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Some can. Chinese wages rising plus the cost of transporting the goods make US more competitive. Labor is not always the major cost, so the argument that they can't manufacture here because we don't work cheap enough is losing ground. Also Chinese firms have been known to steal ideas.
Transport cost will be an issue for shipping raw materials which are large or heavy... for long distances. However with the supply chain for components in Asia, it doesn`t make sense to manufacture in the USA unless all of AAPL competitors decide to also pull out of manufacturing in china, which will never happen in the next 10 years. The current trend is to offshore and contract manufacture electronic goods.
Companies gain a big "cost savings" (aka profit increase) when off shoring certain types of manufacturing. I say instead of sending your operations to China, invest in improving productivity here in America. A large enough investment and effort will allow 1 skilled American assembler to be as productive as three Chinese assemblers, likely with better quality.
My proposal? Take that profit increase you get from offshoring and invest in making manufacturing in America competitive.
Some of these plants in china have high efficiency and some have poor. However many of the CE manufacturing facilities are world class in nature, do have very poor labor rights for workers and have high efficiency.
There`s only so much best practices can do for the usa. The have some jobs in the us which are highly efficient...efficient to the point where you just need one person watching a line...aka almost fully automatic....the problem with that is it doesn`t create enough jobs.
Some labor intensive jobs may return, but the ratiowill be small. for every job that returns, i think 100`s leave. It`s the nature of globalization.
First of all, here's a few very simple facts you got wrong...
1- No, it's not closer to $1 or $2, it is .35 cents...Apple admitted that.
2- No, it's $7.25. That's what minimum wage would be in most states, and they are still not required to give benefits, and taxes/insurance is not going to quadtruple the cost.
3- China makes things WAY WORSE than here. Everything I've ever seen come out of China is a piece of *****. Period. Like most countries do, their quality is much higher within their own country.
4- It probably wouldn't take quite as many as 300,000, however if it did, it would be because of increased profitability, which would thus allow more workers.
I will admit I was wrong on at least one thing though...
According to the price to make their products, which is about half or less what they actually cost, the cost to build something like the ipad is 250$ in components, and 259$ when factoring manufactoring expenses. So...in reality it wouldn't require a 5% increase in prices to consumers, but instead 1%.
That means if they passed 100percent of the increased cost to their consumers, it would amount anywhere between pocket change and two dollars.
In the production of industrial goods and machinery....china has below par quality at the moment. however for CE items they price to quality ratio is very competitive in the world market. Thus, they are stealing the world market for contract manufacturing....and this trend will continue.
China will also lose jobs...the very high labor jobs....that are even higher than ce manufacturing...stuff like shoes and clothing....is going to vietnam and other lower cost countries.
You see with globalization the same thing that happened to uk 40 years ago is now happening to the us and will happen to china (but not for many decades). You cannot escape the laws of globalization and corporate capitalism.
Steve Jobs answered just this question when he said even if he wanted to its not possible.Perhaps one bright horizon is that energy both natural gas and crude may gain us some competitive edge in the future;just depending.Perhaps we also may see as we always have a shift to making things which are more innovative as we always have. I don't see us becoming that competitive in basic screwdriver assembly. In fact I see less since we are going to see deep cuts in defense spending much of which goes to domestic production. That is a huge amount we are likely to see disappear to a large degree.
He didnt tell the truth....gave you a pr version of the truth.
Source for 35 cents an hour where Apple admitted it? And I mean other than The Onion article where they make 31 cents an hour and work a 35 hour workday.
I guess you've never heard of taxes. Look at what Fluke pays for assembly work... it's not minimum wage. Then you've got 7.5% for payroll taxes, unemployment and workers comp, benefits.
I have tons of extremely well built Chinese "crap." My Lenovo laptop is solid, I have industrial electronics stuff made in China that's top notch, my Denon AV equipment is made in China. Of course, none of that was really cheap. The iPhone I wouldn't call crap either, especially compared with the last cell phones we made here. Talk about crap. Those things broke all the time.
You ignore that the big cost isn't labor, it's that the Chinese are simply better at making iPhones.
This guy has a better understanding of the situation.
Three sources, it was in my local newspaper, on Apple's website, and on yahoo news.
I already took that into consideration. Did you not consider the costs Apple already incurs from shipping and importing, plus what they have to pay to the Chinese government? But just to humor you, lets say they did hire 300,000$ and paid them $7.25. Now, once you figure in taxes, workers comp, and insurance, that actually comes to about $13. This is over 40 hours per week, every week of the year. That's 8.112 Billion. So what would be the average cost to the consumer? Well, Appl could absord it and still bring in close to 20 billion just in flat our profit...perhaps more once you remove the expenses they pay for all of their presense in China. Let's say instead however, they pass on 1% to customers. That's $7.37 average per product, though it'd probably be spread out more evenly based on price of item.
Oh, and yeah...it is crap...I've never seen anything before that get's outdated after 6 months. What is the difference between Iphone 4 and Iphone 4S? Siri? What about the Ipad and Ipad 2? Guess the good business thing today is build something that gets a lot of attention, and then a few monthes later come out with something that is basically the same with one or two differences and stick an even bigger price tag too.
I feel pretty secure in the point I've made. They can bring jobs back to America. Of course it will likely cost them 1/4 of their profit...yet no one currently working would have to take a pay cut, and the company would still be making money. Of course, what is the likely hood of them doing this? Corporate greed reins supreme, and why be limited to 20 billion profit when they can support China and the impoverishment of it's people while doing nothing for our unemployment...
Its not only corporate greed. If they want to survive and thrive in the ce battle grounds, they need to keep oursourcing. If they followed the advice of many on this thread, they would be doing americans a favor in the near term...but aapl and the american public would then cause a slow decline in the vision and competitiveness of apple. Greed is only one component. Apple is in a war with other ce companies....they make moves like a chess player makes moves...all calculated with the highest probably statistical outcomes in the favor. Would you ever lose a rook to do a favor for the american ppl....prob not because that could be the end of your chess game after a few more moves.
Of course they would be profitable, but that's not the point. The point is: could they be competitive in a global capitalistic market. And the answer is no.
In modern-day capitalism, the attractiveness of your financial performance depends on investors' relative risk-adjusted options. If your company returned $2 a share in earnings, that's cool - but if your competitor is making $2.25 a share with higher free cash flow at a similar cost of capital, then that $2 is not so good anymore. If everyone else is making $1.75 taking on the same or more risk, then your $2 suddenly looks really great. In Markowitz portfolio theory terms, investors want to pick assets that are on the efficient frontier, i.e., the greatest risk-reward combinations, depending on their risk appetite. Efficient capital and asset markets have significantly reduced frictions for investors and firms, enabling them to fluidly construct their "location" on the efficient frontier a wide array of competing alternatives. All of this means that investments will flow to those areas that offer the greatest risk-adjusted return. Part of that equation means to decrease your expenses to the minimum necessary level and optimize your capital investments for the greatest future return on your sales.
So with all that said, companies that elect to take on higher costs than their competition are only hurting themselves, and the capital markets don't reward that; they punish it.
If corporate jobs are to come back to America on a large scale, they need to do so on a competitive basis, not just an altruistic one.
Those who vote "yes" have little understanding of global economics, trade and commerce.
The concept of an American corporation is long gone. It's not coming back. This is the age of multi-national corporations. If China is getting costlier, the think tanks will identify the next cheaper labor pool and it's not America yet, unless the people are so desperate and unemployment is rampant that people are going to be forced into sweatshops.
Only a 1930s style depression can bring that about, and that's a vicious cycle for the corporation too.
South America and Eastern Europe are the hottest destinations now. More manageable than China. I keep speaking to a lot of Alejandros and Dmitries.
If Apple were to manufacture the iPad completely inside America, it's actual charge could be 7 to 10K (and I'm being lenient here). That will shred revenue. Companies aren't stupid. They don't let emotions cloud their business strategy.
Actually I told my friend the other day there are many jobs for people (americans) if they want to manufacture iphones. They can move to china (or vietnam in the future). Go to the jobs...because the jobs are not coming back.
Uh, sorry to break it to you but there IS no giant reserve of SS money that is being used to pay for the benefits today. Congress has spent that money and it's long gone. Poof. The SS benefits being given out today are taken directly from the SS taxes being paid by current workers. Which means that the retiring generations are taking the contributions of the current working class, and then the current working class will need an even bigger working class when they retire and so on and so forth. I don't know why Americans think that SS has a $2.5T pot of cash sitting in some bank gathering interest, that money has long been spent.
M3 money supply figures are not even provided anymore...its all funny money and the middle class is being hollowed out as we speak. i dont like it either, but i recognize it and dont see any changes in the future.
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