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Microsoft's Wilsonville Jobs Are Going To China, Underscoring Travails of Domestic Tech Manufacturing (oregonlive.com)
An anonymous reader tips us a story: Just two years ago, Microsoft cast its Wilsonville factory as the harbinger of a new era in American technology manufacturing. The tech giant stamped, "Manufactured in Portland, OR, USA" on each Surface Hub it made there. It invited The New York Times and Fast Company magazine to tour the plant in 2015, then hired more than 100 people to make the enormous, $22,000 touch-screen computer. But last week Microsoft summoned its Wilsonville employees to an early-morning meeting and announced it will close the factory and lay off 124 employees -- nearly everyone at the site -- plus dozens of contract workers. Panos Panay, the vice president in charge of the Surface product group, traveled from corporate headquarters in Redmond, Washington, to tell the staff that Microsoft was moving production to the same place it makes all other Surface products. Though workers present say he didn't disclose the location, Microsoft has previously said it makes its other Surface computers in China. The company hasn't explained, in public or to its Wilsonville employees, why it gave up on domestic manufacturing so quickly and didn't respond to repeated inquiries for comment. But the only thing surprising about Microsoft's decision is that it tried to make its computers in the U.S. in the first place.
What this is is a hard landing for "Manufacturing 4.0" advocates and dotcom monkey.
NO mater how much robots you put to screw a screw, you robots can't compete on cost with Chinese.
While labour costs in China are nowhere near being laughable as they were a decade ago, they still outcompete any Western high tech manufacturer. Western manufacturers have no trouble getting orders from DoD to make banal power converters for 10k a pop. Why would they even try competing with Chinese?
Making a top tier factory is a no joke enterprise that takes years, billions, patience, and serious people. You can't simply roll $10 billion USD and have a TSMC-level fab delivered by mail order, nobody in the world will do it for you. It is only possible for an entrepreneur who is ready to spend his life sitting butt naked on an ant pile, building a company along with its technology base - each TSMC fab is a miracle, a work of art, a creation, not something anybody in the world will teach to build or run
The profit margin on the $22k Surface Hub wasn't quite high enough using U.S. employees.
Don't be fooled by your company's slogans; "profits" not "employees" are the company's most valuable asset. Remember what Veronica said in Better Off Ted (S1 E4: "Racial Sensitivity"), which was refreshingly honest:
"Money before people," that's the company motto. Engraved on the lobby floor. It just looks more heroic in Latin.
[ And, no, I'm not against companies making money, but there's more to it than that. ]
It must have been something you assimilated. . . .
Microsoft tried to make some Surface units in the U.S. because they thought of it as marketing.
Microsoft has ended the local manufacturing because the marketing doesn't seem to be returning the cost of the effort.
In short, Microsoft never actually cared about helping to regain some manufacturing in the U.S. They just wanted to *look* like they cared. None of it is a surprise in any way.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Large trade imbalances are a problem; not just for jobs, but because the financial imbalances it causes, and a host of other risks. For example, if we gut our manufacturing base, we could have insufficient manufacturing facilities during an extended war. Venezuela's problems have a Yuuuge lesson: don't put all your economic eggs in one basket. Variety is a backup system, even if it causes short-term inefficiencies.
BUT, Trump is doing it wrong; or at least not in a coordinated way.
An imbalance penalty tariff should be applied to trade with a level based on the imbalance amount: the bigger the imbalance, the bigger the penalty. We'd have to tell the WTO to shove it, though; or get them to change the rules.
However, the penalty shouldn't suddenly be applied in full, but gradually ramped up to give the country and companies time to adjust. We don't want to shock the system. Trump doesn't have the patience for gradual ramp-ups; and the full effect may outlast a presidential term even. It would have to be a coordinated political effort.
Table-ized A.I.
We have two at work (one 84" and one 55") and so far they have worked pretty well for what they are supposed to do. It is up to management to decide if it was worth the cost in the end, but so far I haven't see any issues with them. Other companies MMV of course, but we have a lot of remote employees so it has worked out well for company wide video conferencing, white board for meetings, connecting laptops to it, etc.
maybe one day they will accept that.
I don't know about that. They've made a lot of money out of the Xbox. Most of their hardware ventures have failed, but that one has been a money-maker for them.
"That's the way to do it" - Punch
>> The company hasn't explained, in public or to its Wilsonville employees, why it gave up on domestic manufacturing so quickly
I'm guessing the factory was built to collect an Oregon tax credit or to otherwise mollify some state-level lawmakers. Now that the tax credit has been cashed in (or related legislative/regulatory policy has been created/averted), it's time to pull the plug.
Or maybe this was just the minimum time required to figure out and outsource all manufacturing. There's a June 2015 NYTimes article which pretty much said the same when the factory opened (via acquisition):
"Mr. Hix had a downbeat assessment for what would happen to the manufacturing of the Surface Hub if the product took off and the production process was refined. 'Once they get all the problems out of it, it will go offshore,' he said."
https://www.nytimes.com/2015/06/11/technology/microsoft-picks-unusual-place-to-make-its-giant-touch-screen-the-us.html
Correct. People scream bloody murder about the offshoring of jobs, and then head to Walmart to buy more cheap Chinese shit.
And every morning they run their Chinese-made American flag up the flagpole while thinking about what a good American they are. The American dream is dead and Americans have no one to blame but themselves, as they enabled ALL of it.
Dealing with technical people all the time, it never ceases to amaze me how few understand life outside their little comfort zone. Any time they have to deal with someone who's lower-skilled than themselves, it's an annoyance and they run back to their crowd as soon as they can. Just like a lot of people say everyone should have at least one menial job serving food, working retail or otherwise dealing with the public, I think it would do smart people a world of good to put in some time working in a social services office. Doing so may reveal to smart people that the vast majority of the world is not like them, and may convince them that we shouldn't shoot for 100% optimization if that leaves out a huge swath of the population.
The truth is that we need something at the level of a manufacturing job, that delivers a lower-middle class salary, has regular hours and can be done by people of average intelligence. I know AI is being overhyped now, but the vast majority of white collar corporate jobs are up for replacement next as well. Unless you want society to break down, you're going to need to give people jobs. I grew up in a Rust Belt city and watched every large factory move to the South or overseas, leaving a burnt-out shell of a city. Not Detroit-level, but it's only now coming back. You need employers like this to give work to the masses who can't be big data scientists or work in engineering.
Feel free to call me a Luddite, but leaving some slack in the system will be the only way to preserve it. We're at the point where people can't just move up to the next better job when automation takes theirs. For better or worse, most people are doing the equivalent of factory work, including corporate types.
H-1B.
They couldn't find any Americans to lay off 124 workers.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
When someone can pick up a plant from China and plop it down in WA, pay the same wages, follow the same work rules, dispose of their waste in the same manner, THEN you can say outsourcing is a fair thing to do.
The fact is that you can't. And you can't for reasons that most people agree are reasonable...health and safety of the workers, environmental protection, workplace environment rules, etc. Most people would agree that these rules are in place for what they might call moral reasons, or, it's the right thing to do.
But for some reason, it's no longer the right thing to do when that plant is in China or other third world places. Somehow, what is considered immoral pollution here is not immoral pollution in China. Intolerable work environments here are some how perfectly fine in the third world. But, US consumers and manufacturers are more than happy to take advantage of the low costs of product even when that is only possible in a factory that would be sued out of existence were it in the US.
Outsourcing to China and other places isn't "competition" it's exploitation. But try and do anything about it and you will be called a protectionist or worse.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
Fascism it is then.
My previous job was actually working at the Wilsonville factory on the software used to test the Surface Hub before it was shipped. All the factory workers were temps hired through Kelly Services. Almost all of them looked like immigrants to me. They put on double shifts in order to fill the warehouses with unsold product, so now they can shut down for a couple months while they shift production elsewhere. Why were they doing production in the US in the first place? Microsoft got the Surface Hub by buying out Perceptive PIxel, which was manufacturing it's large touchscreen in the same building Microsoft is now shutting down. Also, there was never enough parking at the plant; it was designed as a shipping warehouse. So the city of WIlsonville didn't allow us to use the entire upstairs portion of the building, since there wasn't parking for employees. Kelly services leased 2 buses to bus in factory workers from whereever they had them park.
I've abandoned my search for truth; now I'm just looking for some useful delusions.