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 ·AT&T Southwest
| reply to scross
Re: In China, Human Costs Are Built Into an iPad said by scross:Well, duh, that's why we have people working for a few bucks a day overseas (and spending all of that overseas, too, what there is of it) while a US citizen could be making $10 an hour or more an hour doing that here - yet the US consumer would only be paying a dollar or two more for each unit of the product. You're not thinking about this too hard if you think 10x the labor cost will only increase a products cost by a dollar or two. Not to mention it takes thousands of workers at one plant to do the same kind of work. I pay more than that at my restaurants and I struggle to find employees who's fingers can bend.
quote:
Survival in the long-term requires long-term thinking - something that has been in short supply in the US for quite a while now.
And long term thinking says not to tell your children to grow up expecting to work in a plant. Most people realize you need a degree from a college to get anywhere and high school alone won't cut it. And you tell them they should look into technology or medicine or finance and not to think about the (non-existent) assembly shop down the street. | |
scross
join:2002-09-13
Cordova, TN | said by howardfine:said by scross:Well, duh, that's why we have people working for a few bucks a day overseas (and spending all of that overseas, too, what there is of it) while a US citizen could be making $10 an hour or more an hour doing that here - yet the US consumer would only be paying a dollar or two more for each unit of the product. You're not thinking about this too hard if you think 10x the labor cost will only increase a products cost by a dollar or two. Not to mention it takes thousands of workers at one plant to do the same kind of work. I pay more than that at my restaurants and I struggle to find employees who's fingers can bend. quote:
Survival in the long-term requires long-term thinking - something that has been in short supply in the US for quite a while now.
And long term thinking says not to tell your children to grow up expecting to work in a plant. Most people realize you need a degree from a college to get anywhere and high school alone won't cut it. And you tell them they should look into technology or medicine or finance and not to think about the (non-existent) assembly shop down the street. I think you'd be surprised at how relatively little the cost of labor can increase the final cost of the product, at least in some areas. Earlier I referred to a $1500 Brooks Brothers suit; IIRC the Haitian seamstress was being paid something like $3 an hour (if even that) to put together this suit, and that was about to be cut in half, simply because she had no place else to go (most of the factories had been shut down by the earthquake). And IIRC, a one dollar an hour seamstress can handle something like ten pairs of blue jeans an hour; I personally could very easily part with an extra dollar per pair of jeans if that meant someone could make $10 an hour out of it.
"You must go to college!" is turning out to be one of the great cons of the century. Most kids who go the traditional route and take on the traditional (these days) debt will never get out from under that rock. Trade schools, vocational schools, apprenticeships, and so on are still all very viable options, and some can lead to surprisingly lucrative careers.
And, BTW, "the (non-existent) assembly shop down the street" - it's coming back! It may not look like the one our parents or grandparents worked in, nor be as big as those, but it's slowly and definitely coming back! | |
Reviews:
·AT&T Southwest
| said by scross:I think you'd be surprised at how relatively little the cost of labor can increase the final cost of the product Labor cost always weighs heavily on the cost of the product. While the cost of putting together $100 components to make a $700 product by a $1/hour worker may not seem to add much labor cost, those $100 components were put together by someone else probably making more than $1/hour.
When I was senior engineer at a medical products company, we were very aware of labor cost. I don't remember how we calculated that but a one dollar increase in pay to a worker did not increase the product cost by only one dollar. In my restaurants (as a bad comparison) labor cost is always multiplied by three when we calculate the prices on our menu. It always works out but that, too, I've forgotten the rationale behind it and it's become automatic for us.
quote:
"You must go to college!" is turning out to be one of the great cons of the century. Most kids who go the traditional route and take on the traditional (these days) debt will never get out from under that rock.
Most? I think only the ones who make the TV news. Both of my boys will have their debt paid off soon. College, it seems, has replaced high school where one goes to get a decent, well rounded education and today's non-manufacturing environment requires more high level thinking skills than muscle skills. quote:
Trade schools, vocational schools, apprenticeships, and so on are still all very viable options, and some can lead to surprisingly lucrative careers.
Careers in what? I tried teaching in a vocational school many years ago and quit when I noticed what we were teaching them was old garbage and antiquated nonsense. One of my nephews, against my advice, went to ITT Tech to get a "degree" in computers and now answers phones for Charter help desk.
quote:
And, BTW, "the (non-existent) assembly shop down the street" - it's coming back! It may not look like the one our parents or grandparents worked in, nor be as big as those, but it's slowly and definitely coming back!
Doesn't look the same and isn't as big is hardly a comeback. | |
 mozerdLight Will Pierce The DarknessPremium,MVM
join:2004-04-23
Nepean, ON | said by howardfine:Labor cost always weighs heavily on the cost of the product. Labour costs have a huge impact when economies of scale cannot be applied to ANY manufacturing operation in a persistent and effective manner -- when economies of scale are effectively applied labour costs is a factor of gross margins targets. China works for Apple [and many others] because they can achieve their gross margins objectives which in turn provide their investors with worthwhile ROI.
Manufacturing can return to North America only when ingenuity is properly rewarded by the market place.
Socialism's vision for society is Utopian driven consequently self destructive over time because Socialism tries to control the market --- ingenuity cannot thrive in a socialistic society. Equality is a socialistic pipe dream that drives mediocrity -- and with mediocrity society fails.
--
David Mozer
IT-Expert on Call
Information Technology for Home and Business | |
scross
join:2002-09-13
Cordova, TN | said by mozerd:said by howardfine:Labor cost always weighs heavily on the cost of the product. Labour costs have a huge impact when economies of scale cannot be applied to ANY manufacturing operation in a persistent and effective manner -- when economies of scale are effectively applied labour costs is a factor of gross margins targets. China works for Apple [and many others] because they can achieve their gross margins objectives which in turn provide their investors with worthwhile ROI. Manufacturing can return to North America only when ingenuity is properly rewarded by the market place. Socialism's vision for society is Utopian driven consequently self destructive over time because Socialism tries to control the market --- ingenuity cannot thrive in a socialistic society. Equality is a socialistic pipe dream that drives mediocrity -- and with mediocrity society fails. Automation changes everything! Foxconn is planning to automate away the bulk of these jobs over the next three years or so. And once "cheap labor" is not a factor, these automated factories can and probably will migrate to other areas.
And Apple's current extreme profit margins will not stand; this is one of the fundamental rules of capitalism ("You will face serious competition at some point, especially if you are highly profitable."). They're already feeling the heat from Android devices; Win8 or whatever devices may be next. And I expect that any day now cheap clones and knockoffs will start to appear in Apple's favorite markets. The "iChing" has a nice ring to it, don't you think? And I doubt Apple would be able to successfully fight a trademark battle over that particular name. | | |
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scross
join:2002-09-13
Cordova, TN | reply to howardfine
said by howardfine:When I was senior engineer at a medical products company, we were very aware of labor cost. I don't remember how we calculated that but a one dollar increase in pay to a worker did not increase the product cost by only one dollar. In my restaurants (as a bad comparison) labor cost is always multiplied by three when we calculate the prices on our menu. It always works out but that, too, I've forgotten the rationale behind it and it's become automatic for us. Sounds like you're using the rule of thumb "add a dollar of cost; increase the price by two or three dollars". While not completely out of line, maybe (it's good for profits, at least temporarily), this is an old and probably outmoded way of thinking.
quote:
Careers in what? I tried teaching in a vocational school many years ago and quit when I noticed what we were teaching them was old garbage and antiquated nonsense. One of my nephews, against my advice, went to ITT Tech to get a "degree" in computers and now answers phones for Charter help desk.
Our local nursing schools (we have three) have more applicants than spots available for their 24-month (more or less) programs. However, the drop-out rate in the first semester is on the order of 80%. So a big shortage is still looming there.
I have a friend who went straight to work after high school. After ten years or so he decided to go to college so that he could get into the computer field. Four years later he graduated with a degree in MIS but couldn't find a job for love or money. So he enrolled in a local tech school, took a few computer courses, got a couple of certs, and then was hired right away. Last I heard he was an IT manager somewhere. (BTW, this was the "rule" around here for quite a while, and it may still be - go to college to get an education, but go to a tech school in order to get a job.)
I read an article a few months back where a railroad company was looking for electricians; they needed licensed and experienced people who could be trained for specialized railroad work. IIRC, they had 40 spots open; they were lucky to get 20 applicants. Ten of those entered the program, but only three finished, and one of those quit shortly thereafter because he didn't like the travel. So now, after months of effort on their part, instead of 40 folks they only need 38!
You should be getting the picture by now ...
quote:
Doesn't look the same and isn't as big is hardly a comeback.
Automation changes everything! | |
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 ·Cogeco Cable
| reply to bobrk
said by bobrk:I believe in that article that it states an iPhone would only cost $65 more if it were made in America.
Is that assuming we live in a dream world where all North Americans work at optimum performance without the necessity for additional rules, regulations, policies, procedures and additional management to ensure that employees are actually working? | |
 signmeuptooThank you YankeesPremium
join:2001-11-22
NanoParticle
kudos:4
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 ·callwithus
| reply to howardfine
said by howardfine:said by steven s:They created that demand in the first place. Shame on you for defending these practices.
And another guy trying to blame us. You know what? I don't care. Nothing I can do about it. If it means I can get a cheaper product, good. Let them handle their own problems. It doesn't affect me. When things were bad in our country, we did something about it. Maybe they will too. And then manufacturing will move elsewhere. Oh, well. I don't care. I have my own problems. Wow, aren't you a caring soul.
--
Join Teams Helix and Discovery. Rest in Peace, Leonard David Smith, my best friend, you are missed badly! Rest in peace, Pop, glad our last years were good. Please pray for Colin, he has ependymoma, a brain cancer, donate to a children's Hospital. | |
| reply to daveinpoway
@signmeuptoo - No I'm not. I already said that. I don't care. Their problem. Not mine. Nothing I can do about it. Let them do something about it. I'm tired of everyone saying I have to fix other countries problems. | |
| said by howardfine:@signmeuptoo - No I'm not. I already said that. I don't care. Their problem. Not mine. Nothing I can do about it. Let them do something about it. I'm tired of everyone saying I have to fix other countries problems.
It is not just other countries problems when we are causing them, and especially when doing so is also causing problems here.
Would you not take responsibility if we decided to start testing biological weapons in Africa? Just started laying waste to the African population so we could test bioweapons? We are doing things that are causing extreme problems in other countries, and we should be taking responsibility for that.
I can't really comprehend how you could come to this conclusion outside of fatigue, or just having no morals. If a company starts using slave labor is it also something you shouldn't care about? Where do you draw the line? | |
| reply to daveinpoway
Embrace the reality... | |
| I don't really think Apple is to blame just because they published this report. If you look at some statistics on china ( take a look here for example: »www.statista.com/topics/753/china/ ) and the working conditions there / generell life conditions you can easily tell that they have been improving since the country is getting more and more wealthy. It is just the way things go. Noone can expect western working standards in these companies. Also all other big western companies are explointing it as well. | |
sk1939Premium
join:2010-10-23
Washington, DC
kudos:9 Reviews:
 ·T-Mobile US
| reply to howardfine
said by howardfine:said by steven s:but Apple conveniently uses the demand they create to evade social responsibility more than any other company of its size and influence.
From the article: quote:
Bleak working conditions have been documented at factories manufacturing products for Dell, Hewlett-Packard, I.B.M., Lenovo, Motorola, Nokia, Sony, Toshiba and others.
...
And Apple’s annual supplier responsibility reports, in many cases, are the first to report abuses.
At the same time, no other company has Apple's profit margins, which is why Apple is being singled out. Apple CAN make changes, but they don't WANT to.
" executives want to improve conditions within factories, but that dedication falters when it conflicts with crucial supplier relationships or the fast delivery of new products. Tuesday, Apple reported one of the most lucrative quarters of any corporation in history, with $13.06 billion in profits on $46.3 billion in sales. Its sales would have been even higher, executives said, if overseas factories had been able to produce more."
“We’ve known about labor abuses in some factories for four years, and they’re still going on,” said one former Apple executive who, like others, spoke on the condition of anonymity because of confidentiality agreements. “Why? Because the system works for us. Suppliers would change everything tomorrow if Apple told them they didn’t have another choice.”
Apple is responsible for the well being of it's employees, the fact that it puts profits ahead of it's companies just means that it's like every other corporation out there.
"Executives at other corporations report similar internal pressures. This system may not be pretty, they argue, but a radical overhaul would slow innovation. Customers want amazing new electronics delivered every year."
The consumers and corporations are both to blame.
Best quote of the article:
“We’re trying really hard to make things better,” said one former Apple executive. “But most people would still be really disturbed if they saw where their iPhone comes from.”
There is no excuse for ignorance in this day and age. | |
Reviews:
·AT&T Southwest
| said by sk1939:Suppliers would change everything tomorrow if Apple told them they didn’t have another choice.”
Maybe not. As someone somewhere asked, if Apple did make threats to pull out, where would they go to find another plant that can do the same thing. quote:
Apple is responsible for the well being of it's employees, the fact that it puts profits ahead of it's companies just means that it's like every other corporation out there.
Let's remember two things in that paragraph. 1) Foxconn does not consist of Apple employees and 2) that plant serves many other companies besides Apple. | |
sk1939Premium
join:2010-10-23
Washington, DC
kudos:9 Reviews:
·T-Mobile US
| said by howardfine:said by sk1939:Suppliers would change everything tomorrow if Apple told them they didn’t have another choice.” Maybe not. As someone somewhere asked, if Apple did make threats to pull out, where would they go to find another plant that can do the same thing. said by sk1939:Apple is responsible for the well being of it's employees, the fact that it puts profits ahead of it's companies just means that it's like every other corporation out there. Let's remember two things in that paragraph. 1) Foxconn does not consist of Apple employees and 2) that plant serves many other companies besides Apple. Another supplier. I'm sure that there are tons of companies out there that would love to contract to Apple, the only drawback would be pushing release dates for new products back.
1) Foxconn reports to Apple corporate, and has to adhere to Apple's standards. 2) That may be, but your ignoring the fact that Apple made more in profits than Exxon Mobile and as the largest, takes the most scrutiny. | |
Reviews:
·AT&T Southwest
| said by sk1939:Another supplier. I'm sure that there are tons of companies out there that would love to contract to Apple Nope. Like I said, it was mentioned somewhere that there are no other companies that can do this type of work and, as you said, you'd be delaying releases for products.
quote:
2) That may be, but your ignoring the fact that Apple made more in profits than Exxon Mobile and as the largest, takes the most scrutiny.
Some people like to only discuss Apple as if they are the only ones involved in all this. | |
sk1939Premium
join:2010-10-23
Washington, DC
kudos:9 Reviews:
·T-Mobile US
| What the article said was that there were no suppliers currently able to provide the flexibility and scaling that Apple desires. That isn't to say there wouldn't be any, Foxconn just happens to be convenient due to the number of companies that use them.
That is true, and it affects more than just electronics as well (designer clothing comes to mind). | |
scross
join:2002-09-13
Cordova, TN
1 edit | reply to daveinpoway
Here's a good story about American manufacturing; not related to Apple, but covers high-end automotive parts production and distribution - an area that I am intimately familiar with.
»www.theatlantic.com/magazine/arc···age=true
A couple of highlights:
"As Autozone, Napa, and other huge auto-parts stores expanded their reach, they used the bargaining power that comes with size to pressure companies like Standard to lower their prices. Failure to do so could cost them the chain stores’ business, which could mean bankruptcy. Larry says this new price pressure came exactly when many of his old friends in the parts trade were retiring and couldn’t persuade their kids to join the business. Throughout the 1970s, ’80s, and ’90s, dozens of Larry’s old friends and competitors gave up and sold out. Larry’s son, Eric, decided to work at Standard after college and now runs many of the company’s manufacturing operations."
Note the constant pressure from their biggest customers to shave prices, on already thin margins, forcing the manufacturer(s) to live more-or-less "on the edge" of bankruptcy at all times - or at least the fear of it. Such pricing pressure is almost always aimed at increasing profits for the large customer - NOT at lowering end prices for the consumer, as is often promulgated in the press and elsewhere.
"Nearly every manufacturing company in the U.S. goes through this same process: regularly, carefully studying its products to see if they could be made more cheaply in a lower-wage country. The calculation constantly changes, because the world changes. Sometimes that’s bad news for American industrial workers, other times it’s good news. Workers in China and Poland and Mexico, for example, have become more highly skilled, and their factories are now able to produce more-precise goods than they could a decade ago. But at the same time, the wages of those workers have risen, as have shipping costs. Unrest in northern Mexico or an oil-price spike caused by trouble in the Middle East can encourage manufacturers to keep production lines in the United States. The development of increasingly complex machinery can do the same: because expensive machines are more likely to pay off when they can be counted on to run 24 hours a day, every day, the availability of steady electricity, for instance, is essential."
Note that one of the many advantages that developed countries have over less-developed ones is reliable infrastructure - electricity, water, roads, flood control, etc. As more and more manufacturing becomes automated, such reliability is essential. Not stated here (but clearly stated elsewhere, at least on occasion) is the need for things such as bribery in less-developed countries - very often for basics like keeping the lights on, making sure deliveries show up on time, making sure garbage gets picked up, and so on. | |
 C_Kill The SocialistsPremium
join:2001-03-19
kudos:3 | reply to sk1939
Wrong msft has higher margins goog has almost as high margins  | |
sk1939Premium
join:2010-10-23
Washington, DC
kudos:9 Reviews:
·T-Mobile US
| said by C_:Wrong msft has higher margins goog has almost as high margins
Only partially wrong. Microsoft has higher margins, but Apple has far higher earnings and higher growth rate.
Microsoft's profit margin is 32.5% with 30 Billion in earnings before interest, taxes, depreciation and amortization. Net earnings were 23.47 Billion. Microsoft's quarterly growth rate is -0.2%.
Google's profit margin is 25.7% with 14.09 Billion in earnings before interest, taxes, depreciation and amortization. Google's net income was 9.74 billion. Google's quarterly growth rate is 6.3%.
Apple's profit margin is 25.8%. However, Apple's earnings efore interest, taxes, depreciation and amortization was 45.5 Billion. Additionally, Apple has 32.98 Billion in net profit and a 73% quarterly growth rate.
In English, Apple made 9.51 Billion dollars more this past quarter (in net profit) than Microsoft, and had a 73.2% higher growth rate. | |
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