President Trump’s Made-in-America hurdle: Asia

“Asia’s sophisticated electronics supply chain and massive labor pool are two obstacles standing in the way of President-elect Donald Trump’s pledge to make U.S. companies bring manufacturing jobs home,” Kathy Chu and Juro Osawa report for Dow Jones Newswires.

“When Jabil Circuit Inc., the world’s third-largest contract manufacturer by revenue, needed to quickly ramp up production of its electronics components a few years ago, the company was able to add 35,000 workers in China in less than six weeks,” Chu and Osawa report. “‘In no other country can you scale up so quickly,’ said John Dulchinos, vice president of digital manufacturing at Jabil, a St. Petersburg, Fla., supplier to companies such as Apple Inc. and Electrolux SA. ‘You have the ability to move quickly and there’s a really strong electronics supply chain in Asia centered around China.'”

“Jabil’s experience underscores the integral roles of China’s armies of migrant workers and Asia’s decades-old supply chain in global electronics productions,” Chu and Osawa report. “It is an issue Mr. Trump will need to address if he wants to bring large-scale production back to a U.S. economy that Washington, D.C. think tank Economic Policy Institute estimates has lost more than 5.4 million manufacturing jobs and 82,000 factories between 1997 and 2013.”

Read more in the full article here.

MacDailyNews Take: Who says the armies of assembly line workers will be humans?

The manufacturing jobs of the future will be focused on keeping the robotic assembly lines running in “lights out” plants. In fact, it’s already happening and has been for some time now. Note to The Wall Street Journal: This is 2016, not 1986.

The robots will come eventually. There are too many benefits. They don’t get tired. They don’t make mistakes. They don’t jump off roofs…. Etc. — MacDailyNews, December 5, 2014

SEE ALSO:
Apple assembler Foxconn now has 40,000 ‘Foxbot’ robots working at factories in China – October 5, 2016
Apple supplier Foxconn replaces 60,000 factory workers with robots – May 25, 2016
Foxconn robots better, but still not precise enough to assemble Apple iPhones – December 5, 2014
Foxconn CEO disappointed with current-gen iPhone-assembling robots; next-gen ‘Foxbots’ in the works – September 22, 2014
Foxconn to deploy ‘Foxbot’ robots for iPhone assembly – July 7, 2014
Why Foxconn’s iPhone robots could create American jobs – February 2, 2014
Apple dives deeper into designing and inventing robots, other manufacturing tech – November 22, 2013
Robots made Apple switch to ‘Made in the U.S.A.’ Macs – December 11, 2012
Foxconn’s 2012 plan: More robots, no layoffs, zero suicides, new factories – November 22, 2011
Foxconn to replace some workers with 1 million robots within 3 years – July 31, 2011

44 Comments

  1. The media is always look for some excuse to make whatever Trump does look bad… Without any examination of results of the current Administration’s utter failure in 8 years to get economic growth much more than 1%, which is terrible, nor have they condemned the 10 TRILLION dollar debt accumulated by one man in 8 years.. which is more than ridiculous..

            1. of course I am not getting an answer from you because you are a coward…there’s not one person here on MDN’s international pool of commenters that won’t proudly state their home country…everyone except YOU, Mr. Coward.

            2. Oh, but several here have asked before and got their answer. You haven’t and won’t ever get it from me.

              In every single response to me, you were rude, called me names, and more often than not used expletives and profanities. There is absolutely no reason ANYONE here would bother answering any kind of personal questions from you.

              If you’re hell-bend on finding out (as I said, your obsession is becoming truly disturbing), you can do it by looking at my posts here over the past twelve years. You simply won’t hear it directly from me, since you don’t deserve the dignity of my answer.

              There are other people on this board who are polite, and I have no problem engaging in any kind of conversation with them.

            3. You keep repeating the same thing. You should know this (I think I told you dozens of times); saying something that isn’t true many times doesn’t make it any less untrue if you keep doing it over and over. Goebbels may have said that if you say a lie and keep repeating it, people will come to accept it as truth (some dispute the provenance of the quote, but regardless, Trump clearly proved it during his campaign), but while it may work on a large scale of uninformed people, it doesn’t work when your audience understands the matter and can easily spot a lie.

              Just give it a rest, man, it is really hopeless.

        1. Are you sure you’re reading the chart properly? It appears to be how many dollars you get for 1 Euro. The chart does show an all-time low meaning the EURO is at an all time low (weaker) not the dollar.

    1. Please, give it up! Do not attempt to cast Trump as the poor persecuted old, white billionaire with the Russian model trophy wife… Oh, woe is he…

      Your gripe is the typical oversimplification and twisting of a much more complex situation which *did not start eight years ago!* Give up the politicrap!

    1. And maybe the robots will NOT Abe made in the USA….

      Regardless of the answer, the long term trend is towards increased automation, which means that both the USA and China will have fewer jobs for this type of workforce.

      And there’s also automation trends for replacing highly compensated “knowledge workers” too, so even a strategy of having more become college educated white collar professionals isn’t a panacea either.

      As such, the topic
      Is vastly bigger & broader than merely assembly jobs in country A vs B.

      -hh

    2. Making robots requires no more skill than making cellphones. If the US wants high-end jobs, they need to be aggressive in market segments the rest of the world can’t match, and the only advantage they can leverage is a better-educated workforce that does higher-end jobs – service, financial, enterprise, managerial, etc.

      Only by aggressively educating the US population more than any other country will you be able to create jobs that other countries can’t do more cheaply.

  2. If Trump makes it difficult for American companies to manufacture products in China, there will be plenty of American companies less able to adjust to it than Apple. Apple only makes a limited range of high value products and is already using a degree of automated assembly.

    I’m not saying that it will be easy to switch to 100% robotic assembly, but Apple is better placed to achieve that than most companies and as they design new versions of their products regularly, it would be possible to design the next version to be better optimised for automatic assembly.

    However such a stance misses the point because while those jobs might disappear from China, there won’t be much of an increase in jobs within the USA because it would only be possible to do those sort of tasks in developed countries by using automation and besides, automated factories could be sited anywhere – not just in America. They can be located wherever the demand is or where land, energy or transport is cheapest. Apple could end up building iPhones in the US for selling in the US, but building the rest of the world’s supply of iPhones in other places.

    China won’t sit by and watch hundreds of thousands of lucrative jobs disappear. They will make it very difficult for American companies to operate or sell in China and that would impact on Apple as they had made so much effort to operate effectively within China and have recently been enjoying the benefits from preparation work done many years ago.

    The silliest aspect about this is that in Apple’s case, automation is inevitably going to be a growing factor with iPhone production anyway, so it isn’t really necessary for politicians to go out of their way to upset China and it won’t noticeably increase employment in the US either.

  3. The think tank states millions of job losses over the years –what about the benefits of lower costs, more product variety, higher quality and less inflation to millions of Americans over the years ?

    If tariffs rise on Asian products -inflation in every major sector will rise -as us companies will raise their prices as well. And those with flat incomes will be hurt

    Need more complete picture

    And Jabil is right -no country can gear up like China -not even the USA

  4. “Who says the armies of assembly line workers will be humans?”

    Very Good comment MDN. What Apple is doing slowly but surely is changing the iPhone by eliminating external connections, buttons and such to the point where they will eventually be able to snap the LCD & circuit board assembly into a LiquidMetal case. Charging by wireless methods will be one of the key methods to reduce complexity.

    I don’t know how long it will take Apple, but near fully automated assembly is coming.

    We have reached a point where the actual size and shape of a phone is not likely to change, so changes going forward will have to be to simplify and reduce costs. The competition will try to do the same.

    1. @Bo,

      The design elements (such as port elimination) actually have very, very little to do with automated manufacturing.

      And even traditional design elements (such as alpha & beta symmetry) are becoming secondary due to technology advances in machine imaging, pic part handling, etc.

      -hh

  5. “… has lost more than 5.4 million manufacturing jobs and 82,000 factories between 1997 and 2013.”

    Welcome to our world folks. The attempts to stem it sound somewhat familiar too though they may slow the trend sadly they failed. Indeed MDN may be right, only robot workers and automation may have serious effect on stemming the tide, though maybe then only to anything close to parity when the machines are repaired by robots while robots design the machinery and processes. Problem then is it doesn’t provide the jobs that this whole response is supposed to generate. Ironically its the cheapest jobs that will tend to stay human the longest… cleaner anyone?

    1. and that is the nub of the problem isn’t it?

      while the use of robots is a boon for manufacturers, their managers and stockholders it is a disaster for working people. eventually will be gone the last of the decent paying jobs in manufacturing, and we can all look forward to service sector jobs. you know, minimum wage.

      then what ? apart from the well educated and well paid, such as engineers, doctors, lawyers, politicians and maybe construction workers, who is going to be left to be able to afford these products ?

      even henry ford had it figured out – before he became a rich, old, reactionary, scrotum – that in order to for people to buy his products they needed to make a decent wage, which is why he raised the salaries of his own workers far above the prevailing wages of the day.

      we are sailing into uncharted waters and ….beyond there be dragons

      1. Reminds me of the argument of the Luddites.

        After all, if you let these damnable powered looms take over, there will be no jobs for weavers and the England as we know will implode into uselessness.

        Really?

        Shall we ban automation in auto assembly plants and then our cars are made by more workers, but the $20,000 car goes to $30-35,000?

        1. you make a facile argument, on the face of it,

          but back in those days of looms, off-shoring was mostly in the realm of gaining raw materials – hence the age of colonialism. unfortunately, today, off shoring involves sending away not bringing in raw materials. jobs going to lower paying countries – and therefore translating into lower cost to manufacturers and improved profits.

          so if robots begin dominating our remaining manufacturing jobs here and lower cost labor overseas attracts other american manufacturing, or at least assembly jobs, what does that leave for us at home ?

          poorly paying service jobs.

          1. In reality, the majority of Apple’s iPhone labor is likely in the discreet integrated circuit “chips” inside it, even though those chips are made in automated clean rooms.

            What Apple is doing right now is putting more of its circuits onto the CPU chip. As that integration results in lower chip and labor costs, it becomes easier to assemble iPhones.

            My bet is that over time, Apple will continue to lmprove designs to minimize labor and eventually it might be possible to get nearly completely automated phone assembly. It might take a decade to do.

            The reason plants in China need 35,000 workers is simply that iPhone/component makers truly do NOT have fully automated assembly.

            1. Apple’s domestic (US) workforce continues to grow, even though it has long ago abandoned domestic manufacturing (with the exception of that one small plant in Texas that’s putting together the trashcan Mac Pros). And that is probably the best example of the direction the country is taking. You won’t be able to employ skilled uneducated workers until they get trained for the jobs that are in need. And not all service jobs are minimum wage. There is work besides picking up garbage (or picking strawberries). We’ll still need plumbers/pipe fitters, electricians, carpet installers, farmers… There is a large spectrum of occupations between an engineer and a garbage collector.

              The point is, manufacturing job loss is nothing new. Industrial revolution is the primary driver of it; the more we improve our manufacturing, the fewer people we need in it. Most developed countries have consistently been moving away from low-skill, low-paying manufacturing. There is no reason for America to stay stuck in the 20th century while the rest of the developed world is in 21st.

  6. I think some of you are missing the point. If Apple and its competitors moved their manufacturing home with robotic factories, that would not put a lot of additional jobs or wages into the U.S. economy. To the extent that it made Apple less profitable, it would be taking money out of the economy. It would not help with the repatriation of profits problem, since the overseas cash is being generated by overseas sales that are completely independent of where the devices are made.

    As Steve Jobs pointed out (and this article just restates), the real advantage that Asia has isn’t that wages are low (you could raise your prices to compensate for that)—it is that there is an enormous population of qualified and motivated workers who are willing to relocate on short notice to follow production cycles as they move from one plant to the next. There are millions of people who are willing to forgo what Americans would regard as a normal family life to live an itinerant existence while sending checks home.

    Where in America could you hire 35,000 qualified workers and start production on six weeks notice? There is no such place, so moving manufacturing home would require very high levels of automation and much longer transition times to retool between one product line and the next. That translates into enormously higher capital costs than relying on Asian labor. There would also be increased material costs, since most of the components are also made in Asia and would have to be shipped to America.

    Not only do automated plants require a lot fewer workers, they require a completely different skill set than you are likely to find among laid-off miners, steelworkers, and boilermakers. As Mr. Jobs said, those onshore manufacturing jobs are never coming back. Telling people that they will is simply giving them an excuse to postpone retraining for the new economy.

    1. Don’t disagree with a word you said. So what can be done for the millions of low skill U.S. workers? They can’t be left to rot. Rightly or wrongly it’s the whole reason Trump got elected.

      1. The only hope for those people is re-education and training toward new fields. Those that can be educated for higher skills will make more, and those that can be trained to do harder, more-complex, or more dangerous work (mining, construction, roadwork, etc.) will have higher paying jobs, and their success can help grown the economy. Even those that can’t be trained will stay in menial (and I mean that in the most respectful sense) positions such as janitorial, sanitation, and other low-skilled service jobs. And they’ll only be able to grow the economy if we are successful exporters or goods or services so we can keep these people gainfully employed and consuming.

        It’s a global world now, and an advanced one. Going forward, only by aggressively educating our children will we make them competitive and give them (and our nation) lives above government subsidization. Good or bad, we can’t leave any child behind because they’ll drag us all down.

        The alternative is that we continue to stagnate, the value of labor falls, our citizens become less employable and less productive, and the other nations that aggressively invested in their own children will one day own us.

      2. One of the highest paying jobs for non-college educated workers is long-haul trucking. Self-driving trucks are already here, and will decimate the ranks of truckers — at least for interstate commerce.

        So, what can be done for low-skill workers? What other industrialized countries have done: increase employment by mandating shorter work weeks, longer vacations, earlier retirement ages and a strong social safety net to allow maintenance of middle-class lifestyles while working fewer hours.

        Of course, SOMEONE has to pay for all that, but don’t look for the current (or incoming) administration to re-engineer our economy to make this work any time soon.

        1. Wait, what? I thought that’s why Trump was elected, to shake things up. 😉

          So yes, the European socialists have been creating shorter work weeks and longer holidays. You and I both know that it’s expensive, ethically challenged, and sends the wrong message to everyone that it’s OK not to push yourself and get an education and that the Government will take care of you because you deserve it. It was entirely foreseeable and inevitable that this solution would result in tension and resentment on both sides. Still didn’t stop them. To bridge the divide we need to find a solution that is fair and where everyone can win.

          I did not vote for Trump (or Hillary) but I am excited to see what he might do. While his words on trade do give me pause (no country ever got rich by restricting trade),
          what he might do to simplify the tax code and create an environment where small businesses can start up and be successful provides some measure of optimism. His likely redirection of the EPA away from dictating draconian prescriptions to combat a potential 2 degrees rise of temperatures a hundred years from now is heartening (sorry global warmers). Those things can have a positive material impact on job prospects for those without college degrees. These people need hope. And they need to believe that someone gives a damn about them. Many on both sides of the political divide need to do some soul searching. The liberal left certainly didn’t get it by lumping them all together as a “basket of deplorables.” And while the conservative right talked a lot about helping the common man, most actions they took in congress went to help the middle and upper classes. Look be him or hate him, Donald Trump spoke for the common man. And if I’ve learned anything in this political year it is that much of the country it truly hurting.

  7. Apple has been using robotic assembly systems since the Fremont plant back in ’84. Sometimes a robotic system does not make sense and is more costly, as in that Fremont plant that closed less than a decade later.

    Apple needs to look at this on a case-by-case basis. Sometimes humans *are* more cost, quality, and time flexibility effective.

    I don’t expect the fully automated, “lights out” plants for Apple products (raw materials, e.g., aluminum blanks for cases, go in a few dozen “doors” and an Apple product, e.g., an iPhone in its shipping box, goes out another door) to happen for then next 10 years or more, but for some Apple products it *will* happen.

  8. Reuters President Elect Donald Trump announced today that to bring back manufacturing jobs to the U.S. he would immediately begin negotiations to bring foreign workers here, after a program of extreme vetting and employ this massive influx at wages comparable to those they receive in Asia. The “They are all very small, but big league workers, I have to tell you,” said the President Elect.

    1. Marvellous — there goes his “American jobs for American workers” hyperbole and his immigration ‘policy’.

      Unemployed blue collar voters aren’t going to be happy about that. Not one bit. It’s the complete opposite of what they thought they were voting for.

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