The Beer Game -or- Why Apple Can’t Build iPads in the US • Hacker News Board

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#101

Post by Domenic_S » Thu, Apr 05, 2012, 4:30 PM UTC

yummyfajitas wrote: post #16

diogenescynic wrote: post #4

Apple could afford to reopen the plants they had in Fremont, they just might not be able to produce 100% of their products there . From the NY Times article he refers to: paying American wages would add up to $65 to each iPhone’s expense. Fender does this--they offer you the choice of a Chinese, Mexican, Japanese, or American made guitar and just price accordingly. I would pay more for an iPhone that I knew was made…

...paying American wages would add up to $65 to each iPhone’s expense. The point of the article is to illustrate that wages are not the only problem. Chaotic effects in multi-tier supply chains are also a real problem. I would pay more for an iPhone that I knew was made in America. I'm sure I'm not the only one. You are certainly a minority. I don't think most people value nationalism at $65. Personally, I'd rather h…

> I don't think most people value nationalism at $65.

You, sir, have apparently never tried to sell something to a person older than 65.

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#102

Post by excuse-me » Thu, Apr 05, 2012, 4:31 PM UTC

nknight wrote: post #23

krupan wrote: post #9

I don't know, do all the unemployed people in a America right now want to work on assembly lines in factories? I know, just because I don't want to doesn't mean everyone else thinks that way, but it just doesn't seem like the correct long-term fix for unemployment. Factory work just doesn't seem like a viable long-term career. I suppose it's the non-hourly-wage assembly-line jobs that come with manufacturing that are…

> Factory work just doesn't seem like a viable long-term career. The US middle class exists (or existed) in no small part precisely because of factory work. Many people have spent their entire lives in factories making a good living, some still do, more would if the jobs were available. Automation is the obvious argument against long-term viability, but most factory jobs have never been automated, and probably won't…

If people that work on an assembly line in a factory in the US are middle class - what's the definition of working class?

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#103

Post by RedwoodCity » Thu, Apr 05, 2012, 4:37 PM UTC

There are plenty of counter examples to this. Boeing has suppliers for key components for its airplanes as far away as Italy and Japan.

Toyota and BMW assemble vehicles in the US from imported parts.

A CPU from intel is often fabricated in a US based factory, tested in Costa Rica, and packaged in Asia.

The issue has too many variables related to margins, tax breaks for factories, and import tariffs; to say the whole electronics supply chain is moving one direction.

As wages and living standards rise in China it is likely that some production will move to other countries and regions, which in the longterm is a good thing because it spreads the wealth.

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#104

Post by RedwoodCity » Thu, Apr 05, 2012, 4:37 PM UTC

There are plenty of counter examples to this. Boeing has suppliers for key components for its airplanes as far away as Italy and Japan.

Toyota and BMW assemble vehicles in the US from imported parts.

A CPU from intel is often fabricated in a US based factory, tested in Costa Rica, and packaged in Asia.

The issue has too many variables related to margins, tax breaks for factories, and import tariffs; to say the whole electronics supply chain is moving one direction.

As wages and living standards rise in China it is likely that some production will move to other countries and regions, which in the longterm is a good thing because it spreads the wealth.

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#105

Post by RedwoodCity » Thu, Apr 05, 2012, 4:37 PM UTC

There are plenty of counter examples to this. Boeing has suppliers for key components for its airplanes as far away as Italy and Japan.

Toyota and BMW assemble vehicles in the US from imported parts.

A CPU from intel is often fabricated in a US based factory, tested in Costa Rica, and packaged in Asia.

The issue has too many variables related to margins, tax breaks for factories, and import tariffs; to say the whole electronics supply chain is moving one direction.

As wages and living standards rise in China it is likely that some production will move to other countries and regions, which in the longterm is a good thing because it spreads the wealth.

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#106

Post by Locke1689 » Thu, Apr 05, 2012, 4:38 PM UTC

e40 wrote: post #98

acslater00 wrote: post #54

Earlier quoted context omitted.

That's a myth. The US has a huge and growing manufacturing base. We make airplane engines, medical devices, computer chips; all kinds of complex, high-tech manufacturing. We have the highest manufacturing productivity per worker in the world. What we don't make anymore are the kinds of products that require rote assembly tasks, like shoes and clothes and iPads. The upshot is that we have decreasing manufacturing empl…

You realize I didn't mean we manufacture nothing, but that we manufacture much, much less than we used to, right? If we can't agree that manufacturing started to move out of the US decades ago, was accelerated by NAFTA, and that we are a consumer of goods made elsewhere (more than others are a consumer of goods made here), then this conversation isn't going to go well.

You're right, it won't go well, because you don't seem to know what the facts are. Check the parents data.

Not only do we manufacture things, we manufacture much, much more than we used to.

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#107

Post by mseebach » Thu, Apr 05, 2012, 4:39 PM UTC

rbarooah wrote: post #88

mseebach wrote: post #85

Earlier quoted context omitted.

The Mao isolation was just a continuation of centuries of Ming isolation, and, emphatically, yes. I think the GP meant modern protectionism in the sense of "Buy American/British/etc" movements.

By talking about how the US and Britain had grown rich through trade and 'imperialist' protectionism and mentioning racism, the GP seemed to be implying that the poverty in China was somehow created by these western countries. Aren't those modern "buy British" or "buy American" movements voluntary? Might there not be good reasons for supporting those who are economically tied to you by culture and legal jurisdiction?

There is no possible way I can read the GP to mean that. He only mentions imperialism and racism after talking about, and with clear reference to, "Buy American".

Most of the movements are voluntary for now, but not all: http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestm...

> Might there not be good reasons for supporting those who are economically tied to you by culture and legal jurisdiction?

Yes and no. But if the support takes the form of a bail-out, you're just wasting your money while delaying the inevitable and making the eventual crash much more painful. If you instead let industries fizzle out over time, it's much easier for something to appear to take it's place.

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#108

Post by liber8 » Thu, Apr 05, 2012, 4:40 PM UTC

e40 wrote: post #98

acslater00 wrote: post #54

Earlier quoted context omitted.

That's a myth. The US has a huge and growing manufacturing base. We make airplane engines, medical devices, computer chips; all kinds of complex, high-tech manufacturing. We have the highest manufacturing productivity per worker in the world. What we don't make anymore are the kinds of products that require rote assembly tasks, like shoes and clothes and iPads. The upshot is that we have decreasing manufacturing empl…

You realize I didn't mean we manufacture nothing, but that we manufacture much, much less than we used to, right? If we can't agree that manufacturing started to move out of the US decades ago, was accelerated by NAFTA, and that we are a consumer of goods made elsewhere (more than others are a consumer of goods made here), then this conversation isn't going to go well.

Not sure what metric you're using to claim that we manufacture "much, much less than we used to". US manufacturing output continues to hit all-time records. Measured in real dollars, output is ~40% higher than in 1990, and ~$220% higher than 1970.

See http://unstats.un.org/unsd/snaama/dnllist.asp for data.

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#109

Post by mindslight » Thu, Apr 05, 2012, 4:40 PM UTC

damoncali wrote: post #94

mindslight wrote: post #78

Earlier quoted context omitted.

"Solve" it on paper by making it someone else's problem? This philosophy is a large part of why manufacturing jobs left in the first place.

You think they don't do this in China? Look around. Making your problems someone else's problems is a time honored business practice.

As a general negotiation technique for assigning of responsibility, sure. But management at both Chinese factories is still small and in touch enough to know that if 1M unneeded custom parts are produced, it's a waste no matter how the financial cost is split. American companies meanwhile are so deep in overabstraction and middle management that the individuals are only capable of covering their asses and claim to have solved the problem when the only thing they 'solved' was the ability of the company to perceive the problem. Two years later the supplier goes bankrupt after eating one too many change orders and, despite what the all-important contract says, parts stop getting delivered.

(Not that this is necessarily the Dell case - I'll bet that Dell is on the hook for a certain amount if they suddenly decide to stop using a particular laptop body. It's just that when this philosophy of financial blame becomes your go-to instead of ignoring the financial abstractions and solving the underlying problem, you're begging for someone to exchange your money for false peace of mind)

Re: The Beer Game -or- Why Apple Can’t Build iPads in the US

#110

Post by showerst » Thu, Apr 05, 2012, 4:43 PM UTC

krupan wrote: post #83

showerst wrote: post #36

Earlier quoted context omitted.

It's not that they necessarily want factories, it's that they're looking for stable career for life jobs for people with _low skills_, which is the difficult part. There are tons of openings in the US for plumbers, and (i believe, not sure post housing boom) also electricians, welders, pipe-fitters, etc. The problem is that these are all jobs that require a few years of training, which the US system isn't very well s…

From what you are saying, instead of investing in creating jobs for people with low skills, it would be better to invest more in helping people take the time to get training and education. Seems like having more educated people that can get higher paying jobs, which give them more disposable income and more free time, would be a much bigger win for our society than simply creating more unskilled labor jobs.

As long as you have enough low skilled people to fill the jobs (ideally, teenagers and depending on your politics, immigrants), this is absolutely true.

The problem is when you fall into a situation like the one we have now, where you have hundreds of thousands of people who had decent paying low skill jobs and lost them all at once (over 5+ years, but close enough in econ terms).

The right thing to say/do long term is 'we should provide adequate training to help these people maximize productivity, as it's a smart investment', but in reality you've got tons of hungry, broke voters on gov't aid, significant political pushback against the government being the one to invest the money in them, and not enough training capacity. You can't build a nursing school overnight from scratch, or triple the capacity of every state's licensing board... So you're a bit stuck, both politically and practically.

The good news is that as the economy grows/recovers, low skill jobs will eventually re-emerge, shifted to whatever sectors they're now needed in. The bad news is that there's ramp-up time for doing this, and very little political will to support the idea that the government should fund it. These people take tons of government aid, which isn't cheap, and they vote. This tends to push politicians towards more protectionist and pro-low skill job rhetoric, ceterus paribus.

I should point out that it's probably not a no-brainer to all economists and policy makers to do this at all, there's significant dispute on if/when/how the government should pick winners in individual fields.