Outsourcing is not about competition, it's about maximising dividends

Discussion in 'Political Opinions & Beliefs' started by Leffe, Apr 24, 2012.

  1. Leffe

    Leffe New Member

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    http://www.guardian.co.uk/technology/2012/apr/23/bad-apple-employ-more-us-workers

    This is an exellent article, in which Apple is examined.

    4G iPhone: assembled in China, the total cost of putting together just one phone was $178.45. Compare that with a sale price (including downloads) of $630 and Apple makes $452 on each phone: a whacking gross margin of 72%.

    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.

    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."


    Even if Apple made the 4G iPhone in the US, they not only would turn a profit, but they would turn a profit that most companies in the world would JUMP at. In doing so they'd create 10's or 100's of 1000's of jobs; American jobs. Furthermore they would set an example to other US manufacturers. They would re-start tech work in the US.

    There's far too much partisan mud throwing going on, and effectively it's breaking your country.

    We all know that companies want to maximise profits, but it would seem that many of them are doing so at the unneccessary detriment of their own country. Apple just built up cash reserves of 10Bn USD. 10Bn USD!!!!

    They can clearly afford to bring manufacturing back to the USA, but they will not as they want to maximise profits for the CEO and investors.

    This is not a pop at the rich, it is a demonstration that it is not US government policy which is driving many of your job woes, it is corporate greed.
     
  2. RtWngaFraud

    RtWngaFraud Banned

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    Excellent post and observations. It's all about greed and profit....BIG TIME. Nothing else matters short term, long term, or on any terms....just fast profit and more for the super wealthy entities that control all our lives.
     
  3. haribol

    haribol New Member

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    Capitalists are hardnosed and they do not care whether doing business in the US will help the waning economy recover and create jobs. This is the flaw of capitalism and China indeed is profiting from globalization for the short term and I do not know it will work in the long run. Tomorrow Apple if finds a better strategic location or economic geography they are likely to relocate their industrial zone.

    Capitalists are funding governments, sponsoring institutional activities that pillar their ideologies and they are in fact funding electoral activities. The world's most resources, no matter what damage it could do to the environment are exploited by them
     
  4. PatrickT

    PatrickT Well-Known Member

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    Outsourcing is about a lot of things. Union extortion, excessive regulations, anti-business ideology, excessive taxation and cost of government.
     
  5. Leffe

    Leffe New Member

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    I'm sorry but ignoring the OP and trotting out the same old mantra is not going to do it. Apple could make 46.5% gross margin if they manufactured in the USA. They built up cash reserves of 10Bn USD by manufacturing abroad. Clearly they could manufacture in the US and still make gob smackingly large profits. They chose not to, not because of any of the "reasons" you offer, but because of greed and a complete lack of patriotism.

    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."
     
  6. SiliconMagician

    SiliconMagician Banned

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    Well if I was a shareholder of Apple I would equally demand that they maximize profits. That is the meaning of a business. Stop trying to force your god (*)(*)(*)(*) economic morality off on everyone else. Businesses do not have some moral obligation to provide the maximum amount of people with jobs!

    Geez. This is common sense.
     
  7. Leffe

    Leffe New Member

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    And STOP BLAMING OBAMA or ANY OTHER POTUS! It's out of their hands, 100%.

    It's not about:

    Unions
    Sxcessive regulations
    Anti-business ideology
    Excessive taxation
    Cost of government
    or anything else.

    It's to do with maximising corporate profit.
     
  8. SiliconMagician

    SiliconMagician Banned

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    Maybe if we made it easier to maximize profit here in the first world by lowering worker expectations a level or two to something more sustainable than the stupid idea that merely showing up to work every morning for 20-30 years makes you "special" then companies would come back!

    I'm so sick of socialists and social democrats worshipping the common worker as if he were some kind of hero. Its time the common western worker realized he's not all that.
     
  9. Leffe

    Leffe New Member

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    They could make 46.5% gross margin if they made 4G iPhones in the US.

    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."

    You will never be able to be on par with China, they live in slums, the workers live on site in dorms, in conditions which have driven many to suicide.

    Apple can make 46.5% gross margin instead of 72%. How much is enough?
     
  10. Leffe

    Leffe New Member

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    Dupe post
     
  11. septimine

    septimine New Member

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    Maixmizing profit IS about competition. If the iPhone costs less to make, then they don't have to charge as much for it, and perhaps if they save enough making iPhones they can cover the cost of more expensive phones as well -- thus raising market share. If they decided to make iPhones in America, not only could they not do that, but they open the door to some other company doing exactly that and driving them out of business.
     
  12. Leffe

    Leffe New Member

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    For the article:

    the average wage in the US electronics industry of $21 per hour

    How much would you reduce American tech workers pay to?
     
  13. Leffe

    Leffe New Member

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    Please read the article before posting.

    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."

    Apple has accumulated 10Bn USD is cash reserves, it has not done this as it was under competition, it has done this because it wanted more money, and was prepared to get it at the expense of American workers.
     
  14. TaraAnne

    TaraAnne Banned

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    Corporate Greed is goood, didnt you know it those greedy socialist American Unions that are the reason.
     
  15. Leffe

    Leffe New Member

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    Another quote from the article:

    but it [making the 4G iPhone in the USA] would still leave 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 they could make the most profitable phone in the world, by manufacturing it in the USA.

    Again, manufacture in China is not about "competition", it is about profit maximisation.
     
  16. Taxcutter

    Taxcutter New Member

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    Two questions for the OP:

    1) How much profit is "too much?" Nobody ever seems to answer that question.

    2) Is it not the company management's fiduciary duty to the shareholders to maximize the shareholders' profits?
     
  17. Questerr

    Questerr Banned

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    So we shouldn't care if a company makes its money through what is effectively indentured labor?

    You are exactly right, businesses have no moral obligations. If a business if forced to choose between maximizing profits through immorality (like slave labor or using toxic materials) or making less profit but using moral choices, they will choose the immoral action every single time.
     
  18. Questerr

    Questerr Banned

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    The only way to make US businesses more profitable with lower costs than those operating in China would be to adopt the same system China has. Do you really want indentured labor in America?

    I forgot. Of course you do. You don't give a (*)(*)(*)(*) about workers and you believe that companies are always right if they are turning a profit.

    BTW, about your sig, I know you fled that thread in defeat after just a couple of pages, but I find it interesting that you put that BS line in your sig. I brought up the point to you in that thread about why we don't help the Bahrainis or Sudanese when they are oppressed and you said that they don't deserve it because they aren't out allies.

    So really it should be more like this: "SiliconMagician is the type of guy who would see a Bahraini woman getting gang raped in a back alley by a bunch of Bahraini cops and close his door and say "not my problem" because he's not friends with the woman and he occasionally goes bowling with his cop buddies."
     
  19. Questerr

    Questerr Banned

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    Should it be okay for a company to maximize its profits by using slave labor?
     
  20. signcutter

    signcutter New Member

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    (1)Thats a strawman agruement... the question should be 'How much compensation to the people and the country who made your success possible is too little?"

    (2)Sure it is... but its also their (corporations like Apple) responibility to contribute to the country that made their fabulous wealth possible. The military that defended them, the education system that provided the know how, the infastructure that made commerce possible. Steve Jobs is a Syrian by birth.. adopted and brought over to the U.S, do you think Apple would exist if he would have remained in Syria?

    Now that they made as much profit as possible in country.. they have lobbyied and legislated away their responsibility to contribute to the overall health of the country. I say tax the crap out any U.S owned company outsourcing labor and importing finished product.
     
  21. Rexxon

    Rexxon Well-Known Member

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    Lowering workers expectations? I'm pretty sure many workers expectations are pretty low as it is. However, if you think that many of us are going to be willing to work and live like the workers in China, you are sadly mistaken. It will be civil war long before that happens, and the poor have the overwhelming majority in numbers.
     
  22. Taxcutter

    Taxcutter New Member

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    Signcutter posted:
    "(1)Thats a strawman agruement..."

    Taxcutter says:
    yet another one that cannot answer the question.



    Signcutter says:
    "...its also their (corporations like Apple) responibility to contribute to the country that made their fabulous wealth possible."


    Taxcutter says:
    That's your opinion, not statutory business law. The fiduciary duty to maximize profit is in federal and state codes. Fail to maximize profit and you are Enron.
     
  23. govtdog

    govtdog Member

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    It is also about corporate lying in order to increase stock prices/dividends, then executives selling their stock and moving with their money to some non-extradition country to live in sheer luxury for the rest of their lives while those of us still working for the company and having our savings in company stock, go broke.
     
  24. SiliconMagician

    SiliconMagician Banned

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    Now the motivation becomes clear.

    You hate all businessmen because a few shady ones got away with what you see as a moral crime and you want to see all of the wealthy in America punished for it, and raising taxes is punishment. Plain and simple.
     
  25. SiliconMagician

    SiliconMagician Banned

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    Now the motivation becomes clear.

    You hate all businessmen because a few shady ones got away with what you see as a moral crime and you want to see all of the wealthy in America punished for it, and raising taxes is punishment. Plain and simple.
     

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