Comment by fnordpiglet | Hacker News Reader

Comment by fnordpiglet | Hacker News Reader

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The problem with that is it’s not actually true. Yes most low end stuff consumers buy is made in China. But US manufacturing is primarily high end - stuff that’s extremely exacting, precise, and technologically advanced that sells to corporations and governments. The fact that Tesla started their factories here then rolled it out as a pattern globally is illustrative of this.

Further, when you consider the aggregate production in Mexico, Vietnam, Malaysia, Taiwan, Japan, Thailand, etc and recognize that an awful lot of it, including electronics, is managed and built by US manufacturing outssourcers like Jabil, it become pretty obvious the US hasn’t lost its edge in manufacturing. It’s just shut down the Knick nack production onshore. Rebuilding those factories in a crisis could be done rapidly, and the labor skill required to oversee a machine pressing scissors is pretty low - that’s why it can be offshored to an unskilled labor pool with such ease.

China dominates these through a willingness to exploit itself for a very low margin and extreme scales. These are definitely advantages - if you don’t care about your people and are willing to destroy your environment for dominance in producing forks, you’ll probably be allowed to. The margins are so low and the barrier to reentry is tiny.

In reality what you posted here is actually wrong. The sophisticated tooling that you are talking about is plentiful in China and is the reason tech companies like Apple choose to manufacture electronics in China.

Here’s what Tim Cook, CEO of Apple, had to say:

"There's a confusion about China. The popular conception is that companies come to China because of low labor cost. I'm not sure what part of China they go to, but the truth is China stopped being the low-labor-cost country many years ago. And that is not the reason to come to China from a supply point of view. The reason is because of the skill, and the quantity of skill in one location and the type of skill it is...The products we do require really advanced tooling, and the precision that you have to have, the tooling and working with the materials that we do are state of the art. And the tooling skill is very deep here. In the U.S., you could have a meeting of tooling engineers and I'm not sure we could fill the room. In China, you could fill multiple football fields..."

Source:

https://www.inc.com/glenn-leibowitz/apple-ceo-tim-cook-this-...

I don’t think you understood. The quality of the tooling doesn’t mean the tooling was built there. It’s also not true that China is the exclusive place where such quality or tooling or critical mass of infrastructure exists. You see similar things in Taiwan, Korea, Japan, and - in the United States. But the customer of the US manufacturing isn’t you personally, a crucial fact when talking about Apple and where they manufacture things for - you personally. The customer is advanced manufacturers - who export tooling and infrastructure to China.

That doesn’t mean China is unable to do this themselves, but it’s just not their focus. I’m sure the decoupling we are doing and export controls will change that faster than would otherwise happen.

The specific market though the US is unable to easily rebuild and bootstrap is end to end semiconductor manufacturing. Our supply chain is almost entirely tied to East Asian manufacturing which is a geopolitical and economic problem for us. Part of decoupling is trying to break that by creating a bipolar manufacturing structure for semiconductors, and increasingly battery and solar.

He's lying. The people who build his phones in China do so for less than $3 per hour. That sounds pretty low labor cost to me.

Sure, one could probably find even lower labor costs elsewhere, and the infra in place is definitely a benefit, but let's not pretend we couldn't just as easily do it in the US if it weren't for those pesky labor costs.

There are many places where labour is cheaper than china.

But then you visit one of the electronics markets in shenzen, and see why everything is still there. Just look at eg. "strange parts" videos on youtube. Need 64 gig memory chips for iphones? Just visit a physical store and buy a few. Need more? Just ask the guy there, and he'll find someone to sell them to you. Walmart ordered christmas ornaments from your plastic company? Need blinking led modules? There are 5 companies nearby that will sell them to you, and you can get them in days, not months. Something like this doesn't exist anywhere else.

I find that quote maddening. The lack of self awareness of the irony in Tim Cook’s statement is astounding and I say this as a huge fan of Apple’s products. I think it’s very disingenuous for him to claim that America lacks tooling engineers when the very reason for this is that companies just like Apple started outsourcing all manufacturing and engineering work to China a few decades ago, in pursuit of lower costs (ignoring the very obvious reasons it cost so much less, while out of the other side of their mouths, loudly patting themselves on the back for supposedly standing for human/environmental rights). This, in effect, for all intents and purposes played a huge role in crippling American manufacturing. Of course it technically still exists, but only a fraction of what it was as recently as the 1990s.

Fast forward to today, per Cook’s own words, China “stopped being the low-labor-cost-country” it once was, so in effect we’re not only back to paying higher prices, now we also no longer have the capabilities to manufacture and engineer that we once had, so it’s a massive net loss for the entire country, and yet Tim Cook is essentially calling people out of touch for suggesting the US could handle the job - when companies like his own are the very reason it no longer easily can today.

Friendly suggestion for Apple and other American corporations: please consider using some of those tens of billions in cash on hand each of your companies have, and invest in helping fix the problem you contributed to: help bring manufacturing and tooling engineering back to your home country. You can solve some of the most difficult engineering problems in the world, you can design a chip that squeezes billions of transistors into a tiny fingernail sized chip, and you can make pocket sized phones that have changed the world. You can do this too!

>ignoring the very obvious reasons it cost so much less

This ignores that US tooling engineers wages would likely have been prohibitive enough to allow enough of them to be coordinated for Apples visions, or that there's enough of them by the time ipod rolled around in 2000s. Some large engineering endeavours takes a lot of specialized talent, and at some point PRC enabled access to another tier of scale and cost of talent that most countries couldn't replicate - there was simply a new tier of talent/supply chain agglomeration you get when PRC admin throws 400m bodies at a problem build up entire concentrated industrial parks / supply chains. If X commodity consumer product need 10 units of talent at 10 cost, US only has 5 at the cost of 15, PRC has 40 and can do it for the cost of 8 due to various structural advantages on top of talent access. The more fundemental bottleneck is US simply doesn't have 10 units of talent, and never had the economics of combining 10 units of talent that can do X for the cost of 10, so the envisioned product is not possible in US, ever. Of course Apple could have payed more and settled for less to protect US workers.

> America lacks tooling engineers when the very reason for this is that companies just like Apple started outsourcing

Apple is big. But not that big. It responds to economic signals just like anyone else. The problem is at the policy layer, not individual actors.

>But US manufacturing is primarily high end - stuff that’s extremely exacting, precise, and technologically advanced that sells to corporations and governments.

European here: I have some products made in USA in my house besides Intel CPUs and Micron DRAM/NAND: a plastic AeroPress coffee maker with paper filters, a plastic Oral-B toothbrush. Nothing fancy or expensive. Do those items strike you like some exotic, precise, high-margin widgets that only the US can make? Spoiler alert: they aren't, even after the EU import taxes and VAT.

So how come US can make mass market commodity tooth brushes and plastic coffee makers locally considering the high wages but we pretend it's not possible? I'm not american so I don't have the right perspective as the locals but from my vantage point it doesn't seem impossible that the US can make other stuff that's usually offshored to the cheapest bidder in Asia. To me, the issue seems corporate greed that refuses to do it, not that it's not possible to make profit making commodity goods in the US as the proof is in the pudding above.

Another proof is that I have a shit tonne of Swiss-made commodity goods in my house that aren't some nanometric precision widgets but for example my plastic trash can and another toothbrush, and Switzerland also has some of the highest wages in the world.

> how come US can make mass market commodity tooth brushes and plastic coffee makers locally considering the high wages but we pretend it's not possible?

America’s advantages are deep, risk-taking capital markets and cheap energy. Our hurdles are high labour costs and stricter-than-China environmental rules.

Our advantage against China is in energy and scale-intensive production that can be automated and done cleanly. This applies to most extrusion methods, which make cheap goods. It also applies to heavy machinery, which is why we make lots of big engines and electric motors.

But the people who built those production lines are still in china (and a few other places). In a case of a wider trade war with china, where are the people who built eg. foxconn? Are there enough US apple employees with skills to recreate production in US?

High end custom stuff, sure... but at the end of the day, you need cheap shoes for millions of people to wear every day, and not a lot of those are made in US.

I live in a small eu country and here, the chinese (hisense) bought one of our companies, just to be able to do the final assembly stage of electronics, to stick the "made in eu" sticker on.. everything else is done elswehere, including that companies original products. And we used to be a former socialist country that produced everything, from cars to computers, tvs, etc.... now we don't have enough basic electricians and plumbers for household work, before even thinking about building any kind of massive production facilities. Even kids want to be influencers, not assembly line workers (and we have to import those too).

Sometimes the people who built them are in China, but not always. But you’re missing that not everything is 100% made in China. There are major manufacturing outsourcers like Jabil (as US electronics manufacturer) who build lines all over the earth and have expertise in doing that globally, as well as in China. The skills required to build manufacturing capabilities haven’t left the US, they’re still here. What’s left is the people on the lines screwing parts together. That’s simply a training exercise.

The manufacturer of vehicles, airplanes, factory automation equipment, high end weapons, medical equipment, and a huge array of high end stuff that requires real expertise and is easily transferable to making forks, is still quite well alive in the US and there are few parallels on earth other than in Europe.

Economic specialization has meant the western countries specialized in extremely high end manufacturing and the engineering and management of low end manufacturing globally. In a crisis the turn around to bring it home would be breathtaking.

> High end custom stuff, sure

American manufacturing exceeds at anything energy intensive or which can be automated. We suck at manual tooling, as Cooke points out.

That applies to, in general, anything big. Big production runs. Big in mass. We’re good at big.

Yeah, this is part of how Japanese companies like Toyota were able to compete with “lean” processes. Early on they were too small to adopt American manufacturing processes so they were forced to try something different.

> In a case of a wider trade war with china, where are the people who built eg. foxconn?

Taiwan. Foxconn is a Taiwanese company, though most of their factories are in China and their founder is a notorious CCP collaborationist.

> you need cheap shoes for millions of people to wear every day, and not a lot of those are made in US.

You don't get cheap products in a country where workers aren't cheap.

This isn't an issue of "the US cannot manufacture their own shoes", it's an issue of "the US customers have gotten used to paying prices that are too low to be achievable in humane conditions".

Shoes would become more expensive once you have to pay the workers, but there will still be enough shoes for everyone.

> Even kids want to be influencers, not assembly line workers (and we have to import those too).

Not every kid who wants to be an astronaut becomes an astronaut.

> we used to be a former socialist country that produced everything, from cars to computers, tvs, etc....

The west can and will easily reenter these markets once it becomes profitable or necessary to do so.

Of course this process would be costly and would require quite a few people to change careers, but its far from infeasible

Why would kids ever want to be assembly line workers? If you find that area of work attractive, why don't you start with yourself becoming one?

Very simple. Because those jobs were once available in mass without an extremely expensive risk of college debt, often unionized and provided good stable salaries that raised many millions of healthy families and provided pensions that have allowed for healthy retirement.

That's what you do for a living, but not something you want to do as a kid. Unless there are kids with middle-aged mentality.

I live in a former socialist country, many kids saw their profession just like this.. elementary school (8 years, ~7->15yo), technical high school, and then work at a local factory for 40 years. And they did exactly that. Only the best few in class went to gimnasiums (general highschools, thought of like prep for college), and then to colleges to become "more". The wide middle of the bell curve was for high school graduates working in factories. And not just factories, some wanted to be automechanics, some electricians, etc.

Now everyone wants to go to college, many to study something where there are literally no real jobs (with added benefit) available (ancient greek, comparative literature, sociology, etc.), and then end up in the public sector, where it doesn't matter if you studied electrical engineering or latin language, all college diplomas are worth the same.

I mean sure, everybody wants to be a superhero, etc. (or pewdiepie-sized influencer for the more younger generations), but once you're 14yo, ending elementary school, you have to choose your next level of education (general gymnasium, one of the technical highschools, economics, construction, cosmetics, etc.), and back then a lot more people chose their actual future careers at that moment than now, where parents push them to gymnasiums, colleges, where some fail (and some somehow succeed), and you then have baristas and warehouse workers with masters degrees and not enough electricians, construction yard workers, factory workers, etc. (electricians etc. are especially bad, because you actually need a high school diploma (or similarly hard alternatives) to do the job).

I believe all kids wanted to become cosmonauts in the socialist period.

Polar sailors or jet pilots work as well.

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