Why Apple doesn’t manufacture iPhones in Rhode Island
January 22nd, 2012 at 2:05 pm by Ted Nesi under Nesi's Notes, On the Main Site
An extraordinary story in today’s New York Times:
[A]s Steven P. Jobs of Apple spoke, President Obama interrupted with an inquiry of his own: what would it take to make iPhones in the United States?
Not long ago, Apple boasted that its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas.
Why can’t that work come home? Mr. Obama asked.
Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said ….
URI’s Len Lardaro reminded me last week that 2012 marks the 25th anniversary of the year Rhode Island stopped being a manufacturing economy. Manufacturing output in Rhode Island has stayed basically steady since 1997, but manufacturing employment has plunged by nearly half. Providence’s workers faced more risk from the rise of China than their peers in any other region of the U.S. save one.
All those worrisome facts came to mind as I read The Times’ stunning article on why iPhones aren’t made in America. The answer is, if anything, more troubling than I’d thought before – the migration of the entire global electronics supply chain to Asia has put the American economy at a deep disadvantage that will be very, very hard to overcome.
Rhode Island’s congressional delegation talks a lot about bringing manufacturing back to the U.S., and each of its members will find some evidence for their views. Senator Whitehouse says China pursues unfair trade practices; that’s part of it. Congressman Langevin says Rhode Islanders aren’t being educated and trained properly; that’s part of it. Congressman Cicilline says the federal government doesn’t support its manufacturing sector the same way China does; that’s part of it.
But reading The Times piece – which you should do – makes their proposals seem awfully inadequate to the scale of the challenge.
Tags: apple, china, david cicilline, economy, iphonea, jim langevin, jobs, manufacturing, sheldon whitehouse, work force
Nesi's Notes covers politics and the economy in and around Rhode Island for WPRI.com. (Twitter: 
The heart of the NY Times article is this: “The Chinese government had agreed to underwrite costs for numerous industries, and those subsidies had trickled down to the glass-cutting factory. It had a warehouse filled with glass samples available to Apple, free of charge. The owners made engineers available at almost no cost. They had built on-site dormitories so employees would be available 24 hours a day.”
Fair trade versus subsidized trade… importing such products should carry a heavy penalty tariff. Slap a $200 fee on all those iPhones and see how fast the manufacturing comes back here. The United States is still by far the largest manufacturing economy in the world, and when measured against per capita output – the U.S. has only 4% of the world’s population, the output is staggering – as is Germany’s.
I wouldn’t go as far as to call Apple unpatriotic, because it sounds too pat, but, like companies that import unfair trade raw materials like cocoa, tin, gold, diamonds, and so forth, Apple trades in dehumanizing, near slave wage labor. Try to buy something from a country at least approaching fair trade if you cannot buy American.
Spoken like a true boss
I find the people of Rhode Island myopic, provincial, show lack of insight, emotionally gifted, have poor judgment, are ethically challenged, and are morally bankrupt.
I personally would love the option to buy electronics or any goods that were manufactured in the US. I’ll pay more to know that someone is getting a fair pay to put together my disposable crap. Unfortunately we live in a world of FOXCON, where people around the world are okay with a Chinese business man oppressing and exploiting his own people, then moving on to exploit those in the Philippines and Mexico. I would imagine it’s only a matter of time before he moves some operations to Africa, of course that might not be to PC.
Why don’t we make Iphones here? Laborers in China are willing to work endless hours for little pay and even sleep in the factory. Engineers are willing to work for pennies on the dollar. Of course, one would imagine they don’t have mortgage-sized student loan debts hanging over their heads, either. People in this country said thanks but no thanks to those living standards a century ago.
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You could make the same product here, sell it at the same price, or a little less… And make a huge profit… It all comes to corporate greed. Corporate America throws out organized labor as the problem, and stirs it with the Koop-aid and most drink it and blame the $ 18.00 an hr person.
[cue spooky music] What is it with you people? (An Occupier, I’m guessing) What is it that makes you skip over the obvious answers, the ones that are well-documented, and the ones that the corporations themselves give… toss all that out and inform us that its some “evil greed conspiracy”…?
It’s so cliche, it hurts to even listen to.
So, you’re actually trying to tell us that paying 1000 employees .25/hr or paying 1000 employees 18.00/hr makes NO DIFFERENCE?
What reality do you live in?
I am in the electronics business. For those of you think this is just because the chinese subsidize electroncis you are crazy.
Running a business in the US (and especially RI) is a very expensive situation.
If we don’t compete, then there will be no jobs. We can say “no” to working conditions and end up with no work at all.
Those of you that suggest it is greed are obviously not running a business in the state of RI.
Try it and let me know how it turns out….
The US has the highest corporate taxes in the industrialized world. We have a Federal government that not only demands more taxes, but demands them quarterly, and requires almost 70% more paperwork. (Then add the state and local governments to the mix.) You may be forced to accept a parasitical union, oppressive and nonsensical environmental regulations, and smelly hippies that live in the park across the street and tell everyone how much they hate you, yet can’t stop using your bathroom.
Why in the world would any business want to stay here? And every business that leaves, the Left screams more about “outsourcing” and “shipping jobs overseas”… but the reason they are leaving is YOU. You should try actually being nice to them for once, and making their lives easier. It’s an enormous pain to move an entire company overseas; things must be at least that much better where they’re going… but you don’t ever think about what made them leave, just all that tax money you’re missing. Greedy Progressives.
But you see your analogy is a double-edged sword. If more US companies hired on people with more than a substandard of living wage, the tax base increase thus alleviating the “corporate” taxes. As you state above in a replay about $.25/hr versus $18./hr, there is also the hidden logistics fee involved in packing, shipping to a container yard, loading on a ship, shipping across an ocean (Workers/Captains/Food/and Fuel), unloading said ship into another container yard, shipping to a warehouse, inventory, ect, ect. Where a US manufacturer could eliminate 75% of that process and overhead. The more workers you lose to oversea manufacturing and call centers, is less taxes that people can afford, less luxury spending, less property to tax. So who in fact is left to tax? Those that have IE. the Business and corporations who have sold out, those that they seek to peddle their wares. So if everyone in this country, just stopped buying the newest shiniest I-device until their practices change we could have a great economic recovery. But in the mean time just stay in your state of contentment blaming everyone else, and usher in the Great Peoples Republic of The Chinese Americas.
How many iphones do you think fit on a huge cargo ship?
That probably comes to about $1 a phone.
The US has been losing manufacturing jobs overseas since the 1960′s.
It’s only lately become an issue in this state because the public unions are being taught an economics lesson which is: Without a healthy private sector public union members can’t retire early and get raises every year.
Jim,
Clinton and Greenspan believed that a manufacturing base could be replaced with Information Technology and financial services. For decades, especially since the 1990′s, we’ve been feasting off the seed corn in the US not realizing that IT and financial services are the result of a solid manufacturing base, not the other way around.
It will take a long time to get back on track.
Agreed.
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