Globalization and its Disconnects

Tom Friedman raises a provocative question in his column in The New York Times on Sunday, asking whether the politicians who talk so much about private sector jobs really understand the big drivers of globalization, manufacturing and how jobs are created in today’s world.

He asks the questions through the prism of the Apple supply chain, and that’s where it gets interesting. It seems lately as if Apple’s supply chain has become perhaps the most famous supply chain in the world, and so much as written about it lately that it seems everyone is trying to read what they want into the Apple supply chain to justify preconceived notions.

You can read Friedman’s column here.

Friedman points to a wide gap between how business leaders see the world we live in and how politicians see the world, and goes straight to that iconic Apple supply chain: 

“Consider the meeting that this paper reported on from last February between President Obama and the Apple co-founder Steve Jobs, who died in October. The president,  understandably, asked Jobs why almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were made overseas. Obama inquired, couldn’t that work come back home? ‘Those jobs aren’t coming back,’ Jobs replied.”
 

Maybe not, but the low-cost outsourced manufacturing model, and Apple’s place in that world, is under severe attack in other quarters, including other sections of The New York Times.

Just days before, the Times reported in detail on the “bleak conditions” at factories in Southern China making products for Dell, Hewlett-Packard, IBM, Lenovo, Motorola, Nokia, Sony, Toshiba. But Apple was the centerpiece:

“Workers assembling iPhones, iPads and other devices often labor in harsh conditions, according to employees inside those plants, worker advocates and documents published by companies themselves. Problems are as varied as onerous work environments and serious — sometimes deadly — safety problems.
“Employees work excessive overtime, in some cases seven days a week, and live in crowded dorms. Some say they stand so long that their legs swell until they can hardly walk. Under-age workers have helped build Apple’s products, and the company’s suppliers have improperly disposed of hazardous waste and falsified records.”
 
And Apple even came up earlier in the week in Indiana Gov. Mitch Daniels’ response to President Obama’s State of the Union address. “The late Steve Jobs — what a fitting name he had — created more of them than all those stimulus dollars the President borrowed and blew,” Daniels said.
 
But that just doesn’t add up, and it’s bizarre for Daniels to hold up Apple as an icon of job creation in the U.S.

Yes, Apple has created 700,000 jobs at factories manufacturing those iPads, iPhones and MacBooks, but almost all of them are outside the United States. And in the meantime, high-tech companies such as Dell and Intel have invested in manufacturing in the United States.

Given what has been reported about the conditions at factories performing outsourced manufacturing, asking Jobs then, and Apple today, about the nature of their supply chain and their sourcing of goods doesn’t seem all that naïve.

 

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