This morning I came across a fairly long yet interesting article about Apple and its manufacturing process. I've heard several people wonder why, if Apple is such a great company, the iPhone is manufactured in China instead of in the United States. It's a perfectly legitimate question — with an unemployment rate over 8 percent for three straight years, we could certainly afford to put a few people to work. But that's where the problems come in. Apparently Chinese labor is dirt cheap, to the tune of $17 per day. And in the cutthroat world of shipping as much product as possible (Apple sold 72.3 million iPhones in fiscal 2011 [1, 2, 3, 4]), if labor costs can be cut to manufacture the devices, so be it. Let's not forget that despite all the magic, Apple is still a corporation with a worldwide reach and stockholders to satisfy — and in that part of the universe, the dollar is (and will always be) king.
The workers at the Foxconn factory in Shenzhen, China, where iPhones are made, work six days a week and at least twelve hours per day. That's almost double the typical American workweek, and under the grueling conditions of assembling electronic products by hand. I'd be curious to see how many unemployed American workers would accept those conditions. For $17 per day, while living on-site in cramped dormitories. I bet not many. It's thus less expensive for Apple to have Chinese laborers do the work and then ship the products out from there. And I'm only singling out Apple because the source article did. Other companies are just as guilty of the process — including Acer, Cisco, Dell, HP, Intel, Motorola, Nintendo, Panasonic, Sony, and Toshiba, among others. In fact, Foxconn reportedly manufactures 40% of the world's products.
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.
"The speed and flexibility is breathtaking," the executive said. "There's no American plant that can match that."
The New York Times
It's a business decision, plain and simple. That doesn't mean it's the right thing to do, but it's happening nonetheless.
West Virginia natives may think this sounds familiar, and they're right. Once upon a time, across the coalfields of West Virginia, workers lived in company housing and shopped at the company store — all the while digging coal by hand in unsafe conditions and loading it onto railroad cars to ship all over the country. The UMWA was formed, revolutionizing labor laws. I wonder how long it will be until an equivalent of John L. Lewis emerges in China.
And after that, I wonder who will become the world's cheap manufacturer to repeat the cycle anew.