After numerous reports of abuses of workers’ rights at Foxconn factories in China, where Apple products including the iPhone and iPad are assembled, many have called for the company to have these made in the US. The response from Apple CEO Tim Cook (and others — Foxconn also assembles products for companies including Samsung, Nokia and Amazon) has been that they have considered/are considering the possibility, but that is just not likely to happen.
The reasons given are not only costs — workers at Foxconn are paid less and work under far more stringent conditions than US workers would (rightly) tolerate– but also suppliers for parts. Many of the components needed to make the tech products Americans covet are also made overseas.
Despite all this, Google has just introduced a new new Nexus Q streaming home media player that was made in the USA — 15 minutes via car from its Mountain View, California, headquarters. The New York Times notes some of the reasons for what is a very small, but significant, decision:
Rising labor and energy costs have made manufacturing in China significantly more expensive; transportation costs have risen; companies have become increasingly aware of the risks of the theft of intellectual property when products are manufactured in China; and in a business where time-to-market is a competitive advantage, it is easier for engineers to drive ten minutes down the freeway to the factory than to fly for 16 hours.
Google executives and engineers are not trying to start any sort of “crusade” but see having a product made in the US as an experiment.
The Nexus Q is meant to be a “bridge between Android tablets and smartphones, and your TV,” by linking them to the Internet cloud to stream video, programs and such. The components for the Q come from the Midwest, where Google found a company to make its metal base, and from Southern California, where a supplier for various molded plastic components was found. Some parts, like semiconductor chips, posed “more of a challenge”; even though the chips may be made in the US, they are often sent to Asia to be assembled with other electronic components.
“Reshoring” manufacturing to the US is quietly, if very slowly, happening. Wage increases for workers in China — $3 to 6 an hour instead of 58 cents — make a difference. Harold L. Sirkin, a managing director at Boston Consulting Group, says that, in April, “fully one third of American firms with revenue greater than $1 billion were either planning or considering to move manufacturing back to the United States.” Such a reversal could mean two to three million jobs would be moved back to the US.
Drew Greenblatt, president and owner of Marlin Steel Wire Products (a Baltimore-based company that manufactures in the US, using automation technologies), even says that parts can be made more quickly in the US and that “the quality if better.” He also noted that “the companies who are investing in technology in the USA are more nimble and agile.”
Google is not planning to make the Nexus Q’s “Made in the USA” status part of its marketing campaign for the device. The company’s engineers do emphasize that there is a “significant advantage to have design located close to manufacturing, especially as more companies closely integrate their software with their hardware.”
Might it be that people are starting to realize, just because you can fly to China, and you can Skype with co-workers across the Pacific and you can fly back all in a few days, there is something to be said for being able to get in your car — ride your bike, why not — a few miles down the road and talk, face to face, with the people who are making the products you plan to offer, and be back home later to eat dinner with your kids?
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