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China Businesses United States

Foxconn Sees New Source of Cheap Labor: The United States 430

Posted by samzenpus
from the times-they-are-a-changing dept.
hackingbear writes "Foxconn is planning to build manufacturing plants in the U.S., probably in cites such as Detroit and Los Angeles. 'Since the manufacturing of Apple's products is rather complicated, the market watchers expect the rumored plants to focus on LCD TV production, which can be highly automated and easier.' Foxconn chairman Terry Guo, at a recent public event, noted that the company is planning a training program for US-based engineers, bringing them to Taiwan or China to learn the processes of product design and manufacturing."
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Foxconn Sees New Source of Cheap Labor: The United States

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  • by Anonymous Coward on Thursday November 08, 2012 @11:14PM (#41928097)

    Americans may have invented a lot of the manufacturing processes used for consumer electronics, but China and other Far Eastern countries have a big edge on us now. Let's put our egos aside and learn what we can from the Chinese.

    • by MozeeToby (1163751) on Friday November 09, 2012 @09:55AM (#41931189)

      Why does this keep getting spread? The US is the second largest manufacturing base in the world, second to only china and that just, just barely and despite having less than 1/3 the population and the presence of strong labor and environmentally laws. Just because the US doesn't make cheap (in terms of quality and type, not price) consumer products doesn't mean that the US doesn't know how to manufacture any more.

      • by TheRaven64 (641858) on Friday November 09, 2012 @11:30AM (#41932097) Journal

        It keeps being repeated because it's almost true. Manufacturing hasn't gone down in the USA, but manufacturing employment has. Just like in the first industrial revolution, the number of people required to manufacture goods has dropped considerably. China had a small short-term advantage because, for certain things, it was cheaper to use poorly-paid workers than machines, but even that's changing. Lots of people are talking as if Chinese factory workers are competing against American factory workers and winning because they're paid a fraction of the amount, but that's not really the case. 10-100 Chinese factory workers are competing against one American factory worker and a large automated assembly line. They were winning because they have lower capital costs, but higher operational costs. Now that companies like Foxconn have large amounts of capital to play with, they're starting to lose again.

        People keep talking as if bringing manufacturing back to the USA will make a difference for the local economy, but it won't. The mindset that a new factory will employ thousands of people and provide employment either directly or indirectly for an entire town is obsolete. This doesn't, of course, stop local governments giving companies millions of dollars in tax breaks to build a factory, and then acting surprised when it only creates a hundred or so new jobs.

        The first industrial revolution had a lot of social unrest because of the wealth-redistribution that the automation caused, concentrating it in the hands of the factory owners. This one is likely to have many of the same problems. Unfortunately, we didn't find a good solution last time.

  • by wierd_w (1375923) on Thursday November 08, 2012 @11:15PM (#41928105)

    They would do better to build their factories in flyover country, where cots of living are lower, average wage is lower, cost of utilities is lower, and all that jazz.

    The central US is well connected for large freight shipments by rail.

    • by Jackie_Chan_Fan (730745) on Thursday November 08, 2012 @11:22PM (#41928163)

      Yes but detroit is a shit hole of desperation and low wages

      • by Anonymous Coward on Thursday November 08, 2012 @11:31PM (#41928241)

        But...but...you have Robocop!

      • Re: (Score:3, Informative)

        by DirePickle (796986)
        It doesn't go New York, Detroit, LA. There are a ton of other cities out in flyover land, many of which have solid manufacturing histories and currently healthy economies.
        • It cost more to rail a container from LA to NY than it does to ship it from China to NY. The rail networks are laid out in a way that there isn't much capacity for this 'flyover country.' Major rail lines connect LA, Chicago, Houston, and Newark. Everywhere not in close proximity to one of these cities is expensive as hell to ship to and from.

      • by mlts (1038732) * on Thursday November 08, 2012 @11:59PM (#41928461)

        Detroit has one thing that a lot of states are in desperate need of:

        Water.

        A lot of factories need fresh water, so locating near the Great Lakes does make sense. Anywhere else in the US risks water shortages.

        • by ryzvonusef (1151717) on Friday November 09, 2012 @05:20AM (#41930055) Journal

          Genuinely curious, but how much water would a company like foxconn need, for making electronics?

          Could someone explain to me where water would come in the manufacturing process of LCDs?

          • Large amounts (Score:5, Informative)

            by Kupfernigk (1190345) on Friday November 09, 2012 @07:03AM (#41930393)
            I don't know about LCDs, but most industrial processes need a lot of cleaning fluid. Electroplating and other coating and surface treatment processes often have to have metal contents in the effluent down in the parts per billion. There is a limit to what filtering, treatment and precipitation can achieve, and often the simplest solution (literally) is to use lots of water. (Before anybody gets uptight about nasty pollution from industry, the worst water pollution is actually the crap manufacturers put in shampoo, shower gel and the like, along with the hormones and antibiotics we and our farm animals leak out into the rivers and sewage systems).
      • by JWSmythe (446288) <jwsmythe@[ ]mythe.com ['jws' in gap]> on Friday November 09, 2012 @12:00AM (#41928469) Homepage Journal

            Actually, they could set up in *any* metro area in the US. Pay minimum wage. Make all the employees part time, so they don't have to pay benefits. 2 20hr/wk employees are cheaper than 1 40hr/wk or salary employee. They can maintain a barely OSHA compliant workplace, and items that are too expensive, they can just absorb the cost of fines. Their customers have financial and political leverage, so I'm sure lots could be ignored, especially if they're going to take a few thousand people off of the unemployment rolls, even though they'll make less working.

            Pretty much, they'll act just like Walmart. A whole bunch of employees who fall below the poverty line.

        • by WarSpiteX (98591) on Friday November 09, 2012 @12:06AM (#41928513) Homepage

          I'm afraid you're exactly right.

          When you start globalizing and opening yourself up to competition with countries that have no labour or environmental laws to speak of, you by default undercut your own industries to the point where they are not competitive.

          Free trade with developing countries is a horrendously bad idea for this reason. Tarriffs can be a mitigating factor - to a point, of course.

          • Re: (Score:3, Interesting)

            by Anonymous Coward

            Free trade with developing nations is only bad for the developing nations (obviously, otherwise developed nations wouldn't push so hard for them). Developing nations import most of their industrialized goods, with free trade they're imported free of tariffs from the developed nation and kill both the almost non-existent local industry and a source of income for the government.

            • by Opportunist (166417) on Friday November 09, 2012 @08:59AM (#41930877)

              If anything, this should show you that highly developed countries with a high living standard are in a very bad situation when it comes to free trade. Who really benefits is the large corporations, not the countries. The cost of living in the US is heaps higher than in China, and it's even worse for other countries. I've been to countries where tipping someone 5 bucks makes him (literally) fall to his knees and worship your feet for being so incredibly generous 'cause you just doubled his income. Add now that labour laws and environment laws even more are near nonexistent in large parts of this world.

              How should you sensibly compete with that? You cannot manufacture domestic goods competitively that way.

              Actually, BOTH, developing and developed countries lose big time in free global trade. The only winners are corporations who can pick the best of both worlds, cheap labour in developing countries and high prices in developed ones.

          • by mysidia (191772)

            Free trade with developing countries is a horrendously bad idea for this reason. Tarriffs can be a mitigating factor - to a point, of course.

            Free Trade could be a good idea, if a condition for a country to participate is, that they have to have legally protected workers' unions, worker safety protection regulation, minimum wage laws, and an enforcement body whose effectiveness is validated through unbiased 3rd party auditing

        • by pwizard2 (920421) on Friday November 09, 2012 @01:27AM (#41928987)
          If they actually do all that, then the people running the place need to go to jail. Running a sweatshop-style operation may fly in China where officials may be easily bribed/never gave a shit in the first place. Here in the USA this type of thing would be absolutely forbidden if only the politicians weren't on the take from corporate interests and actually did their fucking jobs in regulating these bastards. Globalization is going to be the death of this country and our way of life. Sure, free trade allows you to buy a shitty TV for less than $200 now, but how are you going to pay for that when your job barely pays enough to keep you off the street? FSM help you if you need medical care in that situation. Americans were sold on globalism by being tolkd that our money would go further but it turns out the only real winners are the rich assholes who made it all happen at our expense. I'm seeing more and more of this type of shit... for example, rather than pay a wage people can survive on Walmart actually coaches their workers on how to apply for food stamps and welfare. Seriously. The government (i.e. the taxpayer) is subsidizing Walmart's unwillingness to pay a living wage while the people on top (Walton's heirs... who did NOT build that, by the way) make out like bandits. Even when the poorly-engineered shit is made in China people still have to pay first-world prices while living on third-world wages.

          if Foxconn is willing to pay the average manufacturing wage D.O.E. (and would not go out of their way to crush unionization efforts if it came to that) then it would be a whole different story.
          • by JWSmythe (446288)

            Seriously. The government (i.e. the taxpayer) is subsidizing Walmart's unwillingness to pay a living wage while the people on top (Walton's heirs... who did NOT build that, by the way) make out like bandits. Even when the poorly-engineered shit is made in China people still have to pay first-world prices while living on third-world wages.

            As I understood it, Mr. Sam Walton was quite for America and American family values. There were community efforts, and things that you probably never noticed, like no alc

        • by icebraining (1313345) on Friday November 09, 2012 @03:28AM (#41929661) Homepage

          They're not going to pay minimum wage. Didn't you read TFS? They're just going to use machines, and employ a couple of engineers to watch over the production line, just like most other American manufacturers.

          The real cheap labor is not labor at all.

          • by MagusSlurpy (592575) on Friday November 09, 2012 @08:25AM (#41930693) Homepage

            You must have never worked in a factory. You're right that they'll only employ a handful of engineers (actually, it'll be a handful of mechanics and maybe two engineers), but they will still need a couple hundred rednecks to load and unload trucks, make sure the parts hoppers are always full, and clear the backups on the line when a box goes into the heat shrinker sideways.

      • by jd2112 (1535857) on Friday November 09, 2012 @12:30AM (#41928689)

        Yes but detroit is a shit hole of desperation and low wages

        Foxconn will fit in perfectly there.

    • by Bacon Bits (926911) on Thursday November 08, 2012 @11:26PM (#41928193)

      Detroit is centrally located, has very low wages and costs of living (compared to Los Angeles) and, thanks to the auto industry, has a very well developed distribution network via rail and the St. Lawrence Seaway. It also has a strong manufacturing history.

  • by mosb1000 (710161) <mosb1000@mac.com> on Thursday November 08, 2012 @11:15PM (#41928107)

    Chinese companies are more willing to be self sufficient and train workers than American companies, who are constantly whining that the government should do it. And theyre from a communist country where the government is much more powerfull. Good job, assholes.

    • by MightyYar (622222) on Thursday November 08, 2012 @11:42PM (#41928325)

      I don't think you have any experience at all in the Chinese labor market. It is very difficult to retain labor. If an employee finds a job in another factory for an extra 25 cents a day, they just don't show up again. Turnover is terrible, even in highly skilled positions such as engineering. People don't wait around to be promoted - instead, they hop from job to job, earning small title and salary increases each time.

    • by phantomfive (622387) on Thursday November 08, 2012 @11:50PM (#41928393) Journal

      And theyre from a communist country where the government is much more powerful.

      This may very well be why they are trying to establish a base in the United States. The Chinese political situation is far from stable now, so things could go very bad very quickly, and they could lose their entire operations. Having a backup in the US is a good idea.

      Note also that Foxconn is a Taiwanese company, not Chinese, which makes them a convenient target for takeover if the Chinese government decides it needs a distraction. 'We've always been at war with Eastasia," China has always been at war with Taiwan.

    • by zill (1690130) on Friday November 09, 2012 @12:32AM (#41928707)

      And theyre from a communist country

      You keep using that word. I do not think it means what you think it means.

  • Gotta post AC (Score:5, Interesting)

    by Anonymous Coward on Thursday November 08, 2012 @11:18PM (#41928125)

    Detroit (Flint as well) is on the list, L.A. is maybe for managing offices, but the largest plant is going to be in the south. Most likely northern Alabama or possibly Louisiana. How do I know? I work in one of the State Governors office and there has been Foxconn AND Pegatron groups in and out since at least, roughly, Christmas 2011

    • Re:Gotta post AC (Score:4, Insightful)

      by girlintraining (1395911) on Thursday November 08, 2012 @11:55PM (#41928431)

      the largest plant is going to be in the south. Most likely northern Alabama or possibly Louisiana. How do I know? I work in one of the State Governors office and there has been Foxconn AND Pegatron groups in and out since at least, roughly, Christmas 2011

      How ironic (and fitting) that a land where people who still to this day wish for the good old days of slavery and cotton farms to return will soon be working in the modern equivalent of the cotton farm.

  • by slashmydots (2189826) on Thursday November 08, 2012 @11:25PM (#41928191)
    Everyone seems to overlook this factor when talking about stuff like this! Last time I custom ordered a laptop from Toshiba Direct, they decided to build it and ship it out of Shanghai, China without really warning me. It took 11 days to build and about 4 more to ship and my customer was PISSED! I was twice as pissed! That long of a delay is unacceptable! If I want something from anywhere in the US, I can get it in 1 day. Remember the Nintendo Wii shortage? Yeah, with a 3 week delay in build and ship time, you're going to lose millions and make all your customers mad. Oversease production and shipping is NOT fast enough for today's businesses and they will not order from another country at any price if they can avoid it. That's the real reason things need to be made here.
  • by sgt scrub (869860) <saintium&yahoo,com> on Thursday November 08, 2012 @11:32PM (#41928245)

    I guess high priced oil is working in our favor for once. Considering the majority of their market is here, they might even be realizing consumers with money buy stuff. Who'da thunk.

  • Nice troll piece (Score:4, Interesting)

    by SmallFurryCreature (593017) on Thursday November 08, 2012 @11:39PM (#41928299) Journal

    First off, it is Apple, an American company who outsourced all its production to China. It is Americans who think iPhone production is to complex for Americans.

    Second, building a highly automated plant is NEVER about labor costs. It is about avoiding import duties. Assemble it in the US and it is a US product exempt from import duties and hence cheaper. If Americans were normal people it would also generate some good will, creating jobs in a down economy, that is of course terrible! How dare they insult you? This from the same Forbes that cheers all outsourcing. Damn those Chinese, how dare they outsource back to you! Next thing you know people will actually be having jobs and not leeching from the state!

    You will note if you follow the articles, that it is Market Watchers (people who didn't see the crash coming) who talk about iPhone production being to complex. It ain't even for sure yet what will be produced or if the factory will come at all but hey, market watchers already know why it will be producing X and not Y. Even if they don't know what X is.

    As for training... gosh... maybe they will train the Americans in English so they can choose between city or sites and not make up new words. Oh wait I forgot, training on the job. BAD. People should have all the required skills from the start or you will bitch you can't find any workers locally and have to import them or outsource.

  • by girlintraining (1395911) on Thursday November 08, 2012 @11:48PM (#41928369)

    You jabber on about how unions are bad, how they destroyed this country, but you couldn't be more mistaken. The reason we became a world superpower was because of unions, not in spite of them. When the industrial revolution first made land fall, people left the farms to move into urban factories. There was no health care, no OSHA, no retirement or social security, no educational system, and no child labor laws. Workers would get chewed up by machines and that was that. No lawsuits, no nothing -- your livelihood was destroyed. Quite possibly, you later died of starvation. All of the problems that are present in China today were there at the start of our industrial revolution as well: Corruption, environmental contamination, worker abuse, long hours, low pay, and massive wealth inequity.

    Then the unions came, and with it; OSHA, social security, public education, child labor laws, overtime compensation. And you know what happened then? Civilization didn't collapse. In fact, it prospered: The roaring 50s. A single man could now drive a car and live in a house he paid for, in full, and support a wive and two kids, working only 40 hours a week. It was the first generation to grow up with public education, and that literacy reflected in every area of american living; Anyone could invent something new and sell it. America became the land of opportunity. Immigrants flocked to the stars and striped by the millions. The middle class grew, and upward mobility was something just about anyone could achieve. For the first time in modern history, hard work nearly guaranteed a comfortable living. And work hard we did. When Europe was devestated by the world wars, it was american industry and ingenuity that pulled their ass out of the fire, and I'm not talking about the unparalleled capacity to produce ships, tanks, guns, and planes either. We didn't just build our own country -- we rebuilt a dozen others as well in post-war reconstruction. And after all that, you know what we did then? We went to the fucking moon.

    Even Adam Smith in Wealth of Nations pointed out that one of the essential duties of government is to provide for the safety and well-being of its citizens. In other words, the work force. America's investment in its labor force resulted in economic gains far in excess of anything even the largest mega-corporations of today can match. And then it all went wrong.

    It started with the Boomers. Having been given everything by their parents, they didn't understand the price paid by their predecessors. They assumed that this temporary equilibrium, this golden age, was a permanent feature of America. They felt entitled to it, instead of thankful. And when they seized power in the 70s and 80s, they cut social security, education, defunded OSHA, deregulated... and for a time, it was good. But in the shadows consumer debt piled up. The cost of an education skyrocketed, and illiteracy creeped back in. Our scientific and technological progress peaked, then rapidly deflated as the careers of scientist, engineer, inventor, were removed from public prestige and replaced with ridicule and scorn.

    Today, our media holds illiterate opinions as equal to the most established of scientific truths. Our children are unable to afford an education, and we're witnessing the lowest graduation rates from all levels of education that anyone alive can remember. Our economy is in ruins, the middle class is rapidly evaporating, and the few wealthy compete amongst each other to auction off our civil infrastructure and institutions. The bridges and roadways our grandparents built with pride that enabled our economy to prosper grow increasingly deficient, falling into rivers or eating tires and vehicles. Our railway and roadway networks are so badly mangled that the idea of bringing back blimps has been floated a few times as a way of getting goods around. Our air space is managed by state of the art technology... or it was, in 1965.

    No, unions made us a super power. And we're going to lose that status because we took what they gave us for granted.

    • by DNS-and-BIND (461968) on Friday November 09, 2012 @12:32AM (#41928697) Homepage
      Way to totally ignore any negative experience regarding unions...at all. They're the reason our jobs left. I know a fellow here in China from Carolina doing furniture manufacturing. His company told the unions that the price had to come down, they were getting killed by competition from overseas. Union wouldn't budge one inch. Guess what happened? Closed down the factory and moved it lock, stock, and barrel to China. Surprise! Reality.

      Let's also totally ignore the union thugs who came out to bust Cesar Chavez and his workers. Let's ignore the unions that refused help after the hurricane because keeping their own power was more important. Let's ignore the fact that in some states, you can't even work without being forced to join a union. Let's ignore all the union bosses in prison [google.com] (I didn't even bother to cite specific links as Google is continually populated with new stories on the topic). Let's ignore the racism and sexism of the white male union rank-and-file.

      I can't help but notice all the union achievements you list are 50 years old. Once upon a time, there were genuine problems that unions solved. That time has passed.

      • by mister_playboy (1474163) on Friday November 09, 2012 @02:06AM (#41929203)

        Jobs left the US because shareholder profits came to be considered much more important than paying employees enough to afford the products they made. The concept of noblesse oblige has been entirely replaced by amoral asocial asshattery. Greed became the greatest virtue and our equitable society faded away.

        Slashdotters love to fancy themselves as 1%ers (Look at me, I make 70K a year!) and are thus especially useful idiots for big business.

      • by AmiMoJo (196126) * <mojo @ w orld3.net> on Friday November 09, 2012 @05:57AM (#41930197) Homepage

        Way to totally ignore any negative experience regarding unions...at all. They're the reason our jobs left.

        No, they left because the companies didn't adapt to the changing market place. Look at Germany as an example. Strong labour laws and a strong manufacturing sector. They produce high quality products at reasonable prices because they didn't get into a race to the bottom with China, and all while paying a reasonable living wage. They even managed to absorb the East German economy in the process.

        What do you honestly expect workers who are told they must compete with 3rd world labour on wages to do? Default on their mortgage, get a second and third job, pimp out the wife? They were right, cutting wages to unrealistic levels is not the answer, and if you accept it you are even more screwed than if you don't.

  • by zill (1690130) on Friday November 09, 2012 @12:29AM (#41928677)
    "Fucking Americans, stealing ours jobs everyday. My buddy was forced to train his American replacement. It's only a matter of time before my job is shipped overseas as well." -Random Chinese guy
  • Not a surprise. (Score:4, Insightful)

    by kamapuaa (555446) on Friday November 09, 2012 @02:08AM (#41929223) Homepage

    This should surprise nobody. Foxconn has developed as a large international manufacturing conglomerate, and the US has by far the largest manufacturing economy, manufacturing 1.7 trillion dollars a year, compared to China's 1.2 trillion dollars a year.

  • Taiwan != China (Score:5, Informative)

    by Yvanhoe (564877) on Friday November 09, 2012 @03:16AM (#41929589) Journal
    Taiwan has the GDP per capita of Germany, is a democracy, is not communist.
    Just saying.

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