Posted on 05/18/2016 5:16:38 AM PDT by RoosterRedux
When American companies moved manufacturing to China, it was all about cost. China’s wages were among the lowest in the world and its government provided subsidies and turned a blind eye to labour abuse and environmental destruction.
Things have changed. China’s labour, real estate and energy costs have increased to the point that they are comparable to some parts of the US. Subsidies are harder to get and Chinese labour is not tolerating the abuse that it once did. China is now a more expensive place to manufacture than Indonesia, Thailand, Mexico and India, according to Boston Consulting Group.
Add to this the efforts by the Chinese Government to spur indigenous innovation — by forcing foreign companies to reveal their intellectual property and to use local suppliers — and you have strong motivation to relocate manufacturing.
But Apple is by no means looking to exit from China, its second-largest market. It just announced an investment of $1 billion in Uber’s rival, Didi Chuxing. It clearly saw a large market opportunity and a way to appease the Chinese Government.
Technology is, however, changing the labour-cost equation even more and China is becoming unpredictable because of its faltering economy. It may make sense for Apple to locate some of its manufacturing closer to other markets just to protect itself from this uncertainty.
What is changing the labour situation is robotics. Robots can now do the same manufacturing jobs as humans — for a fraction of the cost. A new generation, from companies such as Rethink Robotics of Boston, ABB of Switzerland and Universal Robots of Denmark are dexterous enough to thread a needle and nimble enough to work beside humans. They can do repetitive and boring circuit board assembly and pack boxes.
(Excerpt) Read more at royalgazette.com ...
Article says that the operating cost of robots is now about $1 per hour in the U.S. I presume that includes the amortization of purchase price.
“A new generation, from companies such as Rethink Robotics of Boston, ABB of Switzerland and Universal Robots of Denmark are dexterous enough to thread a needle and nimble enough to work beside humans. They can do repetitive and boring circuit board assembly and pack boxes.”
The unions should not have been so greedy and demanding. They can be replaced!
I wonder if the ice men were unionized, and that’s why the refrigerator was invented...
Much of the migration overseas of American Industry is driven by the hyper regulation that is doing nothing but increasing in America. Regulation is expensive and cannot be replaced by robots, no matter how efficient.
Regulation can be replaced by the stroke of a pen.
A poorly conceived screed which shoots itself in the head with a howitzer in the opening paragraph.
Boom. It takes a true idiot both to write a piece not addressing that, or to not immediately notice that it was left out.
I read the headline and thought that Trump had a special edition iPhone that wasn’t selling very well.
Agreed - also has no understanding of the depth of the infrastructure investment to pull off one of those manufacturing “cities” in China. Saying you can replicate that here with the stroke of a president’s pen is just ignorance in its most base state.
Good article, IMO: https://blog.bolt.io/no-you-cant-manufacture-that-like-apple-does-93bea02a3bbf#.l183rzc4z
And decades of lobbying and lawsuits. A costly and time consuming prospect which hasn’t happened in the United States.
You are right though, it is technically possible even though we haven’t seen it happen.
You might be right, but I's suppose that the fact that the ice kept melting in the icebox and had to be replaced daily was the big driver...
_________________________________________________
To say that the US is not business friendly is an understatement. While there are many regulations in many industries some are absolutely crushing. While regulations and wages make manufacturing expensive the biggest impediment to manufacturing is the US corporate tax structure. When you have over 35% of your profits taken in the form of tax it means that you have to raise your prices 35% to cover it.
There are areas such as cigarette manufacturing and gasoline production that the government makes hundreds of times more money than the manufacturer because of taxes.
The sad thing is that business does not really pay tax they make you pay it in the form of higher prices for their goods. That of course means that those goods are not competitive on the the foreign market, and can't even compete at home with offshore manufacturers. Manufacturers don't go overseas so that they can make a higher profit, they go overseas so they can stay in business. If they don't go their market share dwindles because of their taxed pricing until they are forced to close up shop.
Why pick on Apple, punishing them for having a U.S. corporate headquarters? Samsung should be exempted because they AREN’T based here? Tariffs can have a role, but they have to be thought out. (For you Milton Friedman types out there, my main support for tariffs has to do with national security, not with economic efficiency or even high employment rates, and Friedman does not, and really cannot, deal with it from that angle.)
They also have a role in defending against tariffs being applied unfairly to our products by trade partners.
;)
There are 8,760 hours in a 365 day year.
I have no idea what any particular robot costs, but it has to be awfully cheap for $8760 to cover maintenance, power, human supervision & programming, and amortization.
All excellent points. One of the more enduring legacies of a Trump Administration, I suspect, will be the launch of the real robotics manufacturing revolution right here in the USA. Between cutting off illegal immigration (the cheap labor express) and encouraging on-shoring, US companies will be investing in robotics hugely. This will put the entire economy on a 21st century footing.
Regulation and the highest taxes in the industrialized world. Also there is the taxation of all profits made anywhere in the world for an American company. No other major country does that. It saves that double taxation if the company relocates offshore and becomes a Foreign company.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.