Tuesday, January 24, 2012

How badly do we want to produce products domestically? Not that badly.


This post is written from my perspective as a United States citizen, but the same situation applies to some (not all) of my non-U.S. readers.

If you have been around for any length of time, you realize that there has been a tremendous shift in manufacturing over the last couple of decades. Even in the 1970s, people would complain about the fact that so many products, once manufactured in the United States, were (in the 1970s) being manufactured in Japan.

Of course, those days are long gone. Now when one thinks of manufacturing, one often thinks of China - although there are other countries, ranging from Mexico to Bangladesh, that provide manufacturing services for the products that the First World loves.

And people don't like it, and express their views loudly. Both Republicans and Democrats sometimes champion the "Made in America" slogan, sometimes because of the negative impact that foreign manufacture has on jobs and wages in the United States, sometimes because of the loss of manufacturing prowess that occurs, and sometimes because of foreign policy/defense concerns ("do you want a significant portion of our American economy to be dependent upon THEM?").

But even if the wage issue were to suddenly go away, I suspect that we wouldn't want manufacturers to return to the United States. Even if pollution issues were to suddenly go away, I suspect that we wouldn't want manufacturers to return to the United States. Yes, I know that we say that we want U.S. manufacturing plants, but we really don't.

This hit me when I was reading this New York Times article. While Charles Duhigg and Keith Bradsher's article talked a lot about Apple and iPhone manufacture, the issues that were discussed go well beyond Apple.

The thing that hit me while reading the article was this episode that was recounted:

New screens began arriving at the plant near midnight....A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames.

For the record, Foxconn denies that the episode took place as stated:

“Any worker recruited by our firm is covered by a clear contract outlining terms and conditions and by Chinese government law that protects their rights,” the company wrote. Foxconn “takes our responsibility to our employees very seriously and we work hard to give our more than one million employees a safe and positive environment.”

The company disputed some details of the former Apple executive’s account, and wrote that a midnight shift, such as the one described, was impossible “because we have strict regulations regarding the working hours of our employees based on their designated shifts, and every employee has computerized timecards that would bar them from working at any facility at a time outside of their approved shift.” The company said that all shifts began at either 7 a.m. or 7 p.m., and that employees receive at least 12 hours’ notice of any schedule changes.

OK, let's give Foxconn the benefit of the doubt, and assume that something like this occurred:

Plant management was informed that new screens would begin arriving at the plant near midnight....At 7:00 pm, foremen contacted 8,000 workers inside the company's dormitories and told all of them that they would begin working on a new project the next morning. Upon reporting to work at 7:00 am the next day, each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames.

OK, now that we have the politically correct version of the manufacturing process, imagine that happening in Fontana, California, or in Toledo, Ohio.

First off, the assumption that U.S. workers would even consent to live in a dormitory in the 21st century is laughable. The employee had better be paid enough to get an apartment, and that apartment had better have satellite TV and broadband.

Second off, while it certainly happens, the whole idea of contacting an employee one evening and telling him/her to start a new project the next morning is hard to imagine. Especially when the same process is repeated 8,000 times over. Heck, in the United States it would probably take a week to get all the FOREMEN up to speed to make the necessary contacts. And who knows how long it would take to get all of the staff in. "I have jury duty." "I have to get my daughter to school." "I have the sniffles."

I can tell you what would happen if anyone were to try to mobilize 8,000 employees at a United States plant within 12 hours. What would happen? The local government's department of labor/employment would be flooded with grievances, the press would have a field day about the inhumane treatment of labor, and government officials would end up demanding that the company stop its "slave labor" practices.

Which is why no American company would dare pull a stunt like this at one of its U.S. factories. Instead, they seek their laborers elsewhere - it's a lot easier.

Now one can debate the morality of the situation. Perhaps you feel it's best that United States workers are NOT treated in this way. Or perhaps you feel that American workers had best "suck it up" and deliver goods just like they used to in the 1890s.

But regardless of whether such work practices are moral for U.S. workers, the truth of the matter is that it ain't gonna happen. And until the day that Chinese workers feel comfortable enough to call in sick after a late-night national sports event, we have to take it for granted that the bulk of U.S. product manufacturing is going to take place outside of the U.S.
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