#occupy.. cost to build iPhones in the United States

This piece is from Fullermoney newsletter.

One point it neglects is that, like many large U.S. companies, they can’t repatriate oversea’s profits, without incurring a 35% tax hit.

Presumably, similar applies to other Western Corporations.

Perhaps Gov’t’s need to work a deal that brings these businesses back to the West, or offers tax breaks for oversea’s profits used for domestic Labour intensive Public Works.

Politicians and Union’s need to find some way of getting Capital and Capitalists to regrow domestic economies.

It is hard to estimate how much more it would cost to build iPhones in the United  States. However, various academics and manufacturing analysts estimate that  because labor is such a small part of technology manufacturing, paying American  wages would add up to $65 to each iPhone’s expense. Since Apple’s profits are   often hundreds of dollars per phone, building domestically, in theory, would  still give the company a healthy reward.   But such calculations are, in many respects, meaningless because building the iPhone in the United States would demand much more than hiring Americans – it   would require transforming the national and global economies. Apple executives believe there simply aren’t enough American workers with the skills the company   needs or factories with sufficient speed and flexibility (These jobs and skills were exported, just re-import them the same way).

 Other companies that   work with Apple, like Corning, also say they must go abroad.
 Manufacturing glass for the iPhone revived a Corning factory in Kentucky, and   today, much of the glass in iPhones is still made there. After the iPhone became a success, Corning received a flood of orders from other companies hoping to imitate Apple’s designs. Its strengthened glass sales have grown to more than   $700 million a year, and it has hired or continued employing about 1,000 Americans to support the emerging market.
  But as that market has expanded, the bulk of Corning’s strengthened glass manufacturing has occurred at plants in Japan and Taiwan.
  “Our customers are in Taiwan, Korea, Japan and China,” said James B. Flaws, Corning’s vice chairman and chief financial officer. “We could make the glass here, and then ship it by boat, but that takes 35 days. Or, we could ship it by air, but that’s 10 times as expensive. So we build our glass   factories next door to assembly factories, and those are overseas.”
  Corning was founded in America 161 years ago and its headquarters are still in upstate New York. Theoretically, the company could manufacture all its glass   domestically. But it would “require a total overhaul in how the industry is structured,” Mr. Flaws said. “The consumer electronics business has become an Asian business.  As an American, I worry about that, but there’s nothing I can do to stop it. Asia has become what the U.S. was for the last 40 years.”

This is a more likely incentive for the City of London and Wall Street to shift abroad, unless Politicians can find a way to encourage wealth production here that doesn’t rely on I.T., so much.

In British terms, an example would be to give tax breaks to home based entertainment Industry, such as Film. It could fund universities to provide serendipitous research, instead of tying funding to expected/provable outcomes.


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