Foxconn Weighs $7B U.S. Display Plant(bloomberg.com)
bloomberg.com
Foxconn Weighs $7B U.S. Display Plant
https://www.bloomberg.com/news/articles/2017-01-22/foxconn-weighs-7-billion-u-s-factory-with-apple-nikkei-says
82 comments
Please fix your link at the top to http://asia.nikkei.com/Business/AC/Foxconn-considers-7bn-US-...
Your link goes to page 2, this link goes to page 1.
Your link goes to page 2, this link goes to page 1.
Wealth might not be a good measure to classify middle class in China. A two-bedroom apartment easily costs more than a million in Beijing. Annual income might serve better.
[deleted]
> be admitting that it has lost Chinese and Asian markets.
If Asian markets have only fully embraced Apple with the release of the larger iPhone 6/6+ (record sales!), isn't it possible that these markets are still happy with their phones and see no need to update? There hasn't even been a new design since the iPhone 6.
the statistics that I found only talk about sales. This one counts Chinese users and Apple's share actually went up last month (?): http://gs.statcounter.com/vendor-market-share/mobile/china
If Asian markets have only fully embraced Apple with the release of the larger iPhone 6/6+ (record sales!), isn't it possible that these markets are still happy with their phones and see no need to update? There hasn't even been a new design since the iPhone 6.
the statistics that I found only talk about sales. This one counts Chinese users and Apple's share actually went up last month (?): http://gs.statcounter.com/vendor-market-share/mobile/china
Why do you think they would exclusively manufacture components in the US?
If they partner in massive $7 billion high volume display factory that mostly produces display's for Apple, it's unlikely that they go trough the effort to replicate all that special tooling and quality management for other markets.
It likely won't be for Apple exclusively and it's certainly not the only source of displays for Apple. Several suppliers are investing in OLED production in order to meet Apple's supply requirements.
There is trade-off between redundant supply and cutting edge design.
If Apple pushes for all-glass design and fully adopts OLED it it may have to choose between the technological edge and diversified supply-chain.
Sharp (owned by Foxconn) is good candidate and this joint investment speculation supports it. Having joint operation would mean that Apple can be more involved in the process process.
If Apple pushes for all-glass design and fully adopts OLED it it may have to choose between the technological edge and diversified supply-chain.
Sharp (owned by Foxconn) is good candidate and this joint investment speculation supports it. Having joint operation would mean that Apple can be more involved in the process process.
To avoid a 35% import tariff.
The purchasing power arbitrage is disappearing as Chinese wages increase, the yuan appreciates, and real American wages stagnate or decrease together with the dollar.
I think this, along with augmented production systems requiring fewer workers, is why this factory is being contemplated.
I think this, along with augmented production systems requiring fewer workers, is why this factory is being contemplated.
Real American wages increase with the dollar, not decrease.
The dollar climb has boosted American purchasing power dramatically. That is especially important for a nation that imports as much as the US does.
Americans can buy more with their wages than they could prior to the dollar climb. That covers nearly every economy the US imports from, as the dollar has gained against essentially every currency on the planet. Simultaneously, real wage growth has been outpacing inflation for years now and is set to continue to climb at an accelerating pace due to a dramatic decrease in labor slack in the last five years.
The dollar climb has boosted American purchasing power dramatically. That is especially important for a nation that imports as much as the US does.
Americans can buy more with their wages than they could prior to the dollar climb. That covers nearly every economy the US imports from, as the dollar has gained against essentially every currency on the planet. Simultaneously, real wage growth has been outpacing inflation for years now and is set to continue to climb at an accelerating pace due to a dramatic decrease in labor slack in the last five years.
Real American wages increase with the dollar
In general, an increasing dollar does not have effects on the real price of domestic goods, but decreases the real price of imports. Because that is no change and increased purchasing, it results in a real increase in purchasing power which is therefore an increase in real wages. You can buy a larger basket of goods because the imports cost less.
A strong dollar also reduces export, so how does this pan out net-net?
Just saw this, but American consumers are more sensitive to import prices than export, because consumers generally do not directly receive the proceeds of exports.
Net-net, it'd be hard to say what happens long term in the economy because that has a lot to do with long-term changes in the macro environment, if economic growth remains strong consumers will continue to make out better, if the strong dollar ultimate hurts the economy (and that isn't impossible), a weakening economy hurts consumers more than the stronger dollar.
Net-net, it'd be hard to say what happens long term in the economy because that has a lot to do with long-term changes in the macro environment, if economic growth remains strong consumers will continue to make out better, if the strong dollar ultimate hurts the economy (and that isn't impossible), a weakening economy hurts consumers more than the stronger dollar.
How do you see the yuan appreciating from its current point? China has had a very, very large trade/current account surplus for a long time and it doesn't seem like that will change in the near future.
The yuan will appreciate as the domestic Chinese market grows and the economy becomes less export-driven.
But China is currently propping up the value of the yuan (after a long period of artificially keeping it low to boost exports) and are struggling to deal with their net outflow. I just don't see how their domestic consumption is going to make up for the enormous capital account deficit any time soon, and they're now starting to put restrictions on currency trading for regular citizens...
This might be a good prize to offer Trump in exchange for allowing Apple's untaxed offshore profits to be repatriated at a discount rate.
I think this part is the key. They have $billions sitting in Ireland and elsewhere that they can't invest in US-based operations. If they could bring that back in under some sort of deal, that could mean massive investments, acquisitions, R&D, dividends, and a variety of other things I'm not qualified to guess.
Isn't he already going to be doing that? The discounted rate will be 10% compared to the current 35%, but for all companies not just Apple.
https://www.ft.com/content/c715e806-a66e-11e6-8b69-02899e8bd...
https://www.ft.com/content/c715e806-a66e-11e6-8b69-02899e8bd...
Foxconn is building it, not Apple. If Trump wants to encourage it, he's going to have to back all his anti-trade policy with China.
The first words of the article are
> Foxconn Technology Group Chairman Terry Gou told reporters in Taipei the company is considering a joint investment with Apple Inc. for a display manufacturing facility in the U.S.
I think that provides enough of a kernel of truthiness for Trump to declare "Apple is building a $7b factory, it's going to be yuge!".
> Foxconn Technology Group Chairman Terry Gou told reporters in Taipei the company is considering a joint investment with Apple Inc. for a display manufacturing facility in the U.S.
I think that provides enough of a kernel of truthiness for Trump to declare "Apple is building a $7b factory, it's going to be yuge!".
> questioning whether U.S. consumers will be willing to pay much higher prices for equipment of equal quality
There's also the threat of substantially increased tariffs that could make a panel manufactured by a <$3/hour worker cost as much or more than a panel manufactured by a >$10/hour American worker.
There's also the threat of substantially increased tariffs that could make a panel manufactured by a <$3/hour worker cost as much or more than a panel manufactured by a >$10/hour American worker.
Just keep in mind that you will not find $10 workers in a mass factory setting. After you bring in labor unions + healthcare + workers comp + misc. addionals, it easily brings u.s based factory workers to $18+. This does not include the fact that you have to train people and have a plethora of workers to support this (hr, trainers, etc.)
While everyone in the U.S. I think would agree that securing jobs for Americans would be great, you just can't bend the math enough to make it economical.
While everyone in the U.S. I think would agree that securing jobs for Americans would be great, you just can't bend the math enough to make it economical.
> While everyone in the U.S. I think would agree that securing jobs for Americans would be great, you just can't bend the math enough to make it economical.
Why? Everything in that plant is going to be automated anyway.
Quoting a number of jobs at "30,000" is laughable. The only reason Foxconn would employ 30,000 people is because labor is so pathetically cheap in China. In reality, they will probably employ 300-500 so there is zero reason why they couldn't pay $18+ per hour.
The idea that Foxconn would be automated less than a steel mill is absurd:
http://triblive.com/business/headlines/9409484-74/ati-worker... "Only 32 workers are needed to operate Allegheny Technologies Inc.'s new $1.2 billion hot-rolling mill in Harrison, company officials say."
I am all for Foxconn having a plant here. We need to pull some of the semiconductor and electronics manufacturing back to the US for many reasons (keeping the knowledge, lower transport costs, quicker turnaround, etc.).
Unfortunately, large numbers of jobs really isn't one of reasons.
Why? Everything in that plant is going to be automated anyway.
Quoting a number of jobs at "30,000" is laughable. The only reason Foxconn would employ 30,000 people is because labor is so pathetically cheap in China. In reality, they will probably employ 300-500 so there is zero reason why they couldn't pay $18+ per hour.
The idea that Foxconn would be automated less than a steel mill is absurd:
http://triblive.com/business/headlines/9409484-74/ati-worker... "Only 32 workers are needed to operate Allegheny Technologies Inc.'s new $1.2 billion hot-rolling mill in Harrison, company officials say."
I am all for Foxconn having a plant here. We need to pull some of the semiconductor and electronics manufacturing back to the US for many reasons (keeping the knowledge, lower transport costs, quicker turnaround, etc.).
Unfortunately, large numbers of jobs really isn't one of reasons.
If you are going to quote me, please do it in the context of the conversation.
I was making a reply to a comment of $10 am hour vs $3 in China, in which I stated it would be a lot more than $10 for a U.S factory working - amd - I don't think anyone disagrees with securing American jobs, but the math wouldn't make sense.
The initial remark discussion and reply did not relate to Foxconn jobs vs automation.
I was making a reply to a comment of $10 am hour vs $3 in China, in which I stated it would be a lot more than $10 for a U.S factory working - amd - I don't think anyone disagrees with securing American jobs, but the math wouldn't make sense.
The initial remark discussion and reply did not relate to Foxconn jobs vs automation.
I think you may have forgotten that this is a conversation about an article.
The article states:
The article states:
The facility would cost more than $7 billion and may create
an eventual 30,000 to 50,000 jobs, the publication cited
Gou as saying.
Weasel words that I'm almost positive are mostly secondary employment (i.e. a coffeeshop opens by the plant because of the workers there, etc).
These kinds of numbers are also hugely inflated and based on the most optimistic metrics.
source: worked in pr
These kinds of numbers are also hugely inflated and based on the most optimistic metrics.
source: worked in pr
I completely agree with you, but I also think that arguing the per hour per laborer rate is probably not going to be productive or inform the choice of a US factory or a Chinese one.
The more interesting question is how much of the cost of a display on a per display basis is human labor costs and how much is material and facilities costs? 10 people with a fully loaded cost of $500/hr is the same labor cost as 100 people with a fully loaded labor cost of $5/hr. And if they can make the same number of displays per hour does it really matter what the humans are paid?
I think it is completely reasonable to point out that US factories employ fewer employees per $ of production value than Chinese factories do so building a factory here will create fewer US jobs then building the same factory in China would create Chinese jobs.
However I also agree that generally these discussions involve pulling out one piece of the puzzle and creating the appropriate narrative from that rather than to comprehensively analyze the economics of building the displays locally versus in China.
From a policy perspective I expect a company could successfully argue to use money held overseas to pay an overseas general contractor to build a factory locally. If structured carefully this would allow for funds which are currently inactive to be repatriated without incurring a tax obligation by playing to the vanities of the current administration.
The more interesting question is how much of the cost of a display on a per display basis is human labor costs and how much is material and facilities costs? 10 people with a fully loaded cost of $500/hr is the same labor cost as 100 people with a fully loaded labor cost of $5/hr. And if they can make the same number of displays per hour does it really matter what the humans are paid?
I think it is completely reasonable to point out that US factories employ fewer employees per $ of production value than Chinese factories do so building a factory here will create fewer US jobs then building the same factory in China would create Chinese jobs.
However I also agree that generally these discussions involve pulling out one piece of the puzzle and creating the appropriate narrative from that rather than to comprehensively analyze the economics of building the displays locally versus in China.
From a policy perspective I expect a company could successfully argue to use money held overseas to pay an overseas general contractor to build a factory locally. If structured carefully this would allow for funds which are currently inactive to be repatriated without incurring a tax obligation by playing to the vanities of the current administration.
> While everyone in the U.S. I think would agree that securing jobs for Americans would be great, you just can't bend the math enough to make it economical.
I'm not so sure in this particular case.
People who buy Apple products are (usually) already choosing a more expensive product based on fashion and image. I can see Apple increasing the price a bit and having a big marketing campaign about being "Made in the USA."
In general though, I don't know how it's expected to work. Ironically, I think a lot of the people making the biggest fuss about bringing back manufacturing jobs will be the ones least able to buy the products once the prices skyrocket.
I'm not so sure in this particular case.
People who buy Apple products are (usually) already choosing a more expensive product based on fashion and image. I can see Apple increasing the price a bit and having a big marketing campaign about being "Made in the USA."
In general though, I don't know how it's expected to work. Ironically, I think a lot of the people making the biggest fuss about bringing back manufacturing jobs will be the ones least able to buy the products once the prices skyrocket.
That reminds me of when the CEO of Papa Johns was complaining about having to insure his employees via the ACA and the enormous cost the customers would have to bear: An extra 14 cents for a large pizza.
These people just live in a different world.
http://www.forbes.com/sites/calebmelby/2012/11/12/breaking-d...
In many cases, I would gladly pay a few percent more to have jobs back in the US. It has a cascading effect that truly "lifts all boats." A hell of a lot more than corporate tax breaks.
These people just live in a different world.
http://www.forbes.com/sites/calebmelby/2012/11/12/breaking-d...
In many cases, I would gladly pay a few percent more to have jobs back in the US. It has a cascading effect that truly "lifts all boats." A hell of a lot more than corporate tax breaks.
>> In many cases, I would gladly pay a few percent more to have jobs back in the US.
That reminds me of the idea that climate change can be ameliorated by a few people volunteering to recycle or ride bicycles in lieu of structural changes. TL;DR: these fixes don't work without scale.
I remember a big push around retaining manufacturing jobs in the '80s. Everything from clothes to cars to appliances was touted as being Made in America. By my recollection, the cross-industry marketing spend must have been fairly significant given its prevalence. But it apparently didn't work, and now these products are in general not made in America.
My assumption is that industry tried getting people to buy stuff based on place of manufacture and it turned out that given a choice between "Made in USA" or a few dollars off, most people chose the cost savings. Most people weren't in a position to spend more of their limited funds to save a stranger's job. If this was indeed what happened, I suspect this effort is doomed again.
That reminds me of the idea that climate change can be ameliorated by a few people volunteering to recycle or ride bicycles in lieu of structural changes. TL;DR: these fixes don't work without scale.
I remember a big push around retaining manufacturing jobs in the '80s. Everything from clothes to cars to appliances was touted as being Made in America. By my recollection, the cross-industry marketing spend must have been fairly significant given its prevalence. But it apparently didn't work, and now these products are in general not made in America.
My assumption is that industry tried getting people to buy stuff based on place of manufacture and it turned out that given a choice between "Made in USA" or a few dollars off, most people chose the cost savings. Most people weren't in a position to spend more of their limited funds to save a stranger's job. If this was indeed what happened, I suspect this effort is doomed again.
There was a photo on reddit /funny a couple of weeks ago that had an orange plastic hose trigger with "made in USA" proudly stamped in the plastic. They'd opened up the plastic, and on the metal housing below was "made in China"...
edit: found the photo: http://www.strangefarmer.com/images/content/184933.jpg
edit: found the photo: http://www.strangefarmer.com/images/content/184933.jpg
If you really believe the majority of people think that way then try to explain Walmart.
Everybody will say they want jobs back here, but given two identical products made in China and the USA most people will pick the cheaper one.
Everybody will say they want jobs back here, but given two identical products made in China and the USA most people will pick the cheaper one.
In some cases it is long-run cheaper to buy the cheaper choice, other times it turns out cheaper in the long run to buy the expensive choice --however, this information is not easy to ascertain at the time of purchase and takes too much time for the average shopper to take into consideration when making a purchase.
I'll pay for expensive jeans which will last over the cheap jeans which don't last a year. On the other hand, the fashion industry has a lot to answer for for making people always wanting the new and the trendy, even when it impacts the environment negatively (one pair of boots lasting 10 years vs one lasting a year, for example).
I'll pay for expensive jeans which will last over the cheap jeans which don't last a year. On the other hand, the fashion industry has a lot to answer for for making people always wanting the new and the trendy, even when it impacts the environment negatively (one pair of boots lasting 10 years vs one lasting a year, for example).
I don't believe the majority of people think that way, or at least when it counted: in the 80s and 90s. Now, a lot of people have to buy from China because they can no longer afford the good stuff, even if it was available.
No. People like my parents buy iPhone because it works and because it's a serious phone. Nobody associates iPhone with status. It's a ubiquitous commodity device.
Are you seriously claiming Apple products aren't significantly higher priced than similar alternatives?
I don't even know why I'm replying here if you really don't know your parents could have bought an Android device that also works and is also a "serious phone" for half the price.
I don't even know why I'm replying here if you really don't know your parents could have bought an Android device that also works and is also a "serious phone" for half the price.
Nope. Don't think I made that claim anywhere. What Android device could they have bought for half the price?
A colleague of mine bought a macbook pro for nearly $3k. When he found out about the touchbar, he cancelled the order and looked for other options. I pointed him at a decent Thinkpad X1 Carbon for about $2000, at which point he said "no, that's so expensive!"
When pushed on the point that he just willingly spent more than that on the apple laptop, he said "yeah, but when you use one, people know you're using a quality laptop". Yes, to this man at least, status was worth almost a grand.
When pushed on the point that he just willingly spent more than that on the apple laptop, he said "yeah, but when you use one, people know you're using a quality laptop". Yes, to this man at least, status was worth almost a grand.
And by manufacturing essential parts exclusively in US where costs are higher, Apple would turn it's back to Chinese and Asian markets, essentially cutting it's growth potential.
Both of those indicate an increase in price though, which may dampen demand.
The original article is much more informative. Note is has multiple pages.
http://asia.nikkei.com/Business/AC/Foxconn-considers-7bn-US-...
http://asia.nikkei.com/Business/AC/Foxconn-considers-7bn-US-...
I wonder what Trump's concessions would be for this plant. He criticized apple directly in his campaign, and this plant would be a big win for him.
That's a good question but it's not necessarily something Trump controls directly (nor should he), it is more likely up to the local government/state where the plant is located who could work on incentivizes. That's what happened with the Carrier deal in Indiana largely because that was Pence's state and he could help directly.
This is how it happens in China too. The article mentions that a Chinese city would help invest $8.7 billion, rather than the central state.
> On Dec. 30, Gou announced that Osaka-based subsidiary Sakai Display Products and the southern Chinese city of Guangzhou would jointly invest 61 billion yuan ($8.77 billion) in an advanced panel facility.
And Pennsylvania trade office is working with Foxconn on another plant.
> In addition to the proposed display facility, Gou said Foxconn plans a new molding facility in the U.S., with the state of Pennsylvania a possible site following investment discussions with local officials. A representative from the Pennsylvania trade office attended Foxconn's party Sunday.
It's typically not the exec branches job to set up those deals. But it is great that Trump is willing to get on the phone to help get the deals done, that's seems unprecedented in recent years.
Most likely Trump would be focusing on the trade policy more generally or working with congress to reduce federal regulations. The Dept of Commerce could help promote the idea of operating in America. As well as via the Treasury Dept to simplify the tax code. And Congress to reduce taxation. Again this would apply to all companies, or whole industries, and (most likely) not give any individual companies special benefits in return for opening up shop.
This is how it happens in China too. The article mentions that a Chinese city would help invest $8.7 billion, rather than the central state.
> On Dec. 30, Gou announced that Osaka-based subsidiary Sakai Display Products and the southern Chinese city of Guangzhou would jointly invest 61 billion yuan ($8.77 billion) in an advanced panel facility.
And Pennsylvania trade office is working with Foxconn on another plant.
> In addition to the proposed display facility, Gou said Foxconn plans a new molding facility in the U.S., with the state of Pennsylvania a possible site following investment discussions with local officials. A representative from the Pennsylvania trade office attended Foxconn's party Sunday.
It's typically not the exec branches job to set up those deals. But it is great that Trump is willing to get on the phone to help get the deals done, that's seems unprecedented in recent years.
Most likely Trump would be focusing on the trade policy more generally or working with congress to reduce federal regulations. The Dept of Commerce could help promote the idea of operating in America. As well as via the Treasury Dept to simplify the tax code. And Congress to reduce taxation. Again this would apply to all companies, or whole industries, and (most likely) not give any individual companies special benefits in return for opening up shop.
I think we need "free trade zones" like they have in some asian countries. If you have a mfg business in the zone, you pay zero or reduced taxes on your produced goods and inventory. Maybe throw in some subsides to help comply with regulations as well. These zones can be spread all throughout the country in economically depressed regions.
These programs should be open to all companies, not just the Teslas and tbe Apples of the world. Governors and Presidents should not intervene on behalf of a single company. That isn't capitalism.
These programs should be open to all companies, not just the Teslas and tbe Apples of the world. Governors and Presidents should not intervene on behalf of a single company. That isn't capitalism.
I'm more in favor of a federalist approach instead of specialized city states. Basically less federal oversight and more state oversight (besides maybe environmental stuff which crosses state lines, or give money to other states based on your carbon output). That way if you want to live in a euro-style social services high tax area you can move to Washington. Or if you want mixed go to New York. Market oriented people can go to Texas - for example. States can set up voluntary cross border zones so the regulations and taxation is more consistent for industries that are more disparate. Cross state trade wouldn't be regulated and federal law can focused on national security, foreign trade, currency, and tax collection.
That way if something does work better (like ending the drug war) in one state, there will be a ton of data to reference and eventually good ideas will be adopted by other states.
States like California are big enough to be their own small countries anyway.
This was basically the idea when the US was founded but the federal government has only grown and every 4yrs the presidency becomes more important and given responsibility for everything. So no wonder the exec branch is growing in power - the citizens keep expecting them to be responsible for everything. It'd also protect against Donald Trump's from happening, the whims of one man should never be so influential.
That way if something does work better (like ending the drug war) in one state, there will be a ton of data to reference and eventually good ideas will be adopted by other states.
States like California are big enough to be their own small countries anyway.
This was basically the idea when the US was founded but the federal government has only grown and every 4yrs the presidency becomes more important and given responsibility for everything. So no wonder the exec branch is growing in power - the citizens keep expecting them to be responsible for everything. It'd also protect against Donald Trump's from happening, the whims of one man should never be so influential.
If it's anything like the Carrier "deal" he'd throw them bags of cash to create a handful of jobs.
Your information is wrong.
Carrier didn't get bags of cash to create a handful of jobs.
It's a thousand jobs at an average of $31 per hour in wages, not to mention benefits.
It's up to $7m in incentives spanning ten years.
The jobs are worth about $850 million to $1 billion in total compensation over ten years. The $7 million represents less than 1% of that value. The income taxes, sales taxes, local spending, etc, etc, etc. is worth drastically more to that community and the state than the tiny $700k per year incentive.
Carrier didn't get bags of cash to create a handful of jobs.
It's a thousand jobs at an average of $31 per hour in wages, not to mention benefits.
It's up to $7m in incentives spanning ten years.
The jobs are worth about $850 million to $1 billion in total compensation over ten years. The $7 million represents less than 1% of that value. The income taxes, sales taxes, local spending, etc, etc, etc. is worth drastically more to that community and the state than the tiny $700k per year incentive.
You have many incorrect points.
Firt of all, it's much less than a thousand jobs if you discount the white collar managerial jobs that were never planned to be relocated. The number of overall jobs saved is around 800.
Of those 800, a significant number of them will be eventually automated or are already in the works. So your ten year figure is, in my opinion, a bit overly optimistic.
It was a symbolic show. Even if Trump did a Carrier-type deal every month for his entire presidency, it would be far less than one percent of jobs lost due to automation and offshoring in the past 20 years.
Firt of all, it's much less than a thousand jobs if you discount the white collar managerial jobs that were never planned to be relocated. The number of overall jobs saved is around 800.
Of those 800, a significant number of them will be eventually automated or are already in the works. So your ten year figure is, in my opinion, a bit overly optimistic.
It was a symbolic show. Even if Trump did a Carrier-type deal every month for his entire presidency, it would be far less than one percent of jobs lost due to automation and offshoring in the past 20 years.
It's all smoke and bullshit. Hype up the "creation", completely ignore the general strategy of Carrier to shift jobs out of the country.
Even Forbes thinks it's bullshit: http://www.forbes.com/sites/eriksherman/2016/12/04/trumps-ca...
Even Forbes thinks it's bullshit: http://www.forbes.com/sites/eriksherman/2016/12/04/trumps-ca...
Not to mention Carrier plans to use the money to further automate the plant:
http://www.newsmax.com/Finance/StreetTalk/united-tech-donald...
http://www.newsmax.com/Finance/StreetTalk/united-tech-donald...
But the same company is planning on automating away jobs in that plant and closing the Huntington one. So it's not 1-to-1 gains here. The reality is Carrier is placating an administration for larger contracts (parent company of Carrier).
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Or you could wonder how the Chinese government would react to Foxconn's intentions to open a factory in the US, and not in China. Foxconn gets lots of concessions from the Chinese government. It's easy for Beijing to twist Foxconn's arm a little bit, just enough to reconsider a US investment. Or maybe they will allow it as some kind of sop to the Trump administration.
How long before those jobs are done by robots?
https://www.engadget.com/2016/05/25/foxconn-replaces-60000-h...
https://www.engadget.com/2016/05/25/foxconn-replaces-60000-h...
This part of the article I find amusing: Gou told reporters according to Reuters. “There is such a plan, but it is not a promise. It is a wish.”
So much for Trump's claim that the 50 billion investment is a guarantee. This is why I despise anyone who aids him in making up stuff. It gives false hope when we need to buckle down and realign our economy and government.
So much for Trump's claim that the 50 billion investment is a guarantee. This is why I despise anyone who aids him in making up stuff. It gives false hope when we need to buckle down and realign our economy and government.
According to the article, this plant would employ 30k-50k people. The secondary effects of these jobs would be equally massive. While I would prefer an American company operating the plant, merely employing this many people would be a serious boon.
But Foxcon is pushing very hard on replacing most of its workers with robots. The numbers will probably be more like 3k-5K, not 30k-50k. And they will be high-tech jobs that most of those millions of unemployed factory workers in our country couldn't qualify for.
I do not understand why such a company would not go for central European company where it would get the price for quality ratio much better than in the US. I know that building a factory by Foxconn is probably a way to pay building tax, but the question is if that outweighs revenue.
(1) >> "rising demand for larger displays makes domestic U.S. production a better solution than shipping from China"
Europe would likely cost more than less for shipping.
(2) >> "may create an eventual 30,000 to 50,000 jobs"
Apple is a US company and likely trying to earn some goodwill with Trumps and the public. Foxconn is also looking for good will and to hedge against a possible trade war.
(3) >> "Apple is willing to invest in the facility together"
Speaks for itself.
Europe would likely cost more than less for shipping.
(2) >> "may create an eventual 30,000 to 50,000 jobs"
Apple is a US company and likely trying to earn some goodwill with Trumps and the public. Foxconn is also looking for good will and to hedge against a possible trade war.
(3) >> "Apple is willing to invest in the facility together"
Speaks for itself.
The EU regulations and tariffs alone would be too much of a headache, especially if the phones and/or components are eventually exported outside the EU. A better idea would be to setup a factory in Eastern Europe.
North Africa is another great option in my opinion: e.g., Morocco or Tunisia. Cheap skilled labor with a growing economy, yet still close to Europe and (relatively) North America.
North Africa is another great option in my opinion: e.g., Morocco or Tunisia. Cheap skilled labor with a growing economy, yet still close to Europe and (relatively) North America.
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There's too much red tape.
Central Europe, unlike central America, does not have Trump as its champion.
Is Trump popular in Central America? I thought his whole anti Mexico spiel would make him very unpopular.
But, uh, I thought manufacturing jobs were never coming back stateside. So strange...
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>"In the future they may be paying some $500 more for [U.S.] products, but those do not necessarily work better than a $300 phone," he said, after urging U.S. authorities to provide concessions on land and electricity to facilitate Foxconn's manufacturing operations.
>Despite such U.S. investment, China remains a key market and the primary manufacturing base for Apple and Foxconn, and neither company is leaving anytime soon.
>"Yes, we will continue to add to our investments in China," Gou told reporters. "China is the world's biggest market, and why should we turn down the biggest market?"
>Meanwhile, although Apple's sales in the greater China region declined 30% year-on-year through the end of the September quarter, chief executive Tim Cook remained optimistic about the Chinese market.
This is another piece in the puzzle. For Apple, defending North American market is essential. Starting manufacturing in US might be admitting that it has lost Chinese and Asian markets.
Is China the biggest market as Gou told? For many consumer products and electronics China is the biggest or becoming the biggest market. Surprisingly many products are released first China only.
http://money.cnn.com/2015/10/14/news/economy/china-middle-cl...
>China's middle class is now the biggest in the world, and growing much faster than America's, according to research by Credit Suisse. There are 109 million Chinese with wealth of between $50,000 and $500,000.