Can America Make the iPhone? (Hint: It's Not About The Labor Cost)

Back in February, President Obama surprised Steve Jobs with a question of what it would take to make the iPhones in the United States, rather than China.

Jobs replied that the iPhone could never be made in the United States ... and no, it's not because American labor costs (in fact, labor cost is a tiny fraction of the cost of making an iPhone). It's because America simply doesn't have the manufacturing might anymore:

“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.”

Charles Duhigg and Keith Bradsher wrote this intriguing article over at The New York Times about the death of manufacturing and the disappearing American middle class - if you read only one thing today, make it this one: Link | TLDR? Here it is in video summary


Labor is a small part so if you got people to work got their asses moving not drinking coffee talking about bull**** and they would devolt real effort into the work then you could compete.
You could pay them a livable salary.
oh and drop the unions that take a chunk of money for "protection money" I mean dues.
I know that wording will not set well with some people.
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For all you commentors stating "no Crapple for me"... you do realise how big an Arse you sound by saying stupid comments like these?

Apple, Sony, HTC, Samsung, Pioneer, Sanyo et al use the same facility, so stop being so hypocritical about one comnpany that happens to be the most buzz worthly headline stealer at present.

Try researching before you all sound off like a bunch of children...

http://en.wikipedia.org/wiki/Foxconn#Major_customers
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Labor is only part of the picture - as mentioned, labor costs is only a fraction of the total cost of the iPhone even with American wages.

The other part is the supply chain. What China has been able to do is create an interconnected supply chain that no other country can match.
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It's not just about labor costs in chinese factories. It's also that the Chinese government is totalitarian. They can operate by fiat and set up factories on demand without any concern for things like the environment, zoning, or people who are already living there or using that land. You can't do that in the US where we have things like rights and private property.
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Twice we have heard about the workers at Apple plants threatening suicide, and some workers did go through with it.

This is s system that cannot last. This isn't an Apple issue, it is an industry issue. We can exploit cheap labor and treat people as slaves for just so long and then those workers will revolt.

So, teach the Chinese how to make our stuff, and one day they may decide to just make stuff for themselves and sell THEIR products to the rest of the world.
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Also relevant is this segment of "This American Life" -

http://www.thisamericanlife.org/radio-archives/episode/454/transcript

They work a Chinese hour, and a Chinese hour has 60 Chinese minutes, and a Chinese minute has 60 Chinese seconds. It's not like our hour. What's our hour now, 46 minutes? You know, you have a bathroom break, and you have a smoke break. If you don't smoke, there's a yoga break. This doesn't look anything like that. This looks like nothing we've seen in a century...
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As Miss C and ChrisFromFrance noted...it IS about labor costs.

It's not that you couldn't gather workers at odd hours and expect them to change an assembly line process, in the US. It's that it would be prohibitively expensive. Geez.
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Did anyone catch this part?

"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."

Those Chinese government subsidies are called "free trade".
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These are the same factories that had to add nets and fence to their rooftops to keep their slaves from jumping to their deaths. Is this what we want? For us, or for them?
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Graystone says, "But we DO THIS HERE, but with illegal immigrants."

Not only is that still not ok when it's done at a small scale by local businesses which struggle to make ends meet, but it's much worse when it's a single corporate entity controlling the fates of 700,000 factory workers world wide, and which boasts PROFITS of over $400,000 PER EMPLOYEE!
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I'm definitely on the 'working conditions' issue.. But we DO THIS HERE, but with illegal immigrants. A landscaping company I ran across bought an apartment complex on the shady side of town and FILLED it with mexican workers. So snow falls at 2am and he makes one call to a guy who speaks english. That guy then goes around the complex banging on doors until he's got 30 guys crammed in to three cars and off the go to shovel snow for the next 24 hours...

Pretty much identical to the above true story and probably not too far fetched for any factory until maybe World War 1. Remember folks, we've bombed our own people (as in flying planes dropping bombs) over labor disputes... The middle class was a tiny blip in history and one doubtful to return anytime soon in any country.
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Does anybody reading this blog have any desire to be one of the nameless workers that inhabit that factory? Does anybody have an ethical issue with a company that insists it can only operate by using exploitative working conditions like that?
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working conditions (benefits, healthcare, safety, etc.) IS labor costs.

Example in my company : My truck drivers needs a driving licence, an open-road permit, a crane permit, a loader permit, all of those needs to be assessed every 5 years or so, including numerous (re)training sessions ; then he needs safety shoes, googles, a hard hat, and gloves. Ok now he can drive his truck or loader : but for safety issues the truck and loader are checked by an outside company every two years ; the truck includes as well a very expensive mandatory electronic speed and time control : the driver of course has to stay within authorized speed limits, but he has also to comply to mandatory rest stops.

All this is just the tip of the iceberg why we Americans or Europeans cannot compete with social dumping. We cannot make our society progress in quality and still compete head front with people stuck in our XIXth century...
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I don't understand this "explanation" - obviously 24 hour slave labor is more convenient to Apple execs who want to hold a factory to strict deadlines that they, themselves, wont follow... but how catastrophically would profits be affected if apple had to limit last minute redesigns, or to push back a release date? Would the entire corporation collapse? Are price points so strictly researched that Apple is certain no one would pay an extra $50 for a phone that already costs $400?

Oh well, at least he was being honest.
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Has nobody heard of robots?
Automation of iPhone assembly is not terribly difficult, and even if it were, treat it as a challenge to develop more-capable robots.
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