John Feehery: Speaking Engagements


Jobs, Jobs and the State of the Union

Posted on January 24, 2012

Over the weekend, the New York Times had a fascinating look behind the Great Wall of China and how it basically took over manufacturing of the electronic devices that I use every day.

It all started when Steve Jobs decided that he wanted the iPhone to have a glass screen.  Jobs didn’t want his beautiful creation to have an inferior scratched surface, so he demanded that production turn on a dime, and start cranking the stuff out.

Corning, the glass maker, developed a non-breakable, non-scratch surface, but it was the Chinese who had the ability to integrate the whole shebang into a nice little package, and then produce the buggers in huge numbers.

There were three big takeaways from this article.

First, the Chinese work very, very hard.  When the factory owners got the contract, they rousted thousands of workers in the middle of the night, and immediately put them to work on 12-hours shifts.  There weren’t a whole lot of shop foremen who were going to lead any strikes against management.

Second, for a Communist country, they sure believe in the primacy of big business.  That means no rules protecting workers, no rules protecting the environment, no rules helping out the lawyers.

Third, they have a lot of people, and a lot more qualified people to do the kind of detailed manufacturing work that Steve Jobs wanted to get done than America could ever have.  They can throw tens of thousands of high school graduates who have advanced manufacturing skills where we in the U.S. can only throw tens.  In sure scale, the Chinese overwhelm us.

Now, what can our policy makers do about the China syndrome?

Do we punish our companies (and our consumers) by raising tariffs on products manufactured in China, so that our manufacturing base can be more competitive?  Some would say yes that that is the only way to revitalize our manufacturing base.

Do we better train our unemployed or underemployed workers, through a combination of carrots and sticks (no welfare/unemployment benefits unless you take a manufacturing training course and you stay drug-free)?  If we do that, will the jobs come back or is it a waste of time?

Or do we just let the Chinese continue to produce high-quality stuff for us to buy at much cheaper prices?

At some point, the Chinese worker is going to get sick of being exploited by American corporations.  At some point, they are going to insist that their air be breathable and their water be drinkable.  At some point, they are going to demand better food and better hours and a better quality of life.  And at that point, the American worker is going to be able to compete better with the Chinese worker.

We have seen some manufacturing jobs return to America lately.  Detroit seems to be coming back a bit.  The dollar is weaker and the renmibi is stronger, and Chinese labor costs are slowly rising.

America is still the world’s leader in innovation, and that is a good thing.   But it is not the only thing.    If we are going to keep manufacturing jobs in the U.S., we have to be cognizant of our own role in making that job more difficult.  We need to improve the pool and the quality of our own workers.  We have to insist that the Chinese treat their workers with more respect and more dignity (we can’t compete if the Chinese can exploit their workers and we can’t).  We need to make sure that our currencies have a level playing field.  And we have to have government that is more friendly to business.

It is odd that the Communist Chinese are more friendly to corporate profits than the Obama Administration.  Well, maybe not.

In any event, the President is going to talk about a bunch of stuff in his State of the Union Address.  My guess, though, is that he won’t talk about the role Steve Jobs played in exporting American jobs to China.  Any my guess is that he won’t have any firm ideas on what to do about it.