Offshoring Puff Piece

[SteelCrysis]

http://www.extremetech.com/computing/221...-in-the-us
A pro-offshoring puff piece. Tax incentives have failed miserably at bringing back U.S. manufacturing. Tim Cook could make all the U.S. die and tool makers he wants with Apple's obscene profit pile. It even cites this article as support without bothering to even read the headline: http://www.theguardian.com/technology/20...us-workers

Chinese labour accounts for a tiny proportion of the company's costs: $7.10 for each phone, which accounts for about eight hours of assembly. So what would it cost to make the same iPhone in America? The Cresc team took the average wage in the US electronics industry of $21 per hour and calculated that the total production cost would increase to $337.01. That is a big jump – but it still leaves Apple with a gross margin of 46.5% on each iPhone – a level that Cresc's Sukhdev Johal estimates would probably still make it the most profitable phone in the world.

So: two models of making one of Apple's most popular products, and two models for distributing the profits. The made-in-America model still leaves the California giant with a profit margin that most companies can only dream of, but would create hundreds of thousands of manufacturing jobs in the US to boot. That may strike you as laughably naive, but it's more akin to enlightened self-interest: just think of the way Henry Ford raised wages so Ford workers could buy his cars.

The made-in-China model, on the other hand, has carried no such social benefits, either in Apple's home country or in the People's Republic. Last year, Apple built up cash reserves of $100bn – more than the US government. Indeed, it was so much money that the company was stumped how to dispose of it. Tim Cook, who is now CEO of Apple, announced a few weeks ago that he would begin buying back shares and paying dividends to investors. Among other people who benefited from this arrangement was Cook himself, who was awarded $376.3m in Apple stock when he took over last year. That pile of shares is now valued at around $634m. The people who win from the made-in-China model are big investors and top executives.

In the case of Apple, outsourcing manufacturing is not about keeping costs to customers down – they are still paying huge prices for the latest handset or tablet computer. Nor is it about the company's survival: it would still do tremendously well were it to bring those factories back home. No, in the case of Apple, moving jobs offshore has become a way of directing ever more money to those at the top of American society.

This is not just my conclusion, or that of the Cresc team; it is backed up by the Asian Development Bank. In a 2010 study of an earlier model of the iPhone, ADB researchers concluded: "It is the profit maximisation behaviour of Apple rather than competition that pushes Apple to have all iPhones assembled in the PRC."

[BoFox]

That is a big jump – but it still leaves Apple with a gross margin of 46.5% on each iPhone – a level that Cresc's Sukhdev Johal estimates would probably still make it the most profitable phone in the world.

So: two models of making one of Apple's most popular products, and two models for distributing the profits. The made-in-America model still leaves the California giant with a profit margin that most companies can only dream of, but would create hundreds of thousands of manufacturing jobs in the US to boot.

Capitalist Apple screwing Capitalist America over in the ass...  way to go capitalism, biting America right back in the ass!

Last year, Apple built up cash reserves of $100bn – more than the US government. Indeed, it was so much money that the company was stumped how to dispose of it. Tim Cook, who is now CEO of Apple, announced a few weeks ago that he would begin buying back shares and paying dividends to investors. Among other people who benefited from this arrangement was Cook himself...

Ouch, just one company taking up way more $$ than the debt-riddled US gov't - while the gov't taxes companies like twice as much as Canada does, and still cannot figure out how to resolve its own debt?  All the while, just one damn company is putting the gov't to shame while hardly giving anything back to its own home country except for the rich investors. 

Tax incentives have failed miserably at bringing back U.S. manufacturing.

Incentives just for the rich, and the rich alone (that is, the corporate's bottom line)?  Ugh, the gov't needs taxes to take care of the debts.  How about subsidizing the workers instead, like Rollo's stupendous idea that will probably never switch a light bulb on in the US Capitol that needs its wiring re-worked in the first place?  Then, American workers would be able to buy more shares of Apple (better distribution of wealth in the US), provide better college education for their kids, and keep America's future bright..  rather than contribute to the food stamp welfare US society of the future - only to become a spitting mirror image of China once the government goes bankrupt.

Better 1 loss (subsidizing the workers) than 2 losses (tax incentives for the ultra-rich mega-corporations PLUS food stamps and welfare for all the laid-off workers).

[RolloTheGreat]

Like I told Rollo when he first announced his hare-brained scheme, the rich bastards already screwed over the poor by sending the factories and labor/call centre jobs overseas.  There is no way known that they will reverse this decision until nobody is able to purchase their goods anymore because they are too poor to.

My ideas are better than the government's:

https://en.wikipedia.org/wiki/Bring_Jobs_Home_Act

Wow, a whole 20% of the moving costs and then labor that costs 100X more when they get here- gosh what will industry do?!

Still think my idea to raise import tariffs, and offer subsidies for domestic employment would work.