Tag Archives: USA

Seven Billion Dollar Deal Could Bring 50,000 Jobs to US

The top and side of an iPhone 5S, externally identical to the iPhone 5. Photo courtesy of Calerusnak

Two high tech giants, Foxconn and Apple, are considering a deal to build a panel factory in the United States at a cost of about $7 billion and could create between 30,000 and 50,000 jobs. Chairman Terry Gou of Foxconn said that an investment by Foxconn’s Sharp division will depend on the terms negotiated for the deal at the state and federal levels.

The announcement of the deal comes close on the heels of President Donald Trump’s inaugural address in which the new president promised to make “America First” as the backbone of his policies leading the nation. Trump stated in his speech: “We will follow two simple rules: buy American and hire American.”

One of Trump’s campaign promises was to try and persuade Apple to bring the manufacture of iPhones to US shores. Trump said that he was optimistic that Tim Cook, CEO of Apple, had his “eyes open” to the possibility. Foxconn is the biggest producer of iPhones.

Gou said that Trump-style protectionism was inevitable, but he is unsure how Americans will feel about spending hundreds of dollars more for a phone that does not work any better than a less expensive model that was made overseas.

Gou vowed to increase his investments in China. Apple is also dependent on China, not just for production, but also for sales. Last year China made up 22 percent of Apple’s total revenue, some $46.4 billion.

Russia Breaks INF Treaty

Medium-range ballistic missile with a nuclear warhead RSD-10 “Pioneer”. NATO reporting name was SS-20 Saber. Kapustin Yar museum in Znamensk, Russia. Photo by Leonidl.

The United States is faced with a serious challenge to an important treaty which could have dire consequences if not handled well.

The New York Times reported this week that Russia has deployed nuclear-capable cruise missiles which could be a critical threat to the countries of western Europe.

Officials believe that the missiles were 9M729s, which are ground-based missiles similar to Russia’s Kalibr missiles. The Kalibr were used to hit targets in Syria from a range of 1,000 miles away in the Caspian Sea.

Experts say these missiles are in violation of the Intermediate-range Nuclear Forces Treaty, INF, because they can reach targets from 620 to 3,420 miles away, from ground-based launchers. If this is true, then Russia has the capability of hitting a slew of European capital cities from home.

“We knew it was coming for a long time,” said one expert of the missiles. The Russians “started testing in 2008. In 2011, the Obama administration decided it was a compliance problem.”

The INF treaty is one of the few success stories from the arms-control talks between the two powerful nuclear-enabled countries. During the 1980s Russia had already begun to develop nuclear missiles with intermediate range which had the power to strike western European cities.

President Obama decided in 2014 that Russia had indeed violated INF. During an INF special verification meeting the US presented Russia with the evidence that they were in violation of the treaty. The Russians answered with “capricious arguments,” saying that the US had also violated the treaty.

“None of the Russian accusations amount to the US, in secret, deploying a large number of missiles that violate the treaty,” the expert said. “The US does not have ground-launched intermediate-range forces anywhere.”

Manufacturing Sees Shift from Asia Back to USA

Ironic Economics

In what some analysts see as a bit of economic irony, there is a slow but steady in the manufacture certain products away from Asia and back to North America.

“What you’re starting to see is the economics shifting more into the United States’ favor regarding sourcing from the United States versus sourcing from a low-cost country,”

said Daniel Meckstroth, chief economist at the Manufacturers Alliance/MAPI, a Washington trade group.

The irony is that it is precisely because the US is going through a slow economic period and China and India are experiencing brisk growth as their emerging economies surge that help US manufacturers to minimize the cost gap between them and their Asian rivals.

Wage Gap Closing

According to one consulting group it is even possible that by the year 2015 labor costs in China and the US could achieve parity. If the present Chinese inflation rate of 5.5% continues while the US maintains the lower 3.6% rate of inflation, and if Chinese wages continue rise at the present 15- 20 percent, then wages in the US and China could very well be indistinguishable.

Efficiency Helping US

In Milwaukee, at the Master Lock factory, the shift back to “made in the USA” is already happening in full force. Just two years ago the lock-making machinery there was only running a few hours a day because it was cheaper to order padlocks from China rather than making them at home.

Today the lock-making machine is running at a whirlwind pace seven days a week and three shifts per day. How can this be when wages are six times higher in the US than in China? The answer is because of superior efficiency. In Milwaukee locks are produced thirty times faster than in the factories in China, which more than makes up for the wage gap.

“I can manufacture combination locks in Milwaukee for less of a cost than I can in China,”

said Bob Rice, a senior vice president at the largest U.S. padlock manufacturer.

In the past two years Bob Rice has added about 80 workers to his workforce, which totals 440 at the moment, and could very well continue to rise. A good sign for the future of US manufacturing.

Time to Invest in Chinese Companies

US and EU Hit Hard

The global economic crisis – as we all know – hit hard.  Especially tough impacts were encountered by the European Union and the United States of America.  These regions are today, still being impacted by the crisis, vis-à-vis an uncertain economic future and increasingly high levels of public debt.

China’s 2008 Plans

In reaction to the crisis in 2008, China sensibly set out plans to help make world financial markets more stable.  The country – as companies that seek to make investments there have known for years – is usually on top of its economic situation and what it needs to do to stabilize matters where required.  This is what makes it an ideal environment for companies such as ARC Investment Partners to put their capital.

China Thinking Ahead

This clear thinking during a tough time for Chinese companies, really made a lot of sense for the country’s economic future.  Today, China is a hotspot of stable economic growth, along with a substantial foreign exchange reserve.  The question thus being asked, is can it also now play a role in finding a solution to the world’s current financial issues?  Maybe.  But first, the rest of the world needs to get on board and formulate an accurate perspective of the advantage of making investments in China today.  Some critics firmly believe that if America and Europe really look into investing serious capital into China, a lot of their financial woes would be dissipated.

In other words, America and Europe need to get over their paranoia that investing in China is troublesome due to the country’s national security concerns or other inaccurate perceptions