Apple Computers Used to Be Built in the U.S. It Was a Mess
nytimes.com
nytimes.com
1) it doesn’t make a clear logical case for why manufacturing isn’t done by Apple (or many other companies) in the US, right now
2) it doesn’t give reasoning about why sotuation is unlikely to change, or if it does change, how it will not look anything like industrial-era factory labor manufacturing
3) it doesn’t explain that these realities have nothing to do with Apple, except that Apple finds these economic realities faster than other companies
4) it ends completey abruptly without drawing any real conclusion or thesis or adding any insight (based on solid reasoning)
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The fact that Jean Louis Gassed can’t use a screwdriver has nothing to do with anything... Manufacturing of complex computer systems is complex, therefore requires many different competencies, said competencies must communicate to resolve challenges, and that in and of itself is hard. This hardness requires (literally) an ecosystem of skilled workers to address. Could Apple (or any other company) build such an ecosystem? Yes, if they did it from scratch early on, when the cost to build it was low because the ecosystem was relatively simple. But now, its not a simple ecosystem, and it would be painfully expensive to replicate.
It should be noted that there is probably a strong difference in the complexity (therefore difficulty) of manufacturing high tech products versus other consumer products like cars/trucks, general electronics. That difference is the velocity/pace of new features going to market, required to drive sales. Tech products literally compete on feature sets. Sales of cars and toasters and espresso makers can depend on many factors and so they are not constantly racing to update the product every 6-12 months. I could be wrong here, but I believe the conclusion that tech manufacturing is like all other kinds of manufacturing is baseless. And in fact, the fact that so much has moved to China is the strongest evidence that it can’t simply exist anywhere.
Gateway built computers in a South Dakota. Compaq and Dell in Texas.
“You can’t bring manufacturing back because of those webs, you would have to bring the entire community back,”
Apple is also investing $390m in a chip plant in Texas to supply some of their custom silicon, and there are several suppliers of iPhone components in the area.
*Fixed - bad wording choice
> It cites the lack of economic success
It describes the lack of economic success. I'm not sure what thesis you think the article is "citing" in support of.
> It describes the lack of economic success. I'm not sure what thesis you think the article is "citing" in support of.
Nothing wrong with "cites" in this context. From the OED:
"4. To bring forward an instance, to adduce or allege (anything) by way of example, proof, etc."
Merely mentioning something is not enough to be citing it. There has to be a larger purpose.
Articles like this one like to point out the number of people involved in the Chinese iPhone manufacturing as if that's somehow indicative of something other than simply using cheap labor instead of automation.
If we wanted to manufacture this stuff in the USA, we definitely could, and it would be done using fewer people through automation.
My understanding is the core reason we don't do manufacturing here anymore is it's a lot cheaper to do it where industrial pollution goes unchecked, where regulatory bodies are immature or entirely nonexistant.
When China gets its shit together enough to protect its lands and people from the toxic output of all this industrial activity, large-scale manufacturing will move on to the next victim.
Looks like labor flexibility is another factor. In the US, culturally, you can't summon people from their sleep to start making phones urgently. Apparently this happened after the iPhone prototype Steve Jobs had got a scratched plastic screen 6 weeks before launch. [2]
[1] https://www.nytimes.com/2012/01/22/business/apple-america-an...
[2] https://www.forbes.com/sites/willyshih/2018/11/05/apple-only...
That's already happening: https://www.reuters.com/article/us-china-pollution-zibo/chin...
An acquaintance recently told me that Chinese ceramics production capacity is getting relocated to places like Cambodia.
That said, today it is greatly reduced. But it isn't clear to me at least that this is a permanent state. There is definitely a "community" aspect to this stuff (that part the article seems to get right), but the causality is not clear. If people started manufacturing more things in the Bay Area the community would get stronger as supply chains were shortened.
As I see it, you start building things, and you order all of your components from far away. Then one of your suppliers creates a local factory / warehouse to cut down on shipping costs, then another. At which point you have a lot of things nearby. Similarly for services such as rework, tooling, and metrology.
There is the Tesla plant (fairly high volume), there are three glass/window factories in Oakland (fairly high volume), probably a dozen printed circuit board houses of various volumes, a number of tool and die shops around south SF and Berkeley and elsewhere, at least two sheet metal fabrication plants in south San Jose. Intuitive Surgical has a surgical robot factory in Sunnyvale I believe.
Nothing like a Foxconn "city factory", that is pretty clear. There is however the Gigafactory which is outside of Reno (to your point of being easy to get to).
There is a lot of activity though.
This would really depend on the node used. For anything modern I think the only company left in the west that can do it is intel and I don't know how much of a market friendly option they are. Maybe with a lot of investment there could be some 28nm fabs in a few years which would then take forever to get a ROI, at which point it's anyone's guess what kind of technology will be used for chip manufacturing.
2. I would say assembled rather than produced (if I buy components and assemble a PC at home is it produced in Italy?)
There's no indication I can find otherwise.
> 2. I would say assembled rather than produced (if I buy components and assemble a PC at home is it produced in Italy?)
In that case, iPhones are not produced in China, since the parts thereof are manufactured in many different countries, including the US, and only assembled in China.
For what it's worth, photography from the plant shows there's a little more going on than is typical for building a desktop at home.
https://twitter.com/tim_cook/status/474935247335743489/photo...
You probably read comments that were Tesla be made by an established player, it would've been made for half the cost?
Tesla's success slash failure is thanks to that absence of the established manufacturing culture in light industries.
USA is still is a big manufacturing country, it's curse is that their industry manufacturers "invisible goods," and that its companies are low profile.
For examples, almost all "picoprobes" in the world are made by one small company in USA that you can't even google.
On the other hand, even a third tier smartphone maker in China has high media profile, and every highschooler will be able to name a few.
Electronics is one of the most automated industries on the planet already. You can run in anywhere you want where you can put an SMT line. There are electronics factories even in African countries.
What matters is being able to run in cheaper and better than the next competitor, and you can't do it with three quarters of the global electronics manufacturing ecosystem sitting in a single city - Shenzhen.
IF Apple will agree to sell their products at less than triple digits markup, than they will be free to make iPhone in America.
You are ignoring your own argument by explaining that every car manufacturers wants to produce as cheap as possible, which is also the same reason why Tesla wants to automate everything.
The original comment/question was: how can Tesla do it and not Apple.
Ps. The price of a Tesla is actually okay. It's not 100k and it's avg market priced. iPhone was never avg market priced
Citation on "impossible"? Under Tim, Apple has invested $100 million in US manufacturing. The Mac Pro has been manufactured in Austin since 2013.
Secondly, a $100 million investment in manufacturing is not a small number. Unless you are Apple. Let's assume a wildly low profit margin on the average iPhone of $250. Apple would have to sell 400,000 iPhones to cover that investment with pure profit. In 2017, Apple sold 216,760,000 iPhones.
Here’s a video tour of the Macintosh factory that used to be in Fremont, CA:
This article is the latest entry in a many decades-long campaign of capitalist propaganda dedicated to promoting the concept of "markets" as choiceless forces of nature -- as weather fronts that determine outcomes. The forbidden truth is that markets are the result of decisions made by ownership, and you can't read this terrible article without leaving the truth very far behind.
This deterministic concept of markets is employed constantly to present howlingly absurd statements that serve as cover for the costly-to-the-US-middle-class commercial decisions that Apple made and still makes.
You can tell this article is propaganda because of what it delivers:
Deliverable #1: The headline alone tells you exactly what to think about a historic, complex outcome -- that is to say, this trillion-dollar company's hands were and remain tied by the market. Won't somebody please think of the trillion-dollar company?
Deliverable #2: Personal experience is very sketchily generalized to a historic conclusion. A French exec struggles with his (two whole days' worth!) of work on an assembly line, therefore the entire US factory-building effort could never have worked. Irrevocable factors that define Fordist manufacturing -- division of labor, training, choreography -- these all vanish, dissolved by the power of a irrelevant anecdote.
Deliverable #3: Orwellian ahistoricism deftly applied: Standing in North America, decades after success in WWII left it the only undevastated manufacturer on Planet Earth, someone actually states that the place "[Doesn't] have a manufacturing culture". No, really, that's something someone thought up and uttered, quoted in the NYT. See: "we've always been at war with Eastasia".
Deliverable #4: Eliding troublesome counter-facts: As persons here have pointed out, Apple is on its sixth year of manufacturing its heavy hardware in Texas. There is no "mess" there, and this fact will be lost on millions of laypersons who have taken in at minimum the headline in Deliverable #1 and now think exactly what Apple prefers they think.
There are more of these deceptions in even this short piece, but the point is made. Apple manufacturing is not centrally in the US because Apple leadership made that decision. The "market" did not, "culture" did not. Maximizing shareholder value -- at any social cost -- did.
What you need to do is to start bringing back the parts which it makes sense to do so and expand from there. Assembly plants for cars sold in any significant amount makes sense period just because of the physical volume of cars vs their parts - the assembled cab takes up a lot of excess space - and that is before any tariff issues.
I doubt Apple haven't considered all of this.
Currently China owns this space because the country invested absolutely insane amounts of money to build supply chains and manufacturing, to staff all of the above with competent educated (and mostly docile) workers, and to build supporting infrastructure.
The US (and the UK) have done the opposite - crapped all over public education, allowed infrastructure to rot, and deliberately moved manufacturing offshore, because profit. And also - in the UK at least - because it helps keep the workers from opposing you.
You can't turn around an entire sector by bringing parts of the supply chain home unless there's some obvious benefit. "Patriotism" is certainly a benefit, but if it kills your margins it's a double-edged benefit at best.
This is where the US political system has failed. The US (and UK) haven't had a credible industrial strategy - or actually much of a credible economic and social strategy either - since the 60s.
"Leave it to the markets" turns out to be an exceedingly stupid idea over the medium and longer term. You get your profits and your frothy stock market, and you get a stand-out sector or two which keeps some of the educated middle class minority docile. But you lose your industrial autonomy and your security, the rest of your middle class shrinks to nothing+debt, and ultimately your competitors eat your lunch.
In the end game - still to come - they eat you.
The truth is that industry is doing just fine in the US - it is just largely high end and automated so it employees fewer people than services and is more arcane than just working at the plant making widgets day in and day out.
After reading it about one thousand times, I still struggle with the definition of "middle class".
Is everyone working with a white-collar job considered "upper class"?
Are traditional manufacturing blue-collar jobs considered "middle class"?
What is considered "working class"?
Household income and profession is probably the easiest way to numerically define it.
But I think (in the US) there are two distinct classes being formed, one that is and feels secure in their future due to having a well funded 401k or defined benefit pension, careers at large and prestigious companies with friends also at other large and prestigious companies (who can help you get work if need be), paid leave of various kinds, access to the better schools and health systems etc.
The other class will be those that are setback forever by 1 medical emergency or mistake, have jobs instead of careers, who aren’t really able to plan for the future because they’re skating by and hoping it all works out and they can keep making their debt payments.
You can declare a PhD candidate's "tuition" is ten million dollars a year and then "pay" the worker $10M in tuition credits + $20k living expenses but we all know the actual pay is $20k a year.
A teenager carrying a golf bag might still be upper class, if they're doing it because their father owns the golf course and sees it as a networking opportunity.
Teenager is an extension of his family till he's making a living on it's own. If he manages to extend his family wealth then yes, he's upper class. But if he manages only to drink away his opportunities and his parents stop giving him money... He's not so upper class, eh?
A factory foreman or hairdresser might earn more, but their job has less cachet.
Elsewhere, middle class is more defined by the nature of your work. If you work with your hands, you're working class, skilled, semiskilled or unskilled. Doesn't mean you're poor - tradesmen earn a lot of money. But you're probably not reading a lot of books and aren't as likely to send your kids to college as have them go into a trade or early work too. Whereas people who have a life of the mind, in work and play, are middle class, as are professionals and managers. (Arguably software straddles the line; IMO it's closer to a trade, but it's so malleable and the potential scope so large it can affect society too.)
Upper class is much more about social position than job or income. Who you know, who you're related to, who will take your call if you want to start a new project, or donate to your charity. Actually working for money is not upper class behaviour, it must be about some cause favourable to the social group.
Tradesman who makes €€€ can easily be considered middle class. Meanwhile if you're a poor kindergarten teacher... You'll probably be upper working class at best.
You feel special in some obscure way to claim you're upper class? Well, go hang that on your wall, nobody gives a fuck about it outside of your private circle where that paper translate into money or respect or whatever.
If you want to talk education... Then there're smart people people who have no good manners. People who try to copy aristocratic manners but who're stupid as fuck. And lots of other combinations. But it's subjective at best. Nor most people care about that.
I don't see how people could be sliced into "appropriate companies" in very few categories. At least that's how it goes over there.
I could see how what you're saying might stand true with some blue-blood old-money. But even in countries like UK it's far from clear cut, at least in my experience.
The rise of the middle class is a modern phenomenon, whereby a new class was created who still essentially worked for a living but were able to achieve a measure of security and prosperity that led to a dramatically more stable society.
Of course that development has caused some consternation within the upper classes, who are presently trying quite hard to roll that back.
- Lower class: No economic planning and living hand to mouth. Nearly all of what they earn goes often entirely to pay for the bare necessities needed to repeat the cycle against next month.
- Middle class: Basic economic planning. Able to save a bit for retirement, a rainy day, or just a family vacation. Traditionally could afford to support themselves, one other adult partner, and two children.
- Upper class: Extensive economic planning. Earns far in excess of their immediate or future needs meaning most of their money is spent in 'planning', often geared at earning more money.
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Traditional manufacturing jobs would definitely have been middle class. White collar jobs used to generally be upper class, but now a days that's certainly not the case. Working class is a different distinction altogether and that is just talking about people that need to work in order to be able to sustain themselves.
This is dangerous race to the bottom thinking. The hidden assumption there is that previous generations of middle class people didn't deserve it and that our overall standards should be declining.
I was bringing up the decline of the middle class a while back in a discussion of why Trump won. Someone else said no, its racism, and people are just angry about the loss of their privilege. They pointed out that the black white income gap had shrunk.
Here's the thing though. That's conflating two issues. Racism is real, sure, and yes the black white income gap has shrunk in part due to activism against racial discrimination. But... if the middle class were healthier then blacks with their now-shrunken income gap would be doing much better. If the middle class is dying then the entire struggle for racial income equality becomes a squabble over deck chairs on the Titanic.
Also on saving: the problem is that necessities like housing and health care have exploded. Costs have exploded precisely in those areas that are hardest to trim in a budget. The price of optional expenses like gadgets and entertainment has fallen.
Sometimes, trying to even the playing field (or outcomes) can throw the baby out with the bathwater and lead to "We would all rather be equally poor than unequally better off."
Race to the bottom mentalities are deadly at all levels from working class all the way up to corporate strategy.
In the corporate world you see it when companies focus only on their competition and struggle to undercut each other instead of focusing on creating customer value. You get a deflationary race to the bottom that kills both margins and product quality. It ends with a market full of gutted companies competing to make crap.
Middle class are professionals and business workers, usually making more than double the median income in most publications.
Upper middle is basically a household of two professionals making $100-350k.
It’s harder now as the economy is changing and the middle class professions are devaluing and many regions are declining as concentration keep happening.
It's definitely an agenda, definitely pushed, and fairly absurd.
Here’s also a story, just three weeks old, that paints manufacturing in the US in a positive light: https://www.nytimes.com/2018/11/23/nyregion/the-brooklyn-arm...
The NYT seems to (also) suck at coordinating their “agenda pushing”. It’s almost as if it’s a newspaper publishing ideas that don’t always neatly align to ideology.
Exactly true.
(Apple isn't registered in Delaware.)
https://www.sec.gov/Archives/edgar/data/320193/0000320193170...
In fact, it matters so much that most western countries require the country of origin to be stapled onto the product.
AFAIK, country of origin labels aren't required in the EU, although there are efforts to change that.
I'd argue that the US got the better end of the value chain in this. Of course, it's possible for a company to outsource themselves out of business (cf Dell, which came quite close), but Apple does not seem to be on that trajectory.
1. Work culture - very few people with manufacturing experience
2. Work ethics - not stellar, were you fire people for low work attendance as they do in China, you will have to fire 70% of your workforce in US
3. Workforce education - US has a lot of high school dropouts, lots of PhDs, lots of community college educated clerks, but nothing in between.
4. Labour resources - cheap cities in US are small cities, having access to a lot of labour resources in one place is simply an unattainable dream for US.
Keep shilling for the CCP, telling us how manufactoring can never, ever move out of China... Especially now when people start considering this, right?
Ugh.