Apple asserts china has the skills and America doesn't? Aren't they the problem?

mcmachine · Dec 21, 2015

If Apple made the commitment to manufacture years ago the industry would have grown with them.
It is easy to say today that America does not have the skills needed.
Apple and others are the problem....Why can't they be the solution.
In Fact Tim Cook send me a RFQ!

[email protected]

These companies have killed the trade.
It took along time to kill the industry it will take a long time to build it back.
make a commitment to work with the skilled tradesmen left!

Tim Cook: Apple products aren

Ries · Dec 21, 2015

Its not about assembly costs.
The average iphone only has under ten bucks of chinese content. And that is mostly assembly labor.

its about taxes- if they made them here, they would pay a few more billion in taxes.

The actual cost of using US plants to assemble would be according to this article, about 4 bucks more per phone.
How and Where iPhone Is Made: A Surprising Report on How Much of Apple's Top Product is US-manufactured - Financesonline.com

The parts are already global- an average iphone has parts from Korea, Japan, Taiwan, France, and Texas, California, Arizona and New York, just to name a few places.
Virtually none of the parts are actually made in China.

dksoba · Dec 21, 2015

Ries said:
Its not about assembly costs.
The average iphone only has under ten bucks of chinese content. And that is mostly assembly labor.

its about taxes- if they made them here, they would pay a few more billion in taxes.

The actual cost of using US plants to assemble would be according to this article, about 4 bucks more per phone.
How and Where iPhone Is Made: A Surprising Report on How Much of Apple's Top Product is US-manufactured - Financesonline.com

The parts are already global- an average iphone has parts from Korea, Japan, Taiwan, France, and Texas, California, Arizona and New York, just to name a few places.
Virtually none of the parts are actually made in China.

Where are the skookum aluminum machined parts made (the phone's case/chassis)? I took my iphone 5 apart and found the machining to be decent and found tapped holes machined at an angle for screws that hold the side buttons on. I was pretty impressed.

toolsteel · Dec 21, 2015

“I mean, you can take every tool and die maker in the United States and probably put them in a room that we’re currently sitting in......"
Well, I dont know how big the room he was sitting in was......but that would be a pretty damn big room. Our numbers are certainly not what they once were, but I am pretty certain that statement is the sort of B.S. better left to bar room arguments than a serious discussion. For me it throws everything he has to say in a different light.

mcmachine · Dec 21, 2015

That is the point...It disingenuous to say the reason they aren't made here is the lack of skills!
It is the money...it's always the money.
That is why things are as they are. They made a money decision, unit cost.
What they failed to see is the real cost is loss of jobs and loss of manufacturing.
How do they now, years later lament the lack of skills?

If they gave a price target to achieve I'm confident someone could satisfy it with ingenuity and innovation.
If they ever wanted to reverse the trend, they have to make a commitment to domestic manufacturing.
It took years to get here it will take years to get it back.

mcmachine · Dec 21, 2015

“I mean, you can take every tool and die maker in the United States and probably put them in a room that we’re currently sitting in......"

That was the line that got me...Complete falshood...it's all about saving pennies per unit!

Ries · Dec 22, 2015

The majority of the machining on apple products is done in Taiwan, with Japanese machine tools. They have ordered as many as 1000 Fanuc machines at once, for those factories.
Taiwan is far from a dirt cheap third world country- it is definitely cheaper there than the USA, but its workers get paid several thousand dollars a month, get a 13th month paid every year as a bonus, have national health care and workers comp.

But, again, its almost exclusively tax policy that makes them do that offshore.
They can avoid tens of billions of US taxes.

We could, theoretically, change our tax policy- either by lowering the taxes, or making them pay US taxes on some portion of overseas income. Many countries do one or both.

When Apple needs a smaller run of parts, and control over it, they do it in the USA- the MacPro was made mostly here for a while- interesting article here- How Apple Makes the Mac Pro

I would agree, Cook is full of BS- but, probably, intentionally- that is, he probably knows the truth, but he wants congress to give him a $40 or $80 billion dollar tax break, by suspending taxes on that overseas money so he can bring it back here tax free.

SND · Dec 22, 2015

When they did a documentary on apple and where a lot of their stuff gets done, highly skilled motivated labour was not what it seemed to show.

And yes, its about $ and getting into certain markets bigger than that of north america.

Rewt · Dec 22, 2015

toolsteel said:
“I mean, you can take every tool and die maker in the United States and probably put them in a room that we’re currently sitting in......"
Well, I dont know how big the room he was sitting in was......but that would be a pretty damn big room. Our numbers are certainly not what they once were, but I am pretty certain that statement is the sort of B.S. better left to bar room arguments than a serious discussion. For me it throws everything he has to say in a different light.

ditto, we're still here, some good ones too

cnctoolcat · Dec 22, 2015

Foxconn, a Chinese company and the largest electronics manufacturer in the world by far, builds the i-phones for Apple. How large are they? Seems like they have maybe a million workers, maybe 50,000 engineers.

When you consider Apple needs what, 1/2 million iphones per day, it boils down to logistics. China made manufacturing the main initiative for the last 20 years, and thus they have all the logistics in place to manufacture anything, in any quantity needed.

Essentially all consumer electronics has to be made in Asia, as that's where the technology, experience, suppliers, engineers, etc. for that industry is.

America gave up on manufacturing in favor of a "high tech service economy". Well actually the ruling elite decided that's the direction we needed to take, and through tax policy, regulations, tariffs, etc. we gave up on consumer-goods manufacturing, and thus the potential to manufacture 1/2 million iphones per day.

America doesn't have the skills, we don't have the work ethic (and that's another common myth....yes, we have the most productive workforce, but that's because of the machinery and processes the workers have to operate - it's not because Americans actually like to work hard), we don't have the suppliers, we don't have the engineers.

Apple has no choice but to have the i-phones made in China.

What the US government should do is lower corporate taxes on income earned overseas so American companies will bring the money back here, which would be very beneficial to the American economy.

JNieman · Dec 22, 2015

toolsteel said:
“I mean, you can take every tool and die maker in the United States and probably put them in a room that we’re currently sitting in......"
Well, I dont know how big the room he was sitting in was......but that would be a pretty damn big room. Our numbers are certainly not what they once were, but I am pretty certain that statement is the sort of B.S. better left to bar room arguments than a serious discussion. For me it throws everything he has to say in a different light.

Agreed.

People at his level obviously have no fucking idea what their supply chain looks like. We only have a couple legit tool&die makers here but I know they aren't exactly going extinct...

Pete Deal · Dec 22, 2015

There is a problem. In the article he says the tool and die makers in China would fill "multiple football fields". Ever notice how often the unit of "football field" is used as a unit of measure in the US? It tells a lot about where our collective head is.

Mechanola · Dec 22, 2015

What is “Apple”, some special application?

mcmachine · Dec 22, 2015

What is “Apple”, some special application?

Only when it comes to the tax code!

dcsipo · Dec 22, 2015

cnctoolcat said:
Foxconn, a Chinese company and the largest electronics manufacturer in the world by far, builds the i-phones for Apple. How large are they? Seems like they have maybe a million workers, maybe 50,000 engineers.

When you consider Apple needs what, 1/2 million iphones per day, it boils down to logistics. China made manufacturing the main initiative for the last 20 years, and thus they have all the logistics in place to manufacture anything, in any quantity needed.

Essentially all consumer electronics has to be made in Asia, as that's where the technology, experience, suppliers, engineers, etc. for that industry is.

America gave up on manufacturing in favor of a "high tech service economy". Well actually the ruling elite decided that's the direction we needed to take, and through tax policy, regulations, tariffs, etc. we gave up on consumer-goods manufacturing, and thus the potential to manufacture 1/2 million iphones per day.

America doesn't have the skills, we don't have the work ethic (and that's another common myth....yes, we have the most productive workforce, but that's because of the machinery and processes the workers have to operate - it's not because Americans actually like to work hard), we don't have the suppliers, we don't have the engineers.

Apple has no choice but to have the i-phones made in China.

What the US government should do is lower corporate taxes on income earned overseas so American companies will bring the money back here, which would be very beneficial to the American economy.

chicken and egg, Apple made Foxconn into what it is today, they could have made a company in California or anywhere else. The reason they chose China was the low wages in the first place. But that advantage is now less of an issue because most of the process is automated. Unfortunately by now they are stuck, it would be too expensive to bring it all back. The skills would not be there if the US companies did not take them there in the first place.

dee
;-D

Conrad Hoffman · Dec 22, 2015

I don't think it's a matter of "bringing it back". We started abandoning mass produced consumer goods back in the days of early solid state TVs. Japan trounced us on cameras, and developed techniques for making precision miniature parts cheaply. Sure, we have the ability to make those parts, but not at any sensible cost. The reality is that, even for small quantities of 100-1000 I can get higher quality parts cheaper overseas than in the US. It sucks, but that's where we're at. For some reason vertical integration is despised here, but in Japan it's possible to find a shop that works on mm scale parts, with Rolomatic grinding, Harperizing, vacuum heat treating and even plating, all in-house or with close tie-ins nearby, with six-sigma quality and low cost. Maybe some large companies here have that sort of capability, but zero job shops make it available because it's financially impossible.

jscpm · Dec 22, 2015

Assembly costs are the reason.

There is no way you can do assembly in the United States due to wages and regulation. It's not just so-and-so many dollars more per worker. It is factors like:

- inability to fire workers and unionization problems
- having to hire expensive "HR" workers
- submitting voluminous "employment reports" to the EEOC
- being forced to find and hire workers of particular races
- worker turnover
- inability to discipline and control workers involved in substance abuse and dereliction
- expensive facilities, expensive water, expensive electricity, expensive land, expensive buildings
- expensive facility maintenance personnel
- expensive managers

Scottl · Dec 22, 2015

IMO the decline of America was planned, not just for manufacturing but also for science and technology. Back in the Carter presidency a coworker told me that an organization called The Club of Rome had ordered the deindustrialization of America. He said Carter was a member. We all thought he was off the wall but years later virtually everything he predicted seems to have come to pass.

A few weeks back I read an item about the passing of Canadian oil billionaire Maurice Strong, whose name sounded familiar. It seems that he was the original proponent of the Global Warming theory and had positioned himself to profit from it. He was also mentioned as the man who engineered the transfer of industry to China and profited handsomely from that as well. It seems he moved there years ago.

The coworker previously mentioned claimed that not only manufacturing but eventually science and engineering would go elsewhere as government spending and debt would skyrocket. He also claimed that NASA would be "throttled back" from space exploration and given new earth-focused missions. He told us that the American population would become increasingly frivolous and dependent on government and technology as former third world nations rose up.

We all thought he was nice, but an oddball with his off the wall predictions. He was well liked anyway. One thing I am glad of is that I listened to his advice on finances and investing. That advice was spot on. The rest I mostly laughed off, but not in his presence.

toolsteel · Dec 22, 2015

Conrad Hoffman said:
I don't think it's a matter of "bringing it back". We started abandoning mass produced consumer goods back in the days of early solid state TVs. Japan trounced us on cameras, and developed techniques for making precision miniature parts cheaply. Sure, we have the ability to make those parts, but not at any sensible cost. The reality is that, even for small quantities of 100-1000 I can get higher quality parts cheaper overseas than in the US. It sucks, but that's where we're at. For some reason vertical integration is despised here, but in Japan it's possible to find a shop that works on mm scale parts, with Rolomatic grinding, Harperizing, vacuum heat treating and even plating, all in-house or with close tie-ins nearby, with six-sigma quality and low cost. Maybe some large companies here have that sort of capability, but zero job shops make it available because it's financially impossible.

The one part of your statement that sticks with me is the plating aspect. In China when the chemicals used for plating are discarded.....my bet is they go out the back door. In the U.S. those sorts of operations cost ALOT more due to them being (in my opinion) properly regulated with employee safety and long term effects considered. Not saying I disagree.......just pointing out one "advantage" to dealing in certain markets.

JNieman · Dec 22, 2015

jscpm said:
Assembly costs are the reason.

There is no way you can do assembly in the United States due to wages and regulation. It's not just so-and-so many dollars more per worker. It is factors like:

- inability to fire workers and unionization problems
- having to hire expensive "HR" workers
- submitting voluminous "employment reports" to the EEOC
- being forced to find and hire workers of particular races
- worker turnover
- inability to discipline and control workers involved in substance abuse and dereliction
- expensive facilities, expensive water, expensive electricity, expensive land, expensive buildings
- expensive facility maintenance personnel
- expensive managers

Funny, we don't have any of the problems you point out and we deliver complete assemblies/subassemblies/components to many of our customers. Maybe our utilities and capital investments (water/elec/land/buildings) are comparatively higher but I don't think it's enough, alone, to make a huge impact.

I would think that the environmental controls are a significant factor. Anodizing, plating, etc, all require expensive controls, containment, disposal, etc. It's why we don't do it in-house. China has no such qualms with raping her land like we used to. We've evolved for the better, and this is one consequence.

Apple asserts china has the skills and America doesn't? Aren't they the problem?

Aluminum

Diamond

Hot Rolled

Titanium

Aluminum

Aluminum

Diamond

Diamond

Hot Rolled

Diamond

Titanium

Titanium

Stainless

Aluminum

Diamond

Diamond

Titanium

Diamond

Titanium

Titanium

Similar threads