-
Hey, guest user. Hope you're enjoying NeoGAF! Have you considered registering for an account? Come join us and add your take to the daily discourse.
NikkeI: Foxconn considering $7 billion US Factory with Apple
- Thread starter facetheslayer92
- Start date
- Status
SlipperyFishes
Banned
#2 in the world. China has more than double the production of cars.
Electric Eye
Banned
Oh they want to encourage a trade war? Foxconn forget where they are from and China might quickly stomp out their plans.
Arrogant Bastard
Banned
Honestly, the primary reason isn't wages it is access to materials, market, infrastructure, etc. Foxconn is talking about making a single component here, not the entire phone because it just isn't feasible. They are talking fabricating one component and how it would increase the price by a significant amount. If they created the entire phone here I don't think it is out of the realm of possibility that it would cost near $2000.
Alternative fact?
Valkyr Junkie
Member
The sole answer is: because we never have
We created the automotive industry; we have never been big manufacturers in the tech space even though we created it. Asia has always done our manufacturing for these kinds of components.
His PR machine is really something else. I'm terrified of that the most.
It is what this "pleasing companies for jobs while being nationalistic" thing will lead to. You also saw it during the great depression. Companies like Ford and IBM were already so big that they basically were global, and played governments like they were nothing. Taxations wend back and forth, and wages had to go lower and lower to compete. Until slights start to happen between peoples and someone will loose their cool.
Because China has the better material supply and distribution than U.S in that field currently. This is one reason why many companies off-shored in the first place, not just because of cheap labor. If you look it up for just a second, you will see most of the rare earth metals being used in phones and other electronics is from China.
It isn't a "great thing", but it is better than nothing. The reason why GAF is mocking it is because GAF realizes the goal of foxconn, which is to go full automation. People who see this and say "great" tend to have no foresight and believe in these numbers, not realizing that, that is a temporary number.
While these people keep thinking they can keep it going, the manufacturing industry moves on to automate as much as they can which is going to have harsh consequences on our economy when we are forced to transition later on. The longer countries that rely on manufacturing jobs wait, the more it will hurt when they have to deal with the issue, as it forces the entire country into a retraining program for workers who lose their jobs to technology.
CountAntonius
Member
More jobs especially for the areas that really need it is a great thing. One factory can save a town full of people.
Skellig Gra
Member
Why shouldn't he? This could be big for a lot of currently unemployed people.
NyMartin90
Member
Not questioning that its a bad thing just pointing out what will happen. This would be great. Most of the factories that were announced in the past two months will be going to the Rust Belt. If this one goes there as well he will solidify and make good on his campaign promises to those states.
Shao Kahn Brewing a Stew
Banned
Praise Trump, and not the advancement in technology and the emergence of sustainable supply chain and reshoring that makes the cost of automation and labor insignificant.
You will see more of this happen. A lot more.No one wants to leave anymore carbon footprint (something that Trump says doesn't exist). And Trump will take every credit for it, not that there's anything wrong with taking credit for something you haven't done.
You will see more of this happen. A lot more.No one wants to leave anymore carbon footprint (something that Trump says doesn't exist). And Trump will take every credit for it, not that there's anything wrong with taking credit for something you haven't done.
Netherscourge
Banned
The end result will be China loses jobs, iPhones get too expensive to make and sell and then Americans who make them lose their jobs.
shira
Member
Not when solar powered robots are making them.
Regarding China being much cheaper than the US to manufacture in, it seems like its not really the case anymore: https://www.bloomberg.com/news/arti...ot-its-just-as-cheap-to-make-goods-in-the-usa
"The country with the lowest manufacturing costs, we found, is not China. Its Indonesia, then India, Mexico, and Thailand. China comes nextwith Taiwans costs just a tad higher and the U.S.s a bit more than that, ranking America No. 7 in our study."
"As Chinese labor costs rise, American productivity improves, and U.S. energy expenses fall, the difference in manufacturing costs between China and the U.S. has narrowed to such a degree that its almost negligible. For every dollar required to manufacture in the U.S., it now costs 96¢ to manufacture in China, before considering the cost of transportation to the U.S. and other factors. For many companies, thats hardly worth it when product quality, intellectual property rights, and long-distance supply chain issues are added to the equation."
"The country with the lowest manufacturing costs, we found, is not China. Its Indonesia, then India, Mexico, and Thailand. China comes nextwith Taiwans costs just a tad higher and the U.S.s a bit more than that, ranking America No. 7 in our study."
"As Chinese labor costs rise, American productivity improves, and U.S. energy expenses fall, the difference in manufacturing costs between China and the U.S. has narrowed to such a degree that its almost negligible. For every dollar required to manufacture in the U.S., it now costs 96¢ to manufacture in China, before considering the cost of transportation to the U.S. and other factors. For many companies, thats hardly worth it when product quality, intellectual property rights, and long-distance supply chain issues are added to the equation."
And it all comes down to things like this.
Can Trump take credit for (debatably positive) deal-brokering to help him secure re-election?
Or can (or will) Trump actually influence the success of these sorts of deals by offering personal quid pro quo? What would it mean if Trump or Tillerson personally bribed a company to bring jobs to the US?
Arrogant Bastard
Banned
You really should focus on the last part of what you quoted, that last part is why production is cheaper when it comes to components.
True but due to our lower energy costs we'll quickly reach a point where we can make more cost effective plastics than anyone else soon.
They were produced in China to bolster Apple's insane profits and margin per unit sold.
Apple can make their iPhones in the US and keep the same price (and stop gouging their customers I guess... nah can't have that)
lol you think stockholders would ever allow apple to have lower profits just to have jobs in the us and sell the iphones at the same price?
Can you explain, I'm not terribly knowledgeable about this.
Yeah. For the most part labour costs are no longer a driving issue. It is everything else.
There certainly are a few sectors that absolutely could find an advantage in reshoring (and some already have), but it isn't electronics.
Well, "Stockholders" shouldn't be the sole dictators of what a company should and shouldn't do. It always amazes me that we put so much importance on shareholders over the well beeing of those actually producing worth within the company (you know, the workforce).
Stockholders be damned.
Mr. Giggles
Member
Theoretically yes, but will they bite that bullet considering how much profit they've made?!
In an ideal world, you are correct, but that's not how it works now. Lower profits will be seen as a failure, even if the US is much better off.
Customers have a breaking point. I believe Apple reached it this year, I doubt they can go much higher (even if they'll try with the 7s by, again, increasing the price of every unit by 100$).
Arrogant Bastard
Banned
Wages are such an infinitely small portion of the equation when it comes to manufacturing electronic components. The significant portion of the equation comes from access to the raw materials required for manufacturing, supply-chain, market, etc. There is a reason why the vast majority of electronics come from Asia, that is where the infrastructure to build the electronics come from.
Basically, the rare earth materials that are required for electronics are in China.
So, say we move the facility to the U.S. where are we going to get the actual raw material to make the component? Supply chains, raw material, markets, infrastructure, etc. all of that is still going to be in China. It would cost exponentially more than a single factory to change where this stuff is produced.
Digital-Hero
Member
Will it come with fancy apartments though and jump nets?
This has nothing to do with Trump. They've been mulling this for years. As mentioned in the article, it has to do with transportation of large displays. It's why battery manufacturers have been moving production to the US, they are getting bigger, heavier and less economical to ship.
Arrogant Bastard
Banned
And as the chairman said, it is still a 'wish' at this point.
Thank you!!
BotoxAgent
Member
Didn't know about this but this makes sense. These plans seem like a long shot if that's the case then
If the workers are trump voters, sure, that would be great...
I wonder if this a sign that the Chinese government is starting to prepare for automation by rejecting manufacturing jobs. Short term pain (this is 30k to 50k jobs) for long term gain as they try to put more focus on green energy jobs. They do have a load of well educated scientists and engineers workforce compared to the US. Plus, the government is run by engineers basically.
Shao Kahn Brewing a Stew
Banned
I would like to add a little to this since this is outdated/inaccurate information. Please don't mind as I copy/paste my homework:
iPhone is manufactured internationally, with majority of manufacturing and assembly handled in Asia, most exclusively in China (around 90% of iPhone parts are manufactured overseas). Apple obtains the raw material (aluminum, tantalum, gold, cobalt, tin, tungsten) from China, Brazil, United States, Japan, Germany, India, Austria, Estonia, Russia and Kazakhstan. Apple reserves the raw materials with pre-payment to ensure steady delivery of raw material and quick manufacturing. Key components are made in United States (Audio Chipsets, Accelerometer, Baseband Processor, Controller Chips, Screen, Glass, Touchscreen Controller), South Korea (Display, Flash Memory, Chipsets and Processors), Japan (Camera, Display, eCompass), Taiwan (Chipsets, Camera, Fingerprint sensor), and China (Batteries, Main Chassis Assembly). Other various components are outsourced throughout E.U., South America and Asia, including Germany, Singapore, and Malaysia. Once assembled in China, products are shipped to a centra l warehouse in California for North American distribution, and another intermediate warehouse in China handles the rest of distribution. The product is shipped directly to the customer via Apple Store and Online.
TL;DR: China is adding nothing to the overall value of the product. It's an outdated thinking and they can easily replicate the plant in United States. If anything, it's Japan doing most of the work.
America produces a lot of cars for their domestic market, but they don't export that much:
http://atlas.cid.harvard.edu/explore/tree_map/export/show/all/8703/2014/
I'm not disagreeing with you at all, i believe this as well, I meant it as the "capitalist wold" would never allow a company to have less profits than the previous years and not see it as a failure.
Shao Kahn Brewing a Stew
Banned
CoffeeJanitor
Member
This is good news if they follow through.
According to the NY Times article, this falls under the 50 billion in US investment that Softbank pledged 6 weeks ago.
https://www.nytimes.com/2017/01/22/business/foxconn-might-build-plant-in-us.html?_r=0
According to the NY Times article, this falls under the 50 billion in US investment that Softbank pledged 6 weeks ago.
https://www.nytimes.com/2017/01/22/business/foxconn-might-build-plant-in-us.html?_r=0
Oh God Why
Banned
No posts in this thread thought otherwise?
PdotMichael
Banned
No company wants to go back to the USA, if you get the same quality or better for less.
nephilimdj
Member
Foxconn going to take over the world
A 7 billion dollar new factory is going to contain the absolute latest and greatest in terms of automation and the jobs it does create aren't necessarily going to be blue collar and the ones that are aren't necessarily going to pay great. But still, it is a net benefit for Americans if it comes to pass.
This is also why Trump has an upper hand in the whole stupid One-China thing. A lot of successful Chinese companies are actively scouting US expansion. If something happens those investments get more valuable to reach the US economy.
This is also why Trump has an upper hand in the whole stupid One-China thing. A lot of successful Chinese companies are actively scouting US expansion. If something happens those investments get more valuable to reach the US economy.
Langdon Alger
Banned
They won't be working slave labor jobs. US laws, like the minimum wage, are going to apply if these factories are in the US. And people should be willing to pay more for their iPhones if it means workers will be paid a living wage instead of being horribly exploited like Foxconn workers are in China.
SlipperyFishes
Banned
Foxconn is a Chinese company. It's very much China in a nutshell.
- Status