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(Forbes)   Foxconn plans on outsourcing iPhone manufacturing jobs from China to cheap labor mecca....America. That sound you just heard was everyone at Bain Capital's eyeballs spinning like pinwheels as their heads flip open and shower sparks on the ground   (forbes.com) divider line 46
    More: Obvious, iPhone, Bain Capital  
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1293 clicks; posted to Business » on 09 Nov 2012 at 8:06 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-11-09 07:18:16 AM
Is it April 1st?

Ha ha subby.
 
2012-11-09 08:11:46 AM

notmtwain: Is it April 1st?

Ha ha subby.


Mostly automated systems, if you haven't noticed land is cheap in Detroit right now
 
2012-11-09 08:13:32 AM
Kinda sad when a company with 100 BILLION in cash sitting around in banks makes all their shiat in China.

And Foxconn needs to have suicide nets outside of the dorms for their workers.

Just sad.
 
2012-11-09 08:17:35 AM

tbhouston: Mostly automated systems, if you haven't noticed land is cheap in Detroit right now


I think Detroit actually loses money on these deals for the first 5-10 years due to the incentives to attract a company like this. The hope is that the company is around long enough to actually start earning the city some money.

Also, if the deal is better here, I'm pretty sure Bain would advise a company to go to Detroit. So many derps like subby who think that Bain is a bunch of meanies who just hate America. They advise the client on how to make the most money and that's it. Any of us would expect the same if we hired an accountant, etc...
 
2012-11-09 08:26:29 AM

TIKIMAN87: Kinda sad when a company with 100 BILLION in cash sitting around in banks makes all their shiat in China.


One of the important roles of government is to tamper with the market such that externalities are managed. The ability to perform labor arbitrage is a function of a robust, global transportation network that's heavily dependent upon the activities of governments, including our own. There is a social cost to not employing local labor, as well as an ecological cost, as well as a second level of social costs to the Chinese workers, and these costs are external to the costs paid by the business producing goods.

Long story short: don't blame Apple, blame the government that isn't willing to provide structured incentives to increase the costs of foreign labor so that the external costs are properly reflected in the costs-of-doing-business..
 
2012-11-09 08:41:13 AM

t3knomanser: TIKIMAN87: Kinda sad when a company with 100 BILLION in cash sitting around in banks makes all their shiat in China.

One of the important roles of government is to tamper with the market such that externalities are managed. The ability to perform labor arbitrage is a function of a robust, global transportation network that's heavily dependent upon the activities of governments, including our own. There is a social cost to not employing local labor, as well as an ecological cost, as well as a second level of social costs to the Chinese workers, and these costs are external to the costs paid by the business producing goods.

Long story short: don't blame Apple, blame the government that isn't willing to provide structured incentives to increase the costs of foreign labor so that the external costs are properly reflected in the costs-of-doing-business..


Did not Steve Jobs tell Obama the same thing


my thought immediately went to Steve Jobs' account of a meeting with Obama as described in his biography by Walter Isaacson. Jobs told Obama that he was headed for a one term presidency. Jobs shared with Obama as to how easy it was to build a factory in China and how difficult it was to build a similar factory in America. The reasons Jobs gave were regulations and the administration not being business friendly.


Link
 
2012-11-09 08:45:54 AM
Give it up Subs, now that the election is over no one cares about Bain Capital.
 
2012-11-09 08:52:53 AM

Waldo Pepper: The reasons Jobs gave were regulations and the administration not being business friendly.


Regulations are a big part of managing externalities. It should be more expensive to build a factory here than China- we should be protecting the workers and the environment and doing the best we can to promote fair treatment of everybody impacted.

Regulations should not worry about being business friendly, but they should be efficient, clear, and effective. Regulating agencies have an unfortunate habit of rapidly building up kruft. That's a separate and distinct problem.
 
2012-11-09 09:01:07 AM
If anyone can do it, Foxconn can. Jobs told Obama that wages were not the issue, but that the USA doesn't have the engineers any longer. Particularly, plant engineers who can facilitate Jobsian design modifications, and re-engineer the assembly line overnight.
The story seems to indicate that the American factories would target low-employee processes.
If you're still in school, take more math classes.
 
2012-11-09 09:03:01 AM

t3knomanser: TIKIMAN87: Kinda sad when a company with 100 BILLION in cash sitting around in banks makes all their shiat in China.

One of the important roles of government is to tamper with the market such that externalities are managed. The ability to perform labor arbitrage is a function of a robust, global transportation network that's heavily dependent upon the activities of governments, including our own. There is a social cost to not employing local labor, as well as an ecological cost, as well as a second level of social costs to the Chinese workers, and these costs are external to the costs paid by the business producing goods.

Long story short: don't blame Apple, blame the government that isn't willing to provide structured incentives to increase the costs of foreign labor so that the external costs are properly reflected in the costs-of-doing-business..


The processes that you are thinking of that would provide a balance, such as tarrifs, piss off the country that is effected (in this case China). Unfortunately, the cost of doing that is far greater than losing a little labor.
 
2012-11-09 09:04:24 AM
LCD TV production, not iPhones.
 
2012-11-09 09:04:36 AM
Also, what the heck does this have to do with Bain? They are the ones that perform the assesment of where to put the plant, they get paid either way.
 
2012-11-09 09:07:22 AM

TIKIMAN87: Kinda sad when a company with 100 BILLION in cash sitting around in banks makes all their shiat in China.

And Foxconn needs to have suicide nets outside of the dorms for their workers.

Just sad.


well on the bright side everything will be made by expensive robots in brazil in 20 years
 
2012-11-09 09:09:04 AM
The Campaign did it first. It is a shame that movie came out when everyone was burned out by the election it was funnier than I expected.
 
2012-11-09 09:12:15 AM

plcow: The processes that you are thinking of that would provide a balance, such as tarrifs, piss off the country that is effected (in this case China). Unfortunately, the cost of doing that is far greater than losing a little labor.


There are more measures than simple tariffs. Subsidies, tax structures, grants, etc. There are also more general foreign policy approaches. And, for those that believe in "running government like a business", another approach is to do what businesses do- play two vendors off each other for the same service. That is, make sure that you don't simply use Chinese labor- you put structures in place that ensure American business spread their labor around the world.

This is hardly an exhaustive list, but the key point is that tariffs are only one part of an overall mitigation strategy for problems arising from labor arbitrage.
 
vpb [TotalFark]
2012-11-09 09:14:28 AM

xtragrind: tbhouston: Mostly automated systems, if you haven't noticed land is cheap in Detroit right now

I think Detroit actually loses money on these deals for the first 5-10 years due to the incentives to attract a company like this. The hope is that the company is around long enough to actually start earning the city some money.

Also, if the deal is better here, I'm pretty sure Bain would advise a company to go to Detroit. So many derps like subby who think that Bain is a bunch of meanies who just hate America. They advise the client on how to make the most money and that's it. Any of us would expect the same if we hired an accountant, etc...


It depends on whether you mean Bain & Company or Bain Capital. Bain Capital isn't a consulting firm, it buys companies.
 
2012-11-09 09:20:05 AM
B...b...but Steve Jobs said those jobs are never coming back!!1!

He dissed the American worker. And he died for doing so.
 
2012-11-09 09:22:50 AM

AdamK: TIKIMAN87: Kinda sad when a company with 100 BILLION in cash sitting around in banks makes all their shiat in China.

And Foxconn needs to have suicide nets outside of the dorms for their workers.

Just sad.

well on the bright side everything will be made by expensive robots in brazil in 20 years


fark Brazil!
 
2012-11-09 09:40:44 AM

plcow: t3knomanser: TIKIMAN87: Kinda sad when a company with 100 BILLION in cash sitting around in banks makes all their shiat in China.

One of the important roles of government is to tamper with the market such that externalities are managed. The ability to perform labor arbitrage is a function of a robust, global transportation network that's heavily dependent upon the activities of governments, including our own. There is a social cost to not employing local labor, as well as an ecological cost, as well as a second level of social costs to the Chinese workers, and these costs are external to the costs paid by the business producing goods.

Long story short: don't blame Apple, blame the government that isn't willing to provide structured incentives to increase the costs of foreign labor so that the external costs are properly reflected in the costs-of-doing-business..

The processes that you are thinking of that would provide a balance, such as tarrifs, piss off the country that is effected (in this case China). Unfortunately, the cost of doing that is far greater than losing a little labor.


bullshiat.

china imposes steep tariffs on imports to encourage local industry. Brazil does the same. And both countries were rewarded with massive growth in manufacturing. Foxconn just set up a factory in Brazil, and five more are on the way. Your new ipad-mini? not made in China, but in Brazil.

why can't the US do the same in kind?
 
2012-11-09 09:45:46 AM

dumbobruni: why can't the US do the same in kind?


The question is why doesn't the US do the same in kind.

As we waddle out on black Friday to hit the stores and fill up our shopping carts and max out the credit cards I can't help but think of how much better off the job market would be if just a fraction of those things were made in the U.S..
 
2012-11-09 09:50:05 AM

DrewCurtisJr: I can't help but think of how much better off the job market would be if just a fraction of those things were made in the U.S.


I can't help but think that our economy would be better if our citizenry was more invested in building and employing capital over buying widgets that will be replaced in a few years. Black Friday is "good" for our economy in the same way doing a line of coke is "good" for you- it feels good, until the high wears off, and then you spend your time looking for the next high. Moving the production of those goods into the US wouldn't really help matters, very much.
 
2012-11-09 09:58:14 AM
Sure raise tarrifs on imports, sure put in more regulations, what the hell!

Let's make the products that hundreds of millions of people buy more expensive to create a few hundred thousand jobs!

That'll make things better.
 
2012-11-09 10:02:57 AM

t3knomanser: Moving the production of those goods into the US wouldn't really help matters, very much.


How do you figure? Job creation is the key to economic recovery.
 
2012-11-09 10:05:59 AM

MugzyBrown: Let's make the products that hundreds of millions of people buy more expensive to create a few hundred thousand jobs!


If hundreds of millions of people are buying something, then the producer doesn't need large margins- they'll make it up on volume. So increasing the costs to produce something doesn't really matter much, does it? Unless you're trying to imply that the producers will simply pass these costs into the consumers.

If that's true, I can just stop paying attention to you. I understand that equilibrium price is a deeply complex thing in the details, but in the broad strokes, it's pretty easy to understand: the costs of production have farkall to do with the market price of a good.
 
2012-11-09 10:06:51 AM

Waldo Pepper: t3knomanser: TIKIMAN87: Kinda sad when a company with 100 BILLION in cash sitting around in banks makes all their shiat in China.

One of the important roles of government is to tamper with the market such that externalities are managed. The ability to perform labor arbitrage is a function of a robust, global transportation network that's heavily dependent upon the activities of governments, including our own. There is a social cost to not employing local labor, as well as an ecological cost, as well as a second level of social costs to the Chinese workers, and these costs are external to the costs paid by the business producing goods.

Long story short: don't blame Apple, blame the government that isn't willing to provide structured incentives to increase the costs of foreign labor so that the external costs are properly reflected in the costs-of-doing-business..

Did not Steve Jobs tell Obama the same thing


my thought immediately went to Steve Jobs' account of a meeting with Obama as described in his biography by Walter Isaacson. Jobs told Obama that he was headed for a one term presidency. Jobs shared with Obama as to how easy it was to build a factory in China and how difficult it was to build a similar factory in America. The reasons Jobs gave were regulations and the administration not being business friendly.


Link


Please remind me, which one is a stinky decomposing mass, and which is the leader of the world's most powerful military and economy in the world?
 
2012-11-09 10:15:03 AM

DrewCurtisJr: How do you figure? Job creation is the key to economic recovery.


Not the sorts of jobs we're talking about. First off, they only exist until the costs of automation sink below the costs of paying humans- and this will happen. It probably would have happened already if not for labor arbitrage.

If you were to bring Foxconn into the US, you'd see something very much like the Amazon and Walmart warehouse system. You'd have workers operating in utterly dehumanizing conditions. They'd be fired regularly and forced to reapply for each new campaign. They'd be making a relative pittance, which means they're not really going to be participating in the economy. If you look at warehouse towns, you don't see booming hives of economic activity- you see capital doing what capital naturally does- centralizing in the hands of a few.

The US has a broadly deployed education system and a huge emphasis on entering the work-force late. Theoretically this means we should be producing skilled workers- engineers, scientists, etc. Not
 
2012-11-09 10:16:32 AM
The government could identify cash cow manufacturers then offer those companies tax credits to locate in the US. Not heavy industry but companies like Apple that make enormous profits on enormous sales.
 
2012-11-09 10:17:05 AM

t3knomanser: the costs of production have farkall to do with the market price of a good.


If the market price of a good is $100 and the cost for me to produce it is $125, will I produce it?
 
2012-11-09 10:21:49 AM

MugzyBrown: If the market price of a good is $100 and the cost for me to produce it is $125, will I produce it?


No. I fail to see the problem. The good has no particular right to exist. If the market doesn't support the product, then it is a bad product. Government regulation should increase the costs of goods to better represent the external costs of that good that aren't naturally factored into the price.
 
2012-11-09 10:25:41 AM

StrikitRich: Give it up Subs, now that the election is over no one cares about Bain Capital.


Hell, they probably gave enough money to Obama now and show up at some "Jobs Summit" as a hero.
 
2012-11-09 10:30:36 AM

t3knomanser: Not the sorts of jobs we're talking about. First off, they only exist until the costs of automation sink below the costs of paying humans- and this will happen. It probably would have happened already if not for labor arbitrage.


This could happen with any job. And it's not just the jobs themselves, jobs create support jobs.

t3knomanser: If you were to bring Foxconn into the US, you'd see something very much like the Amazon and Walmart warehouse system. You'd have workers operating in utterly dehumanizing conditions


Maybe if workers could organize without the constant threat of having their jobs offshored to some country with no worker rights they could demand better working conditions. If we had a better job market and companies had to compete to attract workers they wouldn't be able to treat them poorly.
 
2012-11-09 10:31:30 AM

t3knomanser: No. I fail to see the problem.


You said: "the costs of production have farkall to do with the market price of a good"

Which is true to a point, but was used to dismiss the harm tarrifs would do to the whole of the country in order to assist a small class of people.

Supply goes down, innovation goes down, but also in many cases, prices go up.

Sugar tarrifs cause food manufactuers to use corn sugars to sweeten their food, which causes corn prices to rise, which causes less "crop-x" to be grown... etc
 
2012-11-09 10:33:46 AM

DrewCurtisJr: Maybe if workers could organize without the constant threat of having their jobs offshored to some country with no worker rights they could demand better working conditions. If we had a better job market and companies had to compete to attract workers they wouldn't be able to treat them poorly.


Maybe if you provided less restrictive conditions for companies to want to hire employees there would be more demand for workers and companies would have to compete to attract workers.
 
2012-11-09 10:38:15 AM

MugzyBrown: Which is true to a point, but was used to dismiss the harm tarrifs


I was not the person who brought up tariffs. To the contrary, I pointed out that tariffs were only a small portion of the overall domestic and foreign policy solution.

DrewCurtisJr: Maybe if workers could organize without the constant threat of having their jobs offshored to some country with no worker rights


Unions don't work when workers are replaceable. You can't offshore Walmart's retail operations, and those workers will never successfully unionize.
 
2012-11-09 10:42:18 AM
What an inaccurate hack of an article.

Foxconn says they know more about assembly line efficiency than the USA does. This is likely true since America has been out of the assembly line business since Henry Ford for the most part. The cheapest way to do assembly lines is robots. Robots haven't had the dexterity to do a lot of the electronics assembling until recently.

With shipping and tariffs and importing and exporting blah blah blah, it makes more sense to build robotic assembly plants in the USA rather than in China.
 
2012-11-09 10:44:46 AM

Bullseyed: With shipping and tariffs and importing and exporting blah blah blah, it makes more sense to build robotic assembly plants in the USA rather than in China.


This is largely true, but you're forgetting one thing: environmental regulation. Electronics involve all sorts of nasty chemicals.
 
2012-11-09 10:45:50 AM

t3knomanser: Unions don't work when workers are replaceable.


What? Isn't that the main reason for most unions, getting better working conditions because the company doesn't need to because of labor market factors.
 
2012-11-09 10:48:08 AM

DrewCurtisJr: Isn't that the main reason for most unions


Unions try to make workers less replaceable, but if there's a certain critical level of replaceability, it's impossible to get a union in place to begin with. Instead of looking at retail, look back at the warehouse operations. Workers are hired every 90 days. They're fired for any reason, and can reapply at the next 90 window. They move between teams and are kept working so hard that they have no opportunity to form relationships with their fellow workers.

That is an environment that desperately needs a union, but a union could never form.
 
2012-11-09 10:56:01 AM

t3knomanser: Unions try to make workers less replaceable, but if there's a certain critical level of replaceability, it's impossible to get a union in place to begin with. Instead of looking at retail, look back at the warehouse operations. Workers are hired every 90 days.


How is this any different than the conditions of meat packers or factory workers when they formed unions? These were generally not highly skilled people and there were always plenty of people eager to replace them.
 
2012-11-09 10:59:05 AM

MugzyBrown: Maybe if you provided less restrictive conditions for companies to want to hire employees there would be more demand for workers and companies would have to compete to attract workers.


I have no problem with that to a point. If there are unreasonable restrictions of course they should be eased.
 
2012-11-09 11:08:54 AM

MugzyBrown: DrewCurtisJr: Maybe if workers could organize without the constant threat of having their jobs offshored to some country with no worker rights they could demand better working conditions. If we had a better job market and companies had to compete to attract workers they wouldn't be able to treat them poorly.

Maybe if you provided less restrictive conditions for companies to want to hire employees there would be more demand for workers and companies would have to compete to attract workers.


oh look, you are writing bullshiat again.

the US has the least amount of restrictions on hiring and firing employees in the developed world. Its also easier than in many emerging economies, such as Russia, Mexico, Turkey and Brazil.
 
2012-11-09 11:13:03 AM

DrewCurtisJr: How is this any different than the conditions of meat packers or factory workers when they formed unions?


Through lax government regulations and the evolution of defensive strategies, coupled with a different cultural zeitgeist, I just don't see the environment conducive to the formation of unions. I'd love to be wrong, but I have a hard time envisioning a true battle for workers rights in our generation. Maybe it's a failure of imagination, but it would take another Homestead Strike to make progress, and I just don't see that happening.
 
2012-11-09 11:33:05 AM

t3knomanser: Through lax government regulations and the evolution of defensive strategies, coupled with a different cultural zeitgeist, I just don't see the environment conducive to the formation of unions.


As more and more workers find themselves in the offshorable or automatable job category I think we'll have a renewed fervor for worker rights, especially if the unemployment rate remains this high.
 
2012-11-09 12:19:46 PM

Carth: The Campaign did it first. It is a shame that movie came out when everyone was burned out by the election it was funnier than I expected.


Yeah I liked that they called it "insourcing". Are they bringing in their own labor from China as well?
 
2012-11-09 12:51:14 PM

t3knomanser: DrewCurtisJr: I can't help but think of how much better off the job market would be if just a fraction of those things were made in the U.S.

I can't help but think that our economy would be better if our citizenry was more invested in building and employing capital over buying widgets that will be replaced in a few years. Black Friday is "good" for our economy in the same way doing a line of coke is "good" for you- it feels good, until the high wears off, and then you spend your time looking for the next high. Moving the production of those goods into the US wouldn't really help matters, very much.


Because most of the population of the world would rather do coke than work hard or save money (metaphorically speaking of course). Some do both. some do neither.
 
2012-11-10 12:26:04 AM

dumbobruni: bullshiat.

china imposes steep tariffs on imports to encourage local industry.


They also have high taxes on good made for export - that is, a product made in China costs a Chinese person more to buy than it does an American.

Fun stuff.
 
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