Amazing!; this is the first time I have ever seen Mr. Cockburn wind up not
only agreeing with President Obama, but lauding him for calling on business
leaders to "ask what you can do to bring the jobs back." Here's a
fascinating story and powerful conclusion.
Ed
http://www.thenation.com/article/165979/sure-apple-could-build-iphone-here
Sure, Apple Could Build the iPhone Here
Alexander Cockburn
The Nation: In the February 20th Edition
Why do American jobs end up in China? The supposed answer in an anecdote:
the late Steve Jobs summons his senior lieutenants and holds up the iPhone
prototype. It's due to be shipped to stores in not much more than a month.
He points out that the plastic screen has been scratched by his keys. "I
won't sell a product that gets scratched," he says, according to a recent
New York Times story. "I want a glass screen, and I want it perfect in six
weeks."
"After one executive left that meeting, he booked a flight to Shenzhen,
China," the Times reports. "If Mr. Jobs wanted perfect, there was nowhere
else to go." The next sequence reads like a montage in some 1920s film about
industrial production. Within days, a Corning Glass plant in China is
turning out big sheets of toughened glass, which are shipped to a nearby
Chinese plant to be cut into iPhone panes. The small panes are trucked to a
Foxconn factory complex eight hours away.
The first truckloads arrived in the dead of night, according to a former
Apple executive. Managers rousted thousands of workers out of their beds,
lined them up, gave each of them a biscuit and a cup of tea and launched
them on a twelve-hour shift. In ninety-six hours, the plant was producing
more than 10,000 iPhones a day. Within three months, Apple had sold 1
million of them; since then Foxconn has assembled more than 200 million. The
suicide rate among its workers was, Jobs insisted, below the overall Chinese
rate.
Of course, typical Times readers nod their heads. No, cohorts of American
workers aren't available to be kicked out of bed in their communal dorms and
put to work in half an hour. There's no China-subsidized factory space. And
pulsing just below the surface of the text: no tiny, skillful Oriental
fingers ("flexibility, diligence and industrial skills of foreign workers"),
not to mention tiny Oriental wages, for the uniformed assemblers.
When President Obama dined with the kings of Silicon Valley last year and
asked, "Why can't that work come home?" Jobs's reply was "unambiguous":
"Those jobs aren't coming back."
In loyalties, Apple is spiritually offshore. "We sell iPhones in over a
hundred countries," an Apple executive told the Times. "We don't have an
obligation to solve America's problems. Our only obligation is making the
best product possible."
It was the phrase about having no obligation that riled up Clyde Prestowitz,
one of the US government's top trade negotiators in the Reagan years. In an
acrid posting on the Foreign Policy website and in a chat over the phone
with me from his winter quarters in Maui, Prestowitz efficiently dismembered
Apple's "no obligation" pretensions and its rationale for why it and kindred
companies had no alternative to offshoring.
In the 1981-86 period, Prestowitz says, Jobs and his executives "had the
funny notion that the US government had an obligation to help them.. We did
all we could, and in doing so came to learn that virtually everything Apple
had for sale, from the memory chips to the cute pointer mouse, had had its
origins in some program wholly or partially supported by US government
money.. The heart of the computer is the microprocessor, and Apple's derived
from Motorola's 680X0, which was developed with much assistance, direct and
indirect, from the Defense Department, as were the DRAM memory chips. The
pointer mouse came from Xerox's PARC center near Stanford (which also
enjoyed government funding). In addition, most computer software at that
time derived from work with government backing."
Prestowitz points out that Apple also assumes the US government is obligated
to stop foreign pirating of Apple's intellectual property and, should supply
chains in the Far East be disrupted, to offer the comforting support of the
Seventh Fleet. "And those supply chains. Are they the natural product of
good old free market capitalism, or does that scalability and flexibility
and capacity to mobilize large numbers of workers on a moment's notice have
something to do with government subsidies and the interventionist industrial
policies of most Asian economies?"
What about those jobs that "aren't coming back"? We're not talking about
simple assembly that costs a bundle per unit in America and mere cents in
China. In the mid-'90s, at the Apple plant in Elk Grove, California, the
cost of building a computer was $22 a machine, compared with as little as $5
at a factory in Taiwan. This is not a dominant factor when the machine sells
for $1,500 and you have costs like transport to figure in. Furthermore,
stricken America is actually becoming a low-wage magnet.
The high-wage, more complicated manufacturing jobs are in microprocessors,
memory chips, displays, circuitry, chip sets and so forth. This is where
America is supposed to have a comparative advantage. So why are Asian
countries supplying the memory chips and microprocessors and displays
instead of the United States? Prestowitz points to government subsidies and
protection for Asian producers, currency manipulation and bureaucratic
pressure on US corporations by Beijing to make the product in China.
So there's nothing irrevocable about the job loss. US workers, taught the
necessary skills, can put things together properly. But if the jobs keep
going away, why would any American lay out the money to learn those skills?
Obama's recent State of the Union speech was a step in the right direction:
calling on business leaders to "ask what you can do to bring the jobs back."
Specifically, he proposed ending tax breaks for US corporations operating
overseas, rewarding US-based production and turning the unemployment
sinkhole into a re-employment system. "These jobs could and would come back
to America," says Prestowitz, "if Washington were to begin to respond tit
for tat to the mercantilist game.. It wouldn't be difficult to make a lot
more of the iPhone in America and to make it competitively if either Apple
or the US government really wanted that to happen."
[Non-text portions of this message have been removed]
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