8 ms·

A key argument for offshore outsourcing is to take advantage of a lower cost base so you can price your finished goods more competitively. Apple have managed t

A key argument for offshore outsourcing is to take advantage of a lower cost base so you can price your finished goods more competitively. Apple have managed to keep prices high and thus maximize profit. If Mac manufacturing returned to the US, where Victorian working conditions are banned, it would probably be hard for Apple to keep those fat margins.

astrodust 13y ago
Steve Jobs was asked about this aspect of Apple's success. It's not the "Victorian" working conditions, which is hardly the case in a modern factory like Foxconn runs, but resources. If you want 5,000 skilled workers to assemble a new product that's shipping in three weeks, in the manufacturing districts of China and Taiwan you can snap your fingers and get them by the end of the day. In the US and Europe this would take weeks, if not months. There's no on-demand talent pool like this. It doesn't exist. On top of that, if you want something made, nearly anything, you can get it sourced immediately. You want magnets for your new iPad? There's a factory down the road from Foxconn that makes billions of them. You want batteries? Specialized rubber pads? A particular adhesive? A solvent? A new type of display panel? It's all being made right there, and probably just miles away. It could be on a truck to your factory within the day. No customs. No duty. No logistics other than picking up a phone. Don't forget Apple's original Macintosh computers were made in a state-of-the-art plant in California, but the scale of overseas manufacturers, who were making everything from toothbrushes to televisions, made it very difficult to keep competitive. It's not necessarily the wages of the workers, or their thrifty working conditions. It's the entire ecosystem. Despite all this, Mac manufacturing is returning to the US: (http://tech.fortune.cnn.com/2012/12/08/apple-mac-pro-made-in-us/ http://tech.fortune.cnn.com/2012/12/08/apple-mac-pro-made-in...) Details aren't clear at this point, but it seems Apple's partnering with Foxconn to open up domestic manufacturing for selected products. This will probably make the supply chain a lot more complicated, but for something like the Mac Pro, which is low volume, high margin, and on a much more relaxed update cycle, it wouldn't be impossible. Same goes for other products like the Mac Mini. Let's not forget how horrible Victorian working conditions were. People in those times would find working at Foxconn to be like living in a palace. Flush toilets? Showers? Beds with mattresses? Company provided health care? A hard limit on over-time? No beatings? Foxconn's wages are well above the norm in that industry, even if thrifty by American standards.
- bitcartel 13y ago
  The NYT just won a Pulitzer[1] "...for its penetrating look into business practices by Apple and other technology companies that illustrates the darker side of a changing global economy for workers and consumers."[2] [1] http://tech.fortune.cnn.com/2013/04/16/apple-pulitzer-ny-times/ http://tech.fortune.cnn.com/2013/04/16/apple-pulitzer-ny-tim... [2] http://www.pulitzer.org/citation/2013-Explanatory-Reporting http://www.pulitzer.org/citation/2013-Explanatory-Reporting
  - astrodust 13y ago
    Did you even read that first article? Mike Daisey made up things. Big time. He invented things. His report was half fabrication, half stretching the truth. The New York Times, for all their credibility, did really go out of their way to paint a dramatic picture. Such is what happens when you want awards, and not the truth. In any case, all this did spur Apple to crack down hard on Foxconn, but the infractions they've found so far are pretty minor. A handful of under-aged workers that submitted fraudulent paperwork. Some industrial accidents that, while unfortunate, do happen at a plant with 800,000 workers. The deeper down in the supply chain, the more problems you'll find, but at least some are doing the right thing. While working at Foxconn isn't as nice as working at, say, an American automotive plant, it's actually not a bad career for someone who's in their twenties, with no academic accreditation and looking to make a living. If I had a choice between working in a toilet factory, a forge, or a Foxconn factory, I would go with Foxconn every single time. All your rage seems misdirected. What about the people who built the American Embassy in Iraq and had to live in containers in the middle of the desert, who had their passports taken away, and who might never have been paid at all once "living expenses" were deducted from their pay? Ah, but there's no "Apple" in the headline there, so it won't get any traction.
    - bitcartel 13y ago
      Apple has the public's eye, which is why they're getting picked on, just like Nike was a few years ago. The fact that Apple enjoys such fat margins makes them look, at least to some people, that bit more egregious than their competitors. I don't know if the Pulitzer was deserved or not, but I feel it was a tech story worth covering.

astrodust 13y ago

Steve Jobs was asked about this aspect of Apple's success. It's not the "Victorian" working conditions, which is hardly the case in a modern factory like Foxconn runs, but resources. If you want 5,000 skilled workers to assemble a new product that's shipping in three weeks, in the manufacturing districts of China and Taiwan you can snap your fingers and get them by the end of the day. In the US and Europe this would take weeks, if not months. There's no on-demand talent pool like this. It doesn't exist. On top of that, if you want something made, nearly anything, you can get it sourced immediately. You want magnets for your new iPad? There's a factory down the road from Foxconn that makes billions of them. You want batteries? Specialized rubber pads? A particular adhesive? A solvent? A new type of display panel? It's all being made right there, and probably just miles away. It could be on a truck to your factory within the day. No customs. No duty. No logistics other than picking up a phone. Don't forget Apple's original Macintosh computers were made in a state-of-the-art plant in California, but the scale of overseas manufacturers, who were making everything from toothbrushes to televisions, made it very difficult to keep competitive. It's not necessarily the wages of the workers, or their thrifty working conditions. It's the entire ecosystem. Despite all this, Mac manufacturing is returning to the US: (http://tech.fortune.cnn.com/2012/12/08/apple-mac-pro-made-in-us/ http://tech.fortune.cnn.com/2012/12/08/apple-mac-pro-made-in...) Details aren't clear at this point, but it seems Apple's partnering with Foxconn to open up domestic manufacturing for selected products. This will probably make the supply chain a lot more complicated, but for something like the Mac Pro, which is low volume, high margin, and on a much more relaxed update cycle, it wouldn't be impossible. Same goes for other products like the Mac Mini. Let's not forget how horrible Victorian working conditions were. People in those times would find working at Foxconn to be like living in a palace. Flush toilets? Showers? Beds with mattresses? Company provided health care? A hard limit on over-time? No beatings? Foxconn's wages are well above the norm in that industry, even if thrifty by American standards.

bitcartel 13y ago
The NYT just won a Pulitzer[1] "...for its penetrating look into business practices by Apple and other technology companies that illustrates the darker side of a changing global economy for workers and consumers."[2] [1] http://tech.fortune.cnn.com/2013/04/16/apple-pulitzer-ny-times/ http://tech.fortune.cnn.com/2013/04/16/apple-pulitzer-ny-tim... [2] http://www.pulitzer.org/citation/2013-Explanatory-Reporting http://www.pulitzer.org/citation/2013-Explanatory-Reporting
- astrodust 13y ago
  Did you even read that first article? Mike Daisey made up things. Big time. He invented things. His report was half fabrication, half stretching the truth. The New York Times, for all their credibility, did really go out of their way to paint a dramatic picture. Such is what happens when you want awards, and not the truth. In any case, all this did spur Apple to crack down hard on Foxconn, but the infractions they've found so far are pretty minor. A handful of under-aged workers that submitted fraudulent paperwork. Some industrial accidents that, while unfortunate, do happen at a plant with 800,000 workers. The deeper down in the supply chain, the more problems you'll find, but at least some are doing the right thing. While working at Foxconn isn't as nice as working at, say, an American automotive plant, it's actually not a bad career for someone who's in their twenties, with no academic accreditation and looking to make a living. If I had a choice between working in a toilet factory, a forge, or a Foxconn factory, I would go with Foxconn every single time. All your rage seems misdirected. What about the people who built the American Embassy in Iraq and had to live in containers in the middle of the desert, who had their passports taken away, and who might never have been paid at all once "living expenses" were deducted from their pay? Ah, but there's no "Apple" in the headline there, so it won't get any traction.
  - bitcartel 13y ago
    Apple has the public's eye, which is why they're getting picked on, just like Nike was a few years ago. The fact that Apple enjoys such fat margins makes them look, at least to some people, that bit more egregious than their competitors. I don't know if the Pulitzer was deserved or not, but I feel it was a tech story worth covering.