Quote:
Originally Posted by WyoNewk
...While there may be a number or reasons for U.S. companies to have their products or parts built in foreign countries, the main reason is cheaper labor...
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It really depends on the industry. Capital intensive industries manufacture overseas mostly because of taxes. The labor is inconsequential.
Take semiconductor manufacturing for example. The modern microprocessor is arguably the most complex device ever invented by mankind. A wafer fabrication factory ("Fab") designed to build, say, Intel i7 microprocessors costs about $5 Billion to build from scratch, and it doesn't matter if the Fab is in China, India, Singapore, Ireland, Israel, Germany or in Arizona, New Mexico, New York, Oregon or California - it costs about $5 Billion to build. The cost of labor to
build the fab is rounding error. The cost of labor to
operate the fab once it is built is also rounding error (note that the employees in a high end wafer fab are very well educated - materials scientists, industrial engineers, electrical engineers, etc -- frequently with PhDs. The point is they are well paid, and these are very good jobs).
Almost all of the decision on where to locate the Fab is due to the difference in taxes on the Fab between various countries.
Now... back on point... When Intel builds a Fab (or a less expensive assembly/test facility), Intel requires local labor to abide by best safety practices.
A case in point: Boots. Yes, boots. Intel requires the laborers in construction to actually wear safety boots. In Vietnam and India (for example) the custom is that laborers wear sandals or even go barefoot. Intel requires the trade laborers to wear boots -- and this causes massive turnover among the labor force, as the locals do not want to wear boots.