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Author: Subject: Apple, America And A Squeezed Middle Class

Zen Peach





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  posted on 1/23/2012 at 02:24 PM
Truly fascinating read...

quote:
How the U.S. Lost Out on iPhone Work

By CHARLES DUHIGG and KEITH BRADSHER
Published: January 21, 2012

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 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.

Apple has become one of the best-known, most admired and most imitated companies on earth, in part through an unrelenting mastery of global operations. Last year, it earned over $400,000 in profit per employee, more than Goldman Sachs, Exxon Mobil or Google.

However, what has vexed Mr. Obama as well as economists and policy makers is that Apple — and many of its high-technology peers — are not nearly as avid in creating American jobs as other famous companies were in their heydays.

Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apple’s contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple’s other products. But almost none of them work in the United States. Instead, they work for foreign companies in Asia, Europe and elsewhere, at factories that almost all electronics designers rely upon to build their wares.

“Apple’s an example of why it’s so hard to create middle-class jobs in the U.S. now,” said Jared Bernstein, who until last year was an economic adviser to the White House.

“If it’s the pinnacle of capitalism, we should be worried.”

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.

But while Apple is far from alone, it offers a window into why the success of some prominent companies has not translated into large numbers of domestic jobs. What’s more, the company’s decisions pose broader questions about what corporate America owes Americans as the global and national economies are increasingly intertwined.

“Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” said Betsey Stevenson, the chief economist at the Labor Department until last September. “That’s disappeared. Profits and efficiency have trumped generosity.”

Companies and other economists say that notion is naïve. 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.

Apple was provided with extensive summaries of The New York Times’s reporting for this article, but the company, which has a reputation for secrecy, declined to comment.

This article is based on interviews with more than three dozen current and former Apple employees and contractors — many of whom requested anonymity to protect their jobs — as well as economists, manufacturing experts, international trade specialists, technology analysts, academic researchers, employees at Apple’s suppliers, competitors and corporate partners, and government officials.

Privately, Apple executives say the world is now such a changed place that it is a mistake to measure a company’s contribution simply by tallying its employees — though they note that Apple employs more workers in the United States than ever before.

They say Apple’s success has benefited the economy by empowering entrepreneurs and creating jobs at companies like cellular providers and businesses shipping Apple products. And, ultimately, they say curing unemployment is not their job.

“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.

For over two years, the company had been working on a project — code-named Purple 2 — that presented the same questions at every turn: how do you completely reimagine the cellphone? And how do you design it at the highest quality — with an unscratchable screen, for instance — while also ensuring that millions can be manufactured quickly and inexpensively enough to earn a significant profit?

The answers, almost every time, were found outside the United States. Though components differ between versions, all iPhones contain hundreds of parts, an estimated 90 percent of which are manufactured abroad. Advanced semiconductors have come from Germany and Taiwan, memory from Korea and Japan, display panels and circuitry from Korea and Taiwan, chipsets from Europe and rare metals from Africa and Asia. And all of it is put together in China.

In its early days, Apple usually didn’t look beyond its own backyard for manufacturing solutions. A few years after Apple began building the Macintosh in 1983, for instance, Mr. Jobs bragged that it was “a machine that is made in America.” In 1990, while Mr. Jobs was running NeXT, which was eventually bought by Apple, the executive told a reporter that “I’m as proud of the factory as I am of the computer.” As late as 2002, top Apple executives occasionally drove two hours northeast of their headquarters to visit the company’s iMac plant in Elk Grove, Calif.

But by 2004, Apple had largely turned to foreign manufacturing. Guiding that decision was Apple’s operations expert, Timothy D. Cook, who replaced Mr. Jobs as chief executive last August, six weeks before Mr. Jobs’s death. Most other American electronics companies had already gone abroad, and Apple, which at the time was struggling, felt it had to grasp every advantage.

In part, Asia was attractive because the semiskilled workers there were cheaper. But that wasn’t driving Apple. For technology companies, the cost of labor is minimal compared with the expense of buying parts and managing supply chains that bring together components and services from hundreds of companies.

For Mr. Cook, the focus on Asia “came down to two things,” said one former high-ranking Apple executive. 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,” the executive said.

The impact of such advantages became obvious as soon as Mr. Jobs demanded glass screens in 2007.

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.”

In Foxconn City

An eight-hour drive from that glass factory is a complex, known informally as Foxconn City, where the iPhone is assembled. To Apple executives, Foxconn City was further evidence that China could deliver workers — and diligence — that outpaced their American counterparts.

That’s because nothing like Foxconn City exists in the United States.

The facility has 230,000 employees, many working six days a week, often spending up to 12 hours a day at the plant. Over a quarter of Foxconn’s work force lives in company barracks and many workers earn less than $17 a day. When one Apple executive arrived during a shift change, his car was stuck in a river of employees streaming past. “The scale is unimaginable,” he said.

Foxconn employs nearly 300 guards to direct foot traffic so workers are not crushed in doorway bottlenecks. The facility’s central kitchen cooks an average of three tons of pork and 13 tons of rice a day. While factories are spotless, the air inside nearby teahouses is hazy with the smoke and stench of cigarettes.

Foxconn Technology has dozens of facilities in Asia and Eastern Europe, and in Mexico and Brazil, and it assembles an estimated 40 percent of the world’s consumer electronics for customers like Amazon, Dell, Hewlett-Packard, Motorola, Nintendo, Nokia, Samsung and Sony.

“They could hire 3,000 people overnight,” said Jennifer Rigoni, who was Apple’s worldwide supply demand manager until 2010, but declined to discuss specifics of her work. “What U.S. plant can find 3,000 people overnight and convince them to live in dorms?”

In mid-2007, after a month of experimentation, Apple’s engineers finally perfected a method for cutting strengthened glass so it could be used in the iPhone’s screen. The first truckloads of cut glass arrived at Foxconn City in the dead of night, according to the former Apple executive. That’s when managers woke thousands of workers, who crawled into their uniforms — white and black shirts for men, red for women — and quickly lined up to assemble, by hand, the phones. Within three months, Apple had sold one million iPhones. Since then, Foxconn has assembled over 200 million more.

Foxconn, in statements, declined to speak about specific clients.

“Any worker recruited by our firm is covered by a clear contract outlining terms and conditions and by Chinese government law that protects their rights,” the company wrote. Foxconn “takes our responsibility to our employees very seriously and we work hard to give our more than one million employees a safe and positive environment.”

The company disputed some details of the former Apple executive’s account, and wrote that a midnight shift, such as the one described, was impossible “because we have strict regulations regarding the working hours of our employees based on their designated shifts, and every employee has computerized timecards that would bar them from working at any facility at a time outside of their approved shift.” The company said that all shifts began at either 7 a.m. or 7 p.m., and that employees receive at least 12 hours’ notice of any schedule changes.

Foxconn employees, in interviews, have challenged those assertions.

Another critical advantage for Apple was that China provided engineers at a scale the United States could not match. Apple’s executives had estimated that about 8,700 industrial engineers were needed to oversee and guide the 200,000 assembly-line workers eventually involved in manufacturing iPhones. The company’s analysts had forecast it would take as long as nine months to find that many qualified engineers in the United States.

In China, it took 15 days.

Companies like Apple “say the challenge in setting up U.S. plants is finding a technical work force,” said Martin Schmidt, associate provost at the Massachusetts Institute of Technology. In particular, companies say they need engineers with more than high school, but not necessarily a bachelor’s degree. Americans at that skill level are hard to find, executives contend. “They’re good jobs, but the country doesn’t have enough to feed the demand,” Mr. Schmidt said.

Some aspects of the iPhone are uniquely American. The device’s software, for instance, and its innovative marketing campaigns were largely created in the United States. Apple recently built a $500 million data center in North Carolina. Crucial semiconductors inside the iPhone 4 and 4S are manufactured in an Austin, Tex., factory by Samsung, of South Korea.

But even those facilities are not enormous sources of jobs. Apple’s North Carolina center, for instance, has only 100 full-time employees. The Samsung plant has an estimated 2,400 workers.

“If you scale up from selling one million phones to 30 million phones, you don’t really need more programmers,” said Jean-Louis Gassée, who oversaw product development and marketing for Apple until he left in 1990. “All these new companies — Facebook, Google, Twitter — benefit from this. They grow, but they don’t really need to hire much.”

It is hard to estimate how much more it would cost to build iPhones in the United States. However, various academics and manufacturing analysts estimate that because labor is such a small part of technology manufacturing, paying American wages would add up to $65 to each iPhone’s expense. Since Apple’s profits are often hundreds of dollars per phone, building domestically, in theory, would still give the company a healthy reward.

But such calculations are, in many respects, meaningless because building the iPhone in the United States would demand much more than hiring Americans — it would require transforming the national and global economies. Apple executives believe there simply aren’t enough American workers with the skills the company needs or factories with sufficient speed and flexibility. Other companies that work with Apple, like Corning, also say they must go abroad.

Manufacturing glass for the iPhone revived a Corning factory in Kentucky, and today, much of the glass in iPhones is still made there. After the iPhone became a success, Corning received a flood of orders from other companies hoping to imitate Apple’s designs. Its strengthened glass sales have grown to more than $700 million a year, and it has hired or continued employing about 1,000 Americans to support the emerging market.

But as that market has expanded, the bulk of Corning’s strengthened glass manufacturing has occurred at plants in Japan and Taiwan.

“Our customers are in Taiwan, Korea, Japan and China,” said James B. Flaws, Corning’s vice chairman and chief financial officer. “We could make the glass here, and then ship it by boat, but that takes 35 days. Or, we could ship it by air, but that’s 10 times as expensive. So we build our glass factories next door to assembly factories, and those are overseas.”

Corning was founded in America 161 years ago and its headquarters are still in upstate New York. Theoretically, the company could manufacture all its glass domestically. But it would “require a total overhaul in how the industry is structured,” Mr. Flaws said. “The consumer electronics business has become an Asian business. As an American, I worry about that, but there’s nothing I can do to stop it. Asia has become what the U.S. was for the last 40 years.”

Middle-Class Jobs Fade

The first time Eric Saragoza stepped into Apple’s manufacturing plant in Elk Grove, Calif., he felt as if he were entering an engineering wonderland.

It was 1995, and the facility near Sacramento employed more than 1,500 workers. It was a kaleidoscope of robotic arms, conveyor belts ferrying circuit boards and, eventually, candy-colored iMacs in various stages of assembly. Mr. Saragoza, an engineer, quickly moved up the plant’s ranks and joined an elite diagnostic team. His salary climbed to $50,000. He and his wife had three children. They bought a home with a pool.

“It felt like, finally, school was paying off,” he said. “I knew the world needed people who can build things.”

At the same time, however, the electronics industry was changing, and Apple — with products that were declining in popularity — was struggling to remake itself. One focus was improving manufacturing. A few years after Mr. Saragoza started his job, his bosses explained how the California plant stacked up against overseas factories: the cost, excluding the materials, of building a $1,500 computer in Elk Grove was $22 a machine. In Singapore, it was $6. In Taiwan, $4.85. Wages weren’t the major reason for the disparities. Rather it was costs like inventory and how long it took workers to finish a task.

“We were told we would have to do 12-hour days, and come in on Saturdays,” Mr. Saragoza said. “I had a family. I wanted to see my kids play soccer.”

Modernization has always caused some kinds of jobs to change or disappear. As the American economy transitioned from agriculture to manufacturing and then to other industries, farmers became steelworkers, and then salesmen and middle managers. These shifts have carried many economic benefits, and in general, with each progression, even unskilled workers received better wages and greater chances at upward mobility.

But in the last two decades, something more fundamental has changed, economists say. Midwage jobs started disappearing. Particularly among Americans without college degrees, today’s new jobs are disproportionately in service occupations — at restaurants or call centers, or as hospital attendants or temporary workers — that offer fewer opportunities for reaching the middle class.

Even Mr. Saragoza, with his college degree, was vulnerable to these trends. First, some of Elk Grove’s routine tasks were sent overseas. Mr. Saragoza didn’t mind. Then the robotics that made Apple a futuristic playground allowed executives to replace workers with machines. Some diagnostic engineering went to Singapore. Middle managers who oversaw the plant’s inventory were laid off because, suddenly, a few people with Internet connections were all that were needed.

Mr. Saragoza was too expensive for an unskilled position. He was also insufficiently credentialed for upper management. He was called into a small office in 2002 after a night shift, laid off and then escorted from the plant. He taught high school for a while, and then tried a return to technology. But Apple, which had helped anoint the region as “Silicon Valley North,” had by then converted much of the Elk Grove plant into an AppleCare call center, where new employees often earn $12 an hour.

There were employment prospects in Silicon Valley, but none of them panned out. “What they really want are 30-year-olds without children,” said Mr. Saragoza, who today is 48, and whose family now includes five of his own.

After a few months of looking for work, he started feeling desperate. Even teaching jobs had dried up. So he took a position with an electronics temp agency that had been hired by Apple to check returned iPhones and iPads before they were sent back to customers. Every day, Mr. Saragoza would drive to the building where he had once worked as an engineer, and for $10 an hour with no benefits, wipe thousands of glass screens and test audio ports by plugging in headphones.

Paydays for Apple

As Apple’s overseas operations and sales have expanded, its top employees have thrived. Last fiscal year, Apple’s revenue topped $108 billion, a sum larger than the combined state budgets of Michigan, New Jersey and Massachusetts. Since 2005, when the company’s stock split, share prices have risen from about $45 to more than $427.

Some of that wealth has gone to shareholders. Apple is among the most widely held stocks, and the rising share price has benefited millions of individual investors, 401(k)’s and pension plans. The bounty has also enriched Apple workers. Last fiscal year, in addition to their salaries, Apple’s employees and directors received stock worth $2 billion and exercised or vested stock and options worth an added $1.4 billion.

The biggest rewards, however, have often gone to Apple’s top employees. Mr. Cook, Apple’s chief, last year received stock grants — which vest over a 10-year period — that, at today’s share price, would be worth $427 million, and his salary was raised to $1.4 million. In 2010, Mr. Cook’s compensation package was valued at $59 million, according to Apple’s security filings.

A person close to Apple argued that the compensation received by Apple’s employees was fair, in part because the company had brought so much value to the nation and world. As the company has grown, it has expanded its domestic work force, including manufacturing jobs. Last year, Apple’s American work force grew by 8,000 people.

While other companies have sent call centers abroad, Apple has kept its centers in the United States. One source estimated that sales of Apple’s products have caused other companies to hire tens of thousands of Americans. FedEx and United Parcel Service, for instance, both say they have created American jobs because of the volume of Apple’s shipments, though neither would provide specific figures without permission from Apple, which the company declined to provide.

“We shouldn’t be criticized for using Chinese workers,” a current Apple executive said. “The U.S. has stopped producing people with the skills we need.”

What’s more, Apple sources say the company has created plenty of good American jobs inside its retail stores and among entrepreneurs selling iPhone and iPad applications.

After two months of testing iPads, Mr. Saragoza quit. The pay was so low that he was better off, he figured, spending those hours applying for other jobs. On a recent October evening, while Mr. Saragoza sat at his MacBook and submitted another round of résumés online, halfway around the world a woman arrived at her office. The worker, Lina Lin, is a project manager in Shenzhen, China, at PCH International, which contracts with Apple and other electronics companies to coordinate production of accessories, like the cases that protect the iPad’s glass screens. She is not an Apple employee. But Mrs. Lin is integral to Apple’s ability to deliver its products.

Mrs. Lin earns a bit less than what Mr. Saragoza was paid by Apple. She speaks fluent English, learned from watching television and in a Chinese university. She and her husband put a quarter of their salaries in the bank every month. They live in a 1,080-square-foot apartment, which they share with their in-laws and son.

“There are lots of jobs,” Mrs. Lin said. “Especially in Shenzhen.”

Innovation’s Losers

Toward the end of Mr. Obama’s dinner last year with Mr. Jobs and other Silicon Valley executives, as everyone stood to leave, a crowd of photo seekers formed around the president. A slightly smaller scrum gathered around Mr. Jobs. Rumors had spread that his illness had worsened, and some hoped for a photograph with him, perhaps for the last time.

Eventually, the orbits of the men overlapped. “I’m not worried about the country’s long-term future,” Mr. Jobs told Mr. Obama, according to one observer. “This country is insanely great. What I’m worried about is that we don’t talk enough about solutions.”

At dinner, for instance, the executives had suggested that the government should reform visa programs to help companies hire foreign engineers. Some had urged the president to give companies a “tax holiday” so they could bring back overseas profits which, they argued, would be used to create work. Mr. Jobs even suggested it might be possible, someday, to locate some of Apple’s skilled manufacturing in the United States if the government helped train more American engineers.

Economists debate the usefulness of those and other efforts, and note that a struggling economy is sometimes transformed by unexpected developments. The last time analysts wrung their hands about prolonged American unemployment, for instance, in the early 1980s, the Internet hardly existed. Few at the time would have guessed that a degree in graphic design was rapidly becoming a smart bet, while studying telephone repair a dead end.

What remains unknown, however, is whether the United States will be able to leverage tomorrow’s innovations into millions of jobs.

In the last decade, technological leaps in solar and wind energy, semiconductor fabrication and display technologies have created thousands of jobs. But while many of those industries started in America, much of the employment has occurred abroad. Companies have closed major facilities in the United States to reopen in China. By way of explanation, executives say they are competing with Apple for shareholders. If they cannot rival Apple’s growth and profit margins, they won’t survive.

“New middle-class jobs will eventually emerge,” said Lawrence Katz, a Harvard economist. “But will someone in his 40s have the skills for them? Or will he be bypassed for a new graduate and never find his way back into the middle class?”

The pace of innovation, say executives from a variety of industries, has been quickened by businessmen like Mr. Jobs. G.M. went as long as half a decade between major automobile redesigns. Apple, by comparison, has released five iPhones in four years, doubling the devices’ speed and memory while dropping the price that some consumers pay.

Before Mr. Obama and Mr. Jobs said goodbye, the Apple executive pulled an iPhone from his pocket to show off a new application — a driving game — with incredibly detailed graphics. The device reflected the soft glow of the room’s lights. The other executives, whose combined worth exceeded $69 billion, jostled for position to glance over his shoulder. The game, everyone agreed, was wonderful.

There wasn’t even a tiny scratch on the screen.

http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-mid dle-class.html?pagewanted=1&_r=2&ref=general&src=me


 

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Zen Peach



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  posted on 1/23/2012 at 03:15 PM
From what's been coming to light lately, Americans who purchase China made goods are contributing to what I think amounts to human rights violations. I'm glad I don't have anything made by Apple...of course they're not the only offenders....I'm sure I'm typing this on an HP made over there too.

 

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  posted on 1/23/2012 at 03:38 PM
For all the Steve Jobs idolatry, in his final months he told Obama that the US must become business friendly like China. I guess that means getting 30K "troops" overnight into a Barracks to assemple I-Phones - critical to American survival
 

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  posted on 1/23/2012 at 03:51 PM
quote:
For all the Steve Jobs idolatry, in his final months he told Obama that the US must become business friendly like China. I guess that means getting 30K "troops" overnight into a Barracks to assemple I-Phones - critical to American survival


I think that part of the article struck me the most. We can't compete with that. We just can't. No amount of tax breaks or subsidies or bitching about regulations can change that. American workers wouldn't do that. I honestly don't know if that's a good or bad thing.

quote:
“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.”



That's all it, right there. Love it or hate it, that's the truth.

 

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  posted on 1/23/2012 at 04:10 PM
quote:
quote:
For all the Steve Jobs idolatry, in his final months he told Obama that the US must become business friendly like China. I guess that means getting 30K "troops" overnight into a Barracks to assemple I-Phones - critical to American survival


I think that part of the article struck me the most. We can't compete with that. We just can't. No amount of tax breaks or subsidies or bitching about regulations can change that. American workers wouldn't do that. I honestly don't know if that's a good or bad thing.

quote:
“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.”



That's all it, right there. Love it or hate it, that's the truth.


American Companies all over saying "our only obligation is to our shareholder." Financial companies saying "the bottom line is the only thing that is important." Yet, when the economy tanked in 2008 the taxpayers came to the rescue. We can't have it both ways. Unless we become protectionistic in some ways and take a decrease in our standard of living we are doomed. And, I fear, with our debt to China we may be beyond rescue.

 

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  posted on 1/23/2012 at 04:11 PM
It basically breaks down to paying slave wages overseas as opposed to paying a living wage here. Americans aren't gonna live on work sites in crowded dormitories to be on call for 12 hour shifts no matter how many biscuits and tea you give them on the way to their work stations. Face it, bottom line it is cheaper and more profitable for Apple and their shareholders. They could give two $hits about middle class American workers. It is the Gorden Gekko mentality that has taken over corporate America. Once the cat was out of the bag and companies started figuring out how to circumvent workers rights issues by sending jobs overseas where people are willing to work for slave wages, live in dormitories on work sites, and be at beckons call for a biscuit and cup of tea those jobs were gone. And Jobs is right, those jobs will never come back until American workers lower their standards and accept being paid non living slave type wages for their labor. This is not the American way or the mentality that built this country but hey, if they can get away with it they will. Why did Gorden Gekko break up Blue Star Airlines???? Because he could!!!! It's all about profits and shareholders. They could care less about American workers and that is why I think any already profitable American company who outsource American jobs should be taxed massively!!! Instead they get rewarded with lower tax rates and more loopholes to jump through. God bless America.

 

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  posted on 1/23/2012 at 04:45 PM
quote:
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.


this says it all

 

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  posted on 1/23/2012 at 05:09 PM
I read this over the weekend and found it as interesting as many of you have.

The first thing that stunned me was that Obama even had to ask Jobs if the phones could be made here. Proves conclusively - as if more proof was needed - that he's out of touch with our economy, our industry, and our competitors.

While I agree with the comments of many here about the Chinese ability to put scores of workers to task under conditions we would find intolerable, I don't believe this means we can't compete. Computer-aided assembly levels the playing field, and much of this kind of work is already at, or headed in that direction. Even with all that manpower at their fingertips, the President of Foxxcon said a year ago that their goal was to rapidly expand the manufacture of these products by automated methods, and drastically reduce their workforce.

What was really telling was not the article, but the comments afterward. So many commented that Apple should have punishing taxes levied against them for exporting jobs. Yeah, that's the ticket. Then watch Apple world headquarters move overseas too. That'll teach 'em!

 

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  posted on 1/23/2012 at 05:09 PM
quote:
quote:
For all the Steve Jobs idolatry, in his final months he told Obama that the US must become business friendly like China. I guess that means getting 30K "troops" overnight into a Barracks to assemple I-Phones - critical to American survival


I think that part of the article struck me the most. We can't compete with that. We just can't. No amount of tax breaks or subsidies or bitching about regulations can change that. American workers wouldn't do that. I honestly don't know if that's a good or bad thing.



That's all it, right there. Love it or hate it, that's the truth.


Dead nuts on right there.

Company housing and company script were things that my grandfather could describe, but not you or I.

The "living wage" mantra is also dead. You go to the marketplace, you look for the best deal. There are people swimming the Rio Grande in droves to live on the wage to which we turn up our nose.

Myself, I'm just grateful I've survived to this point with what I do have, but I am very concerned about the next few years.

 

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  posted on 1/23/2012 at 05:16 PM
quote:
I read this over the weekend and found it as interesting as many of you have.

The first thing that stunned me was that Obama even had to ask Jobs if the phones could be made here. Proves conclusively - as if more proof was needed - that he's out of touch with our economy, our industry, and our competitors.

While I agree with the comments of many here about the Chinese ability to put scores of workers to task under conditions we would find intolerable, I don't believe this means we can't compete. Computer-aided assembly levels the playing field, and much of this kind of work is already at, or headed in that direction. Even with all that manpower at their fingertips, the President of Foxxcon said a year ago that their goal was to rapidly expand the manufacture of these products by automated methods, and drastically reduce their workforce.

What was really telling was not the article, but the comments afterward. So many commented that Apple should have punishing taxes levied against them for exporting jobs. Yeah, that's the ticket. Then watch Apple world headquarters move overseas too. That'll teach 'em!


The first thing you noticed was a third hand account of something Obama said? And they call me partisan...

No, sorry. Eliminate business taxes, erase all regulations and kill all the liberals that get in the way. We can't compete with this.

 

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  posted on 1/23/2012 at 05:26 PM
quote:
quote:
quote:
For all the Steve Jobs idolatry, in his final months he told Obama that the US must become business friendly like China. I guess that means getting 30K "troops" overnight into a Barracks to assemple I-Phones - critical to American survival


I think that part of the article struck me the most. We can't compete with that. We just can't. No amount of tax breaks or subsidies or bitching about regulations can change that. American workers wouldn't do that. I honestly don't know if that's a good or bad thing.



That's all it, right there. Love it or hate it, that's the truth.


Dead nuts on right there.

Company housing and company script were things that my grandfather could describe, but not you or I.

The "living wage" mantra is also dead. You go to the marketplace, you look for the best deal. There are people swimming the Rio Grande in droves to live on the wage to which we turn up our nose.

Myself, I'm just grateful I've survived to this point with what I do have, but I am very concerned about the next few years.


just wait until you join the ranks of retired Americans that the 1% is trying to squeeze every buck out of with increased burdens of drug and energy and food costs driven up by the system the 1% control.
Cost driven up by protected drug markets with price fixing and by speculation of the commodity markets, not by any supply demand or cost basis.

Maybe then you'll be ready to eat the rich.





 

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  posted on 1/23/2012 at 05:26 PM
quote:
kill all the liberals that get in the way


now this would lower the amount of the unemployed

wott a boost to the system

 

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True Peach



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  posted on 1/23/2012 at 05:28 PM
When governments like China SUBSIDIZE, to the point of giving certain businesses a BLANK CHECK, there is NO WAY we can compete with a nation that has an unlimited supply of labor.

However the Right will blame taxes and US labor for the exportation of US jobs in order to obtain even more tax breaks, none of which is passed onto either US workers or customers.

America is cynically getting PLAYED and GAMED by Corporate America which is playing the victim card in order to reward a very few, as usual.

Last week I read some letters in the Milwaukee Journal-Sentinel after GE Healthcare, which is HQ'ed in Waukesha, WI and one of the largest employers in the state, announced last July that it was relocating its entire X-Ray business to China. They also announced "no jobs would be lost." In my 9 years there EVERY time they made that announcement, heads rolled. And not just a few.

Someone, an ex-GE employee, wrote in that his job had been outsourced to India, but that after 18 months those jobs came back because they simply couldn't perform at the level necessary. Gee, bet that made him feel better.... at one point in my career there I was training people that had been sent over from India but not to worry, that "they weren't going to take YOUR job." Right. I got the hell out of that department and went into sales.

And all this from Jeff Immelt, who is SUPPOSED to be Obama's "Business Liaison" and who is supposed to be strategizing with him on HOW TO KEEP JOBS HERE. Obama, once again, is getting PLAYED by corporate America. He is basically their hand-puppet and either doesn't even know it or does but doesn't care. I'm thinking the latter. Appearances are everything, after all. As is lip-service and window-dressing.

I hope that all of Apple's employees, investors and customers are buckled in, because they have at most 5 years - MAYBE 10 - before the effects of the Chinese stealing their technological secrets will begin to be felt and their market share begins to erode.

At least in America, even if you leave the latest Smartphone prototype on a BAR there won't be competitors churning out clone knockoffs a week later. After all, we DO have trademark, patent and copyright infringement laws here. They don't in China.

Gee, I wonder WHY the Chinese government subsidizes cutting-edge companies there? Because the ROI is so immediate - and huge. The benefits to the state are incalculable...

It'll just be a matter of time before Apple regrets making this decision. As usual, short-term profits trump long term security....

Karma is a BITCH.

 

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  posted on 1/23/2012 at 05:29 PM
quote:
The first thing that stunned me was that Obama even had to ask Jobs if the phones could be made here. Proves conclusively - as if more proof was needed - that he's out of touch with our economy, our industry, and our competitors.

He didn't ask if, he asked what it would take. Not a bad question. The answer is probably more difficult than he'd like, but I don't think it shows he's out of touch at all. If everyone would participate in a very frank discussion around these topics, we might actually get somewhere.

 

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This one goes to eleven...

 

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  posted on 1/23/2012 at 05:30 PM
And it is not about making the best product at Apple. They do that.

But it is about making the most PROFITABLE product. even if that means moving manufacturing to
areas without labor and environmental protective laws.

shame on them.

Not at all the company Woz and Steve started from a garage.



 

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True Peach



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  posted on 1/23/2012 at 05:30 PM
quote:
I read this over the weekend and found it as interesting as many of you have.

The first thing that stunned me was that Obama even had to ask Jobs if the phones could be made here. Proves conclusively - as if more proof was needed - that he's out of touch with our economy, our industry, and our competitors.

While I agree with the comments of many here about the Chinese ability to put scores of workers to task under conditions we would find intolerable, I don't believe this means we can't compete. Computer-aided assembly levels the playing field, and much of this kind of work is already at, or headed in that direction. Even with all that manpower at their fingertips, the President of Foxxcon said a year ago that their goal was to rapidly expand the manufacture of these products by automated methods, and drastically reduce their workforce.

What was really telling was not the article, but the comments afterward. So many commented that Apple should have punishing taxes levied against them for exporting jobs. Yeah, that's the ticket. Then watch Apple world headquarters move overseas too. That'll teach 'em!


So, Rich, of course American workers should be willing to work for $5 a day in order to "compete".....are you sure Obama isn't the only one who is "out of touch?"

 

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  posted on 1/23/2012 at 05:33 PM
quote:
quote:
kill all the liberals that get in the way


now this would lower the amount of the unemployed

wott a boost to the system


Only you could get away with saying something like this and make me laugh.....

 

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Zen Peach



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  posted on 1/23/2012 at 05:34 PM
quote:
quote:
quote:
kill all the liberals that get in the way


now this would lower the amount of the unemployed

wott a boost to the system


Only you could get away with saying something like this and make me laugh.....


Eff Dan

 

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  posted on 1/23/2012 at 05:37 PM
brofan, check yer PMs

 

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  posted on 1/23/2012 at 05:42 PM
quote:
quote:
The first thing that stunned me was that Obama even had to ask Jobs if the phones could be made here. Proves conclusively - as if more proof was needed - that he's out of touch with our economy, our industry, and our competitors.

He didn't ask if, he asked what it would take. Not a bad question. The answer is probably more difficult than he'd like, but I don't think it shows he's out of touch at all. If everyone would participate in a very frank discussion around these topics, we might actually get somewhere.


stop making sense

 

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  posted on 1/23/2012 at 05:51 PM
I was reading about George Eastman the other day. He wasn't pro union, but when Kodak was worth 10 Million he gave 1/3 of the stock to his employees. Didn't Jobs fire one major creative mind at Apple just before it went public?

Money has always been very important; over the last 30 years it has become the only think. My dad worked for a major garment manufacture which employed thousands in NC. The jobs have all since gone overseas as the company 9as they all did) went bankrupt. I still remember the boss (worth about 50 million in the 1980's) keeping a senile salesman on staff when he was non-productive. Told me that he coudn't fire him; sending him home to die. He said "How much is this really costing me?" Doesn't happen today in corporate America."

 

Zen Peach



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  posted on 1/23/2012 at 06:01 PM
quote:
quote:
quote:
quote:
For all the Steve Jobs idolatry, in his final months he told Obama that the US must become business friendly like China. I guess that means getting 30K "troops" overnight into a Barracks to assemple I-Phones - critical to American survival


I think that part of the article struck me the most. We can't compete with that. We just can't. No amount of tax breaks or subsidies or bitching about regulations can change that. American workers wouldn't do that. I honestly don't know if that's a good or bad thing.



That's all it, right there. Love it or hate it, that's the truth.


Dead nuts on right there.

Company housing and company script were things that my grandfather could describe, but not you or I.

The "living wage" mantra is also dead. You go to the marketplace, you look for the best deal. There are people swimming the Rio Grande in droves to live on the wage to which we turn up our nose.

Myself, I'm just grateful I've survived to this point with what I do have, but I am very concerned about the next few years.


just wait until you join the ranks of retired Americans that the 1% is trying to squeeze every buck out of with increased burdens of drug and energy and food costs driven up by the system the 1% control.
Cost driven up by protected drug markets with price fixing and by speculation of the commodity markets, not by any supply demand or cost basis.

Maybe then you'll be ready to eat the rich.








They just came out with a "generic" Lipitor. The co-pay for the generic is more than for the original Lipitor because big pharma still has the rights to the manufacture of it, and the insurance company made it a top tier because it is still technically "brand name" even though the "generic" retail is $17 less than the original. Until other manufacturers are able to produce it and compete price wise, it is what it is. And big pharma is in bed with the carriers.

My costs for prescription medicine this past year were 5x what they were the previous year. Maybe I should say I am frightened instead of just concerned.

There's some tissue you can clean up with on the counter, hoss.

 

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  posted on 1/23/2012 at 06:02 PM
quote:
well, this just depressed the heck outta me. How did we get here? What occupations with pay that is competitive with the cost of living are safe from robots, self-checkouts & foreign labor while being able to weather a recession and don't involve investing a mortgage-worth pile of money in education? Being a politician?


I think you just hit the nail on the head, Charlie. Unfortunately.

 

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Maximum Peach



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  posted on 1/23/2012 at 06:02 PM
quote:
quote:
The first thing that stunned me was that Obama even had to ask Jobs if the phones could be made here. Proves conclusively - as if more proof was needed - that he's out of touch with our economy, our industry, and our competitors.

He didn't ask if, he asked what it would take. Not a bad question. The answer is probably more difficult than he'd like, but I don't think it shows he's out of touch at all. If everyone would participate in a very frank discussion around these topics, we might actually get somewhere.
If the article can be believed, the question was: "Why can’t that work come home?"

Which is slightly different than either of us expressed it.

I can easily list multiple reasons, and I'm not remotely an expert, or have the staff of advisers feeding me info that Obama has.

If I were in his position and wanted a real discussion, I'd offer a list of possible improvements (indicating that I at least knew something of the topic) and then ask would any of those help, or could there be others that would improve our competitive position. Obama didn't want to know the real answers, though given the fact that our economy is our biggest problem right now, he should have known. It demonstrates how out of touch he is.

He doesn't know, or he doesn't care to know, because that's not on his agenda. His agenda is the retention of power and control, not the success of others.

 

____________________
Obamacare: To insure the uninsured, we first make the insured
uninsured and then make them pay more to be insured again,
so the original uninsured can be insured for free.

 

Maximum Peach



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  posted on 1/23/2012 at 06:06 PM
quote:
quote:
I read this over the weekend and found it as interesting as many of you have.

The first thing that stunned me was that Obama even had to ask Jobs if the phones could be made here. Proves conclusively - as if more proof was needed - that he's out of touch with our economy, our industry, and our competitors.

While I agree with the comments of many here about the Chinese ability to put scores of workers to task under conditions we would find intolerable, I don't believe this means we can't compete. Computer-aided assembly levels the playing field, and much of this kind of work is already at, or headed in that direction. Even with all that manpower at their fingertips, the President of Foxxcon said a year ago that their goal was to rapidly expand the manufacture of these products by automated methods, and drastically reduce their workforce.

What was really telling was not the article, but the comments afterward. So many commented that Apple should have punishing taxes levied against them for exporting jobs. Yeah, that's the ticket. Then watch Apple world headquarters move overseas too. That'll teach 'em!
So, Rich, of course American workers should be willing to work for $5 a day in order to "compete".....are you sure Obama isn't the only one who is "out of touch?"
Where exactly do I say anything remotely like that Rich?

 

____________________
Obamacare: To insure the uninsured, we first make the insured
uninsured and then make them pay more to be insured again,
so the original uninsured can be insured for free.

 
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