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[Gary Whitta]

Okay this is probably going to embarrassingly expose my lack of understanding of corporate economics but I think it's worthy of discussion. And this could apply to many American companies that have outsourced manufacturing abroad but I'm using Apple as the example as they're an incredibly high-profile and profitable US company that also (in)famously outsources all its manufacturing to China where working conditions and pay are notoriously awful.

So why not do something really bold in the realm of corporate responsibility and bring all that manufacturing back to the US? Apple could, I'm quite sure, afford to create a huge FoxConn-style facility here in the US where employees would enjoy the same conditions and benefits that other Apple employees enjoy and not, you know, have to commit suicide on a regular basis. At a time when companies like IKEA and BMW are building huge new factories in the US, how about a big American company actually follow suit?

Okay obviously the huge argument against it is that it would cost much, MUCH more to manufacture Macs and iPads here than in China where FoxConn employees are paid something like 65 cents per hour. I don't know if there's even an economic model whereby Apple could pay factory workers even minimum wage and still sell its products at a profit without having to jack up prices. But I do think they'd sell even more volume if consumers could feel good about buying a US-made product at a time when outsourced manufacturing to China and the shitty US job market are such frontline political issues. For each new iDevice to say DESIGNED AND BUILT BY APPLE IN CALIFORNIA would engender a tremendous amount of consumer goodwill.

I'm sure I'm being incredibly naive here, maybe it's just not economically possible. And even if it were but entailed Apple making less per unit the shareholders would never tolerate it because all they give a shit about is their own vast wealth. But wouldn't it be great?

 

[Escape Goat]

I doubt Apple is paying insurance on all those employees. Unemployment, workers comp, etc.

 

[atomsk]

The typical response would be "BUT THEY'RE ALREADY OVERCHARGING HERP DERP"

 

[bjork]

Jacking up apple prices even more would just appeal to the snob factor some folks have about their products, for better or for worse.

Could they afford to do this? Sure. But will they? No. Wal-Mart could afford to pay people $20+ per hour as well, but they're not gonna.

And yes, it would be great.

 

[EviLore]

Engendering some good will (when Apple is already a cultural giant) vs retaining enormous profit margins on all products.

Cost-benefit analysis: keep exploiting third world labor.

 

[Krauser Kat]

Why would apple pay insurance? Employers offering insurance is a shit deal anyway. It could maybe work. But 10-12 an hour is a lot more than 3-6us dollars per hour they might be getting in china.

 

[WickedAngel]

I think you're overestimating the draw of "American Made"; while it was once a mark of pride, it is now associated with inferior products thanks to decades worth of mediocrity. For all their efforts, that branding could actually cost them the sales they have (Nevermind the additional sales they'd need to offset the much higher costs of American labor).

The typical response would be "BUT THEY'RE ALREADY OVERCHARGING HERP DERP"

Whether or not they are overcharging is an arguable point but what isn't in dispute is the fact that they're selling what is considered to be a premium product compared to their direct competition in the industry.

 

[RevDM]

The Chinese don't mind, they agreed to the iTunes Terms of Service.

edit: Gary, an all caps thread title? Tisk tisk.
edit2: Nevermind.

 

[titiklabingapat]

American Apparel tried it and look where it got them.

 

[Gary Whitta]

I think you're overestimating the draw of "American Made"; while it was once a mark of pride, it is now associated with inferior products thanks to decades worth of mediocrity. For all their efforts, that branding could actually cost them the sales they have (Nevermind the additional sales they'd need to offset the much higher costs of American labor).




Whether or not they are overcharging is an arguable point but what isn't in dispute is the fact that they're selling what is considered to be a premium product compared to their direct competition in the industry.

Could not disagree more with that!

 

[SUPREME1]

Apple, specifically, is all about profits. Why would they bother investing the money to build a FoxConn type factory when they can pocket all that money and keep it moving?

 

[Seraphinianus]

yeah, it's a common error on the internet to confuse corporations for people with hearts. They will never do this. ever.

i don't understand why you guys see companies like apple, nintendo, valve, sony, microsoft, etc. as your friend/buddy who has a conscience. Think of them more as your fucked up drug dealer who would gut you and your bank account if it weren't for those pesky laws.

 

[faceless007]

Because Steve Jobs likes money.

 

[Clydefrog]

Business is serious business.

 

[SSM25]

yeah, it's a common error on the internet to confuse corporations for people with hearts. They will never do this. ever.

i don't understand why you guys see companies like apple, nintendo, valve, sony, microsoft, etc. as your friend/buddy who has a conscience. Think of them more as your fucked up drug dealer who would gut you and your bank account if it weren't for those pesky laws.

This!

 

[Lambtron]

American Apparel tried it and look where it got them.

That's probably more the fault of scumbag Dov Charney moreso than good labor practices.

 

[spiderman123]

Engendering some good will (when Apple is already a cultural giant) vs retaining enormous profit margins on all products.

Cost-benefit analysis: keep exploiting third world labor.

this man knows his economics.

 

[Littleberu]

I read about this a couple of months back in WIRED :

http://www.wired.com/magazine/2011/02/ff_madeinamerica/

In early 2010, somewhere high above the northern hemisphere, Mark Krywko decided he’d had enough. The CEO of Sleek Audio, a purveyor of high-end earphones, Krywko was flying home to Florida after yet another frustrating visit to Dongguan, China, where a contract factory assembled the majority of his company’s products. He and his son, Jason, Sleek Audio’s cofounder, made the long trip every few months to troubleshoot quality flaws. Every time the Krywkos visited Dongguan, their Chinese partners assured them everything was under control. Those promises almost always proved empty.

Very interesting read.

 

[wenis]

yeah, it's a common error on the internet to confuse corporations for people with hearts. They will never do this. ever.

i don't understand why you guys see companies like apple, nintendo, valve, sony, microsoft, etc. as your friend/buddy who has a conscience. Think of them more as your fucked up drug dealer who would gut you and your bank account if it weren't for those pesky laws.

Wait, what? What do they manufacture?

 

[LCfiner]

For each new iDevice to say DESIGNED AND BUILT BY APPLE IN CALIFORNIA would engender a tremendous amount of consumer goodwill.

I really don't get this sense at all. I don't think most consumers give a shit. As long as the quality of the manufacturing isn't crap, then it could be built pretty much anywhere


Oh, and it should also be worth noting that this would only create (potential) goodwill amongst a maximum of 50% of Apple's customers.

Apple sells worldwide. do you think they'll care in the UK or Spain if their iPads were built in Texas? This move only creates a sensation of pride amongst a small portion of Apple's customers and would hugely inflate the cost of the items on sale.

 

[Davidion]

When being a fan of a particular company, it helps to keep in mind that you endear yourself to their ideals, not the other way around.

 

[SimleuqiR]

I read about this a couple of months back in WIRED :

http://www.wired.com/magazine/2011/02/ff_madeinamerica/



Very interesting read.

This happens to the company I work for, all the damn time.

But in the case of Apple, they use FOXCONN which runs like an army.

 

[Crazymoogle]

It's not even about pay, really. It's about keeping out of businesses that bring on a lot of risk.

Foxconn doesn't just assemble iPads; they provide core components. And they have their own backup suppliers. Their job is to be a supply-and-manufacturing line, not just for Apple, but for as many different tech companies as they can handle. Apple deciding to build their own iPads would be roughly like getting into the car business, introducing huge delays for assembly thanks to overseas parts. Any goodwill they receive would be massively offset by the cost of being forced to either start their own component companies (a memory fab here, a networking chip fab there...) or deal exclusively with US interests (few of which are really US only, anyways.)

There are just too many different companies to pay, technologies to acquire, and businesses to dip into in order to make a single iOS device.

The path that should be crossed first is whether an assembly-supplier like Foxconn could make it in the north american tech environment.

 

[daycru]

Companies use sweat shop labor because it's cheap. If they gave a shit, they wouldn't. It's the difference between a garage with ten Ferrarris and one with nine. I like Apple's stuff but don't confuse them for decent human beings.

 

[harriet the spy]

Accumulating some guilt from your purchasing habits, Gary?

 

[Smiles and Cries]

I just got a new magsafe adapter for my powerbook pro last weekend and it was funny when I read that California and China line

paid $80 for a damn plug! comes with a sexy black carton box dammit!

 

[Scipius]

I think you're overestimating the draw of "American Made"; while it was once a mark of pride, it is now associated with inferior products thanks to decades worth of mediocrity. For all their efforts, that branding could actually cost them the sales they have (Nevermind the additional sales they'd need to offset the much higher costs of American labor).

Whether or not they are overcharging is an arguable point but what isn't in dispute is the fact that they're selling what is considered to be a premium product compared to their direct competition in the industry.

Spot on. Any gain in goodwill would be restricted to the US (and would probably be less than expected). A premium product can only go up in price so far.

 

[Deleted member 22576]

Wait, what? What do they manufacture?

Happiness.

 

[Hasphat'sAnts]

Cost cutting is also one of the sure fire ways to improve stock price and investor relations. Stockholders don't buy into a company hoping to gain good will, that'd be wasting everyone's time.

Second, people don't give a shit where things are manufactured.

 

[Littleberu]

This happens to the company I work for, all the damn time.

But in the case of Apple, they use FOXCONN which runs like an army.

Yeah, no doubt about it!

For those not familiar with FOXCONN and the work conditions there, you should read :

http://www.wired.com/magazine/2011/02/ff_joelinchina/

It’s hard not to look at the nets. Every building is skirted in them. They drape every precipice, steel poles jutting out 20 feet above the sidewalk, loosely tangled like volleyball nets in winter.

The nets went up in May, after the 11th jumper in less than a year died here. They carried a message: You can throw yourself off any building you like, as long as it isn’t one of these. And they seem to have worked. Since they were installed, the suicide rate has slowed to a trickle.

 

[kehs]

The people that give a shit about things being "made in america" are the people working in the two factories making shit in america.

 

[chaostrophy]

I have a Cowon MP3 player that was made in first-world South Korea and cost less than the spec-equivalent iPod at the time I bought it. So the offshoring seems to be more about keeping profits high than keeping prices down.

 

[The Technomancer]

yeah, it's a common error on the internet to confuse corporations for people with hearts. They will never do this. ever.

i don't understand why you guys see companies like apple, nintendo, valve, sony, microsoft, etc. as your friend/buddy who has a conscience. Think of them more as your fucked up drug dealer who would gut you and your bank account if it weren't for those pesky laws.

We don't. But its funny you mention Valve, because many of us do think that Valve has their customers interests at heart, and thats because Valve seems to have realized the better you treat your customers, the more loyal they become to your service, and the more money you make in the long term.

 

[Ark]

Wait, what? What do they manufacture?

Portal guns! Duh.

 

[jdogmoney]

Wait, what? What do they manufacture?

happiness

 

[aparisi2274]

Okay this is probably going to embarrassingly expose my lack of understanding of corporate economics but I think it's worthy of discussion. And this could apply to many American companies that have outsourced manufacturing abroad but I'm using Apple as the example as they're an incredibly high-profile and profitable US company that also (in)famously outsources all its manufacturing to China where working conditions and pay are notoriously awful.

So why not do something really bold in the realm of corporate responsibility and bring all that manufacturing back to the US? Apple could, I'm quite sure, afford to create a huge FoxConn-style facility here in the US where employees would enjoy the same conditions and benefits that other Apple employees enjoy and not, you know, have to commit suicide on a regular basis. At a time when companies like IKEA and BMW are building huge new factories in the US, how about a big American company actually follow suit?

Okay obviously the huge argument against it is that it would cost much, MUCH more to manufacture Macs and iPads here than in China where FoxConn employees are paid something like 65 cents per hour. I don't know if there's even an economic model whereby Apple could pay factory workers even minimum wage and still sell its products at a profit without having to jack up prices. But I do think they'd sell even more volume if consumers could feel good about buying a US-made product at a time when outsourced manufacturing to China and the shitty US job market are such frontline political issues. For each new iDevice to say DESIGNED AND BUILT BY APPLE IN CALIFORNIA would engender a tremendous amount of consumer goodwill.

I'm sure I'm being incredibly naive here, maybe it's just not economically possible. And even if it were but entailed Apple making less per unit the shareholders would never tolerate it because all they give a shit about is their own vast wealth. But wouldn't it be great?

As crazy as Trump is as a person, he did hit on point that actually made me like him, and that was the fact that the slogan "Made in the USA" is non-existent anymore and that if he were to become president, he would make sure that companies produce items in the USA and not abroad.

The issue with this is that most companies outsource because they can get super cheap labor, cheap work spaces, and not have to insure all their employees.

Unfortunately as much as I would love to see Apple move production back to America, there is no way they would do it. The additional costs alone would severely affect their bottom line.

 

[dinazimmerman]

Cost-benefit analysis: keep exploiting third world labor.

Right, because Apple taking their factories to the U.S. and providing zero jobs to third world workers is clearly the morally superior option here.

Why don't people put pressure on Apple to provide safer working conditions and higher wages for its foreign workers rather than urge them to bring their factories back home? Hint: it's because they care more about domestic workers being unemployed than foreign workers being "exploited."

"Economic patriotism" stems from an in-group/out-group worldview that gives more significance to the welfare of domestic workers than that of foreign workers. We'd all be smart to abandon this backwards mentality, Apple included.

 

[Stinkles]

OK, so I'm no statistician, but how does that number compare to:

a) General Population
b) Jobless Population
c) Employed Population working in tall buildings

 

[captive]

i think you're vastly over estimating the appeal of "made in america."

the type of people that care about that type of thing are the people old enough to remember when made in america meant quality, and teabaggers. Neither of which are the target market for iproducts.

 

[MiniBossBattle]

I am actually afraid that is what is going to happen to videogames/VFX work. The Bay Area used to have tons of VFX studios. Now my friends are in Singapore, Canada, New Zealand and China. I can't help feel they are training our cheaper foreign replacements.

 

[Littleberu]

I am actually afraid that is what is going to happen to videogames/VFX work. The Bay Area used to have tons of VFX studios. Now my friends are in Singapore, Canada, New Zealand and China. I can't help feel they are training our cheaper foreign replacements.

Those Canadians and Kiwi bastards!

 

[AstroLad]

Right, because Apple taking their factories to the U.S. and providing zero jobs to third world workers is clearly the morally superior option here.

Why don't people put pressure on Apple to provide safer working conditions and higher wages for its foreign workers rather than urge them to bring their factories back home? Hint: it's because they care more about domestic workers being unemployed than foreign workers being "exploited."

"Economic patriotism" stems from an in-group/out-group worldview that gives more significance to the welfare of domestic workers than that of foreign workers. We'd all be smart to abandon this backwards mentality, Apple included.

Back in the Nike-controversy days, there was actually a huge movement of people opposed specifically to exploitation of foreign workers that had very little to do with nationalistic preferences. I think people have pretty much given up on that almost completely though.

It's very difficult to put pressure on a company to provide safer working conditions in factories abroad. For one, it's rare to have a clear picture of those conditions while wading through corporate mumbojumbo about things "improving" and other self-back-patting and for two it's just to something that's easy to force upon other countries. Even if you could get them to change their laws, there's little chance they will be properly enforced (this is even a problem in the U.S., though to a much lesser-extent than third-world countries). And further it's just a political quaqmire -- look at how upset a lot of Europeans got about the U.S.A. moving in to arrest Osama and compromising him to a permanent end.

 

[water_wendi]

If you are American you should care about things made in America (if you arent, then you shouldnt be concerned). Its useful when your neighbors have jobs and arent destitute.

 

[andycapps]

Okay this is probably going to embarrassingly expose my lack of understanding of corporate economics but I think it's worthy of discussion. And this could apply to many American companies that have outsourced manufacturing abroad but I'm using Apple as the example as they're an incredibly high-profile and profitable US company that also (in)famously outsources all its manufacturing to China where working conditions and pay are notoriously awful.

So why not do something really bold in the realm of corporate responsibility and bring all that manufacturing back to the US? Apple could, I'm quite sure, afford to create a huge FoxConn-style facility here in the US where employees would enjoy the same conditions and benefits that other Apple employees enjoy and not, you know, have to commit suicide on a regular basis. At a time when companies like IKEA and BMW are building huge new factories in the US, how about a big American company actually follow suit?

Okay obviously the huge argument against it is that it would cost much, MUCH more to manufacture Macs and iPads here than in China where FoxConn employees are paid something like 65 cents per hour. I don't know if there's even an economic model whereby Apple could pay factory workers even minimum wage and still sell its products at a profit without having to jack up prices. But I do think they'd sell even more volume if consumers could feel good about buying a US-made product at a time when outsourced manufacturing to China and the shitty US job market are such frontline political issues. For each new iDevice to say DESIGNED AND BUILT BY APPLE IN CALIFORNIA would engender a tremendous amount of consumer goodwill.

I'm sure I'm being incredibly naive here, maybe it's just not economically possible. And even if it were but entailed Apple making less per unit the shareholders would never tolerate it because all they give a shit about is their own vast wealth. But wouldn't it be great?

I think the bolded part above answers your own question. Remember how Apple is one of the most profitable companies out there despite not really being the leader in sales in anything (aside from iPods)? It's because their cost to produce is low, and their price that they sell at is high. If you start increasing that cost to produce, that's going to impact their shareholders and the profits that Apple posts.

So in other words, for them to do this, it might be a good PR move, but their profits would be cut drastically. Wishful thinking I guess you'd say. Yes, it'd be a great move though in answer to your question. Will it happen? Heck no, Apple likes money and so do their shareholders. Money means more than people to corporations.

 

[LQX]

I wonder when the Chinese people wake up who will be in bigger trouble the US/World or China....

Watched a documentary while back and its like they are literally bread to work in factories. One girl actually dropped out of school to go work at a factory. Her parents only saw her a few weeks a year because they worked at factories to keep her in school.

 

[Jangocube]

The typical response would be "BUT THEY'RE ALREADY OVERCHARGING HERP DERP"

Well, that would mean they could more reasonably do it. And don't fool yourself, you know they are overcharging more then most computer companies.

edit - Spelling ftl

 

[Angry Grimace]

In reality, I've heard it's not necessarily all that cheap to outsource anymore. Yeah, the workers get paid shit, but that doesn't necessarily mean the contract reflects that or that manual labor is the bulk of costs.

I don't understand the concept of "Apple should pay its chinese employees more money."

I sincerely doubt Apple has any foreign factory employees. It seems a lot more likely they simply have contracts with Chinese industrial conglomerates to build iPods to their specs.

 

[dinazimmerman]

Back in the Nike-controversy days, there was actually a huge movement of people opposed specifically to exploitation of foreign workers that had very little to do with nationalistic preferences. I think people have pretty much given up on that almost completely though.

The anti-sweatshop activism of the 1990s actually did work:

During the 1990s, anti-sweatshop activists campaigned to improve conditions for workers in developing countries. This paper analyzes the impact of anti-sweatshop campaigns in Indonesia on wages and employment. Identification is based on comparing the wage growth of workers in foreign-owned and exporting firms in targeted regions or sectors before and after the initiation of anti-sweatshop campaigns. We find the campaigns led to large real wage increases for targeted enterprises. There were some costs in terms of reduced investment, falling profits, and increased probability of closure for smaller plants, but we fail to find significant effects on employment.

http://www.aeaweb.org/articles.php?doi=10.1257/aer.100.1.247

Plus, you're missing the big picture. Being employed at a sweatshop is still better than having no job at all or working in agriculture or an even shittier domestically owned factory. People in developing countries are simply given more employment opportunities when multinationals open up factories there. This can't be anything but a net benefit to the workers living in these countries.

 

[ElectricBlue187]

Because Americans don't care where things are made. If something is better to them, they buy it.

 

[DietRob]

Wait, what? What do they manufacture?

That was a great read from Wired. I agree that if CEO's are just a bunch of MBA's without any experience in engineering it is very easy to just see the shiny coin and not see the cost of the engineering mistakes.