money on stuff that businesses create. Its an amazing concept. Then, the net effect was that shareholders did OK too through higher sales, more profit ultimately, etc, etc.

Now? Nah - some jackwad sits in an office somewhere and dictates how much is enough for him and his do-nothing co-horts. Of course, you return 18%, its not enough. Should have been 20%. You return 20%? Not enough, should have been 22%. And so on. And , as always, the "answer" to the lack of returns is to make stuff where ever the people are the most miserable so you can pay them the least. And ya wonder why people are sick of this crap?

 

[Ramchi]

Tim Cook had already demonstrated the futality of manufacturing in USA with his attempts GT Advanced acquisition further ended up as a disastrous where sapphire glass for its mobiles, watches etc could not be manufactured. All equipment have been reportedly getting shipped to China. Further TC emphasized many aspects of manufacturing such technology, highly advanced skills in very large numbers, infrastructure and of course supply chain ecosystem. Many or most of them were in favour of manufacturing in China (not in other places).

 

[markfc]

Ought to move production to Wales! The Raspberry Pi moved production from China to the Wales in 2012.

Yes, I'd happily apply to work there too.

 

[sransari]

Good points. I know with cars the major hang up with making cars here is that the UAW is a huge cost burden for GM, Ford, etc and Toyota, Kia, etc do not/will not use union labor. They pay good wages/benefits but the avoid the union bloat which saves a ton of money. And Im sure that location has something to do with it too.

As for computer stuff? I believe Apple is a tad greedy here anbd could easily build everything in the USA. Sure, some profit would have to be used for this but why should shareholders be first? I hate that. Didnt used to be that way. Companies used to tke care of employees first, customers second and then shareholders got theirs. Thats how it ought to be. But, Wall Street blood-suckers ruined it. Its never enough profit or money. Ever.

Profits has been and always will be the top priority for business, not to run some sort of benevolent cause to “take care of employees.” Of course, treating employees right = greater profits, but the primary objective is to get paid by producing something that customers want and will willingly pay for (which they will do when a product’s quality is high and priced low). This isn’t a cynical way of conducting business and it hardly has to do with Wall Street greed. It has to do with maximizing profits, which is the primary objective and there isn’t a thing wrong with that. Each and every one of us maximizes our own personal profits in our daily lives by bargain hunting, clipping coupons, and trying to get a job that pays us the most money for our skills and labor. There’s nothing wrong when ordinary individuals maximize their profits, and there’s nothing wrong when big companies do the same.

In this regard, there’s nothing wrong with outsourcing work outside of the USA in order for a company to maximized its profits. If others do the same or better work for less, so be it. They deserve the job. Moreover, this “America first” mentality is predicated on the notion that American lives are more valuable than non-American lives. That’s BS.

If Americans want their manufacturing jobs back, then do it better and do it for less than the non-Americans. That’s the non-snowflake way of getting things done, not crying to Uncle Donnie because the mean Chinese people took your job.

 

[2010mini]

NYTimes talking down on American manufacturing... what a surprise. Their Chinese investors must be so happy.

Oh stop it with the righteous indignation. We used scientist from nazi Germany after the war to fast track our aerospace and military development.

 

[Huntn]

By sending manufacturing overseas, corporations/governments who have hard earned technological advantages, are giving this expertise away to countries like China for corporation profits. Now that’s patriotism.
Where is the US Government and protecting intellectual property in all of this? Who has the expertise to make these products? A couple of engineers at Apple and the thousands of Chinese and factory managers who are actually making this product. Anyone see a security issue associated with this? I’ve applied my argument to the US, but it applies to any advanced country who sends their advanced manufacturing to third world nations for low labor costs, max environmental pollution and huge profits.

Ultimately is this good or bad? How about when China becomes a toxic dump or the next world war rolls around?

 

[unplugme71]

Well, bottom line, it’d be nice if more stuff was made here in the USA. Hard to argue that. There’s plenty of profit there already.

Not only that but Apple isn’t the only company hiring 10k or more employees by 2025. My prior company had planned to hire 16k in US (Midwest and North East) and the one I’m at now 7k.

That’s a lot of jobs scattered across the US that pay decent. My guess is average 50-60k salary.

 

[Huntn]

Not only that but Apple isn’t the only company hiring 10k or more employees by 2025. My prior company had planned to hire 16k in US (Midwest and North East) and the one I’m at now 7k.

That’s a lot of jobs scattered across the US that pay decent. My guess is average 50-60k salary.

I’m curious is $50k still considered a decent salary? I was making $50k in the USN in 1985 as a Lieutenant.

 

[groadyho]

I’m curious is $50k still considered a decent salary? I was making $50k in the USN in 1985 as a Lieutenant.

Here in Colorado 50k is almost poverty. You certainly can't afford a house where the jobs are i.e Denver, Golden, Boulder and everywhere in between.

 

[Huntn]

Here in Colorado 50k is almost poverty. You certainly can't afford a house where the jobs are i.e Denver, Golden, Boulder and everywhere in between.

I believe this talk about “decent salaries” is a result of the GOP/conservative brain washing program at work. Those poor millionaires need the extra coin change for their beach houses, mountain retreats or that new yacht. Please don’t begrudge them your salary.

 

[groadyho]

I believe this talk about “decent salaries” is a result of the GOP/conservative brain washing program at work. Those poor millionaires need this extra coin change for their beach houses, mountain retreats or that new yaught.

Totally agree. Conservatism is what's holding America back. It's a cancer

 

[Tinmania]

Rightly or wrongly cars made in the US have a terrible reputation for design and quality control in Europe, whereas cars made by US companies in Europe are well-regarded. Also, US car companies have the burden of expensive health plans whereas European manufacturers don't really need them thanks to state healthcare arrangements. And, if you think that's too expensive, the UK government spends less on public healthcare per capita than the US government.

Indeed the UK spends nearly half that of the US. You might assume that would translate to worse care in the UK, when in fact the UK spends less with better results. Plenty of other countries do so as well. Hmmm....


Mike

 

[libertysat]

Well, bottom line, it’d be nice if more stuff was made here in the USA. Hard to argue that. There’s plenty of profit there already.

Never enough profit for most stockholders, never.

 

[guzhogi]

I'm curious how labor costs compare between the US and other countries. Also, how many people are trained for this? Every so often, I hear that the US doesn't have enough people trained for manufacturing jobs. Plus, how many are willing to take those jobs?

 

[konqerror]

Indeed the UK spends nearly half that of the US. You might assume that would translate to worse care in the UK, when in fact the UK spends less with better results.

Not true. The US has a slightly lower life expectancy. People use this fact to try to say that the healthcare system is no good, when life expectancy is influenced by lifestyle, race, genetics, culture (food), that medicine cannot fix.

When you compare medical outcomes, that is when somebody with the same illness goes to the hospital and the result of their treatment, the US is unmatched. For example, the US has always led in cancer survival rates.

 

[Tinmania]

Not true. The US has a slightly lower life expectancy. People use this fact to try to say that the healthcare system is no good, when life expectancy is influenced by lifestyle, race, genetics, culture (food), that medicine cannot fix.

When you compare medical outcomes, that is when somebody with the same illness goes to the hospital and the result of their treatment, the US is unmatched. For example, the US has always led in cancer survival rates.

Sure, let's measure it after they are already sick.



Mike