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

[jlc1978]

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.

China followed the model of most developing countries in Asia did throughout the post WWII era. When you have a cheap source of labor you start by building low value products for export because you are cheap as a first step. Then you start to move up the chain to more sophisticated production as other nations with cheaper labor start to exert pressure on your ability to manufacture cheap goods and your labor costs rise as workers expectations for wages rise as the supply tightens. the goal is to move to the top of manufacturing pile by developing the capability to design and produce your own high end products (and eventually outsource production to cheap labor locations). As a result, what was a good job is no longer attractive and production starts to move to cheaper labor locations. China has a lot of labor supply so they can compete a lot longer at the low end, but that comes at a social cost the leaders may find tough to pay.

Chinese culture plays a big role in their success, I agree with that but as the people get wealthier the cultural norms will change. China is already seeing that and it scares the leadership because it threatens teh political stability needed o stay in power.
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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?

I think it is because we undervalue skilled labor. I grew up around mechanics and recognize the skill and effort needed to be a good one; unfortunately many people simply see it as a job that doesn't need a college education, a viewpoint taht often plays out for other skilled tares as well.

A college professor of mine put it best:

"A society that exalts shoddy philosophy while denigrating good plumbing is in trouble. Neither its ideas nor pipes will hold water."

 

[smallcoffee]

I think it is because we undervalue skilled labor. I grew up around mechanics and recognize the skill and effort needed to be a good one; unfortunately many people simply see it as a job that doesn't need a college education, a viewpoint taht often plays out for other skilled tares as well.

A college professor of mine put it best:

"A society that exalts shoddy philosophy while denigrating good plumbing is in trouble. Neither its ideas nor pipes will hold water."

So when you say we undervalue skilled labor what do you mean? As a society? As a business?

So I'm not saying this to you about your business in particular, but it still seems to me that if this skilled labor is indeed this valuable, that wages should rise. If it is in that critical of a need, why is it impossible for a business to train such a person? I applaud efforts that get community colleges to help students learn crafts, but at the same time if they are paying tuition you're just offloading the cost of training to the person that is being trained. This of course is a critique that holds for universities as well (though I don't believe their purpose is for training workers).

One option is creating an employment contract where you pay for the training, and they have to work for you for x number of years so that you realize a return on your investment. That seems reasonable to me. If you rely on them training themselves, then what stops them from just joining the company with the highest salary after graduating anyway? Then you'll just have to increase your salary+benefits or not be able to hire the skilled labor you need.

It's a complicated problem, but I don't think that it's unsolvable.

 

[TechGeek76]

We made a conscious decision to offshore jobs to benefit our economy.

Who is "we"? I am sure the millions of people who lost jobs lost over the years to offshore made that conscious decision? Do you realize how stupid that sounds? The WORKERS didn't make that decision, government and the companies made that decision.

 

[jlc1978]

So when you say we undervalue skilled labor what do you mean? As a society? As a business?

As a society, as evidenced by the elimination of shop and voc ed from high schools and the push to go to college.

So I'm not saying this to you about your business in particular, but it still seems to me that if this skilled labor is indeed this valuable, that wages should rise.

I think you are confusing me with another poster who owns a shop. Yes, wages will rise as the labor market tightens.

If it is in that critical of a need, why is it impossible for a business to train such a person?

The cost to train and time it takes to get someone up to speed, which also drives costs. Large companies can afford to do it but a small firm often can't from a cost and staff perspective.

I applaud efforts that get community colleges to help students learn crafts, but at the same time if they are paying tuition you're just offloading the cost of training to the person that is being trained. This of course is a critique that holds for universities as well (though I don't believe their purpose is for training workers).

Workers always pay the cost of training, either directly to a school or by lower wages until the cost is recovered. TINSTAAFL

As for universities, that may not be the intent but for many the reality is it is the next step towards employment since many jobs require a degree.

One option is creating an employment contract where you pay for the training, and they have to work for you for x number of years so that you realize a return on your investment. That seems reasonable to me.

While some companies do that, labor laws make it hard to enforce them sometimes and what was enforceable today may not be tomorrow so the employer still assumes risk even in such a scenario. IINAL, but from my experience the period must be reasonable and that is up to a court to decide. Even so, if the person can't pay it back you could still win a hollow victory.

If you rely on them training themselves, then what stops them from just joining the company with the highest salary after graduating anyway? Then you'll just have to increase your salary+benefits or not be able to hire the skilled labor you need.

Generally they do, so if you want to hire them then you have to pay the market rate for the level of skill you want. In many fields companies hire away talent from companies known for developing it.

It's a complicated problem, but I don't think that it's unsolvable.

I agree, we just need the will to solve it, since it is a cultural, educational, and political issue. Some countries, such as Germany, have done it but there are problems with their approach, as I remember it, that would make it a hard sell in the US.

 

[smallcoffee]

As a society, as evidenced by the elimination of shop and voc ed from high schools and the push to go to college.



I think you are confusing me with another poster who owns a shop. Yes, wages will rise as the labor market tightens.



The cost to train and time it takes to get someone up to speed, which also drives costs. Large companies can afford to do it but a small firm often can't from a cost and staff perspective.



Workers always pay the cost of training, either directly to a school or by lower wages until the cost is recovered. TINSTAAFL

As for universities, that may not be the intent but for many the reality is it is the next step towards employment since many jobs require a degree.



While some companies do that, labor laws make it hard to enforce them sometimes and what was enforceable today may not be tomorrow so the employer still assumes risk even in such a scenario. IINAL, but from my experience the period must be reasonable and that is up to a court to decide. Even so, if the person can't pay it back you could still win a hollow victory.



Generally they do, so if you want to hire them then you have to pay the market rate for the level of skill you want. In many fields companies hire away talent from companies known for developing it.



I agree, we just need the will to solve it, since it is a cultural, educational, and political issue. Some countries, such as Germany, have done it but there are problems with their approach, as I remember it, that would make it a hard sell in the US.

Sorry for the confusion. Sometimes I rely on my phone. So I don't really disagree with anything you've said. But with that being said it kind of seems like a "well that's just too bad" scenario. I think businesses need to take the lead on this and assume the risk, or go out of business. If they aren't offering an attractive enough salary + benefits, then I'm not sure what else there is to do about it. Partnering with community colleges sounds like a good initiative, as does perhaps working with other businesses to create a cohort where businesses pool together to train people and diversify the risk and costs. Many avenues of approach.

You're somewhat correct about people bearing the cost of training, but I'm not sure if there are any readily available data for the difference in wages for training somebody and wages for somebody who has the equivalent experience and doesn't need trained.

 

[jlc1978]

Who is "we"? I am sure the millions of people who lost jobs lost over the years to offshore made that conscious decision? Do you realize how stupid that sounds? The WORKERS didn't make that decision, government and the companies made that decision.

Actually, all three did. Workers wanted salaries that drove costs above the competitive level, especially in labor intensive industries. People need a decent wage but when that wage is above what can be absorbed in the final price then manufacturing will either increase or move elsewhere. It doesn't have to be offshore, there's a reason new car plants opened in the south and not in the midwest; even in the US regions compete for jobs and offer tax breaks and lower wages to get jobs. That is why I find it funny when people believe a politician created jobs, no you simply lured them from next door by offering bigger incentives to locate where you are; if the company's investment is worthwhile they will do it and create jobs somewhere, you just became the cheapest location.

 

[jimmirehman]

Make way for the $2500 iPhone se

 

[jlc1978]

Sorry for the confusion. Sometimes I rely on my phone. So I don't really disagree with anything you've said.

No worries. I think we pretty much agree as well.

But with that being said it kind of seems like a "well that's just too bad" scenario. I think businesses need to take the lead on this and assume the risk, or go out of business. If they aren't offering an attractive enough salary + benefits, then I'm not sure what else there is to do about it. Partnering with community colleges sounds like a good initiative, as does perhaps working with other businesses to create a cohort where businesses pool together to train people and diversify the risk and costs. Many avenues of approach.

I agree - some sort of partnership is needed between businesses and education; to cover such things as defining the needed skills, providing on the job experience coupled with class room education, cost sharing, getting the needed infrastructure. Since companies ultimately need the labor I think they need to take the lead in developing consortiums, defining, developing and help finance such partnerships or else they risk, as you point out, going out of business or stop growing.

You're somewhat correct about people bearing the cost of training, but I'm not sure if there are any readily available data for the difference in wages for training somebody and wages for somebody who has the equivalent experience and doesn't need trained.

There are a number of academic studies, but Wisconsin has set out the delta in wages for apprentices vs skilled trades that is useful as an indicator of the skill premium. Without getting into the political issue of the government setting minimum wage rates, it shows the differential between training and skilled wages.

Ultimately, a company looks at the all in cost of an employee - wages, benefits, training, etc. and has a number they can afford. That is then apportioned between all the costs of an employee, wages being one of them. If you want more of one then you get less of the other.

 

[tshrimp]

Eh... not if it only creates a couple dozen jobs in a robotic Apple factory.

There needs to be 100,000 jobs created to fix infrastructure in this country. Bridge repair, road paving, grading and erosion control, etc.

Apple isn't gonna do that!

I didn't realize it only took 24 people to do all of Apples iPhone manufacturing. Talk about a streamlined company

 

[2010mini]

Who is "we"? I am sure the millions of people who lost jobs lost over the years to offshore made that conscious decision? Do you realize how stupid that sounds? The WORKERS didn't make that decision, government and the companies made that decision.

Really? The jobs that we originally offshore were low paying/low skilled jobs. The savings from that, if put to proper use would create higher paying higher skilled jobs. Instead we squandered it on wars and focused on Wall Street.

That stupidity lead to jobs being offshore that US workers actually wanted. One that required higher skills.

 

[Zaqfalcon]

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"

I'm aware of all of this thank you, I'm not a complete numpty. You infer I made a value judgement with my question, I did not, I'd merely like to know the answer. Please read before flying off the handle.

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

I have no particular interest in promoting the production of Apple products in the USA. I'm not American and don't live there. I have no affiliation (or irrational patriotism) with any country, the one I happen to be born in or that in which I choose to live. I work, pay taxes and use my vote and my voice to influence the way those taxes are spent, and my focus is a global and egalitarian one.

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.

Agreed, and I'm sure Apple are well aware of this and are probably more interested in developing the markets in the vicinity of manufacture.