Tech Manufacturing Is a Disaster Waiting To Happen 224
Hugh Pickens writes "Peter Cochrane writes that since globalization took hold, geographic diversity has become distorted along with the resilience of supply so we now have a concentration of limited sourcing and manufacture in the supply chain in just one geographic region, south-east Asia, amounting to a major disaster just waiting to happen. 'Examples of a growing supply-chain brittleness include manufacturers temporarily denuded of LCD screens, memory chips and batteries by fires, a tsunami, and industrial problems,' writes Cochrane. 'With only a few plants located in south-east Asia, we are running the gauntlet of man-made and natural disasters.' Today, PCs, laptops, tablets and smartphones are produced by just 10 dominant contract manufacturers, spearheaded by Foxconn of Taiwan — which manufactures for Apple, Dell, HP, Acer, Sony, Nokia, Intel, Cisco, Nintendo and Amazon among others. The bad news is that many of the 10 big players in the IT field are not making good profits, so economic pressure could result in the 10 becoming seven."
Floods (Score:5, Interesting)
Re:Floods (Score:4, Insightful)
... and could possibly happen again this year.
OR will inevitably happen as long as there is a method for corporations to profit more from disaster than from manufacturing.
Re: (Score:3, Insightful)
Yes. Considering the timing and impact that had on storage pricing, it is surprisingly absent from the summary.
Re:Floods (Score:4, Interesting)
There's been quite some evidence mounting that most of the (continuing) price hike cannot be explained by the disaster itself.
Re:Floods (Score:5, Insightful)
Re: (Score:3)
No, prices rose because of the shortage... But customers continues to PAY rather than waiting it out, so that means the price was too low.
As the price of HDD went up, that left a gap for SDD to squeeze in. Most companies have horses in both races so they don't mind.
More importantly, as profit margind start to build up, that opens the door for people to get in the game.
In the case of the article, we need another few disasters to happen so that it's PROFITABLE to open computer hardware facilities elsewhere. T
Re: (Score:2)
Yeah, but it served as the excuse for the initial price hike.
Re: (Score:3)
Re: (Score:2)
Of course not, that's how capitalism is supposed to work (doesn't mean it works in practice al the time of course).
HDD prices are now higher providing an incentive for another player to enter the market with manufacturing outside that geographic area (or one of the existing players to bring up some manufacturing there).
Higher prices make is economically feasible especially considering the payoff bonus of that region gets flooded again.
Re:Floods (Score:5, Funny)
Well, when someone gets capitalism working would you please let us know?
Re:Floods (Score:5, Insightful)
If these devastating market crashes and massive wealth disparities are what capitalism does when it's working, then can we try turning it off?
Re: (Score:3, Insightful)
Re: (Score:3)
We do not yet have the technology to support an economic system that is better than Capitalism. We could conceivably develop technology which would make a Capitalist economy exceptionally difficult to continue (extensive and reliable automation technology, or if we want to jump straight to the end, replicator technology a la Star Trek), but until that time comes, Capitalism is the best we'll ever do.
Re:replicator technology (Score:4, Insightful)
Actually, we're seeing the first stage of Replicator Technology, aka digital copying, and look at the absolutely thundering effect of the affected industries. In a way, Star Trek was sweet, because I actually recall very few lawyers were ever parts of the plots. Today, it would be more dystopian, with a Copyright Infringement SWAT teams. "Someone copied a Justin Bieber song. Alpha Force, Move Out! Go Go Go! GET the Terrorist Sonofabitch!"
Re:Floods (Score:5, Insightful)
We do not yet have the technology to support an economic system that is better than Capitalism.
Really!? We have an economic system right now that is better than Capitalism.
Maybe you've just never heard of a "mixed market economy"?
A mixed market is what you get when laissez faire capitalism is tempered with regulation and social supports.
The truth is that naked capitalism signed its own death warrant over a 100 years ago as a result of its excesses.
The "good old days" of banking panics, raw industrial runoff in your drinking water, monopolies, child labor,
unsafe working conditions, starvation wages, etc etc etc are thankfully gone. Anyone who wants that back is an idiot.
Re: (Score:3)
The beauty of capitalism is that we don't have to come up with the jobs that these newly unemployed will have to do, they will figure that out for themselves. The only way that automation can replace people is if it is cheaper than people. There will come a balance from wage reductions in which automation is no longer profitable, people will still find work. With the reduction of costs from automation the price of commodities go down, that means people will still be able to buy what they need to live eve
Re:Floods (Score:5, Insightful)
HDD prices are now higher providing an incentive for another player to enter the market with manufacturing outside that geographic area (or one of the existing players to bring up some manufacturing there).
Higher prices make is economically feasible especially considering the payoff bonus of that region gets flooded again.
...except if you have external factors such as patents which effectively prohibit anyone truly new entering the industry ever again...
Re: (Score:3)
Re: (Score:3, Insightful)
Of course not, that's how capitalism is supposed to work (doesn't mean it works in practice al the time of course).
We are pretty good at knowing when capitalism is going to fail, but that doesn't stop many people from trying to make it work. Free Market is the new religion, barely understood but used as a trumpet to replace understanding.
If the customer cannot delay purchase indefinitely, no free market is possible. This is why healthcare, electricity, food, and water often fail to react in a free market manner.
If the customer cannot be fully informed of all the purchasing possibilities, no free market is possible. T
Stimulus (Score:5, Interesting)
If you absolutely HAD to spend billions in stimulus money, this situation would be perfect. Create a consortium with the major manufacturers and have the feds build a memory/hard drive/LCD plant(s) here in the states, absorbing all the capital costs (a pittance, compared to the over all stimulus bill).
The consortium would run the plant(s) and probably be competitive with overseas plants because they won't have the burden of the initial capital costs.
Of course, details, details, details but this approach would make sense in many industries.
Re:Stimulus (Score:5, Interesting)
Additional problems on top of the above (Score:5, Insightful)
Like sugar, steel and automotive manufacturing for instance? The "start" happened a while ago, and each of those industries I've mentioned have suffered or caused problems that are directly due to them being protected. Uncompetitive steel prices moved manufacturing offshore, a protected car industry produced almost unsellable crap even when overseas branches of the same companies were making quality designs and local sugar priced itself out of the market so the USA got twice as fat on corn syrup as it would have on sugar.
It's not just about getting others upset. It's about shooting yourself in the foot.
Re: (Score:2)
I don't think you can strictly call it government subsidies.
One way to look at it would be to get rid of government road blocks...permits, studies, applications, etc. All the crap you have to go through to build a large manufacturing plant.
You could also make an argument that government policy has raised the cost of U.S. labor. This would actually be a negative subsidy.
So if you offset the burdens imposed by the government, is that a subsidy?
Re:Additional problems on top of the above (Score:4, Insightful)
Libertarian nonsense. When you remove the trade protections, that is what causes your manufacturing base to move overseas. We can't possibly compete with a company in Asia that's willing to forgo environmental rights, worker rights, and human rights. Now, if you think sweatshop conditions are simply "good business" if you can find some saps desperate enough to endanger their lives and health for peanuts, then you are correct.
Re: (Score:2)
As I said...Details.
But how is the low wages due to lack of labor laws and such differ from the lower cost due to no capital costs to deal with. Both are the result of government policy.
Plus, it could be argued that this kind of action is strategic in nature, to guarantee the ability to continue to manufacture products essential to the economy. Throw in self defense if you want.
But I'd much rather have this policy discussion rather than frittering away billion and billions (apologies to Carl Sagan) on finan
Re:Stimulus (Score:5, Interesting)
Yeah, but that kind of gets everyone else in a huff, and complaining about free trade and stuff
I'm sure if Obama does it the republicans will conveniently forget that Reagan did the same thing. I used to work for a tech consortium that was formed under Reagan's aegis, and I'm a member of another. But if it's done now, it will be socialism.
Where I worked we even had a whole division that sent someone to Japan every month to buy samples of all the latest electronic gew-gaws. Then we'd tear them apart. And let me tell you, if you think any gadget or feature is "new" in the USA, I can guarantee they've had it in Japan for 5 years. I laughed my ass off when everyone was saying how "new" and "revolutionary" the Iphone was. I had seen similar phones for years from Japan.
Re: (Score:2)
The American's were boycotting Canadian lumber because the Canadian rules are different. Because the logging companies didn't have to pay (more than an administrative fee) to log the land, whereas in the US, they auction off the logging rights to the highest bidder.
That's not really true in Canada. Logging companies have to return logged areas to their natural state when they're finished logging the land per the law. Which can be expensive depending on the area. This also applies to things like oil/tar sands mining, lime(for concrete) and other things.
But just remember, NAFTA is not free trade. It's fair trade, if it was free trade. We'd see what we see between states and provinces. No damn busy bodies getting their panties in a knot over wood being shipped acro
Re:Floods (Score:5, Informative)
Re:Floods (Score:5, Funny)
You forgot to mention floods, like what happened in Thailand last year, and could possibly happen again this year.
But ... if you're outsourcing it shouldn't matter, because you don't carry the risk anymore. It all comes from the cloud, and you can instantly switch to another supplier.
(Obligatory xkcd comic - http://xkcd.com/908/ [xkcd.com])
Re: (Score:2)
You forgot to mention floods, like what happened in Thailand last year, and could possibly happen again this year.
That flood was GREAT for business. Both WD and Seagate got record profits out of it.
Re:Floods (Score:5, Interesting)
People who work in risk reduction joke about man-made natural disasters.
The 2008 Sichuan earthquake was natural, but the quality of buildings may have contributed to the death toll. Katrina was natural, but the government response was pathetic (perhaps in a neo-liberal attempt to show how useless governments are). Anything climate change related would be both natural, and man-made.
China (Score:2)
Problem is less of South East Asia, and more w/ China. When China's bubble bursts - and it's a 'when', not 'if', everybody in the world who shovelled their manufacturing there b'cos it is cheap are going to have a major meltdown in their hands.
B/w that and the jobs situation everywhere else, equilibrium will be achieved b/w what companies can afford, and what employees need.
Re: (Score:3)
When China's bubble bursts - and it's a 'when', not 'if', everybody in the world who shovelled their manufacturing there b'cos it is cheap are going to have a major meltdown in their hands.
That's not necessarily so. A recession would mean cheaper capital and labor which is an advantage for export oriented businesses. A meltdown due to the Chinese government going crazy and/or klepto could drop those businesses in their tracks.
Comment removed (Score:5, Interesting)
Re: (Score:3)
Wait, when did we start talking about MBAs and C-level executives?!
Globalisation (Score:2, Insightful)
"Disaster" (Score:4, Interesting)
I recall something about putting all eggs in one basket being a bad thing.
Re:"Disaster" (Score:4, Insightful)
People not being able to get the latest TV / MP3 / phone / iwhatever isn't a disaster
This. Right now, tech manufacturing is feeding the demand to do things like upgrade computers and phones every 18 months. We need to get used to the idea that the existence of a faster CPU with more cores does not imply a need to have one.
Re: (Score:3, Insightful)
No! We must keep buying shit!!! [wikipedia.org] Just put it on the credit card!!! Remember, everyone will make fun of you if you don't keep up with the Joneses. [wikipedia.org] Material goods are how we measure success, after all.
Re: (Score:3, Informative)
That's right, 640KB RAM should be enough for everyone.
Re: (Score:2)
Fun fact: Healthcare, government, infrastructure, power, water, etc all rely to some degree on these technologies. If a local disaster wipes them out for any serious length of time, the effects will trickle globally in very bad ways.
Re: (Score:2)
Fair enough but it isnt as if an individuals or an industry for that matter needs change that rapidly. Wants and perhaps efficiencies do but not needs. There is 0 things I can think of need'ing to do with my PC that was not possible with my first PC AT. There are lots of multi-media type stuff I 'like' to do but nothing I 'need' that could not be effected with that old AT.
People would be able to get by just fine with the tech they have for years. When things start failing they most likely could still be
Re: (Score:2)
Yup, in case of a real disaster how many old usable computers and TVs could we find lying around? I could probably have a dozen crappy old cell phones in a day if I just asked around the office if they got any lying around. It's starting to get fewer and fewer companies but most companies are at least a little bit geographically distributed.
Obligatory tin foil hat (Score:2)
Re: (Score:3)
A marginally more realistic, but just as paranoid scenario: If everything's made in one region, there's essentially one gateway and therefore anyone interested in rigging the market value need turn but a single tap.
Alternative: If everything's made in one place, with few-to-no fab plants elsewhere, then one region has ALL the expertise and experience. The lack of alternatives mean that the manufacturers can dictate R&D and the future direction of the markets. Once skills elsewhere have rusted sufficient
One Location (Score:5, Interesting)
This is precisely why my company does R&D and Manufacturing in the same location - right here in South Carolina. If we have a manufacturing problem, I can take a walk to the other side of the building from my office in R&D and help them fix it - right now.
No waiting for a convenient time for a world-wide conference call where nothing gets done and my instructions are misunderstood by someone who doesn't speak much English.
It's all coming back to this, now. My previous employer did the globalization experiment and realized it is a miserable failure. But, they couldn't abandon it because of the "religion" of globalization. Guys who graduated Harvard Business School with a Masters in Excel Spreadsheets infect the boards of large companies and insist that globalization results in higher profits, and it doesn't.
We make so much money it's almost disgusting. I have a pretty much unlimited budget for lab equipment and investigatory activities, and we engineer some pretty awesome stuff as a result of having the time and money. The 15 hours/week I _don't_ spend on frustrating conference calls with Asia is time well-spent inventing Cool Stuff(TM).
Re: (Score:2)
Until you want to sell into the Chinese (or Indian, or whatever) markets. They will require that you move some of your engineering and manufacturing to one of their local manufacturers.
Turn this around and see if that would work here: WalMart, if you want to sell products in the USA, you'll have to do some of your manufacturing here. Actually, this does occur in the auto industry. Toyota, BMW and others build vehicles for the US market in the US. But this was done to get around protectionism originally int
Re:One Location (Score:5, Funny)
Our Cool Stuff(TM) goes way beyond just the red handle.
Our ToastyBread XL4300 has Wifi and sends you an email and SMS when your toast is done, and has internal cameras that stream video of your toasting bread live to the Internet or your Android Phone. It can even post pictures of the finished product to your Facebook page so you don't even have to do the work to tell the world what you had for breakfast.
In any case, we really only put the Red handle on it for legacy compatibility with older users who still need the interface to be there. All the handle does today is connect to a mechanical linkage that presses the "toast" button internally. We have a Patent on that, too, so don't get any ideas, or I shall sick our team of American lawyers on you.
Re: (Score:2)
Can I toast stuff other than slices of bread? Or is that forbidden by the EULA?
Re: (Score:2)
I think I'd actually buy that, just for the internal cameras.
Red (dwarf) Toast (Score:2)
LISTER: Look, _I_ don't want any toast, and _he_ (indicating KRYTEN) doesn't want any toast. In fact, no one around here wants any toast. Not now, not ever. NO TOAST.
TOASTER: How 'bout a muffin?
LISTER: OR muffins! OR muffins! We don't LIKE muffins around here! We want no muffins, no toast, no teacakes, no buns, baps, bagu
Willingness to pay (Score:5, Insightful)
Or perhaps a better idea is: You will pay either way. Chose: (1) Pay money now for redundancy and a guarantee of supply; or (2) "Pay" later through the unavailability of products.
Re: (Score:2)
Diversity IS redundancy, if you're one of the many who believes that robustness is for suckers.
If diversity reduces productivity or increases operating costs, it'll be squeezed out for the sake of the cost-saving bonus the responsible PHB will get. And things will go along hunky-dory until your one and only basket breaks, reducing your world-wide enterprise to one huge messy sidewalk omelet.
But again, no one wants to spend money (even just opportunity cost) to prevent or mitigate something bad happening tha
Shanghai Surprise? Tsunami is east Asia & US R (Score:3, Informative)
The Marianas Trench [wikipedia.org] is just east of Shanghai along with Taiwan plus even Japan.
Pacific Rim countries are going to be continuously in the threat corridor of Tsunami risk [wikipedia.org] area because of that trench and many others from Chile [wikipedia.org] to the Aleutians [wikipedia.org] at the northern edge near Alaska and Siberia.
Walmart actually though is the first company that such a Tsunami hit reaches the stock price. More than high technology, the trade curtailment from the one port most likely to sustain or protected is Hong Kong. But that port alone cannot handle the volume of China. Nor can we assume that it will be totally protected by such an event despite the natural level or protection being higher than most world ports.
The port of New York is also another one of concern with La Palma [wikipedia.org] off the west African coast potentially creating a 30 meter wave that would inundate the United States east coast is a geologically proven. [wikipedia.org]
"Waiting to happen" (Score:2)
Stuff like that is happening already. Look at hard drives.
More concered over war or land grabs (Score:2)
Re: (Score:2)
There's no reason whatsoever for China to invade Taiwan. The only scenario in which I'd see that happening is if China were to collapse economically and the government were desperately trying to rally the people behind a cause. But Taiwan and China are too economically dependent on each other for any of this to come to pass outside of a nightmare scenario.
I don't see the US having the will to defend Taiwan, but they probably would be forced to. By the time it got to that point, however, we would have long
Re:Cost of some where other than South-East Asis (Score:5, Insightful)
It's almost an irrelevant question as the real reasoning behind it means that a CEO can put more money in his/her pocket. The entire decision process is about how much money they can get their fat greedy paws on RIGHT NOW. The fact that it could all fall down tomorrow doesn't come into the equation. This is yet another corporate culture problem.
Re:Cost of some where other than South-East Asis (Score:5, Interesting)
It's almost an irrelevant question as the real reasoning behind it means that a CEO can put more money in his/her pocket. The entire decision process is about how much money they can get their fat greedy paws on RIGHT NOW. The fact that it could all fall down tomorrow doesn't come into the equation. This is yet another corporate culture problem.
Well said and accurate.
Further examples are becoming painfully obvious by observing--
- The term of many CEOs, and other executives, particularly hi-tech
- The so called "golden parachutes" that many receive
- The fixation with stock market values to the point that they have more to do with the weather than the financial health of a company
The incentive structure for executives is tied to stock prices today, the theory being that:
- A financially healthy and well run company has an appreciating stock price
- Stocks are longer term investments, so it creates an incentive to build a long term profitable company
But we've got the whole thing distorted now...
Re:Cost of some where other than South-East Asis (Score:5, Insightful)
Not to mention the fact that, oh let's say there was a crash in every consumer-oriented supply chain next year...
The majority of end-users and consumers won't REALLY be on the hook for about 5 years, at which point in time, we'll all come to realize that we never actually even needed 64GB of RAM, 25TB hard drives, 96 core 233GHz CPUs, 10 exabit network cards, 65536px wide by 36864px high flat panel displays, and that we were able to "limp" along with our crappy, dumpy 16GB of RAM, 2TB hard drives, 4 core 3GHz CPUs, gigabit network cards, 1600px wide by 900px high flat panel displays, all of which are probably lasting well beyond the manufacturers warranties once we start actually caring for them as if we had to buy new ones for $1,000...
Oh boo-hoo!
Re:Cost of some where other than South-East Asis (Score:4, Informative)
It's almost an irrelevant question as the real reasoning behind it means that a CEO can put more money in his/her pocket. The entire decision process is about how much money they can get their fat greedy paws on RIGHT NOW. The fact that it could all fall down tomorrow doesn't come into the equation. This is yet another corporate culture problem.
I won't dispute that. But it's not the only factor involved, and it's as much a symptom as it is a disease.
Throughout the 20th Century the emphasis was on efficiency. First we replaced individual start-to-finish craftsmen with stations on an assembly line. Then we focussed on Economies of Scale, amagamating and merging. Then we added automation. Then went back and replaced people on the assembly line with robots. Finally, we wrapped up the century by developing an ever-expanding suite of business analytics tools. It wasn't quite as tidy and sequential as this, of course, but that was the general trend.
The end results were very efficient indeed. Instead of many factories and offices clanking and banging along, you end up with a few hyper-efficient factories and offices, all running at high speed and in precise tune. Leaving lots of profits for the executives and shareholders and Lower Prices Everyday for customers.
Until they don't.
The downside of efficiency is that it has no "wiggle room". The only direction you can go is down, and the more finely-tuned your processes are, the bigger the chance that a relatively small kink in the tracks can derail the whole high-speed train.
Floods are bad enough, but they're only one possibility. If you concentrate your resources enough, even a really low-probability limited-scope event like a chunk of space debris coming through the roof can have a major impact. No pun intended.
Sometimes being too efficient isn't so good.
Re: (Score:2)
You forgot the fact that they have been firing their customers for the last 20 odd years.
Other than that, spot on
Re: (Score:2)
And that's why we have two (count em, two!) shipyards capable of building a nuclear submarine. I'm really curious about who would consider that wasteful and inefficient, and what they're opinion would be once a fire (or an attack) puts the single shipyard out of commission.
Sometimes, being inefficient is good, and there's such a thing as being too efficient. Specifically government comes to mind.
Re: (Score:2, Informative)
And it really bothers *ME* how certain pro-corporate slashdotters are CEO worshipers and act like the "shareholder value" meme dropped from the sky from God and never even question if it is real. So let's just call it even, shall we?
Re:Cost of some where other than South-East Asis (Score:5, Insightful)
The prices for the consumer could stay the same. It would cut Apple's profit margin from "obscene" to "above average" however.
Re:Cost of some where other than South-East Asis (Score:5, Insightful)
This idea that we can't "afford" to make anything here anymore is ludicrous. For decades we managed to do so just fine, during our boom years of 1945-1980, when most everyone that was willing to work could find a decent paying job that afforded them a living wage. My grandfather drove a truck for a large portion of that period and was able to make enough money to buy a modest house, get a new car every couple years, support himself, his wife, and their four children, pile said kids into the woodie every summer for a road trip/vacation, and put something away for both his retirement and his kid's college educations. He didn't even get a high school diploma until his later life, having dropped out to enlist and do his duty.
What I want to know is what happens when even China isn't cheap enough to prop up those hyper-inflated executive salaries. What is the next area we're going to be exploiting? Africa, probably. Hell, all they'd have to do is not be murderous blood diamond warlords and the African people will probable weep tears of joy at the opportunity to poison themselves and their environment for 3 cents a day, and the "job creators" will talk up how goddamned benevolent it all is. By that point the US economy should be thoroughly dead and they'll just bring the sweatshops back home, and we will weep our own tears of joy at the opportunity to be slave laborers...
Re:Cost of some where other than South-East Asis (Score:5, Interesting)
It is pointless to just look at those decades. Between the Great Depression and WWII, there were 15 years where nobody bought anything. By the end of WWII there was a huge pent-up demand for things. Add in all of the people now wanting to start a family, and you have even more demand for housing, cars, furnishings, clothing, appliances, etc. Now add in the fact that people were coming back from the war with money, and people were willing to give cheap credit, and you have a huge manufacturing boom.
However, a lot of the seeds of a future downturn were sowed during that time. For instance, steelworkers, angry that their wages were frozen by the government during WWII, even though the company made a ton of money, staged a lengthy strike to force the companies to give them their due. While in the short term they were successful, in the long term they failed miserably. The long strike forced customers of the steel companies to get steel from elsewhere (like Asia), and they found that while the quality was not very good, it was incredibly cheap. As time went on, the price of steel manufactured in the US kept going up (due to the contracts that ended the strike), and the Asians got better at making steel. As a result, all of the customers switched to Asian steel, and the US steel companies either ceased to exist altogether, or are only a small fraction of what they used to be.
Lastly, things like environmental laws (which did not exist until the 1970s) have a huge impact. In the US, when an electronics manufacturer pollutes the groundwater, they are made to clean it up, and a huge cost. No so everywhere else in the world.
Re:Cost of some where other than South-East Asis (Score:5, Insightful)
Lastly, things like environmental laws (which did not exist until the 1970s) have a huge impact. In the US, when an electronics manufacturer pollutes the groundwater, they are made to clean it up, and a huge cost. No so everywhere else in the world.
I'm hoping that I'm not picking up criticism of our environmental laws. There are [wikipedia.org] numerous examples [wikipedia.org] of what happens [wikipedia.org] when there are no regulations concerning pollution. The only reason why these consumer goods are so cheap in China and elsewhere is because we've externalized all of these costs to societies where the average citizen has no power whatsoever to do anything about it.
If the U.S. enforced labor and environmental standards with its imports in the same way it regulated domestic production, we wouldn't be in this mess right now. The only reason any of that offshoring bullshit is possible is because we allow it to occur. The race to the bottom is completely unsustainable. Like I said, what happens when even China isn't cheap enough to manufacture our consumer crap? What happens when oil finally gets so scarce that the cost of bringing the shit here is prohibitive in itself? I refuse to believe that the only answer is "Well, we'll just have to get over this whole "clean air, land, and water thing, and be willing to work like a slave laborer" and that's precisely what I keep hearing needs to happen, especially by people that are financial secure enough that their own existence won't be tainted by that bullshit.
Re: (Score:2)
No, I am not criticizing environmental laws at all, but you can't deny that they raise the cost of doing business here.
While we certainly could refuse to trade with places that don't follow our ideas of what is important, the problem is that other countries are also free to expect us to meet their idea of what is important.
Re: (Score:3)
While we certainly could refuse to trade with places that don't follow our ideas of what is important, the problem is that other countries are also free to expect us to meet their idea of what is important.
The free market at work. If we do not meet their expectations, we do not need to have a business relationship with them. I see no issue there.
I know that is a simplistic view on the matter, but when you get right down to it, it's an ethical choice, and we're becoming, as a culture, pretty damned unethical when it comes to acknowledging these ancillary costs to externalization. It seems like a sizable number of people in this country couldn't give a shit less if Chinese people are flinging themselves off [wikipedia.org]
Re: (Score:2)
It seems like a sizable number of people in this country couldn't give a shit less if Chinese people are flinging themselves off of buildings due to their dreary work conditions
Why should I care that that 17 employees (out of 1.2 million) killed themselves over a 5 year period? [wired.com] The rate is lower than that of the general Chinese population.
I'm not saying that Foxconn is a paragon of corporate citizenship, but don't drag out that meme to support your argument.
Sorry, that is incorrect (Score:4, Interesting)
Oddly enough in a post above (about protectionism) I pointed to protectionism as being the reason US steel companies were so complacent and failed to compete - it's the textbook case for that - but here I see you using it to blame those greasy working class people or something!
I suggest you look into the barriers to importation of steel into the United States so that you can learn that your above anecdote is nothing but partisan bullshit. Call me whatever names you like in return - I'm one of those nasty foreign people that was making steel that the company I worked for wanted to export to the USA in the early 1990s but couldn't.
The Golden Years, blah! (Score:2)
This idea that we can't "afford" to make anything here anymore is ludicrous. For decades we managed to do so just fine, during our boom years of 1945-1980, when most everyone that was willing to work could find a decent paying job that afforded them a living wage.
The nation managed to do fine in those years because the US was the primary manufacturer of anything (that majority of the world was living in abject poverty. By the 70's Japan was a better manufacturer, and nations kept improving their standard of living. Now, the same people who before could not afford anything (or if they could, they would buy it from the only manufacturer, the US), now they can manufacture them themselves. Most importantly, they have a lot to choose from where to buy.
To get those gol
Re: (Score:3)
There are thing we can afford making, and there are others that we cannot (unless we change the nation's ethos with its hunger for the cheapest deals.)
But those 'cheapest deals' are artificially cheap, that's the problem. They're not based on actual cost because they ignore things like pollution and societal problems in 3rd world nations that result from externalizing these costs.
It's pretty much nothing but dumping [wikipedia.org] on a global scale. We've addressed these issues before in the U.S., and have taken steps to combat it in the past, but it seems like once labor became the commodity being dumped, and not its resultant products, everyone become either blind o
Re: (Score:2)
We can't afford anything because we own more stuff than we ever had before. Sixty years ago a person could afford a car and a house on a fairly menial job because that's all they were spending their money on. They weren't squandering money on big houses, multiple cars, flat screens, computers, mobile phones and appliances. And that's not to mention the numerous services people subscribe to.
People would be shocked at how much they could save if they lived the same kind of lifestyle people led all those decad
Re:Cost of some where other than South-East Asis (Score:5, Insightful)
I don't agree with everything that Michael Moore says, but on CNN one time he had a very important point.
When GM was doing well it was making something like $14 billion a year. Yet they were still laying off workers. What is so wrong with making $13 billion a year and keeping the workers, especially those that gave a significant part of their lives to that company.
There is no incentive for a corporation to treat its workers with respect. The unions gave that incentive but their own decadence has greatly ruined their own power. Couple that with the fact when you put in huge golden parachutes and pay millions of dollars to upper management a year there is no incentive for them to care if the enterprise is even there after they are gone. If a huge cluster-fsck.
Re: (Score:2, Insightful)
The people who invested their money in GM did so because they thought GM would give them the best return on that money, not to give $1B in charity to workers who are not needed.
The only way you can afford to do what you are suggesting (long term) is to have an unregulated monopoly, so you can get your customers to pay for your inefficiency and still make a good enough profit for your investors. For instance, IBM did not lay off a single employee for the first 80 years of its existence, through good time
Re: (Score:2)
When they helped the company earn that $14 B, I don't think charity is a word that applies.
Re: (Score:2)
You said 'they made $14B and laid off workers - they could have made $13B and kept the workers'. To me, that says they did not help earn the $14B, because they weren't there (if they were there they would have made $1B less). If they were there doing nothing but costing $1B, that sounds like charity to me. The other way to look at it is the workers were there when they made the $14B (which means they were paid), but they later got laid off. That may be true, but making $14B one year does not mean you a
Already paid (Score:2)
When they helped the company earn that $14 B, I don't think charity is a word that applies.
They were paid for their services that helped earn that $14B. If those services are no longer needed and they are still being paid, that is charity. They were hired to do a job, paid for that job and the job is done. There is no further obligation on either side aside from any residual contractual obligations.
Re: (Score:2, Troll)
What is so wrong with making $13 billion a year and keeping the workers, especially those that gave a significant part of their lives to that company.
That's an important point only in a rhetorical sense, not an economic one. When a company like GM employs more people than it needs, the obvious effect is that those people get to keep their jobs. Everyone can see those people. The media can interview them. They are very easy to identify and sympathize with. But the billion dollars (or whatever) that GM would have to spend to keep them around doing work that GM has apparently deemed to be worth less than what they were paying these employees has to com
Postponing makes it worse (Score:2)
When GM was doing well it was making something like $14 billion a year.
The largest profit in GM's history was in $7.6 billion in 2011.
Yet they were still laying off workers.
And that likely was the correct decision. If you close a factory and don't need the work force elsewhere, keeping them employed is incredibly stupid. Having a profitable year one year means absolutely nothing the next year. When the economy turns down (and it inevitably does), keeping workers that are not needed means you simply will be digging a bigger hole to bury to company in. It's not just about making profits this year, it's about havi
Re:Cost of some where other than South-East Asis (Score:5, Informative)
Apple's profit margin: 29.66%
Exxon's profit margin: 7.62%
Oil and Pharmaceuticals might have larger profits in absolute terms, but that's because that have a much larger customer base. When it comes to profit per unit sold, Apple blows just about everyone else away.
Software company margins beat both pharma and oil (Score:2)
Re: (Score:2)
I think the little known fact is that the specialty hardware makers probably have even better margins than Apple. Have you seen the junk peddled by the set top box makers like Scientific Atlanta and its peers?
Re: (Score:2)
It often appears that even the local distributors have a higher markup than Apple's product margin, let alone the entire profit :(
Re: (Score:3)
In 2002, for example, the top 10 drug companies in the United States had a median profit margin of 17% ( http://www.cmaj.ca/content/171/12/1451.full [www.cmaj.ca] ).
Just to give an idea. 'Obscene' seems appropriate.
CC.
Re:Cost of some where other than South-East Asis (Score:5, Insightful)
The better question is how much more would they cost if we were paying the true cost of manufacturing [wikipedia.org], regardless of where it is being made...
Re: (Score:3)
Re: (Score:3)
It isn't a single-source, it is multiple sources in a single geographic area.
These technologies are licensed, but manufacturing facilities are incredibly expensive to set up. Consequently, they are in areas where the shipping costs of individual components is cheapest at an aggregate.
A manufacturing facility for something like an iPad in the U.S. would still be shipping all the parts from SE Asia because the vast bulk of the supply chain just doesn't exist here anymore.
Re: (Score:2)
"Not making good profits" another corporate-speak, purposefully weakly defined term.
500% is not good profits for some of these people...
Re: (Score:2)
actually they are now
Foxconn's profits are something like 4% of its revenue. That's about what food companies make.
Re: (Score:2)
Yeah, they do commodity work. If they want 5% someone else will come along and do it for 4%.
Re: (Score:2)
I've always bought my phones unlocked and at retail prices, always top-of-the-line phones too, and the most expensive phone I ever bought was $550.
Re: (Score:2)
Yes and the point the parent poster was making was that if that phone had been built in the USA it would cost $2000 rather than the $550 you paid for it.
Re: (Score:2)
In the height of the Foxconn scandals I remember an estimate of a $50 price increase on the iPad if it were manufactured in the US.
Re: (Score:2)
Was all the manufacturing located in, say, California? Or was it spread all around the USA?
Re:Why is this a problem? (Score:4, Insightful)
why is today any different?
Because decades ago, the need for computers was limited to a few large companies. Today, it is very hard to live well as an individual in a western democracy without a computer.
The difference between filing my taxes online and having to do them on paper is about GBP600 per year. Renewing my tax disc on my car and my bike takes 10 minutes on the internet vs 1 hour in the local post office at lunch time. Being able to buy goods online increases where and how I can spend the extra disposable income that the savings give me, thus stimulating the local economy. Maps, communications, the list goes on.
Re: (Score:2)
Nice troll. But I disassembled an 80s frequency counter yesterday. Some chips were USA, some were Germany, and there was on made in Italy!
I'm from Argentina and i also looked at a regulable PSU my dad built back in the 80s: The voltage regs (TI ones) were made in Argentina, and the capacitors in Brazil.
And let's not forget Japan, which is not in SEA.
Re: (Score:2)
The problem is high tax rates, plain and simple.
FTFY.