Clyde Prestowitz for CNN:
As a business, Apple has a right to fear that moving the assembly work from China to the United States will entail raising labor costs so high as to make the company less competitive and profitable. But for it to say that it has no obligation to help solve America’s problems is completely unacceptable.
The problems in the U.S. economy are not for Apple to resolve. They pay taxes — I’m sure they pay a lot of taxes — and they employ tens of thousands of Americans in high paying jobs.
Apple is not a charity, nor should it make business decisions based on a country’s needs or wants. Apple has one financial responsibility — to make money for its shareholders.
Instead of giving trillions in bailout money to companies that have been mismanaged, why not use that money to make doing business in America more attractive.
Really?
Actually it has a second responsibility. Servicing its customers. Without customers Apple goes the way of RIM.
Expecting businesses to act in a way that doesn’t maximize value for their owners or shareholders is ludicrous.
Yes, but only serving their customers as a way to add value, not as an end in itself.
Right, that’s why I said financial 🙂
“Adding Value” isn’t a business plan. Apple’s success has been in creating the best products it can to make its customers as delighted as it can. If you take care of your customers, the value added takes care of itself.
I meant that in response to deviladv above. Servicing your customers is important insofar as it makes your products more valuable. If I keep my customers happy but fail to be profitable, that’s not a winning strategy. Everything a business does should be with an eye toward more profitability,
Something I’ve noticed is lacking from these debates about whether Apple (and other companies) should “bring manufacturing back to the US” :
As someone with experience in industrial automation, I can assure you that if Apple were to build a brand new expensive iPhone plant in the US that it would be heavily automated. Yes some jobs would be created, but those would be a small fraction of the number of people that are now employed in China because of Apple.
CNN obviously has no understanding of the complexity of Apple’s supply chain.
Amen
yep. Why do people assume that an Apple plant here would be as human labor-intensive as in China? Also, even if it was, where the hell are you going to build the thing and how would you build it in less than a decade?
Maybe if the corporate welfare tap was turned off and the tax dodges eliminated, the rest of the system would take care of itself.
True that. It annoys me to no end that there are a thousand ways that the rich can reduce their taxes but the poor college student or the mid 20s kid trying to pay off his college loans etc gets to bend over and pay it all.
I admit in some respects I’m a tad guilty myself. it’s a common film industry trick to INC yourself for tax cuts like sales tax reductions for Post Prod supplies. But I don’t play some of the games like filing my company in another state for even more tax cuts or over inflating how much of my house is my studio or how much I use my car for work or what I bought as a work tool. Unlike some of my fellow industry folks.
it’s more the issue of unions and such that would be the ‘problem’. I say that it’s not a given that they must be unionized and certainly Apple could get around that attempt by putting the factories in Right to Work states. Which is a plus for the workers since up to half their paychecks would go to union dues and frankly what would a union do that state and federal laws don’t already. Unions are great in a situation like mine where I can have 3 different employers in a week but when you are dealing with one company, not so much. Current laws cover your hour limits, rules for OT, minimum hourly wages etc.
there’s also the costs of building the factories and training the staff which would be expensive. iPhones etc are not simple things if you look inside of them. you can literally break a whole unit by not getting the bits screwed and snapped in the right places. Press a tad too hard and you could break a connector and ‘burn’ a whole part. I did it myself replacing a broken screen on my old 3gs (hey it was already out of warranty so why not try it on my own).
That said, if the US government were to play ball Apple might also. Like that request for a tax holiday to bring in overseas money. If they said okay but only if the money was going for building assembly plants in the US, Apple might say okay.
that is actually beside the point. The supply chain is neither here nor there.
What Clyde has no understanding of is accountability. As I said in that every article, Apple didn’t make the issues, so they shouldn’t be the ones called upon to fix them. The problems are due to the laws and the lawmakers. Tax loopholes so the rich stay rich and the poor get jacked. Welfare rules that don’t require folks to do any kind of work and actually encourage women to get pregs as much as they can. States like California where the lawmakers gave themselves huge raises at the same time they couldn’t balance the budget. That’s their job and they weren’t doing it so they should have been made to forfeit those raises. And so on.
Demanding that Apple bring their money home, build factories here etc when the laws are still so dang flawed is like putting a band-aid on a GSW to the gut. Sure it might help for a couple of minutes but the patient is still bleeding and that bandaid won’t save his life. That’s what Clyde doesn’t understand and Steve did. That’s why Steve flat said no to Obama. He wasn’t going to jump in while the problems that the government created weren’t being addressed. Perhaps when Obama and Congress figured that out and actually started to deal with their own mess, Steve might have gotten on board just as Tim might. But not before.
Or not. Have you ever seen the inside of an iPhone or an iPad. I highly doubt that a robot could do much of that work. Producing boxes, slapping on labels, shrink wrapping etc perhaps. But not the actual assembly and probably not the software loads.
Which is why Foxconn isn’t heavily automated either. They likely have just as much ability and it would be just as profitable to the bottom line as if Apple did it here. But it doesn’t work with the product being made.
Actually “adding value” is a business plan and a very good one. Because it is exactly how they make the best products they can. They don’t add something to add it and spec wank. They do it because it adds value to the product.
I was replying to another comment, the context was “adding value” for the owner or shareholders. I meant that if your business plan is simply “make money” it’s a not very good one.
Of course every business wants to make money, that’s how they survive, just like every human wants to breathe. But I don’t wake up in the morning and say “my goal is to breathe.”
A) Proof of that first part.
B) Um, you don’t really know much about unions if you think that.
It’s just not one assembly plant. It’s an amazing array of companies, factories and talent strewn across a number of different countries. Moving all that to the US is sheer fantasy.
OH absolutely. I’m radically simplifying the problem. When you look at the entire infrastructure, the idea that you can just replicate that over here in a year or so? Fantasy. Purest. Fantasy.