Pegatron Ready to Build iPhones in the U.S. If Apple 'Is Willing to Absorb the Costs'

[kobalap]

Ahh..the qualities of being American.... its all OK so long as I am not impacted.

This is typical liberal thinking. Superimposing what your values, your wants and desired on other people.

Rust belt states voted for Trump because they want manufacturing back in Ohio, Wisconsin, Michigan and Pennsylvania thinking that 1) those jobs could be brought back and 2) those jobs would pay a decent wage.

Its what they voted for. If the jobs don't come back or they come back at the cost of low wages and/or localized pollution, why would I get in the way? I don't live in those areas.

 

[Zaqfalcon]

I'd be interested to know how much of a factor transportation costs play into this, and what difference a carbon tax might make.

 

[Zombie Acorn]

I can see it now. "Tim, by building iPhones on our soil, we'll have to lower our margins from 54% to 52% on every iPhone sold and Trump isn't open to any tax breaks to do so...oh and we can only build 950K iPhones a day instead of 1.1 million due to weak manufacturing skills in our workforce"

Tim, "Yeah no."

The robots will take care of it.

 

[sir1963nz]

This is typical liberal thinking. Superimposing what your values, your wants and desired on other people.

Rust belt states voted for Trump because they want manufacturing back in Ohio, Wisconsin, Michigan and Pennsylvania thinking that 1) those jobs could be brought back and 2) those jobs would pay a decent wage.

Its what they voted for. If the jobs don't come back or they come back at the cost of low wages and/or localized pollution, why would I get in the way? I don't live in those areas.

Which is what I said "its all OK so long as I am not impacted."

 

[jlc1978]

How do you think people who didn't have the skills got the skills? Pay more or train people on the job.

Easier said than done. Sure you can take someone with some experience but starting from zero is expensive, time consuming and you don't know if they have the ability to do the work. A big company can afford to train but most firms can't. Community colleges can provide training in conjunction with local companies snd some already do.

 

[sir1963nz]

I'd be interested to know how much of a factor transportation costs play into this, and what difference a carbon tax might make.

How many parts do you think there are in a phone ?
Where do you think those parts come from, its certainly not from Apple.
Likewise, the raw materials, they come from all over the world, do you really think shipping tons of dirt from Africa so you can refine it to get 10lb of rare earth metals makes sense carbon tax wise ?

Just the connectors for example requires someone to make the metal for the pins, someone else to make the plastics, someone else to make the cables and thats before you even get to making the connector.

Then who can make it cheaper the company making stuff for 100 different products or the company who buys 1% of the same raw materials to manufacture for 1 product.

Supply lines, just in time manufacturing, lead times, etc etc etc is an incredibly complex problem.

Simply saying "Apple should make phones in the USA" is right up there with "If we flap our hands fast enough we won't need to fly on planes"

 

[JoEw]

It's a perpetual cost.

• An investigation into labor practices at Chinese factories run by Foxconn and Pegatron, which make Apple products, has found that laborers work over 60 hours a week and make less than two dollars an hour
• With overtime accounted for, the factory's workers earn about $753 in monthly wages.

I am unwilling, as a tax payer, an Apple stockholder or a customer, to pull money out of my pockets to move manufacturing of Apple products into the US.
[doublepost=1489611915][/doublepost]

They can come back. But everyone should be ready for federal minimum wage levels to be adjusted - to something like $3/hr.

I have no problems with that - as a consumer, stockholder or as a tax payer.

Even IF we only paid out 3 dollars an hour, cost of manufacturing goes up 50% right there. Not to account for the cost to make the plant here in the USA, and ship the supply chain to the USA to make it here.

Why are we trying to compete with countries still stuck a century ago? Especially when automation looming ahead that is poised to disrupt these jobs anyway?

 

[sir1963nz]

How do you think people who didn't have the skills got the skills? Pay more or train people on the job.

Problem is, for every trainee you have you need about 50% of a trained person to supervise them, especially in their first year or two.

So, if you say were an electrical firm with 2 tradesmen, to have an apprentice and keep up with the same work loads you would need a 3rd tradesman, thats expensive for the first couple of years until the apprentice starts earning their keep.

And thats why firms want tradesmen, not apprentices, its a competitive environment and if someone else will pay the costs of training, they will happily recruit tradesmen from those companies and forgo the expense.
[doublepost=1489623038][/doublepost]

Even IF we only paid out 3 dollars an hour, cost of manufacturing goes up 50% right there. Not to account for the cost to make the plant here in the USA, and ship the supply chain to the USA to make it here.

Why are we trying to compete with countries still stuck a century ago? Especially when automation looming ahead that is poised to disrupt these jobs anyway?

And the cost of electricity/power comes into play, as does the cost of shipping materials from one place to another.
Then there is the cost of land, land taxes, etc etc etc.

So China, who has invested will continue to invest and reap the benefits because the cost of building infrastructure from scratch is expensive and too big a hurdle.

Robots will still not bring jobs/manufacturing back to the USA.

The ONLY way it will come back to the US is if tax payers shell out billions of tax dollars to subsidise it and even then few if any will get a job.

 

[Nunyabinez]

Rice Cakes and Proper suicide tools are payment enough eh? You would be surprised what can be made here, if manufacturers want it bad enough.
[doublepost=1489608222][/doublepost]


Never heard of a right to work state?
[doublepost=1489608350][/doublepost]

No one bothers with apprenticeships? Train your people.

Thanks for reminding me that there is an ignore feature on this web site.

 

[kobalap]

Even IF we only paid out 3 dollars an hour, cost of manufacturing goes up 50% right there. Not to account for the cost to make the plant here in the USA, and ship the supply chain to the USA to make it here.

Why are we trying to compete with countries still stuck a century ago? Especially when automation looming ahead that is poised to disrupt these jobs anyway?

That's a question for the people of Michigan, Ohio, Wisconsin, Pennsylvania, North Carolina....

 

[flyinmac]

America workers? They are plenty of Americans willing to have factory jobs regardless of pay.

The problem is that we have a federal minimum wage. So the transition is that there aren't any ways to run a legal sweatshop in the United States.

Lots of Americans eager to work. But the cost of living in the United States is so high that you can't work for 50 cents an hour.

And even if you were willing to work for such low wages, the government wouldn't allow it.

 

[MadeTheSwitch]

I think what he was trying to imply is that Pegatron is capable of scaling up and down as needed and is ready and capable of setting up a factory wherever, as long as the numbers are right. As CEO, he's adhering to the tactic of "Always be selling yourself."

Must be some serious language barrier then because that article makes it sound like the production lines are already in place. It takes a long time to build a big enough factory and tool up the line along with training workers. Even if they started today, I would estimate at least a two year ramp up period and that's being very generous. It would likely take much longer.

 

[smallcoffee]

Easier said than done. Sure you can tske someone with some experience but staring from zero is expensive, time consuming and you don't know if they have the ability to do the work. A big company can afford to train but most girms can't. Community colleges can provide training in conjunction with local companies snd some already do.

It is harder for a smaller company, I'll grant you that, but not impossible.

Also, why are you offloading the cost to community colleges? You need the labor.

 

[sir1963nz]

That's a question for the people of Michigan, Ohio, Wisconsin, Pennsylvania, North Carolina....

Who even said the new jobs were ever going to go to those states ?

The parts need to come from China alway so having the factory on the western seaboard makes far more sense than in the middle of the country.
[doublepost=1489628863][/doublepost]

America workers? They are plenty of Americans willing to have factory jobs regardless of pay.

No there's not. These are not jobs like restocking shelves at walmart, these jobs require intelligence, education and skills, and these people already have jobs in the automative, aircraft, space and other high tech industries who are already paying a LOT more than minimum wage.
[doublepost=1489629064][/doublepost]

It is harder for a smaller company, I'll grant you that, but not impossible.

Also, why are you offloading the cost to community colleges? You need the labor.

Because modern technology requires educated people, there is a huge amount of theory in all trades which needs to be learnt , its the practical side of the education that employers supply.

 

[Millah]

How do you think people who didn't have the skills got the skills? Pay more or train people on the job.

My company has been in business for 40 years. But thanks for the advice. As if that hadn't occurred to us .

That's exactly what we are forced to do now. But guess what, that can only get you so far, and unfortunately I have an operation to keep running on time. If I had MORE skilled workers to depend on, I could afford to lose some from production to spend the time necessary to train properly. Otherwise, it slows down production in a way I can't afford, and is simply cost prohibitive. The example of seeking a custom tool and die maker is not something I can teach someone in 1 year. I can't teach someone to think like a machinist. I can only teach them how to read drawings and operate machines. Designing custom tools takes problem solving and intuition.

Another example, precision welders. I can find any old welder who can weld me big plates and pipes together. However, it's not as easy to find someone who can weld thin gage material (.032 Thk Aluminum) and hold tolerances of +/- .005", let alone without melting or distorting the assembly. Not to mention, design and build his own fixtures as he sees necessary for the job. That requires true skill, and experience.

Also, In case you didn't read my post fully, wages have nothing to do with it. My employees who are my go-to guys make healthy salaries. Even my shop help gets paid highly competitive wages.

But I know, everyone who isn't in the field thinks there's always an easy answer. The US is lacking in skilled trades, bottom line. There's nothing wrong with that, but it's not productive to blame China when Americans decided to move away from these skills

 

[JoEw]

Rice Cakes and Proper suicide tools are payment enough eh? You would be surprised what can be made here, if manufacturers want it bad enough.
[doublepost=1489608222][/doublepost]


Never heard of a right to work state?

Show me one "right to work" state with 250,000 people in a central location that is ready to work 60 hours a week making minimum wage. I'm glad we let the market handle these logistics.

That's a question for the people of Michigan, Ohio, Wisconsin, Pennsylvania, North Carolina....

actually it's not up it's up to Apple and shareholders.

 

[thekev]

The problem is that we have a federal minimum wage. So the transition is that there aren't any ways to run a legal sweatshop in the United States.

Lots of Americans eager to work. But the cost of living in the United States is so high that you can't work for 50 cents an hour.

And even if you were willing to work for such low wages, the government wouldn't allow it.

China doesn't have workers available at 50 cents an hour. It has undergone significant inflation in the past 15 or so years.

 

[The-Real-Deal82]

You are not willing to pay more money to bring manufacturing back to the US and make America great again?

Those of us who don't live in America certainly aren't willing, no. If this already expensive product sees a significant price hike, I simply won't buy it. It will no longer be competitive on price therefore becomes less desirable. I couldn't give a toss about making America great in all honesty.

 

[The-Real-Deal82]

I'd be interested to know how much of a factor transportation costs play into this, and what difference a carbon tax might make.

Well it's going to increase quite a bit. All the little components made in China, Korea etc shipped to the US for assembly and then shipped around the world. I get the impression from some here that they don't realise the iPhone is used outside of the US and that they are the more important market.

 

[BvizioN]

I think this cant be good for anyone. It will only increase the cost of the devices, particularly for us outside USA. Leave this to the specialists. All American workers want to do is moan and sue

 

[sir1963nz]

I think this cant be good for anyone. It will only increase the cost of the devices, particularly for us outside USA. Leave this to the specialists. All American workers want to do is moan and sue

Apple would STILL make phones for the international market in China. The rest of the world sees "USA first" as "USA last" , we owe no loyalty to "Made in the USA" so we are not going to accept any cost increases.

Apple will have a problem, do they charge their US customers more and have those close to the Canadian boarder bringing phone back with them.

 

[nick42983]

50's and 60's? We had manufacturing jobs here aplenty as late as the 90's. We are still hemorrhaging manufacturing jobs. There are articles describing in painful detail recent accounts of workers being asked to train the foreign replacements who will be taking their jobs when factories are relocated to other countries.

Meanwhile, I've been reading article after article on my Apple Newsfeed about my generation and younger dying off due to drug use. There was an article yesterday about how police are having to become social workers in a sense, to deal with the explosive drug problem in many areas of the country. I don't think that the loss of jobs and the growing drug problem are unrelated, given that the problems seem worse in former industrial towns.

I'm the daughter of an Asian immigrant, but that immigrant (now a citizen) raised me to "be American and buy American" when feasible. I've kept to cars manufactured right here in the US. And while I have done my fair share of complaining about the rising costs of iPhones, I would feel happy to buy one at a premium that was made in my country. Providing that the quality is up to standard and the NSA doesn't load it up with spyware ala Cisco : https://www.techdirt.com/articles/2...ain-about-nsa-intercepting-its-hardware.shtml


I can't ever say I'm always thrilled with our government, especially the part of it that is not elected and beyond any checks and balances on its power and reach. But I do care about my fellow citizens and our problems. I care about other parts of the world, too, but it's easier to start with the problems in your own backyard. And it's possible to sometimes address both.

I'm older and at a place in life where I can do this. I might not always be. And it certainly would have been a financial hardship when I was in my thirties and younger. So I am understanding that this is not an appealing idea to a lot of people or to Apple. I'm just speaking for myself here, of what I'd like to see and be able to do. An ideal. But I know we don't live in a world where ideals can always be realized. It is what it is.

Great post!!

 

[jlc1978]

It is harder for a smaller company, I'll grant you that, but not impossible.

For many it is and thus must try to hire someone away from somewhere else or let a job go unfilled.

Also, why are you offloading the cost to community colleges? You need the labor.

For the same reasons many companies hire college graduates - it signals a basic set of skills and ability to complete things. The CC essentially acts as an initial screen to identify worthwhile candidates for jobs. If someone wants to learn those skills this offers a way for them to demonstrate they have them and can be trained in more sophisticated ones. The cost is borne by the student as an investment in their future, the CC provide a cost effective way to spread the fixed costs over a larger base and certify a basic knowledge level.

By creating partnerships with local businesses everyone wins - people get good paying jobs, CC get students, and employers get qualified employees.

Unless we rethink vocational training we will have problems rebuilding a manufacturing base.
[doublepost=1489663489][/doublepost]

And thats why firms want tradesmen, not apprentices, its a competitive environment and if someone else will pay the costs of training, they will happily recruit tradesmen from those companies and forgo the expense.

Which is why many firms won't because once a person is trained someone else can hire them away for a few dollars more since they don't have to recoup the training costs.

 

[smallcoffee]

My company has been in business for 40 years. But thanks for the advice. As if that hadn't occurred to us .

That's exactly what we are forced to do now. But guess what, that can only get you so far, and unfortunately I have an operation to keep running on time. If I had MORE skilled workers to depend on, I could afford to lose some from production to spend the time necessary to train properly. Otherwise, it slows down production in a way I can't afford, and is simply cost prohibitive. The example of seeking a custom tool and die maker is not something I can teach someone in 1 year. I can't teach someone to think like a machinist. I can only teach them how to read drawings and operate machines. Designing custom tools takes problem solving and intuition.

Another example, precision welders. I can find any old welder who can weld me big plates and pipes together. However, it's not as easy to find someone who can weld thin gage material (.032 Thk Aluminum) and hold tolerances of +/- .005", let alone without melting or distorting the assembly. Not to mention, design and build his own fixtures as he sees necessary for the job. That requires true skill, and experience.

Also, In case you didn't read my post fully, wages have nothing to do with it. My employees who are my go-to guys make healthy salaries. Even my shop help gets paid highly competitive wages.

But I know, everyone who isn't in the field thinks there's always an easy answer. The US is lacking in skilled trades, bottom line. There's nothing wrong with that, but it's not productive to blame China when Americans decided to move away from these skills

I'm not questioning your business or that you have tried to do anything to solve your problem. Why have Americans moved away from such jobs?

 

[Tycho24]

The problem is that we have a federal minimum wage. So the transition is that there aren't any ways to run a legal sweatshop in the United States.

Lots of Americans eager to work. But the cost of living in the United States is so high that you can't work for 50 cents an hour.

And even if you were willing to work for such low wages, the government wouldn't allow it.

The actual "problem" is that, in China, these are GOOD jobs, that people are eager to do & can take pride in.
They have created a society where working quickly & meticulously is a badge of honor. One has this job & wants to work it as proficiently as they can... until retirement.

Whereas, rote work in America.... particularly in the $12-$15/hr range- is considered menial, trivial, & base. A large number of those that perform such tasks often do so begrudgingly, with a surly attitude of "I can't wait to move on to something else", but frustrated that they truly can't be arsed to put in the effort, or simply aren't qualified to do something else; so they skeet by, doing the least amount possible whilst keeping their job.

So: would I like to pay less for a product happily & meticulously manufactured by a team of people, well-suited to assemble such; or more for the same product shoddily & angrily slapped together by people unhappy with their lot in life? Ummmmm... the former!

To be clear: I have a LOT of civic pride & want good jobs in this country; I simply think putting huge factories that will produce massive amounts of pollution (and will likely be fully automated in the next ten years, requiring a VERY small specialized support staff) in America is a horrible idea, with no benefits whatsoever to the American people.