Foxconn Sees New Source of Cheap Labor: The United States 430
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."
poor choices for locations (Score:5, Interesting)
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.
Gotta post AC (Score:5, Interesting)
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
Nice troll piece (Score:4, Interesting)
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.
Re:So it's come to this. . . (Score:5, Interesting)
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.
Re:poor choices for locations (Score:1, Interesting)
Choosing to build any plant in areas that are highly unionized is simply a crazily dumb mistake. Sure, they may get a year or two of cheap labor but it won't be long before the unions move in and they are paying $50/hr for unskilled labor.
Flyover country is best. Utah is an incredible place to do business. Low taxes, low cost of living, little government interference. The same holds for Texas. A friend has a manufacturing operation in Las Vegas NV. He needed to build a new production facility. He figured it would cost $2,500,000 and would take about 70 inspectors. Instead, he opened up his production operation in Texas. It cost him $200,000 and he dealt with zero inspectors.
Re:So it's come to this. . . (Score:5, Interesting)
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.
Re:So it's come to this. . . (Score:5, Interesting)
Yes and no - the less skilled the job, the harder you have to deal with employee turnover.
For engineers though, providing you are running things well, you'll usually only have a big burst of turnover around the national holiday in March, when everyone gets paid a 13th salary as a bonus. The rest of the year though, everyone just waits until March so they don't lose their bonus. Turnover seems to be getting better too however - we only lost 2 from a team of 20 this past March (compared to 4-5 the previous year, and 5-7 the year before.)
Partly (Score:4, Interesting)
In Holland the Big 11 (largest employers) have actually said they want the strong unions of the past decades back because although they didn't always agree, at least they could negotiate and sort things out. The big companies want "The polder model" back and preferably without the 3rd party, the government, messing things up again.
It is outside north-west Europe (England excepted) that unions seem to have such a terrible relationship, it is an English/Italian thing, to snobby to admit you are just a wage slave at the mercy of your boss and to corrupt to handle money and power. You can't compare a NW European union with an American one but then the relations between workers and bosses are totally different, Romney would not have gotten 50 of the votes in Europe, he would have been seen as the total asshole he is and be spitted out by anyone who works for a living.
You might have noted that in America, many of the working class, call themselves middle class. Here is a hint: If you live paycheck to paycheck and getting fired is going to be an economic disaster, you are working class. Lower class your economy is already a disaster even with a paycheck. Middle class is financially comfortable. And that doesn't mean you can just avoid your credit cards from being canceled each month but that if something major happens, it isn't an immediate issue, loose job, take a year to find a new one. Upper class means you are comfortable for life even if something major happens.
Quick test for Americans: Did it surprise you to find out that YOU are part of the 47% Romney considers to be a leech? Did you even dare to find out if you are in that group?
Re:poor choices for locations (Score:5, Interesting)
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.
Re:Exploitation, unions, and you. (Score:5, Interesting)
Wait a second, you are telling me without unions we would have no public education? Are you retarded?
No, my good and simple-minded detractor, I am simply aware of the fact that the people who ran the factories were the kind of people who, upon seeing a worker get mutilated by the machinery were simply led out the back door as their replacement walked in the front. If they don't value your life they aren't going to consider your education important.
Now I know you've lost it. We went to the moon because of unions?
No, you malignant ball of happy brain death... we built a strong industrial base and developed a large number of highly educated scientists and engineers because of unions, which allowed us to spend money on things like going to the moon, as well as having the expertise to do so.
And he was unionized, I suppose? Just that single person inventing things and selling them, a unionized island to himself.
Without an education, I doubt he'd be inventing much of anything besides idiosyncratic political viewpoints held in such low esteem by the author he wouldn't even pen his name to it. Or perhaps he lost his name in the bottom of a bottle while searching for his misplaced wits...
The unions had nothing to do with that. Union employes always had PENSIONS (well, you would like to think) that keep them from needing social security.
In days of old, when economies were bold, and monies were aplenty... it might be true, these words from you, if a public education you did not benefit. Alas our tale begins, in the darkened days of nineteen thirty two, whereupon there were many old, and the economy had foresaken. Fifty percent, the elderly were, homeless and in need, no pensions had they, no prospects too, when Sir Rosevelt made them all a Deal. He said to them, "I shall save you too, and you, and you, and you!" And with a mighty heave of his pen, he did create pensions for all, where none had existed before.
Most of these people have never had a union, except for certain engineers (and no, I'm talking professional engineer, sanitation engineers have a union, but they ain't real engineers, are they?) and scientists working for a university (and only sometimes then).
Not to put too fine a point on it, you keenly lacking invertebrate of questionable mental faculties and breeding, but they didn't have jobs either.
You must be high or retarded. Perhaps both?
On the internet, asking if someone else is either of those is basically admitting the character defect being accused. Or put in terms your juvenile nature can relate to, "the person who smelt it, dealt it." Good day sir!
Re:poor choices for locations (Score:3, Interesting)
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.
Re:poor choices for locations (Score:4, Interesting)
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.
patent battle defense? (Score:2, Interesting)
I wonder how much of this has to do with American labor and how much it has to do with not having thier product stopped at the border due to patent battles.
Re:Exploitation, unions, and you. (Score:5, Interesting)
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.
Re:This is good for the US (Score:4, Interesting)
I've been working in China for 3.5 years, I get to sit for my 16 hour work day, and we get free dinner!
Problem is, I have a Chinese boss who doubts my leadership skills when I point out that working employees to death is not good for the company.
Re:Get rid of the unions (Score:2, Interesting)
What about the right of the other unemployed individuals who would be glad to have that same job at the lower wage to get started and develop a work history? Is it better to have 2 employed at $12 per hour and 1 unemployed or 3 employed at $8? Shouldn't the business owner be able to make the decision of employing fewer highly skilled/quicker and more expensive workers or more lower skilled lower paid workers? If it's inefficient because of turnover and chaos in the company, the business owner is the one shooting his business in the foot, and his competitors will figure out they can make a different decision and come out ahead.
Consider this model: 10 potential workers, each equally productive if employed. The economy has $20,000 to pay the workers. Is it better to pay 10 workers $2000 or 8 workers $2500, tax the workers the $500 and pass it to the two unemployed men so they can get along? In both scenarios, each employee has $2000, but are the two situations identical? No, if each of the workers are equally productive, and each worker can produce 1000 units of goods per month, and everybody spends all of their money, then the situation with all 10 employed is better, because the economy has 10,000 units to distribute at $2/unit. In the 8 worker situation, we get 8000 units at $2.50 a unit. In the first situation, everybody gets 1000 units of economic goods available to consume and in the second you only get 800.
Think about if you started with the second situation, and tried to move to the first by cutting wages from 2500 to 2000, eliminated unemployment, and provided the economy with a productivity boost that could drive economic expansion? People would scream bloody murder about wage cutting even though eliminating unemployment would improve everybody's overall situation.
Also, the Union v. Ownership dichotomy is the wrong way to go about getting the employees a larger cut of the revenue pie. The true way toward helping the workers out is for them to become owners. Once the business is in the hands of the employees, the union is unneeded since the employees aren't likely to exploit themselves. I'd encourage a policy of preventing the owner from selling his business to a competitor or conglomerate, but instead allowing the business owner to keep his income taxes in exchange for turning the business over to his employees, although it would take several years to transfer the entire company. This would basically be the government buying the business through reduced tax revenues, although the employees union could put their dues toward purchasing the business faster if the owner were selling. Improvements under this system: More and smaller businesses, which would provide more competition both for customers, and for workers. If you aren't happy working for X, go work for Y.
Re:Get rid of the unions (Score:5, Interesting)
Chicken and egg question here. I don't know much about Japan, but from my French perspective German unions do an awesome job, and are probably one of the reasons (though not the sole) why Germany still does pretty well economically compared to other EU countries.
By contrast, the situation is pretty shitty in France. Polls have shown that among the OECD, French people put a higher value to work than most, but also that they tend to hate their workplace. Interestingly, French workers show less insatisfaction when they work for foreign companies. Some economists pin this on the fact that French economy is largely based on inheritance, and it results in a fundamental lack of trust between the various strates of workplace hierarchies. The workers, the middle management, the bosses, no one trusts another.
In the light of what you say about post-WWII, I wonder if Germany didn't ultimately benefit from getting rid of their higher ups, most of which having been in bed with the Third Reich.
Really? (Score:4, Interesting)
Re:patent battle defense? (Score:4, Interesting)
actually what your describing is part of the supply chain problem.
The supply chain right now is so tight time wise that any temporary disruption is felt the entire way down the chain. The problem is that items sitting on shelves isn't efficient. However there is little disaster planning. take a look at what happened to hard drives a couple of years ago.
Or look at japan's car production lines shutting down for three months after the fuskisma earth quake. The factories were open but they couldn't get parts to build.
We are heading toward just in time manufacturing. Where you it won't be built until you order it.
Re:poor choices for locations (Score:2, Interesting)
You'd be astonished at how many places water is used to manufacture without making it into the final product. For example the production of a middle class car takes about 70m^3 water compared to 10m^3 water for cleaning during its whole life.
Re:This is good for the US (Score:4, Interesting)
Re:poor choices for locations (Score:4, Interesting)
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.
Re:Get rid of the unions (Score:4, Interesting)
Where I work our contract includes "fair share" for non members. You DO NOT have to join the union, but YOU DO have to pay your "fair share" portion of the union dues that pays for the operation of the union. Why? Because you benefit from the contract that the union negotiated for the entire group, because BY LAW the union MUST represent you whether you are a member or not.
Time and again the most loud-mouthed, union-bashing, "I make my own way" complainers about the fair share fee were always the first ones in my office wanting to know what the union was going to do to fix their problem, to help them deal with a disciplinary issue, fix their poor performance issues or fight their pending layoff. Suddenly wasn't it nice that there was someone to help them in their time of need? As much as I would have liked to tell them to go deal with it on their own I was bound by law to represent them
I never wanted to work where there was a union, but I was the first one in my area to sign an organizing card - I was tired of getting screwed over. I spent 12 years as a steward with eight of them as chief steward as well as being on the negotiating team. Unlike many on /. that comment on unions I have first hand experience working somewhere that went through the stages of organizing and running a union.
I remember a labor relations professor saying that firms get the unions they deserve. That makes sense. Treat people well and FAIRLY why woul dthey ever want to form a union? Treat people like crap and they will be receptive to a union organizers speech.