Why the United States Will Never, Ever Build the iPhone

[rfranklin]

36. Forbes: Cheap Labor, Taxes, Location: Why Apple Doesn't Build Products in the U.S.

Liker doesn’t buy the claim that U.S. workers don’t have the skills or the flexibility to make Apple products. Any manufacturer opening a new plant has to do some training, he says.

He gave three main reasons why he believes Apple won’t build in America.
•Cheap labor. Apple executives may not want to admit it, but Liker says one of the biggest advantages of going overseas is that workers there are much, much cheaper. This is really an obvious reason, and we all know it. But it’s worth remembering whenever someone tries to claim that the actual reason is because our workers don’t have the right skills. “Right now is the worst time to make that statement since the recession has put so many people out of work,” Liker says. “There are all kinds of skilled workers right now.”
•Taxes. Liker says another big reason Apple and other manufacturers do work in Asia is because taxes are cheaper there. Usually, if a company makes profits from something built overseas, they have to pay American taxes when they “repatriate” those profits back to their headquarters here. But if a company spends money at lots of overseas factories, it just re-invests the profits over there, and it never pays the higher tax. Liker estimates this could make a 20-30 percent difference in profits for a company like Apple...

....There’s another wrinkle to this discussion that Liker says is worth mentioning. Right now, he says China actually has a far greater shortage of skilled workers than the U.S. Demand for workers in China is so high that factories there have trouble holding on to people. Liker says turnover rates of 20-30 percent are common in Chinese factories.

So, according to Liker, the truth is the exact opposite of what Apple claims.


http://www.forbes.com/sites/michelinemaynard/2012/01/24/cheap-labor-taxes-location-why-apple-doesnt-build-products-in-the-u-s/