The moral imperative of U.S. manufacturing

March 21, 2012
By: Tim Heston

The mainstream press and pundits now seem to be realizing that globalization isn’t about finding cheap labor. No, it’s now about something that on the surface is a lot drier and more complex: the manufacturing supply chain.

New York Times reporter David Barboza--who earlier this year wrote the expose on iPhone production at Foxconn--put it this way on NPR’s This American Life: “Some say that you could build an iPhone in the U.S. for just $10 extra a phone, if you were paying American wages. But labor is such a small part of any electronic device, compared to the cost of buying chips, or making sure you have a plant that can turn out thousands of products a day, or making sure you can get strengthened glass cut just right within two days of the project being due.

“Labor is almost insignificant,” he continued. “What’s really important are supply chains and flexibility of factories. You want a plant that’s located right next to the screws, so that when you need a small change to that screw, you can go over there and say, give it to me in six hours, and they can say here you go. If that factory were in another state or continent, it would take two weeks. It’s the flexibility of the Chinese manufacturing system.”   Sure, U.S. manufacturers can offer some incredible flexibility--but generally not to the scale that China now offers.

The show’s host Ira Glass then stuttered a bit. This was a grueling episode for him. The entire hour essentially was a retraction for an earlier show about Mike Daisey, who has a one-man show that details his trip to Foxconn factories. When performing, Daisey opines about bad working conditions in China. But his show, it turns out, isn’t entirely factual, which some may feel is fine for performance art, but not for journalism. Well, at least good journalism.

After his idiosyncratic stutter, Glass said he felt guilty for owning and using an iPhone. Should he feel bad? Should all of us?

Barboza then--being the reporter he is--told Glass what others have told him about why he should feel bad about owning an iPhone. “There were times in this nation when we had harsh working conditions as part of our economic development. We decided as a nation that that was unacceptable. We passed laws in order to prevent those harsh working conditions from ever being inflicted on American workers again. And what has happened today, rather than exporting that standard of life, which is in our capacity to do, we have exported harsh working conditions to another nation.”

I’d like to refine that argument a tad. As Barboza reported, Apple executives told him that the U.S. simply does not have the ability to respond like China’s factories. I’d say it’s a moral imperative that we again build our U.S. manufacturing infrastructure so we can respond to companies like Apple, with skilled workers and automaton. As Barboza reported, in the 1990s a California factory, full of automation, used to produce Apple computers. Surely, such flexible automation could be employed again. Apple has amazing market dominance and eye-popping production volumes. When you combine those two factors, some incredible manufacturing technology innovations may occur. (OK, the global market may not work like that, but the idealist in me sometimes wishes it did.)

I sometimes don’t agree with Robert Reich, former President Clinton’s labor secretary. For instance, a recent Washington Post story quotes him as saying, “it’s difficult to see a huge number of jobs coming back in manufacturing.”

But in his 2007 book Supercapitalism, he made a great point. We Americans, he said, have three forces driving us: the consumer, the investor, and the citizen. The consumer and investor want good, cheap products that allow a company to provide profitable returns for shareholders. After all, growing our pension plans and 401(k)s all depend on a healthy stock market. Indeed, Apple shareholders now are getting some healthy dividends. But with all our consumption and investing, the citizen in us is being buried.

When listening to Barboza on NPR this week, the citizen in me was crying out, wanting to be heard. I had to talk to somebody.

So, I picked up my iPhone.
Tim Heston

Tim Heston

Senior Editor
FMA Communications Inc.
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