foxconn

The big news today is Apple is making some Macs in the USA. This isn’t terribly shocking if you think about it.

iMacs really aren’t as complicated as they were just a few years ago, the parts have consolidated quite a bit. In addition most of the complexity of assembly is being given to increasingly advanced robotics. What years ago was a circuit board put together by humans is now a single chip stamped out by machine. I mentioned this back in June when Google started manufacturing in the US.

I wouldn’t expect something as labor intensive as the iPhone or iPad to be built in the US anytime soon. The limited media access to the factories that we’ve seen, it’s a very manual process.

Manufacturing large goods like an iMac in the US has advantages. First reduced freight costs, less time in Apple’s inventory (something Tim Cook is known to care extensively about), and quite likely tax breaks and subsidies.

I suspect the idea going forward is if it’s labor intensive, do it overseas. If you can do it with minimal human labor, bring it to the US. We’ll see more of these things come “back” to the US as manufacturing techniques are refined and improve extensively. But I don’t think we’ll see the huge number of factory jobs we once had.

Apple just published a report of it’s findings during an investigation into one of it’s suppliers (Hon Hai Precision Industry Co. aka Foxconn)after a report about mistreatment of employees.

I must say that I’m rather impressed with the report they released, it’s more thorough than I ever would have expected to see. Noteworthy is confirmation of one of the pictures showing an open area with rows of beds rather than separate rooms for workers. It’s said to be temporary and resolved soon. Pay structure was too complex (and said to have been simplified now) among other significant findings.

Most interesting was the Apple “Supplier Code of Conduct” they published. The document (version 1.0 in the footer) dates from November 2005, before this controversy. It seems to be pretty thorough for the most part.

Lastly they state they will be using Verité and that they joined the Electronic Industry Code of Conduct (EICC) Implementation Group.

Very interesting is that Apple uses less than 15% of the facilities capacity. Considering all the stuff they make for various customers (Dell, HP, Intel, Microsoft, Motorola) it’s interesting Apple got singled out. Is it really specific to the iPod line? That’s one thing that wasn’t answered in the report. Wikipedia touches on Foxconn’s far reach a little bit here.