How U.S. Lost Out on iPhone Work

Dec 8, 2004
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When Barack Obama joined Silicon Valley’s top luminaries for dinner in California last February, each guest was asked to come with a question for the president.

But as Steven P. Jobs of Apple spoke, President Obama interrupted with an inquiry of his own: what would it take to make iPhones in the United States?

Not long ago, Apple boasted that its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas.

Why can’t that work come home? Mr. Obama asked.

Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said, according to another dinner guest.

The president’s question touched upon a central conviction at Apple. It isn’t just that workers are cheaper abroad. Rather, Apple’s executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that “Made in the U.S.A.” is no longer a viable option for most Apple products.

Apple has become one of the best-known, most admired and most imitated companies on earth, in part through an unrelenting mastery of global operations. Last year, it earned over $400,000 in profit per employee, more than Goldman Sachs, Exxon Mobil or Google.

However, what has vexed Mr. Obama as well as economists and policy makers is that Apple — and many of its high-technology peers — are not nearly as avid in creating American jobs as other famous companies were in their heydays.

Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apple’s contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple’s other products. But almost none of them work in the United States. Instead, they work for foreign companies in Asia, Europe and elsewhere, at factories that almost all electronics designers rely upon to build their wares.

“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.”

Similar stories could be told about almost any electronics company — and outsourcing has also become common in hundreds of industries, including accounting, legal services, banking, auto manufacturing and pharmaceuticals.

But while Apple is far from alone, it offers a window into why the success of some prominent companies has not translated into large numbers of domestic jobs. What’s more, the company’s decisions pose broader questions about what corporate America owes Americans as the global and national economies are increasingly intertwined.

“Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” said Betsey Stevenson, the chief economist at the Labor Department until last September. “That’s disappeared. Profits and efficiency have trumped generosity.”

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MayrMeninoCrash

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#2
Let me summarize. Because Chinese factories aren't afraid to treat workers like shit, they get more business. No wonder this isn't a sustainable model in the United States.
 

Creasy Bear

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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.”
Is this fucker actually gushing admiringly over a manufacturing process which involved workers who live in company dormitories being rousted out of bed at midnight, given bread and water, and then forced to work 12 hour shifts?

Breathtaking? No... I think the word you're looking for is appalling.
 

Sunsetspawn

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Let me summarize. Because Chinese factories aren't afraid to treat workers like shit, they get more business. No wonder this isn't a sustainable model in the United States.
Isn't starting a union at Foxcon punishable by death?
 

Creasy Bear

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Isn't starting a union at Foxcon punishable by death?
Isn't that the company who makes their workers sign a contract which forbids them from committing suicide?

If you try to start a union, we'll kill you. If you kill yourself, we'll fire you.
 
Dec 8, 2004
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Well the president of Foxconn is a charmer...



From Wiki

President compares workers to animals

At a January 15, 2012, corporate meeting, in conversation with the director of the Taipei Zoo, President Gou said, "Hon Hai has a workforce of over one million worldwide and as human beings are also animals, to manage one million animals gives me a headache," according to WantChina Times, which translated Gou's remarks. Foxconn later issued a statement reporting Gou's apology and explaining his remarks in the full context of his conversation with the zoo's director.
 

MurphCO

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Last year, it earned over $400,000 in profit per employee, more than Goldman Sachs, Exxon Mobil or Google
That is a HUGE number, and holy shit if it's true....


I am Libertarian, so whatever these fucks do is up to them, however, at that scale of profit it should stop being solely about profit and some part of them *should* kick in a bit of logic and understand that what is good for this country is good for their company, not just profits. Even though profits are fucking kick ass

I wonder what the profit per employee would be if portions of that manufacturing were in the states.....even if it cut the profit in half, you have to know that you are making a difference in the country that provides the freedoms you exploited to create this global company.
 

Party Rooster

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That is a HUGE number, and holy shit if it's true....


I am Libertarian, so whatever these fucks do is up to them, however, at that scale of profit it should stop being solely about profit and some part of them *should* kick in a bit of logic and understand that what is good for this country is good for their company, not just profits. Even though profits are fucking kick ass

I wonder what the profit per employee would be if portions of that manufacturing were in the states.....even if it cut the profit in half, you have to know that you are making a difference in the country that provides the freedoms you exploited to create this global company.
Your mouth says libertarian, but your words say so-so-so-socialism. :action-sm
 

MurphCO

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Yeah I know...

I own my own business, so my perspective might be different than some folks. When you have that kind of real responsibility for other peoples welfare, your mind does make some different choices than when I was working strictly for monetary gain.


It's a heavy weight at times to have to choose wisely between short term gain and long term goals that benefit everyone.


I would be more likely to re-invest that profit into putting soldiers to work, or helping a city get a better tax base, something that makes a difference.....at Apples scale they can do shit like that, at mine I'm just trying to keep my folks employed. How much money is enough to people? To them it's not enough yet apparently, to me at that scale it'd be enough and then some...


I sound like a fucking hippy I know
 

Motor Head

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FoxCon had to put up nets all around their buildings to attempt to cut down on the suicide rate. And yes, I do believe I read that you will get a 5 year sentence for voicing any sort of dissent and they will kill anybody that attempts to start a union.

After this exchange with Jobs they did an independent study on what the iPhone would cost if it was made in America, I think it came out to the cost going up 23%. That's if the workers were paid a descent wage with benefits. I'm glad Steve Jobs got cancer, he deserved it. Not because he uses foreign workers, but because he allows companies like FoxCon to operate the way the do.
 

Party Rooster

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I would be more likely to re-invest that profit into putting soldiers to work, or helping a city get a better tax base, something that makes a difference.....at Apples scale they can do shit like that, at mine I'm just trying to keep my folks employed. How much money is enough to people? To them it's not enough yet apparently, to me at that scale it'd be enough and then some...


I sound like a fucking hippy I know
A company like Apple is in a big enough spot to where they could actually dictate some of the working conditions going on over there, but yes it would affect their bottom line. You'd think the good pub they'd get from something like that would make them look better in the long run to a lot of their hippie clientele though.
 

MurphCO

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I'm a douchebag for saying it because I have an iPad and I use an iPhone, but it cracks me up to thnk of the hipsters that believe they are alternative, supporting this global corporation that oppresses workers and contributes to what equates to slavery....

That's how it is though, people WANT to believe
 

Creasy Bear

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Iphone cases are made from pulverized Chinese fetus skulls.

Google it! Google it!
 

Your_Moms_Box

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#18
It isn't slave labor, they got tea and a biscuit....


This is the problem with a global economy without any checks on labor standards.
 

peewee

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I refuse to buy any apple products because of shit like this. Is Apple obligated to make products in the US, absolutely not. But shouldn't they have the decently to help the nation that has helped them to grow into a Tech giant. That is why I will keep buying Motorola phones.
 

CousinDave

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I refuse to buy any apple products because of shit like this. Is Apple obligated to make products in the US, absolutely not. But shouldn't they have the decently to help the nation that has helped them to grow into a Tech giant. That is why I will keep buying Motorola phones.

I can assure you the parts inside Motorola phones and every other big tech company's products like HP, Samsung, Epson, Toshiba, JVC, Sony, Texas Instruments, Dell, etc... are made in the exact same factories as the Apple products.

Remember the good old days when products were made in Japan, Taiwan, and South Korea?
 

Ballbuster1

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Loved my Startac. Best non smartphone I ever had.

There's nothing shocking here. 3rd world labor will always

beat out US workers. We demand decent wages and bennies,

they just want to survive.
 

Party Rooster

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I can assure you the parts inside Motorola phones and every other big tech company's products like HP, Samsung, Epson, Toshiba, JVC, Sony, Texas Instruments, Dell, etc... are made in the exact same factories as the Apple products.

Remember the good old days when products were made in Japan, Taiwan, and South Korea?
Yup.

These excerpts taken from the MOT 10-K filed Feb 26, 2009.

Our Facilities/Manufacturing

Our headquarters are located in Libertyville, Illinois. Our other major facilities are located in Plantation, Florida; Beijing, Hangzhou, Nanjing and Tianjin, China; Seoul, South Korea; Chennai, India; and Jaguariuna, Brazil.

We also use several electronics manufacturing suppliers (“EMS”) and original design manufacturers (“ODM”) to enhance our ability to lower our costs and/or deliver products that meet consumer demands in the rapidly-changing technological environment. A significant portion of our handsets are manufactured either completely or substantially by non-affiliated EMS and ODM manufacturers, primarily by two third-party manufacturers in China.

In 2008, our handsets were primarily manufactured in Asia and Brazil, and we expect this to continue in 2009. Our largest manufacturing facilities are located in China and Brazil. Each of these facilities serves multiple countries and regions of the world.
Edit:
More on Motorola...

Labor

In early 2006, Students and Scholars Against Corporate Misbehavior (SACOM), learned that nine women in the Shenzhen (China) Hospital for Occupational Disease Treatment & Prevention were poisoned by n-hexane as a result of working at a plant contracted to produce for the company (Hivac). "Hivac agreed to give every worker suffering n-hexane poisoning a tiny sum of seven to eight thousand yuan. However, they pressured workers to agree, among other things, not to raise future complaints in connection with their disease. Otherwise, the employer said they would get no recompense at all. These efforts to silence workers from discussing the long term effects of their poisoning no doubt influenced the quality of the "independent" audit commissioned by Motorola." Hivac makes lenses for Motorola phones out of Nanshan, Shenzhen Special Economic Zone in southern China. Exposure to toxic chemicals resulting in illness and birth defects has been a recurrent problem with suppliers of parts to cell phone manufacturers, including Motorola and Nokia[5]

In the late 1980s, bitter and often violent battles broke out at the company's South Korean subsidiary over the right to form a union, according to the New York Times: We still don't understand, said Park Joon Hee, country manager for Motorola Korea (employer of 3,800 workers), reflecting on how workers' demands for union recognition escalated into nightmarish days of demonstrations, hunger strikes, near self-immolations and a long siege at the computer center. In January/February 1989 Multinational Monitor reported that an IMF study concluded that the company set up a kusadae - "save the company corps" - which consists of 'thugs' who offer their services to Korean companies. The primary work of the kusadae has been to intimidate trade union activists. The IMF charged that the Motorola kusadae has disrupted union meetings, attacked union organizers with iron bars and cattle prods, and set four union leaders on fire. Motorola had 5,000 employees in Seoul and in 1987 Motorola in Korea made $8.8 billion in profits.[6]

As of 2006, workers in one of Motorola's handset supplier factories, Giant Wireless, in China, were forced upon threat of dismisasal, suspension, and wage penalties to work 12-13 hours a day, in violation of Chinese overtime rules.[7]The illegal forced overtime is covered up by falsification of documents in a dual time-card bookkeeping system.[7]

In the same year, a SOMO report found that workers were being exposed to hazardous chemicals, and that female employees in the Giant Wireless factory in particular suffer from work-related menstrual disorders, fatigue, anemia, headache, and deterioration of eyesight. No occupational health and safety institutions were in place, and workers were not paid while hospitalized.[7]

Further, despite dangerous conditions and forced overtime, workers in the Giant Wireless factory in Shenzhen were paid $0.12 an hour and $0.45 an hour for overtime, well below the legal minimum wages in China.[7]

At the Flextronics factory in Pondicherry, India, which also supplies Motorola, workers are paid above the minimum wage, but, especially given transport costs to the factory, the wages paid(approximately $48 USD/month) are not enough to support any dependents.[7]

Motorola purchases power supply devices including invertors, converters, and adapters from the Yonghong Electronics factory in Shenzhen. Yonghong is a member of the FSP Group and was founded in May 2000. In 2006, it was found to employ children under the age of 16, though by 2008 only workers of legal age were found to be working in the factory.[8] Workers at the factory are forced to work up to 7 days a week and 100-200 hours of overtime a month, in clear violation of Chinese labor law. Exhaustion is a common problem amongst workers at the factory, and they are often paid wages below the legal minimum, especially probationary (new) workers. [9] While some workers are paid the legal minimum wage of 750 yuan/month, the system in place to pay overtime wages does not pay for more than 3 hours of overtime a day, even though workers are forced to work longer in order to make the daily production quotas.

[10] Because of the repetitive nature of the factory work and the extreme long hours, besides exhaustion, workers suffer from repetitive motion injuries, and neck, shoulder, and back pain are common. [10] The problem is exacerbated by the management policy that fines workers for moving their chairs from a yellow line painted on the floor to make all chairs placed in a straight line, a policy even worse for smaller employees who are not close enough to reach their work tables comfortably. [10] Workers are not provided with hazard or safety training or face masks and inhale fumes produced by soldering. [11] Workers at the Yonghong factory are not permitted to stop working there, despite the Chinese labor law code which allows for resignation with one-month prior notice. Employees complain that management refuses to look at their applications of resignation. [11] Workers sleep in rooms with 12 people in the dormitories, and they expressed concerns to SACOM interviewers about the quality and cleanliness of the food provided to them. [12]

http://www.sourcewatch.org/index.php?title=Motorola