Thursday, August 25, 2011

Suicides in China, unemployment in Silicon Valley

In July of 2010, Andy Grove wrote a commentary for Business Week titled "How to make an American job (before it's too late)." The article created a stir last year, but seems to have been totally forgotten a year later, so I'd recommend that you read (or re-read) the whole thing.*

However, due to recent events, I'm reminded of a particular passage in the article:
Today, manufacturing employment in the U.S. computer industry is about 166,000, lower than it was before the first PC, the MITS Altair 2800, was assembled in 1975. Meanwhile, an effective computer-manufacturing industry has emerged in Asia, employing about 1.5 million workers.

The largest of these companies is Hon Hai Precision Industry, also known as Foxconn. The company's revenues last year were $62 billion, larger than Apple or Intel. Foxconn employs more than 800,000 people, more than the combined worldwide head count of Apple, Dell, Microsoft, Hewlett-Packard.

Until a recent spate of suicides at Foxconn's giant factory complex in Shenzhen, China, few Americans had heard of the company. But most know the products it makes: computers for Dell and Hewlett-Packard, Nokia, cellphones, Microsoft Xbox 360 consoles, Intel motherboards and countless other familiar gadgets.

Some 250,000 Foxconn employees in southern China produce Apple's products. Apple, meanwhile, has about 25,000 employees in the U.S. That means for every Apple worker in the U.S. there are 10 people in China working on iMacs, iPods and iPhones. The same roughly 10-to-1 relationship holds for Dell, disk-drive maker Seagate Technology and other U.S. tech companies.

Everybody's upset about Steve Jobs' illness; I'm more upset about lives destroyed in China and livelihoods ruined in America.

*Alternate one page link that might be somewhat abbreviated.

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