Where Your iPad and iPod Are Made

Jonman wrote:
gregrampage wrote:

Edit: Now that I think about it, working for the 2010 US Census I saw the whole thing happen including the wake up calls. Unfortunately we didn't get any biscuits or tea.

No tea? Those bastards.

Not even any coffee. The office coffee was paid for by donations from employees.

gregrampage wrote:

Plenty of companies in America will wake up their workers and put them to a 12 hour shift due to an 11th hour change. I was never woken up there because no one else was working before 7 AM either but the rest was common and if we were a 24 hour business then I could see the early morning phone calls coming too. We were also treated well and paid well in general plus paid overtime for those shifts. I see no problem with that.

Edit: Now that I think about it, working for the 2010 US Census I saw the whole thing happen including the wake up calls. Unfortunately we didn't get any biscuits or tea.

I've seen the same thing. Key people get paged in, extra time scheduled, shifts extended, etc.

The bit that was posted regarding getting 8,700 engineers in 15 days just shows off that the factory is compensating for piss-poor planning. Maybe Apple just doesn't know what they are doing on the production side of things.

Kraint wrote:

The bit that was posted regarding getting 8,700 engineers in 15 days just shows off that the factory is compensating for piss-poor planning. Maybe Apple just doesn't know what they are doing on the production side of things.

The thing you're missing is that you need those engineers to come on board at roughly the same time in order to go from zero production to full production in a reasonable time-frame. A company like Apple can't design a product and then slowly start rolling it off the line over the course of 9 months; they need to finalize the design and then swing into full production immediately. China has the skilled workforce to accomplish that and the US doesn't, that's really all there is to it.

Serengeti wrote:
Kraint wrote:

The bit that was posted regarding getting 8,700 engineers in 15 days just shows off that the factory is compensating for piss-poor planning. Maybe Apple just doesn't know what they are doing on the production side of things.

The thing you're missing is that you need those engineers to come on board at roughly the same time in order to go from zero production to full production in a reasonable time-frame. A company like Apple can't design a product and then slowly start rolling it off the line over the course of 9 months; they need to finalize the design and then swing into full production immediately. China has the skilled workforce to accomplish that and the US doesn't, that's really all there is to it.

What I can't get over from that is 8700 engineers. Really? Does NASA even have 8700 engineers? And these are all employed by Foxxconn? What the heck are they doing when they're not fixing Apple's 11th hour mistake?

sheared wrote:
Serengeti wrote:
Kraint wrote:

The bit that was posted regarding getting 8,700 engineers in 15 days just shows off that the factory is compensating for piss-poor planning. Maybe Apple just doesn't know what they are doing on the production side of things.

The thing you're missing is that you need those engineers to come on board at roughly the same time in order to go from zero production to full production in a reasonable time-frame. A company like Apple can't design a product and then slowly start rolling it off the line over the course of 9 months; they need to finalize the design and then swing into full production immediately. China has the skilled workforce to accomplish that and the US doesn't, that's really all there is to it.

What I can't get over from that is 8700 engineers. Really? Does NASA even have 8700 engineers? And these are all employed by Foxxconn? What the heck are they doing when they're not fixing Apple's 11th hour mistake?

Fixing Apple's 12th hour mistake?

sheared wrote:
Serengeti wrote:
Kraint wrote:

The bit that was posted regarding getting 8,700 engineers in 15 days just shows off that the factory is compensating for piss-poor planning. Maybe Apple just doesn't know what they are doing on the production side of things.

The thing you're missing is that you need those engineers to come on board at roughly the same time in order to go from zero production to full production in a reasonable time-frame. A company like Apple can't design a product and then slowly start rolling it off the line over the course of 9 months; they need to finalize the design and then swing into full production immediately. China has the skilled workforce to accomplish that and the US doesn't, that's really all there is to it.

What I can't get over from that is 8700 engineers. Really? Does NASA even have 8700 engineers? And these are all employed by Foxxconn? What the heck are they doing when they're not fixing Apple's 11th hour mistake?

Building the rest of the world's electronics.

There's a Twitter feed called "GS Elevator Gossip". It's basically just quotes overheard by a bunch of douchbags that work for Goldman Sachs...or at least supposedly. I saw this one that I found both amusing and disturbing:

#1: AAPL says the US doesn't have the workers w/ the skills to make iPhones.
#2: It takes a lot of skill to survive on $0.70 an hour.
Parallax Abstraction wrote:

I did read that article when it came out but I think it left a chicken and egg situation that was never addressed. Was manufacturing in the US so inefficient and the lack of skilled labour so total that the manufacturers had to move everything overseas or is it because the manufacturers moved everything overseas because it was cheaper that the US manufacturing sector become unable to compete? I'm not sure what the answer to that question is but from reading books like The Wal-Mart Effect, my opinion is that it's most likely the latter. I have no real academic evidence to back that up though, it's just my gut feeling. Regardless of what came first, the end result is that North America doesn't have a lot of the type of labour needed to bring electronics manufacturing back over here because there's been no demand for it for so long. We can't easily go back from where we are now.

Lots of manufacturing moved overseas not because of skill, but because of cost. Back in the day Chinese labor was dirt cheap compared to US labor. We're talking 90%+ cheaper. At first US companies competed by automating as much as possible, which raised the skill level required by workers. And that caused a labor shortage as companies struggled to find workers who had to run a computerized assembly machine instead of simply turning a screw.

The skilled labor issue is a bit of bullsh*t since the article makes it clear that there really isn't anything skilled happening at Foxconn. Apple, like every company that manufactures things in China, keeps all the design work and IP close to their vest. Foxconn brute forces everything with human labor because, well, it's so danged cheap and plentiful.

What the article did make clear is that companies have, over time, replicated their supply chains in China. That makes it really hard for an American manufacturing firm to compete if they have to wait three or four weeks for parts to cross the Pacific while their Chinese competitor can simply ring up the factory down the road and have the parts in a few hours or days.

That being said, the entire electronics industry has moved itself several times already. It used to be that everything was made in Japan. Then that got too expensive so things were moved to Taiwan. Now it's cheaper to make things in China than Taiwan, so that's where it is today. When Chinese labor gets too expensive, corporate bean counters will look for a cheaper place and set up shop there.

OG_slinger wrote:

When Chinese labor gets too expensive, corporate bean counters will look for a cheaper place and set up shop there.

I seriously doubt that would happen. Especially at the rate at which China is hording Rare Earth Elements. China has warned in the past that its own industrial demand might lead it to stop exporting REs altogether.

China controls more than 90% of global production of REs and has embarked on a series of deals to secure output from other international producers, meaning it accounts for 97% of all REs sold globally.
KrazyTacoFO wrote:
OG_slinger wrote:

When Chinese labor gets too expensive, corporate bean counters will look for a cheaper place and set up shop there.

I seriously doubt that would happen. Especially at the rate at which China is hording Rare Earth Elements. China has warned in the past that its own industrial demand might lead it to stop exporting REs altogether.

China controls more than 90% of global production of REs and has embarked on a series of deals to secure output from other international producers, meaning it accounts for 97% of all REs sold globally.

China has about 30% of rare earth mineral deposits. The only reason they control 90% of production is because they've made it cheaper and easier to buy Chinese rare earth minerals than mine the other 70%. Once they become more expensive or the supply become less stable do to politics, the other deposits will be tapped.

That and China's recent reductions in their export quotas of rare earth minerals have gotten the WTO involved. China's economy depends on exports so screwing around with the WTO isn't something it really wants to do especially since more Chinese companies want to expand internationally.

OG_slinger wrote:
KrazyTacoFO wrote:
OG_slinger wrote:

When Chinese labor gets too expensive, corporate bean counters will look for a cheaper place and set up shop there.

I seriously doubt that would happen. Especially at the rate at which China is hording Rare Earth Elements. China has warned in the past that its own industrial demand might lead it to stop exporting REs altogether.

China controls more than 90% of global production of REs and has embarked on a series of deals to secure output from other international producers, meaning it accounts for 97% of all REs sold globally.

China has about 30% of rare earth mineral deposits. The only reason they control 90% of production is because they've made it cheaper and easier to buy Chinese rare earth minerals than mine the other 70%. Once they become more expensive or the supply become less stable do to politics, the other deposits will be tapped.

That and China's recent reductions in their export quotas of rare earth minerals have gotten the WTO involved. China's economy depends on exports so screwing around with the WTO isn't something it really wants to do especially since more Chinese companies want to expand internationally.

That may be true, but I can't see them being too pressured to export more REE since they are hoarding them to produce finished products to sell. With their economy growing and world economic influence growing every day, I still do not see how companies would pull out unless America pulls a Cuba style embargo on them (which would completely destroy our economy).

KrazyTacoFO wrote:

That may be true, but I can't see them being too pressured to export more REE since they are hoarding them to produce finished products to sell. With their economy growing and world economic influence growing every day, I still do not see how companies would pull out unless America pulls a Cuba style embargo on them (which would completely destroy our economy).

They aren't hoarding them to produce finished products. They are purposefully limiting production (and exports) to artificially drive up prices.

China desperately wants Chinese to companies compete globally. Chinese companies desperately want to compete globally. Doing so means that they have to follow the rules that everyone else does. That's why getting in trouble with the WTO is something they want to avoid. It's also why the biggest pushers of IP rights and a better court system in China these days isn't foreign companies, but Chinese companies. They want their own inventions and products to be protected and they are gaining the political clout to make that happen.

And the same economic forces that made China a manufacturing powerhouse will work against them when Chinese labor gets too expensive. Already Chinese labor is more expensive than the Philippines and India. Chinese wages have more than doubled over the past several years and their minimum wage went up 22% last year (and it had similar double digit increases for the past three years).

Businesses *will* move their production to countries with cheaper labor and there isn't really anything China can do to stop it, just like there was nothing the US government could do to stop manufacturing jobs from first going to Mexico and then to China. China's only hope is to jump-start internal consumption and shift their economy away from being so reliant on exports.

Parallax Abstraction wrote:

Exploiting lacking labour and environmental regulations in China has been a problem of big business as a whole for a long time now and it's only going to get worse as people continue to demand to pay $500 for an iPad or $300 for a basic laptop that by all rights should cost twice that much at least. Where I think Apple can be faulted is not fighting for change as hard as they could be, something I address in my second blog post.

Personally, I don't think the price consumers expect has much of any relation to working conditions in factories. If Apple raised its priced by 50% tomorrow and fed those profits directly to manufacturers do you think working conditions would change? There's certainly an issue of competition among manufacturers, but I don't think it's nearly so simple as P&L. For things to change, the contracting companies (Apple, etc) will have to be more vigilant about requiring and enforcing safe worker conditions. I imagine this is a tough problem--Apple sends a team to review conditions at a factory and the manufacturer makes its best effort to convince the team into thinking that things are up to par, regardless of what conditions are actually like.

Paleocon wrote:

If you really want to make a difference, it won't be in your purchasing choices. It will be in your willingness to petition your own government to enter into international agreements guaranteeing worker conditions, funding the enforcement of them, and accepting the market consequences. Otherwise, the Chinese are way too savvy and certainly way too numerous to give a rat's rectum about anyone's individual purchasing decisions.

Almost sounds like we'd need some sort of international workers' rights group.

dejanzie wrote:
If you're someone who really wants to only purchase "fairly made" electronics, it seems an almost impossible task unless you just want to largely get out of using modern technology. As an IT person who is also a tech nerd, that's really depressing to me.

+1

If anyone knows how and where to buy 'fair trade' IT products, I would be eternally grateful. I heard even the Xbox is made at Foxconn, and simply knowing that Sony makes its Playstations in normal working conditions would be enough for me to make the switch for the next console generation.

There was a recent Financial Times piece that laid it out this way:

At a deeper level the crisis marks the triumph of consumers and investors over workers and citizens. And since most of us occupy all four roles, the real crisis centres on the increasing efficiency by which we as consumers and investors can get great deals, and our declining capacity to be heard as workers and citizens.

So as impossible as it seems in practice, I think the "fair trade electronics" idea may be the right path.

Parallax Abstraction wrote:
Paleocon wrote:

...The only course of action that seems to have any effect at all is regulation (like the ban on CFC's). And in this case, it needs to be a global agreement.

That's more and more the conclusion I'm reaching as well and it's sad because the high-tech industry is so big, so wealthy, so powerful and so dependant on this cheap, largely unregulated labour that they will ensure such agreements either never come to fruition or are largely toothless when they do. I think it's going to have to be up to the companies themselves to demand higher standards and provide enough transparency to ensure they're being met. But right now, there's simply no large scale demand for them to do so. People want their stuff cheap and that takes priority. Ugh, sometimes I hate being a gadget geek. :(

The point of shifting consumers towards Fair Trade products isn't to make any meaningful dent in the market (though sometimes that can happen, as it has in the UK especially) but rather to raise awareness that can drive political and therefore large-scale change.

Take a listen to the This American Life spinoff, Planet Money, for some recent podcasts about why industry is leaving the U.S. regardless of what tax breaks, etc., are doing. What's really interesting in one of the recent shows is a discussion of why a U.S. manufacturer is still paying a real person to do what could be done by a robot. The answer is that (for now) she's still cheaper. And that was the message in the Foxconn story as well. If labor costs began to exceed the price of machines, factories will switch to machines (and probably get better QA, too). What happens next to all the workers could be rather unpleasant, though... there is something to the claim that as terrible as these jobs are, they're better than the alternative. Or, I'm just lacking in imagination.

Like I said, I used to work for Foxconn and I think the whole China angle is really the wrong take here. If anything, the story of Foxconn is one of a globally integrated multinational.

The company headquarters, btw, is in Tucheng, Taiwan just one hour north of Taipei by taxi. It is there that the deals are cut and the contracts are coordinated.

They have primary research and development facilities in Sunnyvale, California where they design crap like connecters and PCB for whomever needs what. Those plans are then sent to Tucheng, Taiwan where the Taiwanese engineers get to work designing the production facilities. Once they are done, the entire manufacturing facility used to be shipped to Guangzhou by container ship, but I suspect now they just use one of the many contract spaces that Guangzhou as built for the purpose.

Once they are done with the manufacturing, they generally send the whole mess to either Hong Kong or Singapore to be sourced out to the destination most attractive from a tariff standpoint. If it is going to Europe, much of the stuff will be sent unassembled to Poland where trained monkeys will be paid minimum wage there to snap clamshells together and slap on "Made in Europe" stickers on them. If it going to North America, they are generally sent to Monterrey, Mexico for the same sort of treatment (NAFTA ftw!).

It's actually pretty amazing.

Here is an interesting take that also quotes some other interesting takes. I don't know that I believe in the attitude necessarily. But it does point out some of the complexities of the situation.

http://www.forbes.com/sites/timworst...

Paleocon wrote:

...where trained monkeys will be paid minimum wage there to snap clamshells.

It is pretty amazing. And I don't mean criticism, this whole thread is about reflection. Amidist all that operational orchestry, that final part the descriptor of referring to the final assembly workers as 'trained monkeys' whether they be Europe, US, Canada, Latin or South America, or Asia seems to echo of part of the problem posed in the original post.

Global enterprises thrive on the whole competitive differentiator of low cost country sourcing and their agility to adjust. Final assembly is just a skill, one with price / cost and if costs get too high either due to the local economy or regulation, they will move on. It's just a part of orchestry I guess and there is probably a beauty to that optimization, distributed work and the agility to make changes too. But how does the human factor into the global skill, and at what point is the skill more than the human. Take it a step further and its not even a skill its a cost. Maybe that is the reality of life and I guess comes full circle to the original post. When we are just considering cost, things maybe get so distanced from the human behind it that what would normally be ridiculous (or intolerable) just becomes buried in process and organizational 'best practices.'

psu_13 wrote:

Here is an interesting take that also quotes some other interesting takes. I don't know that I believe in the attitude necessarily. But it does point out some of the complexities of the situation.

http://www.forbes.com/sites/timworst...

Wow that's some impressive sophistry. I'm sure if Forbes was around in the 1850s, this is what they would write about the American South:

"Market wages for coloreds can't be compared to what good white folk make up North. They're based on what the market will pay in the cotton fields of 'Bama. And let's face it - the darkies in America have it ALOT better than some bushman in the Kalahari desert. I mean they have clothes and shoes after all!"

That Forbes article ignores the biggest point of all - wages in China are so low because China is run by a brutal dictatorship that ensures most of its population works for peanuts.

jdzappa wrote:
psu_13 wrote:

Here is an interesting take that also quotes some other interesting takes. I don't know that I believe in the attitude necessarily. But it does point out some of the complexities of the situation.

http://www.forbes.com/sites/timworst...

Wow that's some impressive sophistry. I'm sure if Forbes was around in the 1850s, this is what they would write about the American South:

"Market wages for coloreds can't be compared to what good white folk make up North. They're based on what the market will pay in the cotton fields of 'Bama. And let's face it - the darkies in America have it ALOT better than some bushman in the Kalahari desert. I mean they have clothes and shoes after all!"

That Forbes article ignores the biggest point of all - wages in China are so low because China is run by a brutal dictatorship that ensures most of its population works for peanuts.

I think that is a bit of an overstatement.

I'm no big fan of China and wouldn't want us emulating their practices, but the idea that the downward price pressure on labor is due to a "brutal dictatorship" is ignoring economic realities. The real downward price pressure is provided by the fact that there are 1.3 billion Chinese and many of them really want the better wages they are likely to get in a factory than they are toiling as itinerant dirt farmers. The same is true in India btw whose commitment and participation in representative democracy puts ours to shame.

For the majority of the 19th and early 20th centuries America was the low wage manufacturing nation of choice. We accomplished this largely by raping the environment, displacing natives, and regulating the flood gates of immigration to suit the needs of industry (providing what Marx would call "the reserve army of the unemployed"). This is precisely what made America the manufacturing powerhouse it needed to be to win World War 2 and the Cold War. And though some would argue that that immigration policy was a sort of "war on labor", the downward pressure was provided by supply, not price controls.

Supply is the critical factor here.

So if these guys weren't working in a factory for cents a day, what would they be doing? Being lawyers and earning 50 dollars an hour?

Living in a non-first world country (3rd world sounds sh*tty) I can appreciate the complaints about Apple and the charity of americans who are concerned about this, but blaming the business doesn't seem like the solution, the solution to me is in the hands of China, the factories that do this, and the workers themselves.

The US can choose to not work with China and take a hit, but it doesn't even make financial sense and it doesn't fix anything.

BTW Apple is looking at a plant in Brasil, and if some of rich guys are to be believed, Africa is being looked at as a serious future manufacturing heaven, in case China stops playing nice.

Mex wrote:

So if these guys weren't working in a factory for cents a day, what would they be doing? Being lawyers and earning 50 dollars an hour?

Living in a non-first world country (3rd world sounds sh*tty) I can appreciate the complaints about Apple and the charity of americans who are concerned about this, but blaming the business doesn't seem like the solution, the solution to me is in the hands of China, the factories that do this, and the workers themselves.

The US can choose to not work with China and take a hit, but it doesn't even make financial sense and it doesn't fix anything.

BTW Apple is looking at a plant in Brasil, and if some of rich guys are to be believed, Africa is being looked at as a serious future manufacturing heaven, in case China stops playing nice.

Brazil has real possibilities, but they have had worries about security and the stability of business friendly policies. The election of Lula, for instance, has executives worried about such liberal claptrap as workers' rights, environmental protections, and indigenous rights claims.

Africa takes those problems and adds religious and tribal conflict, the real threat of nationalization of properties, and the stability of national governments who generally owe their positions to angry armed men.

So far, China is the best game in town.

The "solution" that both bleeding-heart socialists and hard-hearted capitalists would agree on (I think) is a flatter economic world where disparities between incomes are much lower than they are now. How to get there is, I think, the real question.

Padmewan wrote:

The "solution" that both bleeding-heart socialists and hard-hearted capitalists would agree on (I think) is a flatter economic world where disparities between incomes are much lower than they are now. How to get there is, I think, the real question.

I'm not sure that there is any agreement on that score though. If the disparity doesn't exist, the potential for profit diminishes. As a hard hearted capitalist, I'm not sure that meets with my own interests.

What I am, however, willing to accept is international agreement on base standards for trade. We tend to agree, for instance, that trade in endangered animals parts, human organs, and dangerous weapons of mass destruction is generally bad. We have also done a yeoman job at limiting the use of CFC's.

I don't need the world to be economically flat. I just need some rules we can all live by so we don't end up f*ing it up for anyone who comes after we are done with it.

Serengeti wrote:
Kraint wrote:

The bit that was posted regarding getting 8,700 engineers in 15 days just shows off that the factory is compensating for piss-poor planning. Maybe Apple just doesn't know what they are doing on the production side of things.

The thing you're missing is that you need those engineers to come on board at roughly the same time in order to go from zero production to full production in a reasonable time-frame. A company like Apple can't design a product and then slowly start rolling it off the line over the course of 9 months; they need to finalize the design and then swing into full production immediately. China has the skilled workforce to accomplish that and the US doesn't, that's really all there is to it.

I'm not missing anything. I'm saying you don't have only 15 days to hire people if you are building up a new factory or prepping a design. If you are waiting until your design is complete before you start working out how to build the thing, you are not competent. You have many months, if not years, of work to get a factory up and running for production just in terms of the facilities. If Apple went to a manufacturer, pointed at an empty field, and demanded an iPhone factory in two weeks, they'd be laughed out of the country. Any company worth a single share of its stock will work with its partners months and years in advance of completion of design for manufacturing.

Just to add another article to this.

George Takei posted about this recently: Core Values

Also adding this to the first post.

If people actually gave a sh*t... they would picket outside of Apple stores around the world until enough negative publicity forced Apple to make significant changes.. But people dont give a sh*t..because cheap iPhones and iPads are way more important than worker conditions way across the world in a country most American's don't really give two sh*ts about.

Besides.. Apple couldnt compete effectively with all the other companies doing the exact same thing Apple is doing... yet probably not quite as hard and efficiently...thus Apple is making money hand over fist.

TheGameguru wrote:

If people actually gave a sh*t... they would picket outside of Apple stores around the world until enough negative publicity forced Apple to make significant changes.. But people dont give a sh*t..because cheap iPhones and iPads are way more important than worker conditions way across the world in a country most American's don't really give two sh*ts about.

Besides.. Apple couldnt compete effectively with all the other companies doing the exact same thing Apple is doing... yet probably not quite as hard and efficiently...thus Apple is making money hand over fist.

Yes, because protesting Apple will stop every other major tech company that Foxconn manufactures products for.

Considering that Apple's sitting on a hundred billion dollars in cash, and that they've just posted the most profitable quarter of any corporation in history, the fact that any of their workers, either direct or indirect, is that badly underpaid is criminal.

Malor wrote:

Considering that Apple's sitting on a hundred billion dollars in cash, and that they've just posted the most profitable quarter of any corporation in history, the fact that any of their workers, either direct or indirect, is that badly underpaid is criminal.

Yep, pretty much this. And though they make a boatload more money than most of their competitors, I don't let them off the hook either because even versus their slimmer profits, they could affect dramatic change likely with only a small amount of what they're making every quarter. Yes, "legal requirement to maximize shareholder value" and all that but I don't consider that an excuse for this kind of thing happening. I'm just no more sure what we as individual consumers can do about it.