“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,” Charles Duhigg and Keith Bradsher report for The New York Times. “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? 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,” Duhigg and Bradsher report. “By 2004, Apple had largely turned to foreign manufacturing. Guiding that decision was Apple’s operations expert, Timothy D. Cook, who replaced Mr. Jobs as chief executive last August, six weeks before Mr. Jobs’s death… For Mr. Cook, the focus on Asia ‘came down to two things,’ said one former high-ranking Apple executive. Factories in Asia ‘can scale up and down faster’ and ‘Asian supply chains have surpassed what’s in the U.S.’ The result is that ‘we can’t compete at this point,’ the executive said.”
“Another critical advantage for Apple was that China provided engineers at a scale the United States could not match. Apple’s executives had estimated that about 8,700 industrial engineers were needed to oversee and guide the 200,000 assembly-line workers eventually involved in manufacturing iPhones. The company’s analysts had forecast it would take as long as nine months to find that many qualified engineers in the United States,” Duhigg and Bradsher report. “In China, it took 15 days.”
Tons more in the extensive full article here.
MacDailyNews Take: Many make their living from Apple who do not work for Apple, ourselves included. Mac developers and iOS developers, for one example. iOS device accessory makers, for another. The impact Apple Inc. has is enormous and the amount of employees on Apple’s payroll, regardless of country, pales in comparison to the number of jobs and economic activity the company actually generates around the world.
Related articles:
How Rick Santorum would lure Apple to move assembly from China to Charleston – January 21, 2012
Apple’s real market value: How many U.S. jobs it creates – November 21, 2011
iOS developer salaries skyrocket – November 9, 2011
How many U.S. jobs has Apple’s iPod created? – July 8, 2011
It is an absolute lie that iPhones cannot be assembled in America. Tim Cooks just prefers to use slave labor in China in order to maximize his gross profit margin.
What do you think the purpose of a business is?
Oh – Do you think that a “maximum profit” is justify any (human) price?
Poor material Apple-Lemming!
Btw – heard that China is meanwhile owner of half US? – Whats about that?
Wake up poor Apple-Lemming!
No, you wake up!! The minute Apple starts to use expensive labour (ie American) then you will see that Samdung phones will be WAY cheaper not just a little cheaper. At that point you have started to suck Apple dry until it becomes a GM or CHRYSLER. shitheads like you are happy to suck things dry and then move on to the next thing.
China owns less than 3% of US debt. There is so much bullshit floating around issues such as the Foreign Oil nonsense, that it only serves to cloud the real issues. The US is in this situation because of the Wall Street greed merchants and their control of the government and the end of regulatory oversight.
Dream on swing idiot. Your the one spreading the bullshit. I’m sure you think killing the Keystone pipeline and all the jobs and cheap oil it would have provided a good thing you freak.
It’s “you’re”
Yeah not having those <3000 temporary construction jobs for Keystone so that Canada could very expensively (and dirtily) get out all that tar sands oil was really a horrible loss.
Keystone was not killed… merely delayed so the process could complete itself…
The Republicans were pushing it through, trying to override the wishes of a Republican Governor of the state of Nebraska.
This non-issue is being used as a battering ram against Obama.
Typical political bullshit.
Ever hear of iPhone autofill t-ass?? Obviously it’s “you’re” jack ass. Your incomprehension of Maobama’s destructive powers to the US and it’s economy is what is truly pathetic. Killing Keystone is beyond idiotic and brain dead. It is an issue MARKO, you dumb ass!!!!!
Apple-lemming? I think you need to wake up (and possibly stop projecting) Having a minority share in almost every category (except iPods and recently iPads) Apple’s customers are decidedly bucking the trend, not following like lemmings.
If any group could be reasonably categorized as mindless lemmings it is the group who keep buying MicroSoft products (windows & office).
apples use of chinese labor minimizes the human cost and maximizes the benefit of apple to mankind. Those who think profits come at the expense of humans are ignOrabt of economics or just evil.
The idea that communism had no human costs is rebutted by the 200 million people killed by your kind.
You go, Gary! That Tim Cooks are bad!
I sincerely suggest you look up the term ‘slave labour’ and read it and understand it before making such incredibly stupid statements, as it’s perfectly clear you are displaying utter ignorance of what slave labour actually is.
Fucking dimwit.
Wake up Gary. The US has dumbed down the proletariat to such an extent that it’s easier to put your hand out than to put your shoulder behind the wheel. Where do you think we could get 8, 700 industrial engineers just for one business, when our kids can’t read or do math. Just check out the passing grades of pupils in public schools. Ask the unions what they’ve done to the schools and jobs. Would you pay $2000 or $3000 for an iPad?
JP, you are starting to sound like F10T12 and his cohorts. I thought better of you. Why did you have to stoop to the same technique of tossing around inflated and baseless costs for iOs devices? For shame! A 72 year old lady should know better. You were brought up during a time in which the truth was important.
FYI. I’m a 78 year old ex limey.
The reason it won’t work in the US now is unions. Unions just prefer raping the US every chance they can. And they are a slush fund for the Demo-commie party. Private and government unions. They all donate massively to the Demo-commie party. It’s a cozy little racquet they have going. And it’s the downfall of the US and Europe.
The enviro-nazis won’t and the democrats won’t ever let manufacturing happen in the US. They want to bring us all down.
Your comments are simply not true. The average wage of a chinese worker at foxconn is $111/month. No US labor, Union or not can compete with that. Surprisingly, the areas where american manufactuwring labor can compete on a global scale is in the presence of organized representation. I am not some ultra left wing guy here.
Agreed. If the auto industries all left then returned (as they did) to America there is a way for phones.
If Americans really beleive those jibs are not returning then something needs more to be done.
Without the manufacturing, farming and core services of labour — we might as well lay down and die.
Come on! Are you serious? And, after all, what do you know about US capacities and skills for electronics?
Just having nationalistic dreams do not generate skills by “magic”!
Your comments show a complete lack of understanding as to what is needed in the American economy.
I don’t give a shit where they are built or who builds them. I am in it for the money. Pay minimum wage wherever, and keep their asses to the grindstone. I want to see big profits so I can maximize my investment. I intend to buy a Porsche and find a Wallstreet occupier to wash and wax it and my toilet at home. After that, I will slap them to remind them they are the scum that they are.
Great Article and a few worthy quotes:
“We shouldn’t be criticized for using Chinese workers,” a current Apple executive said. “The U.S. has stopped producing people with the skills we need.”
“This country is insanely great. What I’m worried about is that we don’t talk enough about solutions.” – Steve Jobs
I thought this was particularly informative “The Chinese government had agreed to underwrite costs for numerous industries, and those subsidies had trickled down to the glass-cutting factory. It had a warehouse filled with glass samples available to Apple, free of charge. The owners made engineers available at almost no cost. They had built on-site dormitories so employees would be available 24 hours a day.”
Yet when we even speak of government support for training and business development we get a chorus of “too much spending”, Randian BSand John Wayne posturing coupled with the Party of No blocking every move. We (the people) are doomed by the power elites until we take the country back. Obama isn’t the problem, unfortunately, he doesn’t seem to be part of the solution either.
Together we stand divided we fall
Globalization is the new normal. Like it or not it’s here to stay.
Nations that have prospered have grown, mined and built “things” from Mesoptomania to Egypt to Today.
“Mr. Jobs even suggested it might be possible, someday, to locate some of Apple’s skilled manufacturing in the United States if the government helped train more American engineers.”
I will second that notion with an example.
Oregon Institute of Technology (where I graduated w/honors) has a 95+% graduate employment rate within 6 months of graduation! OIT’s graduates often have to wrack their brains trying to decide which job offer to take, often before graduating!
OIT graduates can hit the ground running in their field as they have hands on experience in their field. Is there any reason not to copy this method of teaching and educate high school students why this makes sense today?
Would you get $100,000 in student loans to graduate in English History or Literature and expect lots of job offers?
To bring back jobs, the US needs to create at all levels and downsize government restrictions and spending that are BOTH overtaxing everyone while paying Federal workers twice the average salary of a similar private sector worker.
The elite class of 6% in Russia doomed the 94% as they took all the perks. It is starting to look the same way in the U.S. The collapse literally ruined majority of the 94%. It can happen here if the government is looked at as having answers.
Apple has more answers in its real world strategy for growth than all of Washington D.C. Time to admit it and move on.
While I agree with your overall premise, “downsize government restrictions” is what created this financial mess in the first place. You can thank both Democrats and Republicans for the gift.
To reduce regulatory oversight in the areas of finance and environment is plain crazy, especially given the horrid track record of the Financial, Oil, Chemical and Mining sectors. Each has painfully demonstrated to the world their inability to self-regulate themselves in an ethical and eco-sustainable manner.
You can’t get the tea party folks, the Republican elites, or the other naysayers to agree to invest in America in any form. They are dooming us to third world status within 50 years. An investment of this scale can only be taken on by government.
To put the education systemof the United States and China into perspective.
China has more Honor Students (top 10%) than America has students.
i think you are clueless – the chinese labourers are mostly farmers coming to the city and earning about 60 to 70 USD a month – they are trained to do simple repetitive tasks.
Yes the education is fierce competition in China and all the world – the numbers maybe a little skewed as the population greatly out numbers USD,
You’re clueless for replying to a point Photoflight never made. His point was specifically about engineers available, as brought up by Jobs. Engineers are not the common labourers
doing repetitive tasks.
There are more of both because yes China has way more people.
The are many problems with starting a manufacturing facility in the states. However, those problems are, in all cases but one, solvable. The one insolvable problem is that unless everyone did it, the be company that did would be at a sizable cost disadvantage. Apple doesn’t build in China because it likes Chinese labor over American labor, it does so because everyone else also uses Chinese labor (or whatever labor is cheapest and most expendable).
Obviously, the US needs to not allow people decide what they do for a livIng. We need to look at the needs Of business and channel people into those fields. I assume that is what happens in China.
Why the heck cant people understand that apple sub contract manufacturing to OTHER companies. Go bug Foxconn, samesung etc to bring manufacturing jobs to the USA. I’m sure none of you will be complaining when your air quality goes to pot or you can’t see the trees for the smog.
“air quality” – “pot”, “can’t see” – “smog”… why do I envision California and the Democratic politicians with their environmental fascist friends?!
Good luck drinking that clean water free from pig blood!
Looks like those wonderful EPA regulations that companies have to jump through hoops for are paying off REALLY WELL!!!
http://www.msnbc.msn.com/id/46078322/ns/local_news-dallas_fort_worth_tx/t/pig-blood-trinity-river-dallas/#.TxuKpXPI7_Q
Moron. There are lapses, but the regs are in place to control companies’ environmental impact and punish them for lax self-enforcement.
We have a prime example of conservative cuts to water control regs leading to the e-coli deaths of 12 people in a town in our province. Another round of cuts to federal food inspectors led to lysteria outbreaks in processed meats.
Unregulated industry works only where the production and client base is small, any bigger and corners are cut.
Dumb ass, “lapses” is the idiot’s excuse! Lax self enforcement? BS! A person’s gonna do, what a person’s gonna do. Same with a company of any size! That’s why the EPA needs to be abolished. Less centralized and more concentration on a state level where each state has their own needs. I bet half those nitwits writing these stupid regulations have never been exposed to the businesses they regulate, nor visited the states where those businesses are in and discussed in partnership versus dictates from up on high, because we all know those pricks in DC know everything!
“So while the Maximum Achievable Control Technology (MACT) as well as Cross-State Air Pollution Rule (CSAPR) rules are going to wreak havoc on places like Texas, destroy the coal industry, and ultimately force power bills to increase almost as quickly as energy sector jobs are shed, the United States government will be embarking on its own jobs initiative: 230,000 freshly minted pencil-pushing bureaucrats!
As stated above, these new jobs would serve the purpose of enforcing all of the new regulations under the Clean Air Act which was created by the EPA in 2009. So why are courts involved? Because the EPA is deliberately violating the very Clean Air Act they are intending to enforce.
In summary, they can’t keep up with regulating something that they volunteered to regulate, so rather than reconsidering the law, they are just breaking it. And while they’re breaking it, they are requesting that taxpayers (you know, the people who don’t have the option to simply break laws that are overly burdensome) have to fork over $21 billion so the EPA can hire enough bureaucrats to handle the absolutely ridiculous hours it would take to regulate all of the carbon dioxide in America.
Even the EPA acknowledges that it’s all pretty insane:”
http://www.redstate.com/aglanon/2011/09/26/epa-calls-compliance-with-own-law-absurd-or-impossible-and-requests-230k-new-employees/
ABOLISH EPA! That would be a start…
I was acutally referring to when china had to shut down all production from factories for the Olympic games to “clean up” thier air quality.
I don’t live in the USA or care one jot about the American Political system. Not every comment on MDN is “Right” or “Left” Wing.
Did anyone reading this pay attention to the details?
$65 Dollars. Thats the estimated difference in labor cost in manufacturing an iPhone in FoxConn and here in the states. The estimated profit more than covers it.
The problem is, as the article says, we do not have the trained engineers, nor the supply chain. In short, we need a short sharp kick to the Corporate Head in this country. We need a major shift.
Bluefinpro, “In short, we need a short sharp kick to the Corporate Head in this country.” Really.
Ever tried to get a permit to quickly build a 250,000 square foot building to get into production in 4-6 months in the U.S.
Good luck!
Sure, because in China, the government hacks and their friends steal the land from the rightful owners. Then there are no standards on the building or the operation (to whit, the explosions last year at plants producing Apple products)
I was being too glib in my comments about time to get a building up as a means of illustrating a point. Sorry for not being more clear.
The largest point is the cost of doing business which encompasses many dozens of factors. The US has become a very high cost place to do business and every business knows it. Anyone can read the surveys on business costs, the places with least and most costs, both within and outside the U.S.
If you make your item in the U.S. and the labor is a significant % of the manufacturing cost, your competitor outside the US will likely start taking your business away, because US CUSTOMERS, all things being equal, will buy the less costly item.
I will readily admit that this big change is making it very difficult for unskilled workers to get decent paying jobs. My only answer to counter this is to wind up training people to constantly upgrade their skills.
If I were to make a suggestion, it would be that those receiving unemployment would be required to attend training classes at least 4 hours a day 5 days a week.
Problems deserve to have solutions discussed, ala Steve Jobs comments in the article when he was speaking to Obama.
Obama is Lenin! Romney is the anti-Christ! Gingrich is a soulless Eichmann! Santorum is the Black Doodler! Paul is the Alien! Businesses rape America! The government is the Root of All Evil! Liberals are Fascists! Conservatives are Commies! Democans and Republicrats eat their babies!
There. Did I miss anyone?
Not you, too! Where will the next pod be found? Run!
Apple has made possible an incalculable number of jobs here in the US. As an education Mac Support Specialist, it made my career possible. (No way would this artist have been inspired to become a fanatical Windows techie.)
If the reason that we cannot produce stuff here in the USA is becasue there are so many factories and so much manufacturing know-how and supply chain infrastructure located in China, isn’t it all a self fulfilled prophesy?
Apple spends billions of it’s own money to help it’s supply chain build the factories it needs oversees too. Cheap labor is but a small part of the immediate picture, but in the long run China is going to take this manufacturing know-how and make products that will rival Apple themselves cutting Apple out of the picture. I think we are shooting ourselves in the foot if we think the Chinese or the Taiwanese (Samsung) are not going to beat Apple at it’s own game and keep the kind of legendary profits that Apple makes today to itself and throw Apple to the curb.
I have seen this scenario play out time and again in my own field, though at a much smaller scale.
Absolutely right!
The Chinese use Apple for R&D at the moment, but at some point they’ll steal what they need to make the Mao Pad and they won’t need Apple any more.
What an idiotic question to ask. Everybody knows Americans don’t work for $200 a month.
The Obamination continues…
Ever have the feeling that some of the American public are like spoiled, uneducated children with attention-deficit disorder?
At the end of 2000, there was a budget surplus, and the national debt was on track to be eliminated. Then tax-cut that benefited mainly the affluent was enacted, two un-budgeted wars were launched, and a prescription drug plan that provided a windfall to big Pharma. Financial industry regulations were repealed or ignored, and by the later half of 2008 the economy collapsed. There are a number facts to consider. First, the administration prior to 2001 raised taxes on the highest income earners, and the economy blossomed. Second, for most the period of the great American prosperity, which began after WWII and ended around 1974, the highest tax rate was a confiscatory 90+%. At the very least this proves that the relationship between taxes and economic prosperity is hardly a simple inverse relationship. Third, the good luck of being relatively isolated by two oceans allowed the US to remain relatively unscathed during the two internecine wars (WWI and WWII) that devastated the rest of the world, particularly Europe. Many of the most talented individuals fled to the US, and with the country’s natural resources, the US emerged as a superpower. These conditions no longer apply. The quality US education is at best highly variable, and few are willing to have their taxes raised to improve it. The same applies to every facet of infrastructure. As Bacevich argues in “Washington Rules” it is naive to expect that electing any political party over another will change anything because of three deeply ingrained flaws: selfishness, hubris, and sanctimony
What a refreshing change to read a rational, well constructed analysis on this site. Nice to see someone writing with their brains rather than their gonads.
You could add pig ignorance and unreasoning patriotism to the list of deeply ingrained flaws.
It doesn’t matter which party or what sort of president is elected. The business of America is War and the government acts as their agent channeling the common wealth into the private purse and bankrupting America in the process.
^ The only comment on this board worth reading.
MDN does not “make its living from Apple”
It makes its living from third parties who make their living from Apple.
The genesis of America’s present morass begun 30 years ago. The blame should lie with policymakers, politicians, think-tanks, economists and Wall Street. All of them bet on the wrong horse:
1) At that time America’s dollar was still strong and it was wrongly used as leverage to manipulate the world’s money markets to dance to America’s dictates;
2) America’s foreign policy dictated that the economies of friendly countries should be strengthened with the export of American technical know-hows and production techniques to the extent that it was alright to let many of its “sunset” industries to die in order to win and influence friends;
3) The tome of hubris among America’s intellectual think-tanks and economists that America can survive from a manufacturing base to that of a service-base economy;
4) the use of buzzwords such as globalization, competitive advantages in the hope that America can still rule the roost;
5) The belief that savings was no longer appropriate for growing and sustaining an economy and that America’s consumer society can be the engine of growth for the world’s economy;
6) The belief among opportunistic Wall Street’s financial institutions and sevice industries that America should use its financial wizardry and forte in exchange for foregoing its industrial advantage in order to force other countries’ financial and service sectors to open and accommodate to American banks and other financial institutions;
7) The elevation of foreign policy to the detriment of domestic policy from both the Democratic and Republican parties. From Nixon to George Bush foreign policy was the easier route to burnish personal weaknesses.
These are some of the reasons that I can think that had contributed to wrong decisions, which if elaborated fully could lead to a complete encyclopedia.
Don’t merely look at the symptoms but more importantly realize the causes. It’s too late to shut the stable door after the horse has bolted. Americans have been fooled by politicians and those highly paid thin-tanks and greedy Wall Streeters.
When energy costs rise enough the globalized supply and manufacturing model Apple is using will fall flat on it’s ass.
The guy says the USA lost iMac production over about 15 bucks a unit. That’s pretty sad. Goes to show you can’t count on American business to do the patriotic thing. Need a 15 dollar/ unit tariff is what we need. Go try and sell a ford car in China and you’ll see how it works going in that direction…
American’t did this to ourselves by making Free Trade out mantra and not Fair Trade. At the same time baby-boomers raised their kids to know how to buy things not know how to make things. And it isn’t education anymore it is edutainment, infotainment, polititainment, religitainment, etc. Apple, in fact, is one of the few companies that has never relied on big government contracts or handouts to grow, like HP, Microsoft, Dell and Blackberry have. My criticism of Steve is that he should have taken a salary that he would have paid maximum Social Security taxes on. He didn’t need to save the company $150k per year but state and federal governments could have used the tax dollars. This is the example of American Exceptionalism that sucks: our tax system is regressive (the poor pay the highest %age of income in taxes) and Apple should discourage that. But make iPhones in America? Apple is just waiting for the American firm that comes and sells them the right deal. But in American’t, no one can anymore.
In various judgmental tones, some here have said:
– Chinese communism is more efficient and cost effective than democracy, and “nobody can compete” with that manufacturing prowess
– “environazis” have made it too expensive to manufacture anything in the USA
– Americans are all greedy (and that is good when working for a company like Apple but bad when working for one’s own interest or for a Union)
– Americans are lazy and stupid (compared to what is unclear)
How many of you who sympathize even partially with the above statement are currently driving a nice european car? Did your German luxury sedan not outcompete other rivals, even with a 40% exchange rate penalty that the US dollar has over the Euro? Why is it that German workers can sustain a balanced economy, essentially buoying all of Europe, with democratic processes in place to prevent “eminent domain” communist abuses, with very high labor standards, and with very effective and economically positive environmental standards? How come they accomplish all of this, you the “job creator” Americans buy their products, and yet you claim American can’t do the same???
I suspect the answer is simple: blind ideology to Wall Street boom/bust greed rather than long-term stability and economic prosperity for ALL.
They would have moved to Texas or Florida or NC anyway California is to tuff to do business. Between the payoffs to the Democrats and unions, and the lawsuits It is just not worth the effort Plus US companies make everything to the lowest common denominator. They couldn’t make an Apple product here nobody would buy the machines