[HN Gopher] iPhone maker Wistron quits, saying Apple didn't let ...
___________________________________________________________________
iPhone maker Wistron quits, saying Apple didn't let it make a
profit
Author : ksec
Score : 152 points
Date : 2023-05-22 16:23 UTC (6 hours ago)
(HTM) web link (9to5mac.com)
(TXT) w3m dump (9to5mac.com)
| dirtyid wrote:
| Not just Apple manufacturing, seems like they're divesting from
| India in general after 10 years, also killing their plans to make
| laptops and EV components. My understanding is they were barely
| making money throughout their time in India. Wonder if Tata
| takeover of iphone assembly going to do better? Kind of expected
| outcome for TWnese companies known to treat their labourers like
| shit and India gov unable to manage their population from
| breaking things after being treated like shit. Which has caused
| problems for more than just Wistron. Yes it's good workers
| standing up for themselves, but smart thing is to do that after
| you've proven indispensible, otherwise reinforces India being
| difficult place to do business in.
| alephnerd wrote:
| Winstron's divestment to Tata was honestly a good move.
|
| A big reason Foxconn, Winstron, and other
| Taiwanese/Malaysian/Singaporean assemblers were able to succeed
| in Mainland China was due to cultural competency within the
| existing Chinese diaspora (eg. knowing how to communicate to
| who, how to manage workers, etc).
|
| Foxconn, Winstron, and co would just straight up have
| Taiwanese/Malaysian/Singaporean/Thai Chinese move to Mainland
| China (in reality mostly Guangdong, Fujian, and Zhejiang due to
| cultural and familial connections plus the easy commute from
| Hong Kong or Shanghai) to help manage operations.
|
| Taiwanese companies don't have that kind of advantage within
| South Asia. At that point, it makes sense just to work directly
| with Indian conglomerates like Tata, who already have in house
| domain experience manufacturing everything due to India's
| Chaebol-esque corporate culture, or Japanese+Korean companies
| that are open to training from scratch.
|
| I've seen first hand how South Korean and Japanese companies
| managed their assembly plants in my dad's village in India
| (they manfuacture the electronics and computers for Wind
| Turbines) and it was a night and day difference to a similar
| attempted Taiwanese operation there.
|
| The difference was SK+JP companies would actually try to hire
| management locally, and if there wasn't anyone qualified, then
| invest in actually training from scratch, or alternatively,
| make a partnership with an existing company in India to help
| manage the local operation.
|
| Meanwhile, the attempted Taiwanese operation underbid severely,
| saw significant timeline overruns, tried to manage everything
| in-house, and the project was eventually scrapped and given to
| a private sector South Korean-Indian consortium. There was also
| a bit of corruption/malfeasance with the Taiwanese operation
| which pissed people off in the district.
|
| All this happened in the 2009-2012 timeframe
| dirtyid wrote:
| I rememeber in 90s, local mid-level managers who worked for
| MNC in PRC tend to like their SKR bosses and frequently hated
| TW bosses simply because cultural overlap allowed them to
| push harder. With SKR they could at least feign ignorance
| with language barrier but TBH still got their work done. I
| can imagine shitshow of having language barrier and still not
| meeting KPIs because they're not cross culture competent.
|
| Anyway Tata feels like a good fit, always felt like matter of
| time before audit/tax or political shenanigans drive foreign
| electronics assemblers out and eventually consolidate under
| India champions. Still seems a little premature, but I
| remember numbers last year that 2500/12000 registered
| forreign companies closed Indian operations since mid 10s, so
| maybe it's time for India chaebols to take over.
| alephnerd wrote:
| > worked for MNC in PRC tend to like their SKR bosses and
| frequently hated TW bosses simply because cultural overlap
| allowed them to push harder. With SKR they could at least
| feign ignorance with language barrier but TBH still got
| their work done
|
| Haha yep, I've heard similar stories in Vietnam as well.
| Idk why but Taiwanese/Malaysian/Singaporean management
| culture is absolutely atrocious compared to Japanese+SK
| management culture. All of them share equally shitty work
| cultures, but at least the Japanese+SK ones actually tried
| to train people from scratch. I really don't know why
| Taiwanese/Malaysian/Singaporean companies don't do that as
| well.
|
| > always felt like matter of time before audit/tax or
| political shenanigans drive foreign electronics assemblers
| out and eventually consolidate under India champions
|
| Ehn, India's a federal system so financial+political
| shenanigans are highly dependent on the state's political
| and business culture.
|
| It's the same in PRC ofc, with the administration in
| Guangdong/Zhejiang/Fujian being much more competent than
| the administration in Yunnan, Hunan, or Hubei.
|
| That said, knowing about these intricacies requires
| cultural domain experience, which can only be acquired by
| training+hiring locally, or working with local players.
|
| > I remember numbers last year that 2500/12000 registered
| forreign companies closed Indian operations since mid 10s,
| so maybe it's time for India chaebols to take over
|
| I'd be curious about the breakdown by nationality.
|
| After the Doklam standoff in 2017, Indian Federal
| Regulators began cracking down on Chinese FDI severely
| (which before 2018 was one of the largest FDI inflows India
| received), which lead those firms to divest their
| operations to Indian, Korean, Taiwanese or Japanese
| corporations.
|
| For example, Xiaomi India's operation was originally run
| from Mainland China itself, but they were forced to sell
| their India operation to a Taiwanese-Indian consortium, so
| the only Chinese thing left of Xiaomi India is just the
| name.
| mise_en_place wrote:
| Interestingly, it seems first mover advantage backfired on this
| company. Due to lack of margins and vendor lock in.
| ShadowBanThis01 wrote:
| Does relying on Chinese companies in India really accomplish the
| goal of independence from China? If there's some kind of
| political conflict, isn't it likely that China can shut those
| down using leverage at home?
| huyage wrote:
| Isn't wistron literally a taiwanese company?
| thr0waway001 wrote:
| I guess that's how you get to be a trillion dollar company.
| TradingPlaces wrote:
| Foxconn somehow made $137m profit in the past 12m.
| xxs wrote:
| You mean by installing the suicidal protection net, Foxconn
| barely makes it? Foxconn has 1m3 employees. If they made just
| 137m in profit - that's just $8 profit per employee a month.
| AYBABTME wrote:
| "just" 8$ per employee/m versus which similar industry's
| standard?
| draw_down wrote:
| [dead]
| yalogin wrote:
| Didn't they also have some issues with payments and working
| conditions for their factory employees?
| gwbas1c wrote:
| From TFA:
|
| > Back in 2020, there was a major riot at its Bangalore plant
| over underpaid wages, with millions of dollars' worth of damage
| done. Both the Indian government and Apple investigated, and
| both found that Wistron was indeed guilty of serious labor law
| violations, including underpayment of its workers.
| jasmer wrote:
| Yes, that's how Apple outsources those unsavory problems.
| cowsup wrote:
| Correct. Story seems to be, Wistron was screwing over employees
| to save costs, and used those low-costs to secure a deal with
| Apple. Then they got caught by the government, and now have to
| play by the rules. Because of this, they asked Apple for more
| money, and Apple said no. So now the deal is done.
|
| The deal really shouldn't have happened in the first place, had
| Wistron played fair from day one.
| elcritch wrote:
| Pretty sure Apple is partly guilty as well. I really doubt
| they didn't know exactly how Wistron was bidding so low.
| karamanolev wrote:
| They might have suspected, but I doubt they formally knew.
| I would guess it was a type of "don't tell me, I don't want
| to know, plausible deniability and all".
| capableweb wrote:
| > I would guess it was a type of "don't tell me, I don't
| want to know, plausible deniability and all".
|
| Imagine something like due diligence laws for making
| business contracts, so you can't really blame plausible
| deniability anymore.
| mschuster91 wrote:
| That's the core idea behind the EU's supply chain laws.
| No matter what, anyone on the upper levels can get busted
| - it's a massive incentive for everyone to make sure
| their supply chain is not skirting around or openly
| sharting on laws. And it's also an incentive to not look
| the other way when you _know_ that a vendor 's bid is
| very very low.
| jbverschoor wrote:
| They probably didn't tell bc they wouldn't get the deal.
|
| Simple story. Just some more Apple bashing like always.
| jrockway wrote:
| I would assume that Apple looked into it a little bit. US
| companies can get in trouble if their contractors abroad
| use slave labor, buy parts from the wrong country, or
| divert part of the contract to use as bribes. So I doubt
| this is a case where everyone at Apple laughed about how
| it was too good to be true, CC'd the lawyers, and the
| lawyers wrote back "yeah hahah".
|
| At the end of the day, you can't always find everything
| even if you try really hard.
| Dah00n wrote:
| You can make it yourself if it is important enough.
| actionfromafar wrote:
| Only suckers formally know _anything_.
| paulryanrogers wrote:
| There be dragons.
|
| Better a high trust society with some checks and balances
| than one ruled by "don't write down anything" sociopaths.
| MichaelZuo wrote:
| Which one do you think you currently live in?
| genr8 wrote:
| tell that to the lawyers who make a living defending
| corporations and putting up legal firewalls of plausible
| deniability
| willcipriano wrote:
| If only incompetence was a crime.
| actionfromafar wrote:
| To be clear, I don't like how it is. But if corporations
| have a personality, they either verge on or go full hog
| on sociopathic. Any corporate lawyer will tell management
| to not write down potentially incriminating.
|
| The better among corporations actually try to do the
| right thing, most of the time. But of course, if there's
| some kind of incident, there's still a lockdown
| mentality.
| phone8675309 wrote:
| This sounds like a case of Apple not doing due diligence on
| their subcontractors.
| genr8 wrote:
| a similar situation just happened between Nvidia and EVGA. NVidia
| makes the chips, And So, holds all the bargaining chips so to
| speak, and EVGA is just the board partner that has to find some
| way to make the price work. At some point it becomes impossible
| and they have to actually walk away in order to not be taken
| advantage of. We know this much, and I'm going to assume the
| situation was similar here with Apple and Wistron.
| kitsunesoba wrote:
| I think the Nvidia/EVGA situation might be a little different
| in that it looks like Nvidia is intentionally trying to squeeze
| out board partners like EVGA in favor of self-branded cards.
| The closer parallel is probably when Apple killed the Mac clone
| program by making it extremely difficult for clone makers to
| compete.
| mannyv wrote:
| "We didn't understand our costs, so we underbid and now are
| blaming Apple." - Wistron
| kitsunesoba wrote:
| It does seem likely that this is a case of a bit of column A, a
| bit of column B.
|
| Apple very well may have unrealistic demands, but I believe
| it's also likely that Wistron may not have dealt with the level
| of QC, precision, and consistency that is expected of Apple
| products and based their estimates on experiences of working
| with more typical hardware companies.
| dfox wrote:
| Wistron is large part of the reason why IBM/Lenovo ThinkPads
| are regarded as some kind of etalon of quality and
| repairability. I assume that most of the issue there is
| misunderstanding of how to run a factory in India and how is
| that different from both Far East and Europe.
| draw_down wrote:
| [dead]
| s1mon wrote:
| Yes, that's certainly a valid reaction, and is likely partially
| true. It's also true that Apple is very well known for very
| hard negotiation and squeezing their suppliers until there's
| only a few percent margin. You'd have to be insanely good at
| controlling all of your costs to make money all the time under
| that constraint. If yields change or component/material prices
| fluctuate the wrong way any predicted profit could disappear.
|
| Apple also pays suppliers on net 90. With inflation the way
| it's been, any miscalculation there will sink things. Not all
| suppliers know how to be banks too. Considering how much cash
| Apple has, this is really reprehensible.
|
| As a supplier to Apple, the gross numbers are so seductive
| since they are larger than just about anything else, but the
| net numbers are orders of magnitude less.
| crazygringo wrote:
| > _You 'd have to be insanely good at controlling all of your
| costs to make money all the time_
|
| But to be fair, that's what hardware manufacturers are
| _supposed_ to be good at.
|
| The whole point is that the ones who are good at it make
| money, the ones who aren't go out of business. That's
| capitalism in a nutshell at every level, and manufacturing
| _especially_.
| CharlesW wrote:
| > _It 's also true that Apple is very well known for very
| hard negotiation..._
|
| No successful company is over-paying suppliers.
| Centigonal wrote:
| There's a difference between over-paying suppliers and
| being literally the best in the world at squeezing
| suppliers, which Apple is IMO.
|
| You can argue (and I will argue) that Apple's skill at
| squeezing their suppliers while still maintaining reliable
| supply chains is a huge part of why they're the biggest
| company in the world (and also why Tim Cook and not Scott
| Forstall or Jony Ive succeeded Jobs). That squeezing has
| real human costs, which Apple is insulated from.
|
| They've outsourced the majority of their labor (and related
| liability) to a global cadre of high-volume, low margin
| suppliers, while capturing most of the value created by
| that labor by owning the Apple brand and maintaining tight
| control of information, resulting in an asymmetric
| risk/reward profile for Apple inc.
| mistrial9 wrote:
| "those who do business with Dell, go out of business"
| mistrial9 wrote:
| I fail to understand the negative votes (above), Dell did
| and does exactly what is attributed to Walmart and others
| in this thread. It is known among manufacturers but held
| in secrecy like so much in that business. Source:
| multiple years in used computer industry in California
| throwaway09223 wrote:
| Successful companies overpay suppliers all the time -
| especially if they're growing very fast and are focused on
| scaling growth over cost efficiencies.
|
| Large companies who've already scaled up their products are
| more incentivized to focus on cost cutting.
| geodel wrote:
| Send this list of overpayers to Wistron. Please help them
| make some money.
| smoldesu wrote:
| > No successful company is over-paying suppliers.
|
| If Apple did not over-pay their suppliers, the M1 would not
| have been manufactured on the 5nm node.
| spiderice wrote:
| That isn't over-paying. That's paying what they need to
| get the best. Unless you have some evidence that they
| paid X for 5nm when they could have paid less.
| lesuorac wrote:
| > Apple also pays suppliers on net 90.
|
| I've always been surprised at how much of the business world
| runs on credit. You hear stories about how payments have been
| months-years delayed (or never show up).
|
| I'd like to think if somebody got more than 100days behind
| I'd cut them off from the next shipment but never been in
| that spot.
| ekidd wrote:
| Apparently, one of the reasons that RedHat survived the
| dotcom crash was that they were absolutely merciless about
| companies that didn't pay on time for RedHat's
| engineering/consulting services.
|
| I recall someone who had several on-site RedHat engineers
| at his company, doing some kind of Linux work. The company
| missed one Friday payment to RedHat. Every single RedHat
| engineer was gone the following Monday, never to return.
| AYBABTME wrote:
| Any source? Looks like a very interesting story, would
| love to read more.
| coredog64 wrote:
| The way that China has handled this is that they view those
| razor thin margins as an opportunity to move up the value
| chain. 1) Foxconn opens an assembly plant 2) Supporting
| infrastructure is backfilled into the area 3) There's now a
| geographic industrial concentration that can support domestic
| electronic designers
| halJordan wrote:
| It's good to know the full story, but it's reprehensible? I
| don't want to cast stones but a really easy connection to
| make is that wistron took the contact knowing they could only
| "be profitable" by not paying their labor. So I'm supposed to
| hate Apple for doing what a business is supposed to do (and
| frankly being excellent at it). And I'm supposed to champion
| Wistron for what they did? That's reprehensible if we're
| throwing the term around.
| bdidbdidhdidh wrote:
| you really think apple gives a detailed build instruction on
| the bid war moment?
|
| it probably is a room full of parts and to win you have to
| commit to the non present parts too.
|
| just like fashion production bids btw
| jalk wrote:
| Or perhaps even more damning (as the article also mentions):
| "We expected to get away with paying our workers lower than the
| legal minimum"
| mouzogu wrote:
| https://nypost.com/2020/12/15/riots-at-apple-plant-in-india-...
|
| this is what apple does. they use their clout, then they turn
| their back and play ignorant whilst placing unrealistic demands
| on the subcontractors who then place those demand on the labour.
|
| from: https://www.macrumors.com/2023/02/14/only-half-of-indian-
| iph...
|
| > "Apple engineers told that Chinese iPhone suppliers and
| government officials have a "whatever it takes" approach to win
| iPhone orders, work was often completed weeks ahead of schedule
| at "inexplicable speed". In India, [we] are not running at this
| pace. "There just isn't a sense of urgency," one Apple engineer
| remarked."
|
| Remember, this is a $3 trillion company, with resources greater
| than most countries. A company built on tight control of
| information. If you see lots of positive or misdrecting comments,
| it's not necessarily a coincidence (imo).
| petre wrote:
| > "There just isn't a sense of urgency," one Apple engineer
| remarked."
|
| Apple meets India, nothing new. They'll just have to adapt.
|
| https://youtu.be/BTd-PWYQy4Y
| wincy wrote:
| As an aside, it's ridiculous that video got flagged as a
| video for kids and suggests downloading the YouTube Kids app.
| gowld wrote:
| It's a pirated video (but the original channel seems to be
| missing that video https://youtube.com/@selfhelpsingh)
| afro88 wrote:
| And there's no way to give feedback that it's been
| miscategorised
| atorodius wrote:
| FWIW I think the uploader sets this flag, not some
| algorithm.
| TazeTSchnitzel wrote:
| It's not that simple, YouTube itself can also set it, and
| I'm not sure how that works, maybe it's algorithmic.
| Sometimes it's done manually.
| reaperman wrote:
| This is the same playbook the auto industry has followed for
| the past 50 years or so.
| ralph84 wrote:
| > this is what apple does
|
| This is what globalism does. Take the environmental destruction
| and shitty working conditions that would never be allowed in
| your own country to other countries and centralize the profits
| from doing so into the hands of a few.
| nervlord wrote:
| [dead]
| slg wrote:
| This is what capitalism does. Crossing borders might make
| things easier because laws and the cost of doing business
| will vary, but using your power to squeeze every cent you
| possibly can out of your business partners is a function of
| capitalism and not globalism.
| b59831 wrote:
| [flagged]
| ly3xqhl8g9 wrote:
| At least our current surface finishing technology has advanced
| so we no longer see the kid sized hand prints [1]. "Apple's
| cobalt batteries are built on the backs of child labor in
| mines, causing severe physical harm to children and violating
| international standards of human rights." [2] Their PR: "Apple
| will use 100 percent recycled cobalt in batteries by 2025" [3].
|
| [1] Kid sized hand prints on old victorian roof tiles,
| https://www.reddit.com/r/interestingasfuck/comments/13oser2/...
|
| [2] 2022, Child Labor and the Human Rights Violations Embedded
| in Producing Technology,
| https://www.culawreview.org/journal/child-labor-and-the-huma...
|
| [3] https://www.apple.com/newsroom/2023/04/apple-will-
| use-100-pe...
| crooked-v wrote:
| You seem to be assuming that 3 is a lie, but I'm pretty sure
| someone would notice if Apple wasn't actually changing the
| sources of their rare earths.
| avmich wrote:
| Cobalt is not a rare earth. Changing sources happens
| gradually, mostly not overnight.
| beambot wrote:
| Tracing the source of materials is very non-trivial. Even
| diamonds, where UUIDs are commonplace, still have to manage
| the influx of blood diamonds into the global supply chain.
| ly3xqhl8g9 wrote:
| PR means Public Relations and I meant nothing more than the
| fact that it is an Apple official response. Certainly says
| something about our times when you directly expect PR to be
| lies.
|
| They might just as well change their sources now, or after
| 2025. The trillions are already in their banks; the
| children that mined until now are dead or close to; we, the
| consuming public, have been compromised because we like
| shiny toys (I own quite a few Apple products, at least a
| dozen children, they are so frail, must have been murdered
| to manufacture them); all is great. All that's left is to
| think of a truly unimaginable science fiction story: a
| $2.7+ trillion company is found guilty for the death of one
| single child and the company is dissolved.
| phone8675309 wrote:
| They're using the Walmart playbook
| cptskippy wrote:
| The book The United States of Wal-Mart by John Dicker laid
| this all out pretty clearly nearly 20 years ago.
|
| * corrected spelling the author's name.
|
| **https://www.amazon.com/United-States-Wal-Mart-John-
| Dicker/dp...
| m463 wrote:
| also another story: https://www.fastcompany.com/47593/wal-
| mart-you-dont-know-2
| nell wrote:
| Does this book really exist? Google search on Amazon shows
| no results for this.
| no_wizard wrote:
| Appears the author's last name was a typo. Its John
| Dicker[0] not Decker
|
| [0]: https://www.goodreads.com/en/book/show/312990
| cptskippy wrote:
| I miss spelled the author's last name but the result
| still shows up:
|
| https://www.amazon.com/United-States-Wal-Mart-John-
| Dicker/dp...
| [deleted]
| A4ET8a8uTh0 wrote:
| Some context may be needed. Walmart is known in MBA circles
| for being one of the first companies to have used detailed
| data on products to negotiate new terms with suppliers (
| usually to suppliers detriment ). Information asymmetry with
| main goal to increase a chance for an increased leverage is
| what it is all about.
| ska wrote:
| I suspect the information asymmetry is as big a factor as
| the scale difference. In most negotiations, Walmart can
| fundamentally affect the bottom line of the counter party
| in a way that just isn't true in the other direction. They
| are more than happy to use this to the counter party's
| detriment, and even sometimes the consumers.
| mbesto wrote:
| Ok, so what do people expect the alternative route is? It's
| a known strategy, that works, and increases profit if
| implemented correctly.
| thatguy0900 wrote:
| The alternative route people would prefer is for people
| in charge of these companies to act ethically and not try
| to squeeze everyone around them for every cent of profit
| possible. Especially if you're already one of the richest
| companies to ever exist. That's not very realistic,
| though, since sociopathy is essentially taught in
| business schools now.
| smabie wrote:
| Everyone is trying to squeeze everyone else, including
| you. This isn't about sociopathy, this is just the human
| condition.
| webmobdev wrote:
| Doesn't Toyota do something like that - from what I
| remember, they actually assist their partner-supplier-
| small-businesses to grow with soft loans, technical help
| and business advise?
| phone8675309 wrote:
| If you work full time at federal minimum wage then you
| qualify for food stamps and other government assistance.
|
| Walmart took it a step further - they have information
| for their employees on how to do that efficiently, rather
| than paying a living wage.
| nicoburns wrote:
| This. And I'd add, we'd like a legal environment that
| rewards people and companies who act in this way over
| those companies that act unethically in pursuit of
| profit.
| HollywoodZro wrote:
| > people in charge of these companies to act ethically
| and not try to squeeze everyone around them for every
| cent of profit possible
|
| That's our stock market though. If Walmart isn't
| squeezing on costs, then it needs to make that up in
| gross revenue otherwise the stock will suffer.
|
| Is it possible to be "ethical" in how you define it, when
| the financial market performance of the company is
| largely dependent on this?
| avmich wrote:
| I wonder if the supplier can similarly have the detailed
| data on the customer and how that helps in negotiating both
| ways.
| steveBK123 wrote:
| It's asymmetrical for the most part on a lot of stuff Was
| listening to Bloomberg the other day and they were
| talking about how Walmart is the biggest grocer in US.
| They have pricing power because for example they
| constitute something over 5% of all Heinz sales. Similar
| for paper products from one of the big companies like
| Procter & Gamble.
|
| The inverse is not true, as you are unlikely to find any
| vendor who Walmart makes 5%+ of all their sales dollars
| off of.
|
| So Walmart can generally turn to any of these vendors and
| say - we will evaporate 5% of your sales overnight if you
| don't give into demand, and send all our orders to some
| competitor.
| carlosjobim wrote:
| I've never understood this. If you're not making enough
| profit - or even loosing money - selling to a large
| client, you are better off without them. Profit should
| come before everything else, including growth.
| collaborative wrote:
| Then you wouldn't exist. Even the smallest business goes
| through years of losses before it (hopefully) reaches
| profitability. Pay to sell is the only way nearly 100% of
| incumbents have to simply exist. If they don't do it,
| someone else will
|
| Traditionally, businesses build a reputation and
| customers learn where to find them (a physical location).
| They then become and stay profitable. Anyone depending on
| a monopolist for its pay-to-sell strategy won't usually
| reach profitability. The monopolist might be as small as
| a greedy feudal lord in the middle ages. Today we have
| Apple/Google etc
| fatbird wrote:
| This is part of it, but a bigger part is simply that
| Walmart approached suppliers with a proposed volume that
| would require the company to rebuild themselves as an
| operation in order to meet that demand and the required
| service levels, at the price Walmart was willing to pay.
|
| If they succeeded (many didn't, ending in bankruptcy), the
| supplier was now trapped: no one could offer Walmart levels
| of volume, which the supplier now had to operate at to make
| a profit. Walmart could come back next year and demand
| lower prices. They famously joked amongst themselves that
| their goal was to drive out all profit for their suppliers.
|
| Vlassic Pickles is the classic example of a company that
| took the offer, rebuilt themselves, and became massively
| larger than they were before.
|
| I worked at a manufacturer for several years in IT. Walmart
| was a customer, but only in a limited way (i.e., without
| requiring huge volumes and service levels[0]). Our main
| competitor, Rubbermaid, was a tier 1 supplier. When
| Rubbermaid's main factory in the segment burned down,
| Rubbermaid withdrew from Walmart as a supplier, citing low
| profit margins. We got the call to come to Bentonville,
| where they offered us the chance to replace Rubbermaid,
| which would mean a fundamental restructuring of our entire
| operation to service them. We (wisely) declined.
|
| [0] An example of the service level required: Walmart would
| send an order by EDI that would include a two hour window
| for delivery, 24 hours out, for a store. That meant you had
| to have inventory and drivers within a certain distance
| from every Walmart location so that you could immediately
| pick the order, get it on a truck, and arrive at the store
| within that two hour window.
| ska wrote:
| I remember a claim (from Vlassic itself?) also that
| Walmart pushed them into producing larger volume SKU's,
| against their (Vlassic's) detailed data on usage, shelf
| life, etc. Result: more mouldy pickles in peoples
| refrigerators. Hurt Vlassic as a brand, not really in
| consumer interest, but Walmart could advertize a $/volume
| nobody could match.
|
| I met an independent trucker who said he sometimes did
| pressure relief for a large logistics company but would
| refuse any Walmart deliveries (not to the stores, to
| central warehouses). He claimed they gave you a 15 min
| delivery slot on a cross country route, they only way to
| avoid penalties was to aim to be there hours early and
| wait on your slot. He said it basically added 3-6 unpaid
| hours for every trip, and wasn't worth it.
| kyleyeats wrote:
| > a sense of urgency
|
| I've never heard this phrase from anyone that wasn't nakedly
| seeking power and compliance from others.
| SkyMarshal wrote:
| I first heard it from the military, where training seeks to
| recreate the stressful fast-pace conditions of an actual
| battle or war.
|
| Years later I started hearing it in business too, as if
| management circles thought it would be useful in increasing
| production rates. Not accounting for the fact that levels of
| urgency similar to military training may not be sustainable
| in peacetime, and result in workforce burnout and other
| problems.
|
| A better alternative I've seen in high-impact academic
| research groups is "focus", rather than urgency. Focused
| effort produces research results, and can even be energizing
| rather than draining and burnout inducing. I would hope
| business circles would adopt that academic approach rather
| than the military one.
| treis wrote:
| That is not my experience at all. It's even used by sports
| announcers. As an example: "The offense needs to move with
| more sense of urgency given the clock."
| Krasnol wrote:
| > If you see lots of positive or misdrecting comments, it's not
| necessarily a coincidence (imo).
|
| And right there the topic drowns in whataboutisms before it
| disappears from the frontpage.
| saiya-jin wrote:
| > If you see lots of positive or misdrecting comments, it's not
| necessarily a coincidence (imo).
|
| I like HN a lot but for this type of topic, its consistently,
| desperately, and annoyingly un-objective (if thats a word). I
| do get that we humans tend to form echo chambers by ourselves
| just to validate our viewpoints and decisions however
| subjective they may be, but I expect a bit more than what I see
| here from some of the smartest folks on Earth.
|
| Their influence is _very_ visible also in other places, ie
| otherwise great web for photography - dpreview.com is a pure
| echo chamber for Apple. Every apple product is discussed in
| details and glorified, any problems are completely ignored.
| Most competition is given almost 0 coverage, especially direct
| competitors or those that currently surpass some of their tech
| at given time. And we don 't talk US-vs-China stuff, many phone
| manufacturers don't have any China ties at all, or are outright
| US companies.
|
| There is no way in hell Apple is not pouring tons of cash into
| ironing their fuckups, or just errors in judgement, infrequent
| as they are, and HN is way too visible and important to not be
| part of such an operation. To skip it would be a very junior
| mistake, and there are no juniors in this space in 2023, not
| with richest company globally.
| buescher wrote:
| If Wistron was having quality problems, as has been rumored about
| iPhone production in India [1], this could have been the sort of
| deal where both sides lost.
|
| [1] https://www.theapplepost.com/2023/02/26/apple-
| disappointed-w...
| eunos wrote:
| Wistron exit from India
| https://economictimes.indiatimes.com/tech/technology/wistron...
| MuffinFlavored wrote:
| what portion of apple assembly for things like
| macbook/watch/iphone aren't 100% done by machine, and if they
| aren't 100% done by machine (which they aren't), it sounds
| extremely not easy to do by hand (especially at scale, for "low
| wages")
|
| what parts can't they automate?
| MichaelZuo wrote:
| Most of the final assembly is done by hand. Hence why so many
| people are needed in the final assembly factories of Foxconn,
| Wistron, etc.
| buescher wrote:
| Automation doesn't guarantee quality, and it is hard to do at
| a high quality level, at scale, also.
| manuelabeledo wrote:
| What I read is that Wistron didn't have a good strategy getting
| in India, and that cost them Apple's business.
| smoldesu wrote:
| So... is it possible to make iPhones outside of China or not?
| nradov wrote:
| Yes, iPhones are also manufactured in Brazil and India. This is
| largely due to trade barriers in those countries.
| mdasen wrote:
| Yea, I think it started with trade barriers, but I think
| Apple likely wants to increase non-China manufacturing to
| reduce their risk a bit. Tensions with China have been a bit
| high and when you're Apple's size, it can be good to lessen
| the risk there. Even if it's unlikely that something would
| cause a disruption, when you're a nearly $3T company it's
| probably wise to diversify that risk. Apple's annual revenue
| is greater than the GDP of many countries like Finland or New
| Zealand. Ramping up manufacturing in India could be a good
| hedge against China or the US doing something that might
| impact their exports from China.
| ihsw wrote:
| Wistron has has a rough history, including
| underpaying/withholding pay from employees[1]. Good riddance.
|
| [1] https://www.businessinsider.com/apple-says-wistron-on-
| probat...
| shp0ngle wrote:
| While Foxconn has... good history?
| dogma1138 wrote:
| Foxconn offers robust safety net for its employees...
|
| (I'll walk myself out now).
| misterprime wrote:
| Literally literally.
| tomxor wrote:
| Only if they are lucky, retaining limbs is not a
| contractual obligation for Foxconn.
| cush wrote:
| Apple is so huge that they treat their manufacturers like a
| freelance design contracts... "We'll let you build our devices.
| We can't pay you, but think how amazing it will look to have
| Apple in your portfolio!"
| southwesterly wrote:
| "Oh, by the way, sign this NDA so you can't even talk about
| it."
| unicornmama wrote:
| It might appears unfair from Apple's side to take advantage of
| their position. However, hardware manufacturers do not resemble
| naive and exploited children. Commoditized vendors experience
| pressure to zero their margins from their largest customers.
| Every big customer does this (Wallmart, Google, Amazon, etc.)
| It's textbook business strategy.
| avmich wrote:
| Capitalism. If manufacturers can't count their beans, who'll do
| that for them? Of course same applies to actual freelance
| persons - where the dynamics is substantially different.
| supernova87a wrote:
| Apple _does_ help its suppliers to make a profit -- but the
| amount of profit that sustains a healthy set of vendors for
| Apple, at quality levels and corporate practice levels that Apple
| evaluates as "fair".
|
| Now, you may criticize that this holds vendors over a barrel and
| squeezes them to narrow margins, etc. But at least give Apple
| credit for having a view to the long run and trying to create a
| pool of vendors that it can rely on in a sustainable way, and not
| just some surge capacity for the next quarter only to drop them.
| Apple thinks longer than that. Their procurement function is
| quite skilled.
|
| And it's not like the vendors would magically have some source of
| business at better terms than Apple that would be good for them
| _in the long run_ either. You want suppliers to somehow be raking
| in great margins in excess of what was "fair"? You want an
| employer who's more clueless and lets you make lots of extra on
| the top?
|
| A successful supplier to Apple knows what it's capable of and
| what its costs are, signs on to grow with Apple and become
| successful, and share in the practices that make a company
| efficient, skilled, productive. They can choose to join this
| train. Or not. It's voluntary.
| rullelito wrote:
| Vendor says they can't make profit. Wall-of-texter on HN says
| they can.. So hard to know who to believe..
| lotsofpulp wrote:
| Given that Apple has delivered tons of devices into people's
| hands and continues to do so for well over a decade, I am
| going to go with the common sense that Apple's suppliers must
| be earning a profit, otherwise they would not be doing
| charity work for Apple.
| squokko wrote:
| Flagship customers often do this to vendors. They know that
| "Apple is our customer" is a big selling point, so they turn the
| screws tight and make the vendor serve them for no margin.
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