It seems more and more apparent that the real world of legitimate manufacturing is completely unknown and unappreciated by just about everyone outside of it. Terry Gau – chairman of Foxconn – says “he did not believe President Obama could succeed in moving production lines back to the US because Americans have outsourced those jobs for too long. But he hoped Americans could learn how factories are operated so they can return home to set up facilities with automated equipment. Mr Gou said he was already in discussion with the Massachusetts Institute of Technology about establishing an exchange programme.” Foxconn is going to teach American manufacturers how it’s done – and MIT says thanks, we’ll help you do it? Are you kidding me?
There is no avoiding the fact that Foxconn is a manufacturing train wreck. They are currently unable to meet demand for the latest iPhone; and a few months ago they had a fist fight in the plant blow up into a full scale riot. The fight was between workers and quality inspectors over the impossibility of meeting quality standards. That sort of problem is manufacturing 101 stuff – the kind of thing even a passing concern for manufacturability in the design process precludes. Fix the design or fix the process, but only fools think disciplining workers is a solution.
Terry Gau is a sweatshop operator, pure and simple. Apple zealots can argue otherwise all day long, but he exists only when the trinity of incredibly innovative product design, raw short term greed and wholesale ignorance of manufacturing converge – such as at Apple. Year after year stories of worker abuse – the stuff of Upton Sinclair and Charles Dickens novels – come from Foxconn, and year after year the Apple folks are shocked to hear such things go on, and year after year Foxconn promises to fix the problems. Foxconn knows manufacturing like the average straw boss at the Homestead steel mill did in 1892, and just as the Carnegie Steel boys dealt with problem by having Pinkerton guys shoot disgruntled workers, Terry Gau solves problems with an abusive security force. And this is the guy MIT wants to bring in to teach America how to manufacturing is done?
Just to be clear about how much Terry Gau can teach us about automation, that has been a topic of interest to Foxconn for a year or less. Robotics and automated assembly are the solution they have pursued to uppity employees who wanted a modicum of tolerable working conditions and a little more than a couple hundred bucks a month. It has long been little more than a grand scale manual assembly operation thriving on dirt cheap labor. Just about every mid-level manufacturing engineer in the United States can tap dance around their knowledge of automation … a fact apparently unknown to the folks at MIT.
And just to be clear about Apple, knowing full well that the hard core of Apple enthusiasts will raise a cry of outrage at such an assertion, they have passed their peak and are on their inevitable way out. They were a one dimensional – one trick – pony, albeit it one heck of a trick. Long a decreasing player in the phone market, they have dropped below half of the pad market. While they won their patent suit with Samsung on their home turf in the California courts, they lost on the neutral court in Europe. Exposed for operating a global tax avoidance scheme, their loyalty to anyone or anything other than short term profit is evident. Not only are the people who make their products and the communities in which they operate of little or no concern, their own long term health is ignored. Turnabout is fair play, and Apple is seeing their fair-weather friends on Wall Street bail on them, with their stock price dropping by some 20% over the last few months.
That Terry Gau suffers from the delusion that he has great manufacturing prowess is, perhaps, understandable; and that Wall Street had a love affair with Apple is also easy to understand. But Apple has never been anything more than the product of Steve Jobs’ product genius and with his passing history will record them as little more than another spectacular meteor in an age of continually rising and falling contributors to incredible technical revolution.
Foxconn will boom and thrive so long as the mainstream business press and the academic world chooses to see the exploitation of cheap labor as economic emergence of third world economies, rather than the replay of the shameful early era of the industrial revolution that enlightened countries have put long behind them.
If MIT wants to learn the right way to manufacture things they don’t need to go to China. There are plenty of far better teachers in their own Boston backyard.