How U.s. Lost Out On Iphone Work

[dothemaths]

http://www.nytimes.c...=1&ref=business

American workers don't want to sleep on site, they'd rather sleep at home. More like slave labour is what corporations want to manufacture devices.

I doubt Americans really want these types of jobs back and when the penny drops for the Chinese workers they won't want to do this either.

Very, very interesting ....

I wouldn't expect to see that kind of analysis in a mainstream paper .... things must be very bad indeed for the lower middle class in the US.

Summarises the inherent contradictions in globalization beautifully.

[@contradevian]

24 hour operation is not completely out of the ordinary for a modern factory, even one in Europe.

Nissan Sunderland have been running 24 hours a day since 2000.

http://www.telegraph...-operation.html

Don't live in dorms though or get roused at midnight like PoW's to start a 12 hour slave shift.

More akin to Nazi forced labour camps.

And before we get hung up about Apple, the alternatives are manufactured this way too.

[MarkG]

Apparently chip fab is highly automated, so not very labour intensive. Assembly of computers and other consumer electronics is however much more labour intensive...

Yeah, there's not a lot of human interaction with chip manufacture; when you're building devices which can be trashed by a single piece of foreign matter, the last thing you want around them is a human.

[Tiger Woods?]

why is having millions of empty homes a bad thing. they have built entire cities to cater for future growth, and massive infrastructure work which right now probably arent fully utilised anywhere near capacity but provide the basis for the future.

Nothing wrong with building millions of needed home.

It is, however, rather sick to leave millions of the empty as "investments" whilst people live in cages, factory dorms and slums.

[Saving For a Space Ship]

Auschwitz had publicity photographs like that.

As to not having nice homes to go to, perhaps they could use some of the 64.5 million flats that are sitting empty?

MAO-schwitz ?

why is having millions of empty homes a bad thing. they have built entire cities to cater for future growth, and massive infrastructure work which right now probably arent fully utilised anywhere near capacity but provide the basis for the future.

the problem in the uk is we dont do any of these things anymore. people complain when we want to build a high speed rail line or an airport, which takes several decades to do due to red tape.

Massive waste of resources, both in building & upkeep, instead, build them as you need to fill them. They put them up very quickly, afterall.

And I can vouch for how tragic these places are having spent 3 days walking around a Foxconn plant during one of my site visits over summer.

It was actually so sad and depressing that when I got back to the hotel I was very close to tears - Seeing the scramble nets at first floor level around all the buildings really did it for me.

The staff live on site and work 12 hours per day 6 days per week. My visit was even halted whilst they had their 90 min sleep for lunch break.

edit for typo

[Tiger Woods?]

If it did, I'm not aware of them. More to the point, the sweatshops of China are not comparable to Nazi concentration and extermination camps.

Um...I was making a point by hyperbole.

You are technically correct. As far as I know Auschwitz didn't have publicity shots, but Theresienstadt did. Also see this link. Prior to the visit of the Danish Red Cross, the Nazis shifted a portion of the Theresienstadt inmates to Auschwitz to lower the density in the camp and then led the delegation through a predetermined path where "happy Juden" lived 2 or 3 to a room.

You can see what is left of the propaganda film, "The Fuehrer gives the Jews a City" here:

http://video.google.com/videoplay?docid=-7220829978743875704&q=The+Fuhrer+gives+the+jews+a+city&total=3&start=0&num=10&so=0&type=search&plindex=1

. Edited January 22, 2012 by Tiger Woods?

[CrashedOutAndBurned]

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

American workers don't want to sleep on site, they'd rather sleep at home. More like slave labour is what corporations want to manufacture devices.

I doubt Americans really want these types of jobs back and when the penny drops for the Chinese workers they won't want to do this either.

Used to work for a company that was importing lots of Chinese goods where once they'd supplied UK and German made equivalents. The boss, who was pretty switched on, said the rise of China was relatively temporary and the all manufacturing would return to Europe once wages rose and transport costs increased. The only troubled is, the UK, unlike France and Germany, lost so much manufacturing would it even know how to manufacture anything on a large scale again? When we talk about UK manufacturing these days we're generally talking foreign owned car plants or putting jam into jam jars (using German-made production-lines).

Edited January 22, 2012 by CrashedOutAndBurned

[Garf]

Um...I was making a point by hyperbole.

I've been around many factories in Asia. I've also heard about the holocaust from people who survived it ... so I ought to be in a good position to understand your comment, but I honestly can't see what point you were trying to make.

Why don't you try again?

[t1234]

Steve Jobs was put on the spot. Whats he going to say to the rest of the room, these jobs aren't coming back because we pay the Chinese peanuts and make them work in terrible conditions that in America would be illegal?

You really think its that hard to train people to assemble electronics.

[mfp123]

“We sell iPhones in over a hundred countries,” a current Apple executive said. “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.”

‘I Want a Glass Screen’

In 2007, a little over a month before the iPhone was scheduled to appear in stores, Mr. Jobs beckoned a handful of lieutenants into an office. For weeks, he had been carrying a prototype of the device in his pocket.

Mr. Jobs angrily held up his iPhone, angling it so everyone could see the dozens of tiny scratches marring its plastic screen, according to someone who attended the meeting. He then pulled his keys from his jeans.

People will carry this phone in their pocket, he said. People also carry their keys in their pocket. “I won’t sell a product that gets scratched,” he said tensely. The only solution was using unscratchable glass instead. “I want a glass screen, and I want it perfect in six weeks.”

After one executive left that meeting, he booked a flight to Shenzhen, China. If Mr. Jobs wanted perfect, there was nowhere else to go.

Factories in Asia “can scale up and down faster” and “Asian supply chains have surpassed what’s in the U.S.” The result is that “we can’t compete at this point,”

For years, cellphone makers had avoided using glass because it required precision in cutting and grinding that was extremely difficult to achieve. Apple had already selected an American company, Corning Inc., to manufacture large panes of strengthened glass. But figuring out how to cut those panes into millions of iPhone screens required finding an empty cutting plant, hundreds of pieces of glass to use in experiments and an army of midlevel engineers. It would cost a fortune simply to prepare.

Then a bid for the work arrived from a Chinese factory.

When an Apple team visited, the Chinese plant’s owners were already constructing a new wing. “This is in case you give us the contract,” the manager said, according to a former Apple executive. The Chinese government had agreed to underwrite costs for numerous industries, and those subsidies had trickled down to the glass-cutting factory. It had a warehouse filled with glass samples available to Apple, free of charge. The owners made engineers available at almost no cost. They had built on-site dormitories so employees would be available 24 hours a day.

The Chinese plant got the job.

“The entire supply chain is in China now,” said another former high-ranking Apple executive. “You need a thousand rubber gaskets? That’s the factory next door. You need a million screws? That factory is a block away. You need that screw made a little bit different? It will take three hours.”

its that kind of production that is also out competing the west. it used to be like that but no longer is. as mentioned the nissan plant in sunderland is the most flexible, productive, efficient car plant in europe, and one of the best in the world. whenever new cars are made its the first plant in line to get the work.

the problem is there just isnt enough examples of it. its that fast moving flexibility that has been lost. whether its building a new factory, a new road even a new house, the red tape slows everything down and puts a brake on things happening. ironically, bureaucracy (included in that is the welfare state etc..) is hindering us and is less of a problem in china.

Edited January 22, 2012 by mfp123

[Pindar]

"skilled" is a corporate euphemism for "willing to drop your drawers and take it up the Khyber on demand". That's how the US and most of Western Europe suddenly developed a chronic skills shortage in the mid 1990's when the WTO opened up new possibilities for corporate exploitation.

Edited January 22, 2012 by Pindar

[MarkG]

You really think its that hard to train people to assemble electronics.

I remember one US electronics company complaining back in the 90s that US education levels were so low that when they hired new workers they often had to start by teaching them to read and write.

So yes, it may be quite hard to train the kind of people who are available for those jobs.

[MarkG]

“The entire supply chain is in China now,” said another former high-ranking Apple executive. “You need a thousand rubber gaskets? That’s the factory next door. You need a million screws? That factory is a block away. You need that screw made a little bit different? It will take three hours.”

I read a book a year or two back, I forget which it was but it was about some aviation program in WWII or the 50s; they needed some new components built so they got in a car, drove to one of the industrial cities and had all the appropriate suppliers signed up by the end of the day... there were small engineering companies all over and what one couldn't do the company down the road could.

Imagine trying to do that in Britain today.

['Bart']

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.

A few on here seem to think that the US is a good bet economically. This kind of rains on their parade a bit.

All they want is the newest thing for the lowest price. They care not where it came from.

Exactly the attitude espoused in the BBC 3 series "Blood, Sweat and T-Shirts" and "Blood, Sweat and Takeaways".

Things changed a bit once the Brits in the group had to live and work in the same conditions.

If it did, I'm not aware of them.

The classic documentary "The World at War" shows staged newsreels of the happy conditions in the camps.

[Gone baby gone]

“We sell iPhones in over a hundred countries,” a current Apple executive said. “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.”

‘I Want a Glass Screen’

The glass screen in the iPhone is made of "Gorilla Glass" supplied by Corning, who would be the ones subcontracting to a Chinese factory.

According to their website, it's made in factories in the USA and Japan:

http://www.corninggorillaglass.com/faqs/all?page=1

Until Jobs contacted Corning, they had an (old) product that had no current application.

There would be little point in making the glass in the USA then shipping it to China, so this is another case of cause and effect. Once manufacturing moves to China, it makes sense to make most, if not all, of the components there - especially anything that weighs more than half a gram.

Interestingly, Jobs himself set up two Just-In-Time factories to make computers in California (one for Apple in the early days, another for NeXT). So he probably knew something about manufacturing processes.

EDIT: Actually, I misread the Corning website, they don't manufacture in China at all, just the USA and Japan... Something fishy about the NYT article then...

Edited January 22, 2012 by What's'isname

[LuckyOne]

The glass screen in the iPhone is made of "Gorilla Glass" supplied by Corning, who would be the ones subcontracting to a Chinese factory.

According to their website, it's made in factories in the USA and China:

http://www.corninggorillaglass.com/faqs/all?page=1

Until Jobs contacted Corning, they had an (old) product that had no current application.

There would be little point in making the glass in the USA then shipping it to China, so this is another case of cause and effect. Once manufacturing moves to China, it makes sense to make most, if not all, of the components there - especially anything that weighs more than half a gram.

Interestingly, Jobs himself set up two Just-In-Time factories to make computers in California (one for Apple in the early days, another for NeXT). So he probably knew something about manufacturing processes.

And in the long run, the high value added R&D follows the manufacturing too. The last "bright spot" for the West will fade over time.

[Gone baby gone]

And in the long run, the high value added R&D follows the manufacturing too. The last "bright spot" for the West will fade over time.

I don't agree. China has been making stuff like mobile phones and PC components (or complete units) for over a decade now and there is no sign of any large Western manufacturers moving their R&D there. In an industry where you are trying to attract the best creative (and technical) talent, the location you are "tempting" them to will play a big part in the attractiveness of the offer. Would you rather relocate your family to Palo Alto, California, or Shenzhen, China?

It would be a no brainer for me, I think.

[Olebrum]

Suicide Slave Factory makes Billionaire happy.

[Tiger Woods?]

I've been around many factories in Asia. I've also heard about the holocaust from people who survived it ... so I ought to be in a good position to understand your comment, but I honestly can't see what point you were trying to make.

Why don't you try again?

You know precisely the point I was trying to make. I'm not interested in pandering to those who love twisting stuff to get offended on someone else's behalf. It is pathetic.

Or are you just plain simple?

Edited January 22, 2012 by Tiger Woods?

[efdemin]

I don't agree. China has been making stuff like mobile phones and PC components (or complete units) for over a decade now and there is no sign of any large Western manufacturers moving their R&D there. In an industry where you are trying to attract the best creative (and technical) talent, the location you are "tempting" them to will play a big part in the attractiveness of the offer. Would you rather relocate your family to Palo Alto, California, or Shenzhen, China?

It would be a no brainer for me, I think.

It's more to do with intellectual property laws, or rather the complete lack of them, in China. The western companies are well aware that if they moved any business-critical knowledge over there they would be stolen and copied before the execs have gotten off the return flight back to the US/Europe. They're amoral and money-obsessed but they're not completely stupid.

The big question mark is whether the Chinese companies can build on their current knowledge and expertise in a similar way to Japan and South Korea have. I honestly don't know. They have the numbers but I'm not sure about whether the culture allows any kind of long-term innovation.

Edited January 22, 2012 by efdemin

[aa3]

Would you locate production in a country that had out of control legal system that could hit you anytime, onerous labour laws, unions, a mountain of ever changing environmental and other regulations... fat, lazy populous who is anti-business, a government which is radically anti-business.

Or in a country powering forward and who wants real industry, like your business. Who couldn't care less about things like the percentage of women in your management. All they care about is you creating real wealth in their nation.

I think even when Chinese wages surpass European levels, production will still stay there. Just like it is staying in South Korea and Japan. Actually still production is moving to South Korea and Japan in many areas like shipbuilding and aviation.

The same question was asked recently with regards to automobile production. Why was GM moving production to Korea, when Korean industrial wages are higher than American industrial wages? Well for GM it is simple, they look at the output they get per $ spent, and they simply get more there.

[LuckyOne]

I don't agree. China has been making stuff like mobile phones and PC components (or complete units) for over a decade now and there is no sign of any large Western manufacturers moving their R&D there. In an industry where you are trying to attract the best creative (and technical) talent, the location you are "tempting" them to will play a big part in the attractiveness of the offer. Would you rather relocate your family to Palo Alto, California, or Shenzhen, China?

It would be a no brainer for me, I think.

Things always seem to follow a four step process

- Assembly of foreign made components

- Assembly of a mix of foreign and domestically made components

- Joint ventures with a mix of foreign and domestic R&D and components

- Eventual replacement of the JVs with purely domestically owned and managed businesses

The phone and computer "industry" is probably at step 2. The car industry is at around step 3. The commercial aviation business is very close to step 4.

The process is not about Apple engineers living in Cupertino or Shenzhen. It is about the long term ownership of the dominant players across industries.

Edit : To try to reflect what I meant rather than what I originally said.

Edited January 22, 2012 by LuckyOne

[newbonic]

Suicide Slave Factory makes Billionaire happy.

I think that's the best summary of this story on this thread.

The issue of nazi slave labour camps has been brought up a few times. But I think the Soviet style 'Potemkin Villages' of communist era Russia in the 1930s would be a better example. They showed prominent foreign useful idiots around specially prepared communities and presented them as typical in Stalin's USSR, most of whom duly reported on how nice it was for workers in the modern USSR.

Not that I'm implying that Job's and co are idiots, but if you showed them the Victorian conditions of the Chinese coal miners whose labour supplies the leccy for these places, or the small suppliers to the big assembly plants, etc. etc. then it would damage their 'plausible deniability' excuse of "better a crap job than no job".

I doubt that it would stop the average Wayne, Dwaine, or Chardonnay lusting after the latest model phone though, even if they did know of the pay and conditions of the people who assembled it.

[LuckyOne]

I think that's the best summary of this story on this thread.

The issue of nazi slave labour camps has been brought up a few times. But I think the Soviet style 'Potemkin Villages' of communist era Russia in the 1930s would be a better example. They showed prominent foreign useful idiots around specially prepared communities and presented them as typical in Stalin's USSR, most of whom duly reported on how nice it was for workers in the modern USSR.

Not that I'm implying that Job's and co are idiots, but if you showed them the Victorian conditions of the Chinese coal miners whose labour supplies the leccy for these places, or the small suppliers to the big assembly plants, etc. etc. then it would damage their 'plausible deniability' excuse of "better a crap job than no job".

I doubt that it would stop the average Wayne, Dwaine, or Chardonnay lusting after the latest model phone though, even if they did know of the pay and conditions of the people who assembled it.

Societies develop, evolve and decline at different rates. China got a later start than we did.

Following your logic to its extreme, should we knock down every Victorian building and destroy every Victorian antique because of the Victorian pay and conditions of those who built / made them?

[Tiger Woods?]

Suicide Slave Factory makes Billionaire happy.

Succinct.