Saturday, May 21, 2011

Meet Foxconn, the monster that we created.

Yesterday there was a report of the deaths of two employees in an explosion and fire at a FoxConn plant in Chengdu, China that coincidentally or not, manufactures Apple's popular iPad. Foxconn factories have been called 21st century sweatshops. One Foxconn complex in Shenzhen employs somewhere around 500,000 workers, so it's not just a company town, it's on its way to becoming a company megopolis. Foxconn's ascendancy is a modern phenomenon. Foxconn was founded in 1974 as a Taiwanese corporation, but it didn't open its first factory in mainland China until 1988. Now Foxconn has almost one million employees, roughly five times as many as General Motors, and twenty times as many employees as Apple Inc. Foxconn makes most of Apples toys, the iPad, the iPhone, and lots for other companies as well, including the Amazon Kindle. Foxconn makes all these things, and they employ lots of people, but they don't make anything close to Apple's profits. Last year Apple made $18.4 billion on $65.2 billion in revenue. According to Wikipedia, in 2010 Foxconn had revenue just shy of Apple at $59.3 billion but only made profits of $2.2 billion. Apple's technology has generated lots of jobs, but most of them were NEVER in the US, and never will be. The manufacturing technology is also growing somewhere else than the USA. In theory, Apple could settle for less profit and manufacture more of its goods in the US, but that wouldn't sit well with Apple's shareholders including lots of US pension funds who are buying the AAPL stock at $335 a share, 16.7 times last year's earnings. The stock holders are counting on Apple becoming even more profitable. In other words, in some ways we are all to blame for corporate outsourcing behavior when we demand ever increasing earnings that are unsustainable without outsourcing.

What the growth of Foxconn tells us is that putting money in technology and education won't necessarily bring us the jobs of the future. I suspect that the million workers at Foxconn didn't get their jobs because of educations like those produced at our colleges and community colleges. Most of them got jobs because they are young, have fast hands and can sit for a long time.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.