A Reality of Outsourcing

[bankside]

On one hand, what does a Canadian care whether his iPod comes from China or the United States? Either way, it isn't made at home. Whoever makes it best and cheapest should get my business.

Even more, do you think I'd buy a Blackberry instead of an iPhone just because they're a Canadian company? Free trade is the way to prosperity and better products for consumers.

On the other hand, I think it is unreasonable for any corporation to rely on its suppliers building factories "just in case," particularly when it flows from the use of government subsidies.


Yet, if China is stupid enough to tax its own citizens to make our phones cheaper, well hopefully they want to pay my mortgage and buy my groceries too.

 

[SLOPPYSECONDS]

Through the perspective of Apple, Inc.

How the U.S. Lost Out on iPhone Work
http://www.nytimes.com/2012/01/22/b...queezed-middle-class.html?_r=2&pagewanted=all


Please take the time to read the article, particularly the section on how manufacturing overseas works in the factory cities of FoxxConn. What are your thoughts? Perceptions? Are we not spending enough time talking about the solutions? If there are solutions, what are they?

How do you balance the massive requirements of a continually growing tech. industry between growing the economy in the United States and meeting global demand?

there solution but world male cult ures no wanna hear it

ans like 18th century etc life is but lube ta pass da day fa um

unless miracle of miracle da tiny few get help where it matta world ova

 

[JayHawk]

there solution but world male cult ures no wanna hear it

ans like 18th century etc life is but lube ta pass da day fa um

unless miracle of miracle da tiny few get help where it matta world ova

Translation:

There is a solution but the male culture does not want to hear about it.

Life of the poor is not worth much to the capitalist if it obstructs money.

It would take a miracle to help the unfortunate around the world.

 

[SLOPPYSECONDS]

Translation:

There is a solution but the male culture does not want to hear about it.

Life of the poor is not worth much to the capitalist if it obstructs money.

It would take a miracle to help the unfortunate around the world.

.........
thankyou very murch nice a you amke try


there solution but world male cult ures no wanna hear it

ans like 18th century etc life is but lube ta pass da day fa um

unless miracle of miracle da tiny few get help where it matta world ova

 

[JB3]

I think this says a hell of a lot about what type of company Apple is. They turn $400,000 profit for each employee working for them. Made 180 billion last year (I think, I didn't refer back to the article to check my number) and they bitch and whine that it would take 9 months to hire the engineering work-force here to do the same job that China could do more quickly. On another note, I think 180 million is plenty of money to build your own factories right here in the US. I always heard Steve Jobs was a big prick anyway.....he wanted a glass screen in 6 weeks and the USA couldn't do it that fast, so he looked elsewhere. He has the right to do that, of course, but some things take time.

To some people and companies, the almighty dollar wins out over anything else.........Pity really.

Educate yourself on the electronics industry. 9 months is an entire product cycle.

 

[Spiff]

Outsourcing offshore for cheap or near slave labor is always unjustified. . . . unless of course it is to make the products we love.

 

[JB3]

Outsourcing offshore for cheap or near slave labor is always unjustified. . . . unless of course it is to make the products we love.

Labor costs are only a small part of it.

 

[gewhite3]

Educate yourself on the electronics industry. 9 months is an entire product cycle.

So?.....and this can't change? It's written in stone I imagine and should force us to use alternative labor in China. Good one.

 

[JB3]

So?.....and this can't change? It's written in stone I imagine and should force us to use alternative labor in China. Good one.

Unless Americans and people around the world want to start paying significantly more for their electronics, it won't change. There are real, and genuine, economic reasons for that production not being here. There are also technological reasons for it as well. And you have it backwards: AMERICANS are the alternative labor; chinese factories are the primary labor.

Just saying 'pfft, move the production to the US' is ridiculously out of touch, and completely divorced from the reality of the CE industry.

 

[glorff]

If you want to understand why we don't have a chance to get jobs back all you have to do is try to work with the US Government bureaucracy for a while and you will throw your hands up in despair

 

[Kulindahr]

I think this says a hell of a lot about what type of company Apple is. They turn $400,000 profit for each employee working for them. Made 180 billion last year (I think, I didn't refer back to the article to check my number) and they bitch and whine that it would take 9 months to hire the engineering work-force here to do the same job that China could do more quickly.

To some people and companies, the almighty dollar wins out over anything else.........Pity really.

It's not "the almighty dollar", it's keeping your employees in their jobs.

Nine months is forever, due to customers, not any rule companies have. If two innovations come out, one just 15% better than the other, if the one that's better takes a month longer to come out, the poorer one will win out. Why? Because customers already bought it by the multiple millions, along with accessories and everything else. They're not going to switch for something just 15% better, when they know another innovation will come out in another six months that will put it to shame anyway.

When you employ 700,000 people, the difference between 6 weeks and 9 months can mean the difference between keeping them all employed or laying off a hundred thousand.

It's one reason some university engineering programs assign projects without warning with plainly unfair deadlines: the real world of economics is like that, and it isn't driven by the CEOs, it's driven by the consumers who establish the rules by their buying habits.

 

[gewhite3]

It's not "the almighty dollar", it's keeping your employees in their jobs.

Nine months is forever, due to customers, not any rule companies have. If two innovations come out, one just 15% better than the other, if the one that's better takes a month longer to come out, the poorer one will win out. Why? Because customers already bought it by the multiple millions, along with accessories and everything else. They're not going to switch for something just 15% better, when they know another innovation will come out in another six months that will put it to shame anyway.

When you employ 700,000 people, the difference between 6 weeks and 9 months can mean the difference between keeping them all employed or laying off a hundred thousand.

It's one reason some university engineering programs assign projects without warning with plainly unfair deadlines: the real world of economics is like that, and it isn't driven by the CEOs, it's driven by the consumers who establish the rules by their buying habits.

I agree with everything you are saying, Kuli. I think the point I was trying to make is that at the time Steve Jobs said "I want a glass screen and I want it in six weeks." is what I have the problem with. Apparently, no glass screens existed at the time, so who's to say that if Steve had continued on the path of finding a way to do it in the US, working with Corning, and even if this means the product were launched months later instead of when it originally was, that Apple would have lost out in any way, sold less iPhones, another maker would have beat them to the punch, etc.? Instead, Steve gets this letter from China saying "We can do it now and really cheap." and he jumps at it. It would be nice to think that maybe he cared a little more about keeping jobs in the US (no pun intended) instead of jumping at the China offer. That's all I'm saying I have a problem with. I know that there are major hurdles here with bureaucracy when it comes to building additional facilities and overcoming all of the legal obstacles to be nimble in the business sense (I have read many of your posts on that subject). It's just that it doesn't sit well with me. He took the easy way out.

I understand the reasons he is being defended for his decisions, I just wish he'd had more balls when making those decisions.

Seems like I'm not the only one who feels this way:
http://www.msnbc.msn.com/id/46143670/ns/business-us_business/

In a nutshell: I understand it, but I sure as hell don't like it.

OK, I'm done

 

[JB3]

I agree with everything you are saying, Kuli. I think the point I was trying to make is that at the time Steve Jobs said "I want a glass screen and I want it in six weeks." is what I have the problem with. Apparently, no glass screens existed at the time, so who's to say that if Steve had continued on the path of finding a way to do it in the US, working with Corning, and even if this means the product were launched months later instead of when it originally was, that Apple would have lost out in any way, sold less iPhones, another maker would have beat them to the punch, etc.? Instead, Steve gets this letter from China saying "We can do it now and really cheap." and he jumps at it. It would be nice to think that maybe he cared a little more about keeping jobs in the US (no pun intended) instead of jumping at the China offer. That's all I'm saying I have a problem with. I know that there are major hurdles here with bureaucracy when it comes to building additional facilities and overcoming all of the legal obstacles to be nimble in the business sense (I have read many of your posts on that subject). It's just that it doesn't sit well with me. He took the easy way out.

I understand the reasons he is being defended for his decisions, I just wish he'd had more balls when making those decisions.

Seems like I'm not the only one who feels this way:
http://www.msnbc.msn.com/id/46143670/ns/business-us_business/

In a nutshell: I understand it, but I sure as hell don't like it.

OK, I'm done

Except that's not what happened. The glass was made by Corning in Kentucky, but Apple could not find a supplier that could cut the glass quickly enough that was located in the US. Because it was literally a last minute change, they couldn't wait for months for a factory that was capable of it to be built.

You also have to consider that, by the time they switched the screen to glass, they already had huge amounts of parts stockpiled ready to be assembled into the final product. Every day those parts sat waiting cost Apple, and their suppliers money.

Frankly, no person in Jobs' position would have decided to wait for a factory to be built. It wasn't the 'easy way out', it was the route that made the most sense. From the way the decision is depicted, they TRIED to keep the production in the US, but there wasn't a facility capable of it.