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View Diary: Apple and Unbridled Capitalism (248 comments)

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  •  Hard to tell (4+ / 0-)
    Recommended by:
    Dburn, Food Gas Lodging, FG, sagesource

    "How much less money would Apple make if those 400,000+ manufacturing jobs were based in the USA.  A billion less? Two? FIVE? "

    You presume that if Apple's new U.S. labor costs (for all the various components) rise 15x or so, they will continue to both sell at current prices and that sales will remain at current levels, subsidized (for the time being) out of retained earnings. Instead, it's at least equally likely that iPads would now cost noticeably more and sell in greatly reduced numbers. So, someone ought to run those numbers and get back to us.

    •  Is it reasonable (9+ / 0-)

      to assume even the doubling of labor costs while leaving manufacturing in China can completely disrupt a companies balance sheet? Aren't we already subsidizing current prices through slave labor?

      Or is it more realistic to say unreasonable profits at the expense of labor will no longer be tolerated? That Apple, Dell, HP and even Nike who's profit margin is in the 1000's% is ridiculous and provides no benefit to the majority of people.

      •  Undefined (3+ / 0-)
        Recommended by:
        markw, Food Gas Lodging, sagesource

        I don't have have the slightest idea of how Apple arrives at its prices. Which is why I asked for someone (not you, apparently) to provide some hard numbers.

        More to the point, I don't want to work in one of these factories, but "slave labor" does not seem to me a precise use of terms. As for "reasonable" and "ridiculous" in regard to prices and profit margins, I gave up on the "just price" shortly after Aquinas. I didn't see a good way, or a competent authority, to set those boundaries by fiat. On the whole, markets eventually make these decisions. One instance of the working of the market in labor is when Chinese workers mount a protest over wages and working conditions. It would seem that such protest is, in fact, having an effect. Eventually, I imagine the Chinese will work out something they can all live with.

        If that's too slow for you, then you have the option of not buying from companies you dislike. They just have to make products that people want to buy, not to meet some abstract test of "benefit to the majority of people." Me, I'm looking forward to the iPad3. One of the things my purchase of that tablet will do is to help provide employment for people in China who, until recently, lived in much more difficult circumstances, under the domination of others who were absolutely certain of what qualified as beneficial to the majority and of how things ought to be priced, not to mention their use of genuine slave labor.

    •  Information on retail pricing changes (7+ / 0-)

      if the product was made here. First off, Apple may have a lead in iPads, but they cannot, as a public company, start a trend with manufacturing at home , when their competitors are underpricing them using the Android system.

      Also FoxxConn installed 10,000 robots this year with a goal of 1 million in 2 years.  That means labor content will be measured in machinery depreciation. If Apple were to to lead on this USA made issue, it would be committing corporate suicide. It's not only the Gross margin compression, as they have very little leeway to raise prices. If anything with the Kindle Fire being "good Enough" for the a large portion of consumers, Apple will be forced to compress it's gross margin more and/or offering cheaper versions of all their products which almost dictates going offshore.

      Apple used to manufacture here and with Steve at the Helm, the factories had the SJ look and worked well enough, that they had no peer. Then he was fired, no product innovation took place in the interim 12 years except the switch to a Power PC chip. By the time he came back on, China had turned from a junk manufacturing economy to a far more sophisticated one mainly by stealing Technology from their customers and the exploitation of cheap labor.

      The Apple product line carried a huge premium even when he came back . Eventually that premium was reduced to a marginal amount which drove Apple form less that a 4 Billion market Cap in 1997 to a 400B market cap in 2012.

      Wall Street has as much to do with this as the design and marketing companies. Companies  get dinged massively if they manufacture here. A 27 year old Steve Jobs wouldn't have given a shit. A more mature SJ at 42 did give a shit.

      Look at Caterpillar , the second largest exporter of American made goods with 66% of their output going overseas. Yet the stock wasn't really moving until they announced the formation of partnerships with China based companies. That and the weak dollar gave good immediate results and what analysts would term a "great outlook" once they got rid of the pesky unions.

      That doesn't mean all of their manufacturing will be moved because of the size of some of the earth moving equipment they sell, but we will feel it.

      As I Alluded to in another diary, Apple , at best, could only settle for assembled in the US , as most of the parts from it's 150 suppliers are off shore. We no longer have the infrastructure to build a 100% American made electronic product except for some boutique items here and there.

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