Foxconn Sees New Source of Cheap Labor: The United States

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."

Comments

This is good for the US

[Anonymous Coward]

Americans may have invented a lot of the manufacturing processes used for consumer electronics, but China and other Far Eastern countries have a big edge on us now. Let's put our egos aside and learn what we can from the Chinese.

Re:This is good for the US

[ColdWetDog]

Screw that. Coffee and a doughnut or I'm staying in bed.

Re:This is good for the US

[TheRaven64]

It keeps being repeated because it's almost true. Manufacturing hasn't gone down in the USA, but manufacturing employment has. Just like in the first industrial revolution, the number of people required to manufacture goods has dropped considerably. China had a small short-term advantage because, for certain things, it was cheaper to use poorly-paid workers than machines, but even that's changing. Lots of people are talking as if Chinese factory workers are competing against American factory workers and winning because they're paid a fraction of the amount, but that's not really the case. 10-100 Chinese factory workers are competing against one American factory worker and a large automated assembly line. They were winning because they have lower capital costs, but higher operational costs. Now that companies like Foxconn have large amounts of capital to play with, they're starting to lose again.

People keep talking as if bringing manufacturing back to the USA will make a difference for the local economy, but it won't. The mindset that a new factory will employ thousands of people and provide employment either directly or indirectly for an entire town is obsolete. This doesn't, of course, stop local governments giving companies millions of dollars in tax breaks to build a factory, and then acting surprised when it only creates a hundred or so new jobs.

The first industrial revolution had a lot of social unrest because of the wealth-redistribution that the automation caused, concentrating it in the hands of the factory owners. This one is likely to have many of the same problems. Unfortunately, we didn't find a good solution last time.

So it's come to this. . .

[mosb1000]

Chinese companies are more willing to be self sufficient and train workers than American companies, who are constantly whining that the government should do it. And theyre from a communist country where the government is much more powerfull. Good job, assholes.

Re:So it's come to this. . .

[MightyYar]

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.

Gotta post AC

[Anonymous Coward]

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

Re:Get rid of the unions

[Jackie_Chan_Fan]

You're right, unions ruined everything, including child labor and slavery. Oh the good old days, when you could lock your workers in a factory, and watch them burn to death. (Actually happened)

poor choices for enforcement.

[Anonymous Coward]

But...but...you have Robocop!

Exploitation, unions, and you.

[girlintraining]

You jabber on about how unions are bad, how they destroyed this country, but you couldn't be more mistaken. The reason we became a world superpower was because of unions, not in spite of them. When the industrial revolution first made land fall, people left the farms to move into urban factories. There was no health care, no OSHA, no retirement or social security, no educational system, and no child labor laws. Workers would get chewed up by machines and that was that. No lawsuits, no nothing -- your livelihood was destroyed. Quite possibly, you later died of starvation. All of the problems that are present in China today were there at the start of our industrial revolution as well: Corruption, environmental contamination, worker abuse, long hours, low pay, and massive wealth inequity.

Then the unions came, and with it; OSHA, social security, public education, child labor laws, overtime compensation. And you know what happened then? Civilization didn't collapse. In fact, it prospered: The roaring 50s. A single man could now drive a car and live in a house he paid for, in full, and support a wive and two kids, working only 40 hours a week. It was the first generation to grow up with public education, and that literacy reflected in every area of american living; Anyone could invent something new and sell it. America became the land of opportunity. Immigrants flocked to the stars and striped by the millions. The middle class grew, and upward mobility was something just about anyone could achieve. For the first time in modern history, hard work nearly guaranteed a comfortable living. And work hard we did. When Europe was devestated by the world wars, it was american industry and ingenuity that pulled their ass out of the fire, and I'm not talking about the unparalleled capacity to produce ships, tanks, guns, and planes either. We didn't just build our own country -- we rebuilt a dozen others as well in post-war reconstruction. And after all that, you know what we did then? We went to the fucking moon.

Even Adam Smith in Wealth of Nations pointed out that one of the essential duties of government is to provide for the safety and well-being of its citizens. In other words, the work force. America's investment in its labor force resulted in economic gains far in excess of anything even the largest mega-corporations of today can match. And then it all went wrong.

It started with the Boomers. Having been given everything by their parents, they didn't understand the price paid by their predecessors. They assumed that this temporary equilibrium, this golden age, was a permanent feature of America. They felt entitled to it, instead of thankful. And when they seized power in the 70s and 80s, they cut social security, education, defunded OSHA, deregulated... and for a time, it was good. But in the shadows consumer debt piled up. The cost of an education skyrocketed, and illiteracy creeped back in. Our scientific and technological progress peaked, then rapidly deflated as the careers of scientist, engineer, inventor, were removed from public prestige and replaced with ridicule and scorn.

Today, our media holds illiterate opinions as equal to the most established of scientific truths. Our children are unable to afford an education, and we're witnessing the lowest graduation rates from all levels of education that anyone alive can remember. Our economy is in ruins, the middle class is rapidly evaporating, and the few wealthy compete amongst each other to auction off our civil infrastructure and institutions. The bridges and roadways our grandparents built with pride that enabled our economy to prosper grow increasingly deficient, falling into rivers or eating tires and vehicles. Our railway and roadway networks are so badly mangled that the idea of bringing back blimps has been floated a few times as a way of getting goods around. Our air space is managed by state of the art technology... or it was, in 1965.

No, unions made us a super power. And we're going to lose that status because we took what they gave us for granted.

Re:Exploitation, unions, and you.

[girlintraining]

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:Exploitation, unions, and you.

[mister_playboy]

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:Get rid of the unions

[Zeussy]

Oh yes, it's all the unions. Even though Germany has unions, pay's it auto works more, and their car industry is profitable, makes more cars, with large amounts of exports.

Unions done wrong fuck the system up. Builds adversarial us (the workers) vs them (the management) mentalities. Unions done right, can and does work very well. It is collaborative, where everyone works together to make the company better, struggle through the bad times etc. This collaboration works both ways, if the company is hitting hard times, the board, management should be taking paycuts themselves, stopping bonuses. They have failed to lead the company into a properous position. Before they have the cheek to ask the workers to cut their salaries, they should be severely cutting their own pay first. Put their hands up in the air, and claim "Yes, we fucked up", so how can we get through this? The CEO has taken a paycut of 80% sacrificing $25 million saving about 300 jobs, can you guys cut 15% until we get through this?

Both Germany and Japan after the second world war had written into their constitutions by Eisenhower, MacArthur and their aides various protections and rights for workers to bargain and act collectively. They both have become some of the biggest players in the automotive industry, and this is not by coinicendence, it is by design.

Re:poor choices for locations

[JWSmythe]

    Actually, they could set up in *any* metro area in the US. Pay minimum wage. Make all the employees part time, so they don't have to pay benefits. 2 20hr/wk employees are cheaper than 1 40hr/wk or salary employee. They can maintain a barely OSHA compliant workplace, and items that are too expensive, they can just absorb the cost of fines. Their customers have financial and political leverage, so I'm sure lots could be ignored, especially if they're going to take a few thousand people off of the unemployment rolls, even though they'll make less working.

    Pretty much, they'll act just like Walmart. A whole bunch of employees who fall below the poverty line.

Re:poor choices for locations

[WarSpiteX]

I'm afraid you're exactly right.

When you start globalizing and opening yourself up to competition with countries that have no labour or environmental laws to speak of, you by default undercut your own industries to the point where they are not competitive.

Free trade with developing countries is a horrendously bad idea for this reason. Tarriffs can be a mitigating factor - to a point, of course.

Re:Get rid of the unions

[Anonymous Coward]

Though union leaders screw over the members occasionally, it's no where near as bad as what corporate executives do. In fact, unlike corporations, unions have government watchdogs. Union leaders are fiduciaries for their members, so both the members and the government regularly investigate and sue malfeasance. Corporate executives are principally fiduciaries for the corporation, and it's difficult for either the government or shareholders to ensure accountability.

The notion that unions are corrupt, their members slothful knuckle-draggers, is political spin by the GOP and the business community which has unfortunately become common wisdom. Of course there was egregious corruption (and still is, but nothing like 50 years ago). But it wasn't just the unions, sadly. Union corruption is just more memorable. We can identify with stealing cigarettes from a truck, or scotch off a boat. Most people find it hard to wrap their heads around sophisticated corporate embezzlement schemes.

Re:Get rid of the unions

[Anonymous Coward]

Huh? You can't be for unions, but against union shops. If unions didn't have enforceable contracts with companies to only employ union members, then companies simply would never employ union members.

You have to understand the function of unions: to stabilize low-skilled, low-barrier-to-entry labor markets. There's no way to accomplish that stabilization without excluding some part of the labor market. They work by placing restrictions on the labor supply.

It my seem inefficient when you listen to anecdotes, but its often more efficient writ large. You need employment and wage stability in order for people to be able to save and plan ahead. It makes them more productive. You then reroute some of that additional gain to folks who got screwed, in the form of welfare.

That's the economic theory. Feel free to dispute the underlying premises, or debate the efficacy of the scheme. But its undoubtedly sound policy given the right circumstances.

Re:poor choices for locations

[icebraining]

They're not going to pay minimum wage. Didn't you read TFS? They're just going to use machines, and employ a couple of engineers to watch over the production line, just like most other American manufacturers.

The real cheap labor is not labor at all.

union shops are against freedom

[dutchwhizzman]

Once you mandate union membership you lose the edge for the unions to actually be beneficial for their members. In effect, you'll be trading one bad overlord for another. Corrupt union directors will want to protect and grow their empire, not put their energy in representing their members. A union should be beneficial enough for people to want to join voluntarily. Several western European countries still have a healthy union culture, without being mandatory membership. These unions generally do a pretty good job negotiating collective things and have "free" legal representation in case an individual member has trouble with their employer. Union strikes are relatively rare, but tend to be influential enough to be feared by employers. In short, it's perfectly possible to have the unions make themselves useful without mandating membership.