Could companies bring jobs back to America and still be profitable? (insurance, union)

[upstateforchanger]

Was reading a recent article about Apple Inc (which has all of it's manufactoring done in China) trying to 'improve' conditions of it it's workers so they go from working 60 hours to 49 hours while still making about the same level of pay (whatever that is at 35 cents an hour). The part that really caught my attention however was where they said "labor costs are only a small fraction of the total cost for most high-tech devices"

Really?...So if that's the case, why are you the most profitable company out there, yet you pay your workers less than what most Americans make in three minutes. Here is some interesting information for you to consider:

Apple's Income:
-Revenue: 108.249 billion
-Operating Income: 33.790 billion
-Profit: 25.922 billion
-Assets: 116.371 billion
-Equity: 76.615 billion

Salary of workers: (Based off approximate # of 200,000)
-218.4-- million (Keep in mind it was reported they pay back half of their salary to the company through rent and food costs, plus this amount would already be included in Apple's final profit) This is also if you consider each of those 200,000 workers to have worked 60 hours a week.

Now...
Salary if they had 275,000 workers doing 40 hours per week:
-4.147 billion

This would put a pretty good size impact on the company, but if you eliminate the Chinese from the equation, that new number then goes into the three billions, and then they also save money from not having to transport from their to here. Essentially they could directly take this hit on them, and even though they would take hits elsewhere as well, this would still leave them with over 20 billion in profits, not to mention other assets.

However, that is unlikely, and let's say, since they said it's a small part, that they pass on the expenses to the consumer by...say 5%. That is 196.430 million spread across all their products, which is about 132 million a year...so about a $1.50 per product, though it will not be spread out that evenly between each.

Okay, so there may be some other prices that come or go with it, it would simply take too long to lay out every single thing, especially just for discussion purposes, but if it meant getting almost 300,000 people in the USA back to work and only costing those who buy Apple about $1.50 extra, would it be worth it for us and for them to come back to America, and do you think it would be worth it for other companies as well?

[Malloric]

Um, there's a big difference between .35 cents an hour (actually, more like $1-2 an hour) and $30 an hour, which is probably what it would cost with taxes and benefits. 300,000 jobs x 2000 hours a year = 6 million hours * 30/hour = 18 billion. So, yes, if Apple cut its profits in half, those jobs could possibly be done in America. Apple has extremely high profit margins on most of its products, however. The iPhone/iPads supposedly cost about $200 to make. That's less than half of Apple's overseas contract labor, however... for all of them to come back, no, Apple could not manufacture in the US profitably.
The iPhone 4S Only Costs 49 Cents More To Make Than The iPhone 4 [Report] | Cult of Mac

Nor is it just money, China is simply better at making iPhones than we are. Three month ramp ups in America or 15 hours in China... on products that have a life-cycle less than a year, it simply wouldn't work. China is the reason they can churn out massive numbers of devices for launches in a few days. We simply couldn't do it here at any price. It's the same reason GM et al have suppliers manufacturing on-site except times about a thousand.
http://www.nytimes.com/2012/01/22/bu...pagewanted=all

[Teak]

I was reading some Idaho newspaper online the other day and they mentioned two companies that were moving their off-shored (out-sourced) parts back to the USA. Said that the costs of doing business in places like India and China were no longer competitive. Said that quality control and supply-chain management was easier to handle in the good ol' USA. One of them was Buck Knives; forgot which one was the other.

[mathjak107]

we are a manufacturerer of industrial and commercial water and sewage pumps ,we do all our manufacturing of castings for our products in china and a little bit in mexixco..

we have to do it there as both the epa restrictions here and labor costs had us at a severe disadvantage to our competitors.

we actually assemble, design and QC our products right here in long island employing 103 people.

we used to rebuild and rewind motors here too but have stopped as that too would have required us to move off shore to remain competitive so we decided to close down that end of our business.

[stevemorse]

Most of them not all, in a non union state they could be profitable. But the Northeast or CA, you guessed it. NO.

[Boompa]

Corporate Profits are higher than they have ever been, the key is greed. That is why the income disparity is si out of wack. If American business undeerstands that we, the Americans, will no longer buy forieegn products, they will stop being parasites. I recently traded in both of my Korean cars for US made cars built in union shops, even though the Hyundai was built in the US. It is only when Americans stop buying foriegn goods that we can rebuild our economy.

[pvande55]

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.

[Garfunkle524]

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.

[Malloric]

Originally Posted by Garfunkle524

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.

They're doing that... a whole lot of that, actually. We're still the biggest manufacturer in the world, and post-recession manufacturing here as been undergoing something of a renaissance. Still, you have to look at it in context. Manufacturing, despite growing decade after decade, hasn't kept pace with the growth of our economy. It's an ever shrinking piece of the American economy.

The other factor is jobs. Investing in making American manufacturing competitive does not create very many jobs. You're looking at huge capital investments in modern factories that employ a few hundred people. For example, the billion dollar Chattanooga plant (that's just the first phase) that will eventually employ 2,000 people. That's $500,000 per job created. VW can afford that since it's a massive company with lots of lobbying power (the government picked up most of the tab). And that's new economic activity. There are just as many examples where making America competitive actually costs jobs since labor is replaced with robots.

[mattee01]

Originally Posted by Malloric

Um, there's a big difference between .35 cents an hour (actually, more like $1-2 an hour) and $30 an hour, which is probably what it would cost with taxes and benefits. 300,000 jobs x 2000 hours a year = 6 million hours * 30/hour = 18 billion. So, yes, if Apple cut its profits in half, those jobs could possibly be done in America. Apple has extremely high profit margins on most of its products, however. The iPhone/iPads supposedly cost about $200 to make. That's less than half of Apple's overseas contract labor, however... for all of them to come back, no, Apple could not manufacture in the US profitably.
The iPhone 4S Only Costs 49 Cents More To Make Than The iPhone 4 [Report] | Cult of Mac

Nor is it just money, China is simply better at making iPhones than we are. Three month ramp ups in America or 15 hours in China... on products that have a life-cycle less than a year, it simply wouldn't work. China is the reason they can churn out massive numbers of devices for launches in a few days. We simply couldn't do it here at any price. It's the same reason GM et al have suppliers manufacturing on-site except times about a thousand.
http://www.nytimes.com/2012/01/22/bu...pagewanted=all

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 100 percent of the increased cost to their consumers, it would amount anywhere between pocket change and two dollars.