How U.S. Lost Out On iPhone Work

New York Times:

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.

Read the whole story: New York Times

Comments

[JavaManiac]

04:10 PM on 01/23/2012

So Santorum's argument that we are efficient and ready to be put to work in manufacturing is false. No matter how much you offer these companies - they are not going to come back here - where people don't even appreciate a job - or try to do deliver a stellar performance each day.

[dpct]

02:32 PM on 01/23/2012

So If I could ask only one question to the Late Steve Jobs, or any of the other CEO's present it would be this. Would you want you own children to work at one of these factories?

[JavaManiac]

04:11 PM on 01/23/2012

These are adults working in the factories.

[Silverwolf72]

01:03 PM on 01/23/2012

Apple Inc. (United States)[26]
ASRock (Taiwan)
Asus (Taiwan)
Barnes & Noble (United States)
Cisco (United States)
Dell (United States)
EVGA Corporation (United States)
Hewlett-Packard (United States)[27]
Intel (United States)
IBM (United States)
Lenovo (China)
Logitech (Switzerland)
Microsoft (United States)
MSI (Taiwan)
Motorola (United States)
Netgear (United States)
Nintendo (Japan)
Nokia (Finland)[26]
Panasonic (Japan)
Philips (Netherlands)
Sharp (Japan)
Sony Ericsson (Japan/Sweden)[28]
Toshiba (Japan)
Vizio (United States)

All these companies do business at Foxconn, for all those people bashing only Apple

[theveggiedude]

03:27 AM on 01/24/2012

Google is missing, but not for long. They are in the process of buying Moto.

[16oz]

06:11 PM on 01/24/2012

Which Foxconn? All of those are through Foxconn Taiwan - ONLY Apple and lenovo uses foxconn China. Foxconn is a Taiwan company.

I Bash Apple because it has the cult power to put Made In USA on its products and still sell the same amount (if not more) product. It is greedily going to China - giving China workers jobs when it does not have to. THATS THE DIFFERENCE.

[DRaymond]

12:25 PM on 01/23/2012

Apple is just lazy. They didn't want the bother of doing their own manufacturing so they pushed it off onto Foxconn, who simply throws bodies at a problem. Apple doesn't care about the qualities of Chinese labor, they just want to write a check to Foxconn and get container-loads of products. Based on Apple's sales numbers and the estimated numbers of workers at Foxconn working on Apple products the produce about 53 iThings per month per employee. That isn't efficient at all when you consider that Toyota's North American Assembly plants produce an entire car or truck with less that 25 hours of labor. The difference is of course that Toyota invests in automation and efficiency while Foxconn has an endless supply of labor to throw at it at $300 per employee per month. A US based Apple factory, using Toyota-style automation, could produce iThings with only minutes of labor per each since there are maybe a dozen components total in most of them. But the difference is that Toyota sees itself as a manufacturer and Apple doesn't. That's the problem, it isn't considered hip or cool in Cupertino to be a manufacturer. http://betweenthenumbers.net/2011/07/what-if-apple-had-to-manufacture-in-the-usa/

[theveggiedude]

03:19 AM on 01/24/2012

You obviously did not read the article. Cheap labour is not the reason companies go to China (it is only the icing on the cake). The factories in the US can't compete because of lack of infrastructure and lack of expertise and lack of willingness to want to work at solution solving. The chinese offered all three.

[DRaymond]

02:16 PM on 01/24/2012

I am obviously not the one who didn't read the article.  Otherwise you wouldn't have come across this bit

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 over 10,000 iPhones a day.
“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”        

So obviously american workers are deficient because they don't live in on-site dormitories, won't put up with being pulled out of bed at any time of the day or night, given a biscuit and a cup of tea, and then be forced to work a 12 hour shift.  All on $300 a month.  Would you work under those conditions? No?  Well then I guess you just don't have the 'expertise' to work at an Apple plant.  or maybe you just don't want to 'work at solution solving' that much.  And this Apple executive actually sounds proud of the kind of working conditions, at how 'astounding' they were.  

And then look at the numbers.  With 8,000 workers they were producing 10,000 per day.  That means that they were assembling 1,25 iPhones per employee per day!  That means six and a half employee hours per phone presuming that the workers were only working 8 hours and not the 12 hour shifts mentioned in the article.  That is terrible productivity considering that the iPhone teardowns have shown that it contains maybe a dozen parts.  The only way that works is if you are paying employees $300 per month.  The low labor cost is not at all the icing on the cake.  That is corporate spin.  The low labor costs and slave-like conditions are the only things that make it work.

[young man]

12:09 PM on 01/23/2012

please stop buying apple product if you don't like apple's practice. Same for anyone else's product. if you claim that you didn't know, you're clueless as obama.

[theveggiedude]

03:24 AM on 01/24/2012

The problem is the government not helping out industries in trouble. The minute that happens, people cry 'socialism'. Well, as the article explains, the Chinese did it, and that is why their industries are now ahead of the west. They could make glass more efficiently than any US company, and thus got the iPhone contract.

[helioszephyr]

11:52 AM on 01/23/2012

If we continue purchasing foreign owned brands, we'll keep funding technology research/advancements outside the US.

http://www.huffingtonpost.com/2012/01/22/cancer-detecting-smartphones_n_1222666.html?ref=technology

[J0E1]

11:21 AM on 01/23/2012

It's because Apple wants to still charge "Made in USA" prices but reap the profits from "Made in China" labor. It's worked.

[jflorish]

11:14 AM on 01/23/2012

That work will never come back because like it said, so many side businesses and suppliers all decide where they want to do the work. It's not like you can have a discussion with 2 or 3 companies, it's way beyond that.

[ramblingjohnny]

02:35 AM on 01/25/2012

You could start by saying if it not entirely build here you're going to get hit with so much Customs Duty that your price point will be beyond what peoples will be willing to pay. Until their workers get pay and treated by our standard! It a buyers market and buyers should set the standard! Beside the rest of the world will wise up and start demanding fair wage at some point. You're going to run out of hellhole to squeeze for cheap labor soon.

[SETexasLib]

11:12 AM on 01/23/2012

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 over 10,000 iPhones a day.

“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”

And yet they reward these remarkable workers with low wages and working conditions that make a lot of them feel that suicide is more attractive than working at Foxconn. This does not commend either Apple or Foxconn.

[IDIOTA]

01:03 PM on 01/23/2012

"And yet they reward these remarkable workers with low wages and working conditions that make a lot of them feel that suicide is more attractive than working at Foxconn. This does not commend either Apple or Foxconn."

True.

[davholb]

04:41 PM on 01/23/2012

SETexasLib and IDIOTA: Meanwhile, the Apple VP in charge of Manufacturing Logistics for the Fareast, has just completed the construction of his new 6,250 sq. ft. house in the gated community of Ballantyne in Charlotte, NC and he and his 3rd wife are finalizing the plans on his yet to be constructed 5,250 sq ft 3rd home at Hilton Head, SC. He has a $3 million 2nd home at Batchelor Gulch, Beaver Creek, CO. He doesn't have time to worry about our concerns. He has a meeting with 6 of his VP associates in San Franciso, CA tomorrow at 8:00 a.m. to review the profit projections for the 3rd quarter, 2012 in which the goal is to improve income by 8.5%. It appears the only means to achieve this is to cut production by alleviating 3000 workers, earning $300 per month, requiring the remain 8,300 to spend 14.5 hours per day, in lieu of 12 (same pay scale). It goes on and on. Unfortunately, between myself, you IDIOTA and SETexasLib, there is nothing we are going to be able to do to stop it. The sun rises in the east, sets in the west and it appears Citizens United is here to stay. So, Hang on!! fanned and faved ya both, for thinking about it!!

[Andrew Cole]

10:21 AM on 01/23/2012

You have to admit that Apple is a very flexible and agile company. They must be in order to perform the amount rhetorical gymnastics required to get people that they are in China for any reason other than slave wages.

[helioszephyr]

10:54 AM on 01/23/2012

How is this exclusive to Apple?

[edenooch]

10:11 AM on 01/23/2012

they lost it cuz theirs a billion china men who will do the job faster, better and for 46 cents an hour...then they just gotta ship crap here

[netzwerg]

10:49 AM on 01/23/2012

If "a billion china men" are better and faster on the job than their American counterpart - what's wrong with that?

I thought the US was all about being bigger, better, faster...?

[An Engineer]

08:59 AM on 01/23/2012

The Chinese system may stink, but it will ultimately prevail over the West because we are too comfortable in our personal peace and prosperity. Yes, there are pressures within, but the Chinese National leadership has firm control and a military that will fire on dissidents (and there is NOTHING that the US will be able to do when it happens). We are too dependent on Chinese natural resources and labor for our material comfort. When the time comes when we need to fight to preserve Western culture, there will be few with either the skills or resolve to step forward. China WILL become a World-dominating power again because we are willing to lay it down. They will be far less kind than we are when they rise to dominance.

[netzwerg]

10:38 AM on 01/23/2012

"When the time comes when we need to fight to preserve Western culture..."

What western culture? McDonalds? Hollywood movies?

[penndl]

04:16 PM on 01/24/2012

Don't forget War.

[An Engineer]

08:59 AM on 01/23/2012

Get some perspective.
China is NOT America. China has a Billion people. There is no economy on Earth that will provide American luxury to such a hoard. Typical Chinese citizens are in a survival / sustenance personal environment. Those working twelve hour shifts for $17 are much better off than their brothers who labor on farms tending rice paddies or work harvesting Bamboo for fifteen hours a day don't earn $17. You like that environmentally friendly, sustainable furniture? It is produced at greater human cost than iPhones, Androids or your $30 DVD player. The aluminum patio furniture industry is their training ground for aluminum welding. Those who do very well are found and promoted into the Chinese Aerospace industry. Making good aluminum welds is a difficult skill to learn. But lousy welds work for American outdoor furniture. So we are participating in their skill development. There is much incentive to become skilled. Those who do not improve will weld twelve hours a day for something like $17 while the skilled will move into better paying and slightly less strenuous work. But the Chinese are an industrious and patriotic people. China WILL put a colony on the Moon. They are learning the technical skills and training an army of skilled workers. They have a national resolve, they may grumble about many things, but they are proud of their nation and will follow their leadership. The idealistic of Tiananmen Square, and those who follow are too few to wrest control from their

[penndl]

04:04 PM on 01/24/2012

So true, I have Chinese colleagues and they are not complaining. I got the impression from listening to them that the dormitory living is possibly a status symbol.

[derickma]

08:55 AM on 01/23/2012

it's almost like a military operation there is noway to compete with that labor laws and unions won't allow it and we simply don't have the manufacturing ability to do it here ..why buy parts from all over the world ship them here just to be put together.

We don't need more automotive factories ..we need more electronics factories .. chips, hard drives, flash memory. That's how we start to catch up

[An Engineer]

12:01 PM on 01/23/2012

Actually, we need both the coarse manufacturing (big stuff) and fine technology manufacturing (small stuff). But the small stuff typically runs a gauntlet of EPA mandates that make it nearly impossible to open a new plant. Semiconductor fabrication requires many chemicals declared to be carcinogenic, and therefore so bound up in bureaucratic regulation that moving off shore, even to Europe (where they also have strong environmental controls). If moving to Europe makes sense, you can be sure that it is way over regulated.

[netzwerg]

06:57 AM on 01/23/2012

"...a current Apple executive said. “The U.S. has stopped producing people with the skills we need.” "
What he really means is Apple can exploit workers with 12 hour 7 day a week work but they can't do it here."

No he is right. You missed the part of the article about mid-level engineers.
Last September, there was an American college graduate applying for work in my (engineering) company here in the Netherlands. All looked ok, and we decided to invite him for a job interview.
I asked him, to explain the Pythagorean theorem to me (a²+b²=c², very easy).
He couldn't. And he had a college degree in engineering!!
We ended up applying a German who was well prepared for the job and also speaks fluent english to work with english speaking countries.

[Andrew Cole]

09:54 AM on 01/23/2012

I call B.S. Where did this "Engineer" get his degree? He sure has hell wouldn't have come out of my program and I goto a public college.

[helioszephyr]

11:09 AM on 01/23/2012

it's attitudes like yours that will further keep the US "asleep at the wheel". Because you "say" your the best, doesn't mean you are.

My daughter is in med school... who had excellent grades coming into applying for a university of her choice. She had a difficult time getting in with first round apps. Why? There's a surge of foreign, predominantly Chinese, applicants to US med schools, who not only have the money to pay for it, but come prepared with their "basic" equivalent high school/pre-med that outstrip most of our students. They're dedicated, competitive and focused... not so much worried about beer and college sports. My daughter was accepted in the second round.

Look at the stats in medical/science/technology focused universities in the US, you'll notice a disproportionate 1st/2nd generation foreign student enrollment... particularly Asian, Indian, German.

So, keep calling it BS... and that's what we'll be shoveling as a job.

[J0E1]

11:24 AM on 01/23/2012

So one American slips on the Pythagorean theorem and that confirms that American engineers are inferior to their foreign counterparts? I hope you don't run your company because it won't be around in 5 years with that kind of idiocy at the helm.

[netzwerg]

04:58 PM on 01/23/2012

Where did I say that American engineers are inferior?
The one I mentioned was not right for my company, maybe there are better ones out there, who knows?
I am pretty certain my company will be around in 5 years, since we grow about 15% per year, that's why we are in urgent need of qualified employees.