Friday, January 22, 2016

Why Not Manufacture the iPhone in America?

Speaking at Liberty University the other day, the Donald declared that he would bring the jobs back home. In particular, he would bring the high tech jobs back home. Under a Trump presidency the iPhone would be manufactured in the good old USA.

And, I am assured from reliable sources, if the Donald said it could be done it will be done. After all, he did build the skating rink in Central Park, ergo... he can do anything he says he will do.Right?

Hearing this claim, William Jacobson of the Legal Insurrection blog recalled a New York Times article from four years ago. It recounts a dinner that President Obama had with Apple executives, including Steve Jobs. When Obama asked Jobs what it would take to make iPhones in the USA, Jobs answered thusly:

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

The president’s question touched upon a central conviction at Apple. 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.

Apparently, Chinese factories are simply better than ours. A lot better, as it happens.

The Times continued:

 Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. 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.”

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.

No one is going to wave a magic wand and make the jobs come back. The problems are not at the top as much as they are throughout the ranks of middle management and technical workers. We simply do not value mid-level skills… perhaps because we only value highly intellectualized skills.

The Times adds this:

Though Americans are among the most educated workers in the world, the nation has stopped training enough people in the mid-level skills that factories need, executives say.

To thrive, companies argue they need to move work where it can generate enough profits to keep paying for innovation. Doing otherwise risks losing even more American jobs over time, as evidenced by the legions of once-proud domestic manufacturers — including G.M. and others — that have shrunk as nimble competitors have emerged.

We can also note that Americans would never tolerate the working conditions that exist at the Foxconn plant in China. And that these working conditions can easily compromise worker health.

All of it matters to us, but we also want our iPhones and we would not buy an American-made product if it cost more and did not work half as well.

'Tis a predicament…


David Foster said...

I think the linked articles are highly questionable. "Fitting glass screens into beveled frames" is not 'mid-skill' work, it is low-skill work. And it is a task highly susceptible to robotics.

Re the assertion that "8700 industrial engineers" would be needed to set up iPhone manufacturing in the US...really? Industrial engineers establish the manufacturing process and workflow, set time standards, etc; once you are doing true mass production the number of IEs required should be pretty independent of the quantity of units produced. Highly questionable IMO that you would need 8700 of them to do this job. Now if they're talking about foremen and shift supervisors, etc, that would make more sense.

If the iPhone absolutely, positively *had* to be manufactured in the US, Apple would automate the hell out of the process, and would also maybe do a better job of refraining from last-second changes in the design such as described in the article. The overall costs perhaps wouldn't be as low as they are now, but they'd be a lot lower than one would calculate by merely looking at the ratio of the labor costs in the US and in China.

David Foster said...

Here's a thought-experiment I think is interesting. If Henry Ford had been able to have the Model T built in Mexico by people making 8 cents a day, with adequate transportation for inbound materials and outbound products, would the assembly line and other labor-saving technologies have been created?

In the 19th century, it was widely considered that Americans focused more on mechanization because labor was more expensive than in Europe.

Dennis said...

Oh that we had the same industrious people in this country. can anyone seriously believe that we are graduating people from our universities who are ready, willing and able to do a job other than community organizing? Along those lines little primer on why we do not have the wherewithal given the governments we elected as people. Until we get people who do a better job of electing those who represent us we will not be able to compete effectively and efficiently.
For your edification and fun. Please do not look at the very end until you have finished the test because it does answer why.


Part I:

A. Back off and let those men who want to marry men, marry men.

B. Allow those women who want to marry women, marry women.

C. Allow those folks who want to abort their babies, abort their babies.

D. In three generations, there will be very few Democrats.

Part II:

Ten Poorest Cities in America (How did it happen?)

City, State, % of People Below the Poverty Level

1. Detroit, MI 32.5%

2. Buffalo, NY 29.9%

3. Cincinnati, OH 27.8%

4. Cleveland, OH 27.0%

5. Miami, FL 26.9%

5. St. Louis, MO 26.8%

7. El Paso, TX 26.4%

8. Milwaukee, WI 26.2%

9. Philadelphia, PA 25.1%

10. Newark, NJ 24.2%

What do these top ten cities (over 250,000 pop.) with the highest poverty rate all have in common?

Detroit, MI - (1st on poverty rate list) hasn't elected a Republican mayor since 1961

Buffalo, NY - (2nd) hasn't elected one since 1954

Cincinnati, OH - (3rd) not since 1984

Cleveland, OH - (4th) not since 1989

Miami, FL - (5th) has never had a Republican mayor

St. Louis, MO - (6th) not since 1949

El Paso, TX - (7th) has never had a Republican mayor

Milwaukee, WI - (8th) not since 1908

Philadelphia, PA - (9th) not since 1952

Newark, NJ - (10th) not since 1907

Einstein once said, 'The definition of insanity is doing the same thing over and over again and expecting different results.'

It is the poor who habitually elect Democrats... yet they are still POOR.

Part III:

"You cannot help the poor by destroying the rich.

You cannot strengthen the weak by weakening the strong.

You cannot bring about prosperity by discouraging thrift.

You cannot lift the wage earner up by pulling the wage payer down.

You cannot further the brotherhood of man by inciting class hatred.

You cannot build character and courage by taking away people's initiative and independence.

You cannot help people permanently by doing for them, what they could and should do for themselves."

~Abraham Lincoln

"Any man who thinks he can be happy and prosperous by letting the government take care of him had better take a much closer look at the

American Indian."

~Henry Ford

Dennis said...


Six trivia questions to see how much history you really know. Be honest; it's kind of fun and revealing. If you don't know the answer, make your best guess. Answer all of the questions (no cheating) before looking at the answers.

1) "We're going to take things away from you on behalf of the common good."

A. Karl Marx B. Adolph Hitler C. Joseph Stalin

D. Barack Obama E. None of the above

2) "It's time for a new beginning, for an end to government of the

few, by the few, and for the few... and to replace it with shared responsibility, for shared prosperity."

A. Lenin B. Mussolini C. Idi Amin

D. Barack Obama E. None of the above

3) "(We).... can't just let business as usual go on, and that means something has to be taken away from some people."

A. Nikita Khrushchev B. Joseph Goebbels C. Boris Yeltsin

D. Barack Obama E. None of the above

4) "We have to build a political consensus and that requires people to give up a little bit of their own ... in order to create this common ground."

A. Mao Tse Tung B. Hugo Chavez C. Kim Jong II

D. Barack Obama E. None of the above

5) "I certainly think the free-market has failed."

A. Karl Marx B. Lenin C. Molotov

D. Barack Obama E. None of the above

6) "I think it's time to send a clear message to what has become the most profitable sector in (the) entire economy that they are being watched."

A. Pinochet B. Milosevic C. Saddam Hussein

D. Barack Obama E. None of the above

No peeking!

Scroll down for answers...

(1) E. None of the above. Statement was made by Hillary Clinton


(2) E. None of the above. Statement was made by Hillary Clinton


(3) E. None of the above. Statement was made by Hillary Clinton


(4) E. None of the above. Statement was made by Hillary Clinton


(5) E. None of the above. Statement was made by Hillary Clinton


(6) E. None of the above. Statement was made by Hillary Clinton


priss rules said...

"Though Americans are among the most educated workers in the world, the nation has stopped training enough people in the mid-level skills that factories need, executives say."

Those are not mid-level skills but slave labor shills.

Ares Olympus said...

It is interesting that republicans are generally against family planning, on some strange idea that third world poor people might choose an abortion when they've sucessfully avoided a 4th or 5th pregnancy they don't want.

But having a surplus of people people in other countries, and yes, China is still third world in employment opportunities for the average person. So as long as we have poor people elsewhere, capitalism will search for ways to exploit or empower them as you like to define it. So they can all have 6 more kids and create the next generation of poor people to feed the factories.

So America benefits by having lots of poor desparate people willing to do work in conditions and compensations that we'd never accept.

All so we can afford to buy products we're too poor to make.

That's not capitalism, but it is globalism, and it is also dependent upon a world order that is not guaranted once our cheap energy glut disappears.

I wonder if we'll ever return to a world where fixing things is cheaper than buying new things, but not for a while it looks like.

But there may come a time in the future where local markets sell themselves as "closed loop economics", where the same people who make things can afford the same products they make, and when we're done with things, they can be recycled back into components we can recycle or reuse. Its a utopia, but I have to imagine some places will try this, perhaps isolated communities will try first?

The food coop by my place has something they call P6, principle 6, for products made locally. Its nice to think some changes can be made voluntarily, by people willing to pay a little more.

I imagine a future were "progressive governments" act conservative, and set laws against importing things that can be made locally.

But I don't think iPhones are ever going to be on that list, more things that have a limited shelflife, and don't last long. It's hard to guess how our high tech world will fit into a low carbon energy future.

Andrew_M_Garland said...

=== ===
Kotkin: [edited]A more traditional liberal approach [to the stimulus package] might have focused on improvements that could leave tangible markers of progress across the nation - ports, airports, hydroelectric systems, and road networks.

Unfortunately, liberal regulation and law have reduced our ability to build or produce anything. "Shovel-ready" projects were 5 years away. The government could only spend stimulus money on its own regulatory agencies, school teachers, and soon-to-fail green energy startups. The stimulus was stupid, but failing to spend it on capital projects was idiotic.
=== ===

Just Try to Get a Permit, I Dare You
[edited] IPad sales so far have utilized something on the order of 100,000 man-years of manufacturing employment. If this were done in the US, it would have been more automated, but still it would probably have required at least 10,000 man-years of manufacturing labor.

However, imagine trying to get permits from our bureaucrats in the required time to build or even refurbish a manufacturing complex for 10,000 jobs in this country. The environmental impact report alone on traffic impacts would take several years, and a single lawsuit on one component of the supply chain would delay the entire project for years.

Reviving the US economy is easy. Stop treating industrial activity as a scam on working people and poisonous to Gaia.

David Foster said...

Related post: Faux Manufacturing Nostalgia