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How the US Lost Out on iPhone Work

When Barack Obama joined Silicon Valley’s top luminaries for dinner in California last February, each guest was asked to come with a question for the president.

But as Steven P. Jobs of Apple spoke, President Obama interrupted with an inquiry of his own: what would it take to make iPhones in the United States?

Not long ago, Apple boasted that its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas.

Why can’t that work come home? Mr. Obama asked.

Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said, according to another dinner guest.

The article discusses why China, with a massive workforce and attendant flexibility, is able to out-compete for US manufacturing. It's not just the cost of labor.

edit: should mention, it's a long read.

Cliffs notes: Because globalism

I read that last night, it was a very good article.

edit: on one page; http://www.msnbc.msn.com/id/46091572/ns/business-us_business/#.TxyfeW9SQZQ

I don't see how western countries can compete with China on manufactoring, the labor is China is cheap, they don't have to comply with as many employment laws.

It's too expensive to make things for the likes of us.

If there's something that requires skill thats where western countries can compete.

You dont need to be clever to assemble iPhones.

The article says that China not only has the advantage of cheap labour to run lines but also simple supply chains because all the factories are close together, and a huge supply of the skilled tradespeople needed to get a production line up and running.

Add to all of that the ability to just build a new factory next door because the government says to do it.

The downside is fewer and fewer workers whose jobs can support them and their families to buy the stuff from China and keep the whole economy turning.

The company (Foxconn) that makes iPhones has some pretty shockingly bad working conditions.
http://www.irishtimes.com/newspaper/world/2012/0112/1224310140652.html

You can have cheap electronic devices, or you can have humane treatment of workers. It's difficult to manage both, it seems.

Edit: Another issue is the level of pollution from production at that scale. I doubt many americans want that in their backyards. Consumerism, long term, is not going to be sustainable.

Countries take turns being the one that manufactures things for everyone else. At any given time, several countries have the cheapest labor and make everything. That success gets them a new consumer class and suddenly their labor isn't so cheap anymore and it's someone else's turn.

At some point, china's currency will increase whether they like it or not (and man are they ever trying to keep it low) and they will have to buy things from the new cheap guy.

Unskilled manufacturing jobs within industrialized countries is dead; at least until the cost of transportation eclipses the 20x wage advantage developing nations have over their industrialized counterparts.

The downside is fewer and fewer workers whose jobs can support them and their families to buy the stuff from China and keep the whole economy turning.

I can see the emotional appeal of 'stop sending jobs to the Asian job-stealing bogeyman', but I can't subscribe to it because I prefer cheap stuff. Technology has made our lives generally more connected and dynamic, but in return we as employees have to continue to evolve our competencies and be more dynamic as well.


Automatically Appended Next Post:

Rented Tritium wrote:Countries take turns being the one that manufactures things for everyone else. At any given time, several countries have the cheapest labor and make everything. That success gets them a new consumer class and suddenly their labor isn't so cheap anymore and it's someone else's turn.

We've seen it happen time and again. US jobs got outsourced to Mexico, Mexico to China, China to India, Vietnam and Indonesia.

At some point, china's currency will increase whether they like it or not (and man are they ever trying to keep it low) and they will have to buy things from the new cheap guy.

Anyone living in the US has no credibility in calling China a currency manipulator. What do you think we're doing with ours? The reason the Renminbi is weak is because it is pegged to the dollar.

Rented Tritium wrote:Cliffs notes: Because globalism

Slightly longer Cliff notes:

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.

No factory in the United States could manage that. At least not without time and a half and a rather lofty wage.

This too shall pass.

it is only a matte rof time befor ethe growing economic class in China starts demanding certain "rights" and eventually it will all go haywire for them too.

Add in the ethnic stew and burgeoning nationalism and we are in for a good show.

Its the "liberalizing" forces of economic development.


Automatically Appended Next Post:

dogma wrote:
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.

No factory in the United States could manage that. At least not without time and a half and a rather lofty wage.