Why the United States Will Never, Ever Build the iPhone

[ashling]

It's not just cheap wages. China has more skilled factory workers and sits at the center of the global supply chain.

http://www.theatlantic.com/business/archive/2012/01/why-the-united-states-will-never-ever-build-the-iphone/251837/#.Tx7V71sl4F8.facebook

[ingac70]

1. What "skill" is there to assembly work?

More bullshit excuses.

[rfranklin]

2. You are correct! This is just like the B.S. about companies unable to find qualified Americans

for all other kinds of jobs. They want slave labor or third world wage scales.

[midnight]

33. I agree... Money making trumps all else...

[Initech]

37. Yup. We're out there. We don't want to work on their terms.

Shit wages, no pension, no benefits, no overtime, long hours, abusive supervisors, no breaks, and no chance of unionization. If that's what they want, fuck 'em!

[Ikonoklast]

6. Not skilled labor. Sorry. Might be difficlut, but still unskilled.

Tell me that there are more tool and die makers in China, or millwrights, or any other of the skilled machine trades and I might agree with the article, but assembly workers that can be trained in a week's time are not 'skilled' tradesmen.

[Tansy_Gold]

13. I've done it.

It's low-skill.

Most of it does not require understanding the product or even how the individual operator's task fits into the grand scheme of the device. Minimal but very task-specific training required, hours maybe, day at the most.


Tansy Gold, who "did it" when high tech electronics manufacturing was still done in the US

[rfranklin]

36. Forbes: Cheap Labor, Taxes, Location: Why Apple Doesn't Build Products in the U.S.

Liker doesn’t buy the claim that U.S. workers don’t have the skills or the flexibility to make Apple products. Any manufacturer opening a new plant has to do some training, he says.

He gave three main reasons why he believes Apple won’t build in America.
•Cheap labor. Apple executives may not want to admit it, but Liker says one of the biggest advantages of going overseas is that workers there are much, much cheaper. This is really an obvious reason, and we all know it. But it’s worth remembering whenever someone tries to claim that the actual reason is because our workers don’t have the right skills. “Right now is the worst time to make that statement since the recession has put so many people out of work,” Liker says. “There are all kinds of skilled workers right now.”
•Taxes. Liker says another big reason Apple and other manufacturers do work in Asia is because taxes are cheaper there. Usually, if a company makes profits from something built overseas, they have to pay American taxes when they “repatriate” those profits back to their headquarters here. But if a company spends money at lots of overseas factories, it just re-invests the profits over there, and it never pays the higher tax. Liker estimates this could make a 20-30 percent difference in profits for a company like Apple...

....There’s another wrinkle to this discussion that Liker says is worth mentioning. Right now, he says China actually has a far greater shortage of skilled workers than the U.S. Demand for workers in China is so high that factories there have trouble holding on to people. Liker says turnover rates of 20-30 percent are common in Chinese factories.

So, according to Liker, the truth is the exact opposite of what Apple claims.


http://www.forbes.com/sites/michelinemaynard/2012/01/24/cheap-labor-taxes-location-why-apple-doesnt-build-products-in-the-u-s/

[originalpckelly]

69. What, Americans can't learn it?

This is a crock of crap. But never fear, when we can print off our computers and shiny objects of the day, we won't need the Chinese.

[snooper2]

12. T1, and are you saying putting phones together is hard?

[snooper2]

34. I wouldn't agree with that..a machinst should be able to make cam or a gear for a Rolex

Anybody off the street can be shown how to do a number of steps in a row, over and over and over and over----

Example-
I can teach just about anybody to build out a trunk group in a switch-

Create - A
Use - B
Use - C
Naming convention = (insert)
Assign - D
blah blah blah...



Now, would that person be able to figure out why there is 1-way audio, hell no...

[Mopar151]

61. That's an operator, not a machinist.

Even then - if you get a single chip in between the locating feature of the part, and the fixture (like a vise) in the machine, you can make an expensive piece of junk.
If the part is at all "fussy", the operator needs to be able to measure the previous part, and either adjust a tool offset or replace and reset a tool or tools to keep the next part within specs.
And I'd be the first to tell you that there are assembly jobs which involve multiple skill sets and an awful lot of judgement and specialised knowledge, not to mention the ability to work safely under pretty extreme conditions.

[Romulox]

17. Tesha's right--those kids are good! nt

[Snake Alchemist]

27. It's their tiny hands that make all the difference. nt

[Snake Alchemist]

49. No, I agree. Sometimes we need to use children or segregate workers based on race

depending on the needs of the corporation.

[ingac70]

83. +1

LOL

[Hugabear]

31. Are you saying that American workers are somehow inferior to those in China?

I find the notion that American workers aren't capable of this type of assembly work to be highly insulting.

[leftyohiolib]

39. wow we beg your forgivness you have a screwdriver. youre right no one in the us is qualified

to use one of those.


noone

[joshcryer]

71. "ultra-fine-pitch assembly work"?

This is method assembly. It does not require significant accuracy at all. When you disassemble a product, you might think "wow, that screw was tough to put in" but in reality the methods used make it easier. If you have a tool that holds the screw, and all your job is is dropping a screw into a hole and turning a knob, the act of putting the screw in is far different from that of a service repair person.

[joshcryer]

78. I don't own an iPhone, but flex cables are very very easy.

Flip up the insertion bit, place, clip it down. They were designed for assembly. Once locked they cannot be unlocked easily without breaking them, and must be "slipped in."

This is not an iPhone but it gives you an idea:



On the iPhone the internal bits are assembled outside of the case, if you have to repair a bit of the iPhone you will have to disassemble it completely to get an idea of how it's done by the workers, otherwise you are not experiencing the technology as they do. Trying to fiddle with components that aren't designed to be easily repaired is not giving you that sort of feel.

[ingac70]

79. 10 years worth, Thanks for asking.

in the automotive industry. Hired with no qualifications.

[Sen. Walter Sobchak]

92. My girlfriends employer outsourced to a company in Texas

Previously PCB's were made in Taiwan and finished in California by hand by people who knew how to operate this thing blind-folded.



Take a wild stab in the dark at the skill level and defect rate of the assemblers in Texas... of whom few are experienced and none have formal training. She is now stuck there having become permanent adult supervision for a project she fought tooth and nail against. When assembly was in-house they had trouble finding people in Orange County except when Boeing Space Systems was laying people off.

[eShirl]

5. I can say from personal experience: not that much.

in the 1990s, DEC managed to give us on-the-job training, expecting us to be up-to-speed of an experienced worker within a couple weeks.

[eShirl]

11. and soon robots will be doing all the assembly work. (NT)

[joshcryer]

75. I don't see that as a problem, I see it as a solution.

Revenue sharing is the only outcome. People aren't going to like it but a good chunk of the human population is not going to do menial labor anymore. But in the meantime we'll exploit the hell out of a peoples forced to work many hours a day for practically nothing, and justify it while we can.

[progressoid]

76. Not as long as there is cheap human labor.

Listen: http://www.thisamericanlife.org/play_full.php?play=454

Fast forward listen from about 20-32 minutes if you don't want to listen to the whole thing.

[ThomThom]

47. I totally agree

We can make that thing. We can make anything if our labor was protected, we need tariffs. What happened to the high tech jobs be were supposed to get? Our top exports are gasoline and cigarets and the only thing we make is burgers (not very healthy burgers at that)

[Mopar151]

60. I, sir, take that as a personal insult.

I've done such work for 35 years. There are many skills involved, depending on the complexity of the process and the product. How are you with micrometers? Are you certified in electronic soldering, at the component level or by wave-soldering? How is your welding?

[ingac70]

81. I used to work in the automotive industry....

and was trained to use a micrometer. I also had to solder those little clips on rear windows to hook up defrosters. I didn't go to school for it. They hired me and showed me how to do it. Just like they show those little kids in China.

[Mopar151]

89. Mike the journals, bore guage the saddles, pick the inserts to get the clearence right

Shrink a journal into a 16' mill roll with liquid nitrogen, after boring out the old one on a (huge) lathe. Tune a vibrating bowl feeder to flow rate, range changable by adding a counterweight. Going to a customer who I can't name, to feed material that does not offically exist. Assemble an automated ply stacker for composite flak helmets, pack it "to go", reassemble and align on a bad (could be 'crete, could be mud...) floor, surrounded by the cast of Deliverance.
Dude, there's assembly, and there's assembly.... And I'm sure there's a guy in China can do it too. But he's 10000 miles away, and his evil snake of a boss gives him shit to work with, and aims to work him into the grave in 7 years. Who do you want assembling your $250K "pig in a poke"? Bearing in mind the evil snake's cousin will have all the drawings you sent over, and will be backdooring your product in 6 weeks.....

[hughee99]

67. Tell that to the UAW. n/t

[ingac70]

82. I used to be UAW....

an unskilled Production worker. WTF does that have to do with phones, BTW?

[hughee99]

84. When did assembly work become "unskilled"?

When non-union workers are hired at lower wages, the argument always seems to come around to "you get what you pay for" suggesting that union workers are better at their job compared to non-union workers. This particularly seems to be the case when discussing auto-assembly plants relocating. If the jobs don't require any "skill" why would this be the case?

[joshcryer]

87. Once you work there you become skilled?

Of course, labor standards here are a lot higher than over there. They can take a young 13 year old off of the streets, put them in a cubicle doing something, and they'll learn the job quickly. Here, over time we've got safety standards built up. Have fun getting an OSHA certification to drive a forklift!

[hughee99]

88. So the quality of workers

should be the same in 2 different domestic plants where one is union and the other is not, right? Same OSHA standards, and with no "skills" involved a non-union worker after the training period ends should be about the same quality as a union worker with 10 years experience, right?

[ingac70]

98. That depends on the educational level of the area you are going to....

http://southernstudies.org/2005/08/toyota-reveals-limits-of-great.html

States that happen to be union unfriendly also seem to have a problem with intelligence.

[hughee99]

99. What does it matter, if they train you on the job to do something that requires no skill

While workers in those states with "intelligence problems" may take a little longer to train, once trained, they should be no better or worse at their repetitive tasks as a person who designed the device they're assembling or the most intelligent person in the world.

[ingac70]

100. Not according to Toyota.

A non-union company.

[ingac70]

91. they...

hire off the street and train you on the job... production= unskilled..

[baldguy]

4. "Industrial Policy Matters"

Following the standard RW neo-con influenced dogma - The US doesn't have an industrial policy. Proof that Republican policies are intended to weaken America.

[MineralMan]

7. As an aside, but about the iPad...

My wife bought one for her work at Target. She handed it to me to do the setup, for some reason. When I first turned it on, it defaulted to Japanese as the language. Very strange. I did manage to figure out how to change the language to English, but not without some head-scratching.

[Zalatix]

10. The article eats its own tail.

Those sorts of statistics should bring into cold, clear focus why America's education system is at such a disadvantage when it comes to manufacturing. The problem isn't a lack of elite graduates. We have those. It's our unskilled working class.

It's been widely reported that Chinese schools graduate roughly 600,000 engineers a year, versus about 70,000 in the United States. Some have tried to downplay the severity of that gap by pointing out that as many as half of those Chinese engineers have the equivalent of a 2-year associate's degree. That may be true. But it's also missing the point. China has learned to produce graduates with mid-level technical skills that, as The Atlantic's cover story this month illustrates, are crucial to the modern manufacturing process. The United States needs to learn to do the same if it wants to remain a manufacturing force in the future. Our immediate goal shouldn't be to prep more students for Harvard, Penn State, or University of Central Florida. It should be to find a way to make sure that more than 25% of the students who enroll at community colleges actually graduate within 3 years.

Here's the problem. Even if America pumps out 600,000 engineers a year with the mid-level technical skills that the Chinese have, the Chinese can do the job for less than two dollars a day.

They're happy to work for Foxconn while living in conditions like this:
[img][/img]

[HughBeaumont]

18. At first glance, one would think it's about skill . . . but further on . . .

"In China, workers are cheap, plentiful, and -- most importantly -- mind bogglingly compliant in ways that America's culture and its tightly enforced labor laws simply wouldn't allow. "

They live like beat-down slaves in a polluted squalor-flecked hell-hole. And there are millions of them.

This is what some of the free traitors call progress?

[JustAnotherGen]

19. Well said

And I'm wondering why Moto has started launching phones made in Chicago - if the American worker sucks so much? If we are so far out of the way of the Global Supply Chain? And I also disagree with Apple's contention that the American factory cannot shift fast enough to meet their changing demands . . .

I mean - in terms of working for one of those companies that sells their product - and how INFLEXIBLE they are about basic customer experience things (like simple things - like making sure a US based customer understands how to dial back to the US from Belgium) being placed in box or referred in their online materials in a timely manner . . . it's not like they themselves care at all about the American Consumer Experience.

They sell us shit made by slaves, then tell us to suck hairy you know whats when those who take the customer service call because their product is not clear in its supporting materials try to say: Folks. Cute little ithing - but seriously - first time users don't know to get it to switch to their native language.

That's totally lost on Apple. Completely. Good in their stores - but once the product needs to go over a voice path they don't 'get it'.


And I've probably said too much so I'll be going now.

[JustAnotherGen]

57. Tell that to Verizon

Who released numbers that kill today.

[JustAnotherGen]

58. Psst

By our female CEO and female CMO! Woot! Hoot!

[MattBaggins]

30. Another part of the problem.

The Times reports that when Apple was looking for a new factory to cut the high-strength glass for its iPhone screens, it picked a Chinese plant that had already built a new wing for work in anticipation that it might win the contract. It was able to afford that pricey gamble thanks to subsidies from the Chinese government.

Every time you buy a Chinese product, the Chinese government uses that money to prop up the their system.

People are so hell bent on using Solyndra as a weapon against Obama, no one cares to talk about the fact that China flooded their Solar companies with money just to crush ours.

[girl gone mad]

85. They don't need our money, they can print their own.

It's funny that many of the same people who complain about government spending and the Fed's printing presses will point to Apple as some sort of private sector miracle. They've been propped up by the Chinese government, as this story indicates. The Chinese government built an entire factory on spec.

[quakerboy]

93. Its not the money

Its the jobs. The money is far less important to them than the jobs. They(chinese government) understand money is just paper issued by governments, but when enough people get discomfited, that's when problems happen.

[frylock]

35. if they were happy to work under those conditions, foxxconn wouldn't have to erect saftey nets

[sharp_stick]

15. The main reason

isn't the lack of workers in the US, it's the lack of workers willing to be dragged out of bed in the middle of the fucking night because Steve Jobs, or whoever the next prick is, decided at the last second to make changes to the agreed upon design and refused to move the launch date.

As long as the Chinese condone treating their workers like factory farm sows US industry is going to feed off it as happy little clams.

[marmar]

16. ........

Sorry, but it really is just cheap wages.

[Tansy_Gold]

20. Uh, that's cowshit.

[leftyohiolib]

40. an A for observation

[Tansy_Gold]

41. I liked it, though!

And watched it long enough to realize it was udderly inaccurate.

[leftyohiolib]

42. an A for wit

[Romulox]

21. It's because Apple's fans have no problem defending child labor, neo-slavery.

[johnd83]

22. In about 5-10 years the assembly will all be done by robots anyway

and the entire point will be moot. The National Robotics Initiative and other programs are working on developing robots that are easier to program and will be able to learn assembly procedures much faster than current robots. Also, the price of robots will drop significantly as the technology matures. China's giant worker pool will become a liability, not an advantage. FoxConn, who assembles the Apple products, is already starting the switch.

[quakerboy]

94. Cheaper than $2 a day?

If so, China will be happy to make it happen for less. Their government understands that money is just paper, but keeping people employed rather than rioting is important.

[johnd83]

96. $2 a day is for subsistance peasants

I am pretty sure factory workers get paid more, or at least cost more to house and feed. I completely agree about the currency manipulation. I hope that Obama actually does something about it this time.

[redqueen]

23. "A foreman immediately roused 8,000 workers inside the company’s dormitories,

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.”

Similar stories could be told about almost any electronics company — and outsourcing has also become common in hundreds of industries, including accounting, legal services, banking, auto manufacturing and pharmaceuticals.

http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?_r=1



That is why. Until we are willing to live at a company dormitory, work 6 days a week, 12 hours per day, and consent to be available in the middle of the night... not for life or death matters... but for fucking iPhones... those jobs are never coming back.

China needs a labor movement.

[MattBaggins]

25. "China needs a labor movement"

Or we need tariffs again.

Or when people like Steve Jobs spout off that they don't owe anything to America, when they move their companies to China, we should help them pack up, and assist them in the paperwork to give up American citizenship and apply for Chinese citizenship.

[Zalatix]

28. Exactly.

[redqueen]

29. +1

[Fearless]

68. Or both!

[GeorgeGist]

24. Tail ...

wag dog.

[IDemo]

26. Unfortunately, the trend is moving R&D overseas as well

Much of the hardware and firmware design and testing is transitioning to the East to follow the manufacturing.

[Hugabear]

32. Insult to American workers.

This is all about cheap wages. To imply that American workers simply are not up to the work is a damned insult to the American worker.

[Dreamer Tatum]

38. You mean they have more UNSKILLED factory workers.

Skilled factory workers wouldn't put up with living in cages.

The iPhone will never be made in the US because Apple demands that quarterly earnings grow in perpetuity, like all public companies.

[TheKentuckian]

43. Shit, throw a 10,000 duty on the shit and you'll see a factory in Alabama ASAP

I picked Alabama because you know they'd hit the Reich to Slavery states, if forced onshore.

[Zalatix]

45. But a tariff would be 'racist' and 'xenophobic'. LOL!

[TheKentuckian]

52. Right on

[retread]

51. What a load of fertilizer! Motorola used to have a ton of maunufacturing plants in the US.

It wasn't the lack of skilled workers that made them move to 3rd world countries.

[TheKentuckian]

53. It is funny how these Reich Wing/corporate talking points are now Democratic cannon,

in some quarters? Especially, from those bizzarely claim to be loyal Democrats and never discuss policy aspirations other than pushing recycled right wing prescriptions from the likes of the Heritage Foundation and love Andrew Sullivan.

[Snake Alchemist]

54. You need to understand the equation.

Apple Loyalty > Democratic Loyalty

[Snake Alchemist]

65. Yes, but Apple is supposed to be a "good" company.

That is the image they've fostered and taken advantage of. It's the hypocrisy that people notice.

[TheKentuckian]

97. Often enough it is probably the same site

and if not, similar or maybe worse conditions.

[Blue_Tires]

56. I'm disappointed to see that, too...

It's all fun and games until it's THEIR job that gets chopped...The author doesn't look the type to work on an assembly line or have any friends/relatives who do. All he cares about is the lowest-cost iPhone that Apple can legally get away with making...

Maybe when the Atlantic outsources all of its editorial content that writer will wake the fuck up...

[girl gone mad]

86. It's not even low cost.

They don't pass the savings along to consumers at all. Their profit margins are insane, which is one reason they deserve to be singled out for shame, despite the fanboi protestations.

[Crabby Appleton]

59. Indeed they did - I worked for Motorola in the 1980's

in the Communications & Electronics Division. We made military & police radios - plant was in Ft Wroth Tx. Cell phones - Motorola invented them. When Neil Armstrong transmitted "One small step..." from the surface of the moon - it was on a US made Motorola radio.

[Blue_Tires]

55. That's apple's story and they are sticking to it

perhaps a tariff would be in order until apple sees the light...

[Aerows]

63. Greed

"To put that in perspective, it's about 10% of the full retail price for the cheapest iPhone 4S. Given the fat margins on Apple's products, the company could absorb that extra cost and still come away with a profit. But it's hard to imagine why they would make that sacrifice."

[high density]

66. "Cheap labor isn't the issue?" It is when the slave labor builds it cheaper than robots.

What Apple (and the rest of Corporate America) is looking for in manufacturing doesn't exist in the USA because it was destroyed in the quest to maximize profits.

In addition there is no reason for the short product cycles that Apple and everybody else is aiming for. We really do not need an incremental new version of Widget X every six or twelve months.

[maggiesfarmer]

70. we haven't even gotten to supply chains yet

yes, cheap labor is a huge driving factor, but there's lots of people debating that. ask anyone in manufacturing and they'll confirm what the article is getting at, the real money is made or lost in supply chain management. A ton of the current component semiconductor producers are in Asia giving Chinese companies a strategic advantage in time-to-delivery. further, China has been rumored to be stockpiling metals and minerals for manufacturing processes.

The second half of Cook's equation -- supply chains -- might be even more important. We like to talk about how the world is flat, but in reality, it still takes a month to ship goods from the U.S. to China. Because Asia is the hub of electronic components manufacturing, Chinese factories can get crucial parts faster and cheaper, whether they're coming from a semi-conductor factory down the street, or a Samsung plant in South Korea. Local Chinese factories also crank out the little metal bits like screws that you can't build an iPhone without, a small but important advantage. The United States is cut off from those networks.

more
even more

[joshcryer]

73. I would buy that if we weren't making the glass or ICs.

They make the PCBs and the CAPS. PCBs and CAPS are made by machines for the most part. Glass and ICs are made by machines, too, again for the most part.

The low labor cost is the single defining equation here.

It helps that the Chinese don't have to contend with higher pollution standards and labor standards. It helps that their corporations are effectively "company towns" where they run as mass labor factories and no one can see inside or have any sort of pro-labor oversight.

[maggiesfarmer]

77. not saying that labor isn't a factor

it might be the largest factor (I'm not 100% on that). But supply chain is everything in manufacturing. even if we equalize the labor costs, if they have the supply chain advantage the Chinese companies will still kill us.

[joshcryer]

80. Well, one reason labor "costs so much here" is we have standards that defend labor.

You get 10-15 minutes break every hour (bathroom breaks), you get 1 to 2 one hour breaks every workday, you have high air quality standards, you have OSHA work standards (working in construction and being certified I myself can say that's a major labor investment). So to "equalize labor costs" you're also putting a wrench into the supply chain, since the entire supply chain is depending on this cheap, uncared for labor. Throw pollution standards in there and I wouldn't be surprised if the costs would be the same as they are here.

Basically they get away with it because they don't have NCLB, EPA, EEOC, etc, etc.

[maggiesfarmer]

74. another point, about Chinese companies being so flexible

the ability to quickly ramp up and ramp down huge quantities of trained workers is a huge competitive advantage for those companies. The iPhone might only cost $65 to make in the US (I bet it's more) but if Apple had to pay unemployment insurance for the ten's of thousands of workers that they routinely laid off and re-hired (or typical US manufacturing union compensation), I bet it costs almost twice that.

radical change needs to occur with Chinese labor or the US needs to impose a tariff. And I suspect that either would be economically painful for the American middle class.

I have no solutions, but the more I read, the more complex I realize the problem is.

[quakerboy]

90. You expect me to believe that

a group of people, among whom the "lazy idiots" can master 15 different versions of Final fantasy, memorize stats for multiple stats for dozens of sports teams, and find a million ways to grow pot without getting caught, cannot manage to operate routine factory machinery?

Bologna.

[aquart]

95. They can build it. Who will be able to buy it?

Chinese workers slave for peanuts. Which is dandy because we don't mind the suicides and we don't mind if they pollute themselves into extinction.

But what if they start minding? You're betting on a permanent slave state. Bad bet.

What if the price of oil makes importing iPhones too damned expensive for anyone but a Romney?

What if they have a massive earthquake?

Have fun with your factory output then.