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Monday, November 12, 2012

Foxconn Factory In the Ruins of Detroit?

Posted by on Mon, Nov 12, 2012 at 8:31 AM

In case you have never heard of Foxconn:

Shortly before midnight on Sunday, a fight among assembly-line workers at the Apple supplier, Foxconn, escalated into a riot, involving some two thousand members of the staff, and perhaps the guards, that reportedly left forty people injured.

The state-news service said that five thousand police moved in to restore control. The plant, which has seventy-nine thousand workers in the coal-country city of Taiyuan, shut down. Reporters at the gates saw broken windows and paramilitary police with riot shields, helmets, and batons guarding the entrance, while a loudspeaker urged calm. After twenty-four hours, Foxconn reopened the plant Tuesday.

Though most of the iPhone assembly is done elsewhere, workers said that the iPhone was being made there, too, so the story leapt onto front pages.

There's now a rumor in the air that Foxconn might open one of its world-famous factories in cold and dying Detroit.

Foxconn Electronics (Hon Hai Precision Industry) reportedly plans to establish manufacturing plants in the US and is currently conducting evaluations in cities such as Detroit and Los Angeles, according to market watchers. Since the manufacturing of Apple’s products is rather complicated, the market watchers expect the rumored plants to focus on LCD TV production, which can be highly automated and easier.
For those who have yet to guess why this rumor is even being entertained:
The differential between Chinese and American wages is slowly narrowing...


Comments (7) RSS

Oldest First Unregistered On Registered On Add a comment
There has been a fair bit of talk over an American manufacturing renaissance. Wages in China are rising as is the political cost of making things there. American wages have been stagnant and there are growing tax subsidies and other breaks for doing things here. Plus you have rising transportation costs and a growing fear that China might not be as stable as it lets on.
Posted by giffy on November 12, 2012 at 8:52 AM · Report this
Charles, for all your trashing of rural lifestyles, now you're picking on Detroit? Have you even been there? Ask Kelly O. It's cold there, but it's not dying. That town roars. We hum.
Posted by Stumphaven on November 12, 2012 at 9:23 AM · Report this
biffp 3
We're winning the race to the bottom.
Posted by biffp on November 12, 2012 at 9:38 AM · Report this
What @2 said. Detroit hasn't been more alive in my lifetime. (I'll be there again next week.)

Also, on top of wages narrowing, fuel goes up; at some point it becomes cheaper to pay people here than to manufacture cheap shit halfway around the world and then pay to ship it here. Now we just need to figure out what to do with landfills full of barely-a-year-old cellphones...
Posted by Cow on November 12, 2012 at 11:12 AM · Report this
Doctor Memory 5
I've been predicting this for a while. Wages are only part of the equation: there's a language and culture gap, a 10-12 hour time zone gap, and then the ungodly hassle of shipping your products by boat(!) and getting them through US customs: the point at which it's more than worth paying a relative wage premium on the actual labor is probably much closer than you'd think. Just read the

Foxconn's factories in Brazil were pretty clearly their test run for internationalizing their operations: Mexico and the US are likely next, and not necessarily in that order.

The obvious model here is Toyota and Honda, who quite happily assemble cars in Mississippi and Ohio respectively.
Posted by Doctor Memory on November 12, 2012 at 12:03 PM · Report this
Doctor Memory 6
oops: "...just read the updates on any moderately popular kickstarter project that's trying to assemble stuff in China. It's an education for everyone involved."
Posted by Doctor Memory on November 12, 2012 at 12:04 PM · Report this
Thanks for comparing L.A. to Detroit. Like it doesn't suck enough here already ...
Posted by jhops on November 12, 2012 at 1:20 PM · Report this

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