Why the iPhone is made in China (it’s not just labour cost!)

http://today.msnbc.msn.com/id/46091572/ns/today-the_new_york_times/t/why-apple-says-it-cant-build-iphone-us/

Excerpts from the article
(Read the red bits, but these points in red do not come alive without some detail) :

Why can’t that work come home? Mr. Obama asked (to Steve Jobs)

… Apple has become one of the best-known, most admired and most imitated companies on earth, in part through an unrelenting mastery of global operations. Last year, it earned over $400,000 in profit per employee, more than Goldman Sachs, Exxon Mobil or Google …

… Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day. … (speed, efficiency, adaptability, responsiveness) 

… Though Americans are among the most educated workers in the world, the nation has stopped training enough people in the mid-level skills that factories need, executives say. To thrive, companies argue they need to move work where it can generate enough profits to keep paying for innovation. Doing otherwise risks losing even more American jobs over time …

… “We sell iPhones in over a hundred countries,” a current Apple executive said.“We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.

… In part, Asia was attractive because the semiskilled workers there were cheaper. But that wasn’t driving Apple. For technology companies, the cost of labor is minimal compared with the expense of buying parts and managing supply chains that bring together components and services from hundreds of companies. … (It’s not just low labour cost, but low cost of production for all parts)

… When an Apple team visited, the Chinese plant’s owners were already constructing a new wing. “This is in case you give us the contract,” the manager said, according to a former Apple executive. The Chinese government had agreed to underwrite costs for numerous industries, and those subsidies had trickled down to the glass-cutting factory. It had a warehouse filled with glass samples available to Apple, free of charge. The owners made engineers available at almost no cost. They had built on-site dormitories so employees would be available 24 hours a day.

The Chinese plant got the job.

“The entire supply chain is in China now,” said another former high-ranking Apple executive. “You need a thousand rubber gaskets? That’s the factory next door. You need a million screws? That factory is a block away. You need that screw made a little bit different? It will take three hours.”  (symbiotic relationships, not hampered by distance, improve productivity)

As the company has grown, it has expanded its domestic work force, including manufacturing jobs. Last year, Apple’s American work force grew by 8,000 people.

While other companies have sent call centers abroad, Apple has kept its centers in the United States. One source estimated that sales of Apple’s products have caused other companies to hire tens of thousands of Americans. FedEx and United Parcel Service, for instance, both say they have created American jobs because of the volume of Apple’s shipments..  (not all jobs were lost)

“We shouldn’t be criticized for using Chinese workers,” a current Apple executive said. “The U.S. has stopped producing people with the skills we need.

… The last time analysts wrung their hands about prolonged American unemployment, for instance, in the early 1980s, the Internet hardly existed. Few at the time would have guessed that a degree in graphic design was rapidly becoming a smart bet, while studying telephone repair a dead end. (the future presents new, unexpected possibilities,  so who will gain ?)

This may be a long shot, but I think that preparing for General Paper is a little like the tough concerns for governments, companies and workers presented in the article. We do not know exactly what’s coming (i.e. the A-level questions), yet we have to prepare ourselves to face that unknown.

So, what exactly would we need, and how do we get it ?
… … it could be that some of the things we need to face the year-end exam, are the same things we need to have for bigger changes later

 

Credits to generalpaperlessons.wordpress.com

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