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Lenovo Building Manufacturing Plant in North Carolina 120

Posted by Unknown Lamer
from the unknown-lamer-sent-to-the-factories dept.
An anonymous reader writes "One of the major themes of the ongoing presidential election in the United States has been the perceived need to bring product manufacturing back to the United States. A recent announcement from Lenovo is going to play to this point; the PC manufacturer said today that it's building a U.S. location in Whitsett, North Carolina. The new facility is small, with just over 100 people and is being built for a modest $2M, but Lenovo states that it's merely the beginning of a larger initiative." It makes sense: their U.S. HQ is a stone's throw away in RTP.
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Lenovo Building Manufacturing Plant in North Carolina

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  • by alphax45 (675119) <kyle.alfred@gmail . c om> on Wednesday October 03, 2012 @01:51PM (#41540603)
    Just a new line inside an existing facility. Still good news :)
    • by Jeremiah Cornelius (137) on Wednesday October 03, 2012 @02:06PM (#41540827) Homepage Journal

      Another Chinese mega-corp, exploiting cheap labour conditions in a distressed 3rd world economy.

      • Well, it is ironic...will the rich Chinese follow with massive outsourcing to the third-world US in all areas of industry? :-)
        • Given that the average monthly salary at Foxconn is $350 and the working conditions are miserable and that this is still considered a great job in China where there are waiting lists just to apply, there is still some way to go until US workers are competitive to their Chinese counterparts.

          • by jopsen (885607)

            this is still considered a great job in China where there are waiting lists just to apply, there is still some way to go until US workers are competitive to their Chinese counterparts.

            [Citation Needed]
            And you should probably find a source from 2012.

          • by mcgrew (92797) * on Wednesday October 03, 2012 @03:51PM (#41542041) Homepage Journal

            Given that the average monthly salary at Foxconn is $350

            That is a meaningless number. When I was in Thailand in the USAF, it was a 3rd world country (since industrialized). The bungalow I rented cost $30 per month, woman included. I could feed four for a dollar in a nice restaraunt. I could take a bus anywhere in the coutry for five cents, a taxi for a buck. A tailored shirt was five bucks. When I was in Delaware I lived like a pauper, eating in the mess hall and living in a barracks and was always broke, same salary in Thailand and I lived like a king.

            I'm twice as rich as someone in Chicago earning the exact same amount as me, because prices there are twice what they are here, especially for essentials like food and rent and utilities.

            Without pricing info, the monthly salary is a meaningless figure. They most likely indeed do live terrible, poverty stricken lives, but otoh $350 may be a lot of money there and they could possibly be living better than me.

            • It is not meaningless in the context of the conversation, which is about how much the company must pay those workers, versus how much it must pay a US worker to do the same or probably worse job. An equivalent US worker would cost the company at least 10-15 times as much when you include salary, benefits, taxes and increased overall cost of doing business in US (rent, supplies etc).

            • by fafaforza (248976)

              Yes, but if you pay your US employee $2000/month, with the Chinese equivalent making $350, how much will you be selling your laptops for, and for that matter, who will actually afford to buy them. Manufacturers go to Asia, India, Eastern Europe and South America because of labor cost difference to the price you can ask for the product in other economies (which I'm sure you understand).

              • Re: (Score:2, Informative)

                by Anonymous Coward

                What is the labor content of that laptop in dollars? It's pretty small. There was a report a while ago that paying the Foxconn workers standard US wages would add $17 per unit or so. This isn't some hand made product here, the cost is in many things, the labor is a fairly small fraction. Add in the costs of expedited shipping, and 'poof' away goes that differential. Add in growing wages in the coastal regions of China, some labor distress and 'poof' away goes more of it.

                There are metal fabrication hous

                • by fafaforza (248976)

                  Question is, are all parts of a computer created by and at Foxconn? Did they only consider the assembly line, or every single piece? What about things like insurance, unemployment, etc, etc? And did they consider all people in the chain like managers et al, or only assembly line workers that would be making $12/hour? I'm not convinced that the additional cost would be that little. If it was, then it would make little sense to outsource there as you then have to ship the stuff halfway around the world a

              • by Hadlock (143607)

                You can still afford them. Dirt cheap goods are a fairly recent phenomenon. The world will not implode if the cost of non-durable goods goes up by 10%.

      • by zlives (2009072)

        This was interesting to me regarding $.23/hour labor from prisons in US

        http://www.colbertnation.com/the-colbert-report-videos/419674/october-01-2012/the-word---supply-chained [colbertnation.com]

        • The plan to re-build America's manufacturing base?
          Shifting funds from education to penal corrections.

          It's been going on for years, now. Like the history of Australia, in reverse.

      • by unixisc (2429386)
        You beat me to it. Apparently, outsourcing has worked so well for US companies that now the Chinese are trying it out. And that too on the US, not to some Elbonian dictatorship in Africa where people sell mud for a living.
      • by formfeed (703859)

        Another Chinese mega-corp, exploiting cheap labour conditions in a distressed 3rd world economy.

        Well, it is a "right-to-work" state.

        But with Lenovo at least the workers will have some kind of safety net.
        Literally.

  • Relatively stronger opposition to government interference has led to a tax structure which is more attractive to business.

    • by DogDude (805747)
      So, you're suggesting we should be in a race to the bottom and just eliminate all taxes on businesses?
      • Re: (Score:2, Troll)

        by ShanghaiBill (739463)

        So, you're suggesting we should be in a race to the bottom and just eliminate all taxes on businesses?

        Yes. Businesses should not pay income tax on their profits. They will either pay the profits out to their stockholders, who pay tax on the income, or they reinvest it to generate more jobs much more efficiently than the government would. By taxing businesses, we are just discouraging companies from investing and pushing jobs overseas.

        Currently dividends are taxed at a very low rate (just as Mitt Romney) but that is because they are already taxed at the company level. But by taxing at the company level w

    • by bwintx (813768)
      Perhaps also related to NC's being a "right-to-work" state. TFA didn't mention that as a factor, so I'm just guessing.
    • by Nidi62 (1525137)
      Im pretty sure the Research Triangle has more to do with the fact that it is formed by the triangle of Duke, UNC-Chapel Hill, and NC St, which are strong tech/science/research schools. Plus there's the fact that the Triangle has been around since the 50s. This is what makes it attractive to businesses, especially reasearch and tech companies.
    • Yeah, 'cuz the South never got no Federal money....hey wait.....
    • This is true for states like Texas. I don't know that I've ever heard anyone brag too much about North Carolina tax structure. I didn't look it back up but if I recall correctly they're kind of middle of the pack to high side for a US state if I recall.
      • by h4rr4r (612664)

        I bet cheap land and low cost of living has even more to do with it. Just wait until those areas get built up. Then the companies will move to the next backwater.

        Texas is from what I can tell a terrible place to live. You can't even walk to the bars since everything is either 6 lane or a dry county. I don't mind go there to hunt or visit my family, but I could never live there.

  • Just don't put it near any military bases...

  • ..has our dollar really declined that much?
    • by Anonymous Coward

      I would think this would be related to the US Government refusing to purchase computer equipment not made in the US. It's a market that IBM/Lenovo used to dominate and the costs of running this production line in the US is more than outweighed by what they'll make from new government contracts.

      • by rwise2112 (648849)
        I'm just curious as to who would qualify for a requirement of equipment to be made in the US? And what's the definition of 'made' in this case anyway, since nearly all components except processor and GPU, will still be made overseas anyway and just assembled in the US.
      • Transportation is probably a factor, as well. For things like warranty work or build-to-order configs, the customer doesn't want to wait for the boat from China or pay for the plane from China.

        Companies that sell nothing but prebuilds don't care as much; but if you do customization it isn't uncommon to have a 'slapping FRUs into boxes' plant somewhere in the US or northern Mexico that is supplied with more labor intensive parts from elsewhere.

      • From a Chinese company? Hmmm......if they are worried about Wind Farms near drone facilities, somehow I don't see them purchasing laptops made by a Chinese company.
        • by jdray (645332)

          It's likely that the "no wind farms near drone facilities" was as much about getting the builder to select US-manufactured turbines over Chinese-manufactured ones for the purpose of encouraging US manufacture of a lot of large, expensive machinery rather than some fear that the Chinese are going to embed spy cameras in windmills.

    • by ShanghaiBill (739463) on Wednesday October 03, 2012 @02:15PM (#41540929)

      ..has our dollar really declined that much?

      It is not so much the decline of the dollar, as the automation of manufacturing. As factories become more automated, the "labor" component of the cost goes down, and at some point is exceed by the transportation and inventory costs of off-shoring. At that point it becomes cost effective to "re-shore" the factory.

      I have been inside factories in both China and the USA. Chinese factories bustle with people. American factories tend to be almost devoid of all lifeforms. Manufacturing is coming back to America, but manufacturing jobs are not.

      • by tlhIngan (30335)

        is not so much the decline of the dollar, as the automation of manufacturing. As factories become more automated, the "labor" component of the cost goes down, and at some point is exceed by the transportation and inventory costs of off-shoring. At that point it becomes cost effective to "re-shore" the factory.

        I have been inside factories in both China and the USA. Chinese factories bustle with people. American factories tend to be almost devoid of all lifeforms. Manufacturing is coming back to America, but

      • by Formalin (1945560)

        It's mindboggling where that point is though.

        Whenever I see things like a $30 bench with heavy cast iron ends - made in china. How does it not cost that much just to ship the thing...

        Why are Chinese iron frying pans cheaper than ours? Not a whole lot of labour involved really, but an awful lot of weight for shipping.

        Then there's other things - I notice a lot of canned corn, for example, is made in Thailand. Canned fruit from South Africa, and more and more Chinese fruit and veg.

        How the fuck is it possible t

        • by volmtech (769154)
          Put your farmer hat on. Caned corn comes from sweet corn, not regular field corn. It is harder to grow, needing pesticide sprays every three days and must be harvested at peak of sweetness. It can be harvested by machine but hand harvesting allows unripe ears a few days to mature. Sugar is usually added to caned fruit, world sugar prices are much lower than the tariff protected price of U.S. sugar.
  • by tqk (413719) <s.keeling@mail.com> on Wednesday October 03, 2012 @02:01PM (#41540755)

    WTF does RTP mean, in context with this story?

    • by Anonymous Coward on Wednesday October 03, 2012 @02:03PM (#41540773)

      It stands for Research Triangle Park

      http://en.wikipedia.org/wiki/Research_Triangle_Park [wikipedia.org]

    • by Qzukk (229616)

      Seems to be Research Triangle Park [rtp.org]

    • Research Triangle Park, at a guess, since it's in North Carolina.

    • by fm6 (162816)

      It's an abbreviation for "Slashdot editors are not detail-oriented".

      The "makes sense" comment is lame. Proximity to your HQ is not a priority for factories. The right kind of labor pool and low operating costs are far more important. The SE U.S. is known for both, which is why IBM built up there. Both Lenovo facilities are probably part of the the real estate they acquired when they bought IBM's PC division.

      (Yes, I am an expert, kinda. Three years on various Sun hardware product teams.)

      This is boutique manu

      • by alteran (70039)

        Also, the "stone's throw" is like about an hour at highway speeds. Some throw. ;-)

    • as had been said Research Triangle Park (its an area with a bunch of different tech companies i think RedHat is one of them) if you live in NC you would know BUT SOMEBODY SHOULD HAVE EXPANDED THAT BIT for non-locals.

  • I, for one, welcome our new Chinese Overlords!

    • by fm6 (162816)

      You're late toi the party. By 20 years or so.

    • I, for one, welcome our new Chinese Overlords!

      Did you know that we got the word 'Obligatory' from the Japanese phrase: "domo obligato mistah ra bahtoo"? Which basically means: "automated comment".

  • How Funny (Score:5, Interesting)

    by WindBourne (631190) on Wednesday October 03, 2012 @02:15PM (#41540949) Journal
    American companies can not build here, but Chinese can. Just amazing how bad American leadership has become.

    At this point, if the west really wants to acknowledge China's gov cold war and take it on, then we should start sending as many MBA's to China as humanly possible. Of course, the Chinese will probably realize it and simply put a bullet in each one of them and then charge the USA for it, while subsidizing and dumping the rest of the ammo on America's market.
    • by Nidi62 (1525137) on Wednesday October 03, 2012 @02:26PM (#41541089)

      Of course, the Chinese will probably realize it and simply put a bullet in each one of them and then charge the USA for it, while subsidizing and dumping the rest of the ammo on America's market.

      Hey, fewer MBAs and cheaper ammo. Sounds like a win win to me.

    • by fm6 (162816)

      I share your cynical view of U.S. business leadership, but Lenovo's attempt to PR this as a bold new U.S. manufacturing initiative is pure spin. They're simply expanding a small facility they bought from IBM years ago.

      • Re:How Funny (Score:5, Insightful)

        by WindBourne (631190) on Wednesday October 03, 2012 @03:26PM (#41541795) Journal
        Oh, there is little doubt of that. However, it is STILL more than what large American companies have done. Hell, you have ppl like Carly Fiorina, Meg Whitman, Immelt, Rometty, Palmisano, Dell, Gates, Jobs, etc arguing that the best way to help American companies is that they be allowed to bring back tax free the money that W/neo-cons tax breaks gave them. Of course, we did this once already, and NONE of it was used to create new jobs here in the USA. So it is twisted that it is even being suggested.

        Yeah, I have little faith in Chinese companies, since 99% of them are controlled by the Chinese gov, OR are loyal to their nation (and I do not blame them for that). BUT, America's large business leaders are the worse scum on this planet.
        • by fm6 (162816)

          No argument, though my ire is directed less at the leadership of big business than at a tax and financial system that favors the megacorp. If we're ever going to start re-importing manufacturing jobs, we need small and medium businesses to be able to finance their ops, something they can't do now.

          And I think it's a little simplistic to think of Lenovo as an arm of the Chinese government. Their actual equity is only about 15%, and even that's indirect. Now, you might think the fact that they're an ideologica

          • I would have to say that businesses will never re-import the jobs. Instead, new products must be created by new companies and then protected via decent IP (though I think that we need to kill off method patents; one of the more evil things that the courts have done/allowed).

            Lenovo is VERY MUCH an arm of the Chinese gov. All of the top ppl are buried deep into the Communist party. Just because Chinese Gov. does not have a direct ownership, does not mean that they do not control them. It is no different th
            • by fm6 (162816)

              All of the top ppl are buried deep into the Communist party

              Yes, and everybody at Koch Brothers belongs to the Republican Party. That gives them influence over the party, not the other way around.

              The majority remains under Chinese control.

              I assume you meant "under Communist control." But your conflating "China" with "Communist" is kind of revealing. Yeah, the country is still controlled by a cadre of people whose official goal is world revolution, the end of capitalism, and the worker's paradise, yada, yada, yada. But look at the way they've run China for almost 30 years: like a business. To make that busine

    • Didn't Boeing try to build there?
      Pretty sure Boeing qualifies as an American company.
      Maybe not, the American government squashed them.
      Maybe the problem isn't necessarily business leadership....

      • The 787 is built all over the world. They brought a harvard MBA from GM that said that by outsourcing, they could solve all of their issues. The 787 is such a disaster in terms of time delays and screw-ups, that it is now officially worse then the 747 was (and that was cutting technology).

        However, Boeing DID open a plant in NC to assemble aircrafts and it is going even now, as we speak. So, no, it is the f'ing business idiots.
  • The worst crowd who could possibly own a company. I'd say this is just a token gesture to lull us into a false sense of security that outsourcing to China has any long term benefits
    • by lexlthr (2038974)

      The worst crowd who could possibly own a company. I'd say this is just a token gesture to lull us into a false sense of security that outsourcing to China has any long term benefits

      From http://en.wikipedia.org/wiki/Lenovo [wikipedia.org] Responding to claims that Lenovo is a state owned enterprise CEO Yang Yuanqing said: "Our company is a 100% market oriented company. Some people have said we are a state owned enterprise. It's 100% not true. In 1984 the Chinese Academy of Sciences only invested $25,000 in our company. The purpose of the Chinese Academy of Sciences to invest in this company was that they wanted to commercialize their research results. The Chinese Academy of Sciences is a pure research

    • by fm6 (162816)

      The "worst crowd"? I was unaware that Donald Trump was a commie.

      U.S. companies don't check with their stockholders every time they add a hundred-empoloyee manufacturing line, so Lenovo doesn't do the same with the Chinese Government. Which, incidentally, doesn't have a direct or majority stake in Lenovo. What they do have is the semi-autonomous Chinese Academy of Sciences, which has a 1/3 stake in Legend Holdings, which has a 1/3 stake in Lenovo. The other 2/3 of Lenovo belongs to private entities, includin

    • by Anonymous Coward

      US debt is owned by the Chinese.

  • Did the US government do anything to incentivize Lenovo to make this decision or did Lenovo make it all on their own? What I'm wondering is whether the gov't is doing more than just talking about doing more manufacturing in the US.
    • by TimHunter (174406)

      There were no state or local incentives. Around here this is regarded as a major plus. We're feeling a bit burned by PC manufacturers.

      Another major difference between Lenovo and Dell is that Dell was lured by a pledge of up to $280 million in state and local incentives, which at the time was a record for North Carolina. Lenovo sought no incentives and received none, said state Secretary of Commerce Keith Crisco, who was among the host of dignitaries who attended Tuesday's news conference.

      In 2005 Dell

  • > the perceived need to bring product manufacturing back to the United States

    Why would the act of bringing any sort of employment back to the states be considered a 'perceived need'?

    • by thaylin (555395)
      Because you can do it with other job sectors, not just manufacturing. It is perceived, because it is not required to bring jobs back.
      • Explain this to unemployed American manufacturing workers who perceive a need for income. Not everyone has the ability or means to change careers, especially when there aren't many jobs to be found in other sectors these days. With the way the economy is, why would we not welcome any and all domestic employment opportunities?
  • by Anonymous Coward

    I'm posting this anonymously to protect the guilty.

    I work for a company that makes great products, but isn't exactly a cutting-edge manufacturing powerhouse. I had a suspicion that the pendulum was starting to swing the other way when we moved our manufacturing to China.

  • It makes sense: their U.S. HQ is a stone's throw away in RTP.

    Hopefully the stones are made in the US.

  • Dell opened a plant in NC some years back, pocketed the tax incentives, ran it a few years and then abruptly closed it. It wouldn't surprise me if Lenovo did the same.

  • This is China offshoring to USA.
  • Government contracts (Score:2, Informative)

    by Anonymous Coward

    My wife replaced her government issued laptop recently. She was free to get whatever laptop she wanted, as long as it was not made in China. So she ended up with a Dell assembled in Ireland with parts manufactured in China. I assume the NC facility will be mainly a federal government procurement facility to comply with the "not from China" policy.

  • where we are grateful to our Asian overlords for considering us worthy of manufacturing jobs. Disgusting. Ross Perot was right in '92 about this and about NAFTA. He said there'd be plenty of jobs, alright on both sides of the broder, both paying $7.50 and hour
  • by ErichTheRed (39327) on Wednesday October 03, 2012 @03:16PM (#41541659)

    Even if it's just for PR points, some domestic manufacturing employment is a good thing. The reason why isn't nice, it's not politically correct, but it's the facts:

    Not everyone is intelligent enough for knowledge work.

    In my opinion, if we continue the way we're going, we're going to spiral into a society with three classes -- business owners, knowledge workers and a huge swath of working poor. If everyone has to complete at least a masters' degree to secure a place in one of the top two classes, that completely ignores the other 75% of the IQ distribution.

    Think about the way society was organized in the 50s through the 70s:
    - Only the highly intelligent and/or well off went to college. They typically inherited a business, got a technical, science, engineering or other kind of knowledge job, or became academics. Each one of these outcomes guaranteed a stable job for life because that's what business ownership, academia or large corporate employment did back then. This is still the preferred path, minus the guarantees of course.
    - For the high end of the medium-intelligence scale, there were plenty of paper-shuffling jobs in corporate environments. Remember that before computers, automation and email, large corporations had to employ thousands of file clerks, secretaries and layers of management that just routed paper reports around. Because US companies were doing so well, and things couldn't be outsourced and automated, a huge upper middle class thrived.
    - For the low end of the medium-intelligence scale, there were millions of factory jobs. They were all simple, stand on a line for 8 hours and perform a single task or set of tasks. Because of unionization and a lack of global competition, even those jobs were stable and paid reasonable living wages. This was the bulk of the middle class, and I grew up in a Rust Belt city in the early 80s so I got to watch it all unravel live.
    - The screwups, dropouts or just plain dumb people wound up doing menial labor. But even at that end of the scale, there was less downward pressure on those wages, so they were able to scrape by for the most part.

    The problem is, in 2012, you can locate a factory anywhere, employ thousands of people for a fraction of the price that 100 would cost you, and pump out products just as quickly as before. All the secretaries and paper routers lost their jobs in the late 80s/early 90s automation and downsizing waves. So now, where do all those people who used to have solid incomes go? They either end up permanently unemployed, or go work menial jobs for just above minimum wage, no security and no benefits. So you have a huge class of working poor, working at Wal-Mart, as a home health care aide, or something else.

    It's a really tough problem that might have a very bad ending in the next 40 years or so -- we need to find something for everyone to do and someone to employ them. Conservatives love to tout entrepreneurship as our savior, but do they really think a factory guy whose job was bolting the same two parts together for the last 20 years is going to be a successful business owner? Thinking like that will mean you have a class of bankrupt working poor instead of just working poor as all their little ventures fail.

    So yes, I hope manufacturing comes back. And I hope it can be something that someone can build an entire career on, not just a string of $10/hr temp jobs.

    • by Anonymous Coward

      All the secretaries and paper routers lost their jobs in the late 80s/early 90s automation and downsizing waves.

      Only the ones that didn't see it coming. The mailroom clerk that picked up a book on Lotus Notes administration got a big promotion.

    • by PRMan (959735)

      No. They think that new businesses hire people. And people working private enterprise job raise more taxes than people working government jobs. Having a huge government is wasteful and expensive and limits our ability as a nation to create wealth.

      Also, it is not just intelligence that places people on the scale, but a variety of other factors. My brother is overweight and slightly socially awkward in person, but not on the phone. He has had a string of $10/hour jobs. But he finally excelled at mortgag

    • Yeah, this is one of those problems that people have seen coming. Just to tweak your comments though:
      While there may be a bell curve to intelligence, education CAN affect where that average lies. Now, there are natural geniuses out in desert that would have been math majors had they had any schooling, and given a chance they can pick up new things later on. And there are those who, despite a massive amount of effort from everyone involved, never quite grasp calculus. But on a society level, education makes
      • by Formalin (1945560)

        Artsy people. The creative types. Yeah, that's right, I want my utopia to have murals'n'shit instead of featureless concrete. Unless you're into that [wikipedia.org].

        Speak for yourself. Brutalism is an art. An awesome one.

        I for one look forward to a brutalist dystopia. At least then the buildings will match the general mental state of the populous.

  • I love it. IBM sells Lenovo to china. China decides to come back to the states and build here and people scream. Yet most of the screamers drive a toyota or nissan or volkswagen and have no qualms about supporting these foreign companies. Because... they have factories in the US? Or do they really believe they're US companies?

  • ...to use for labor in North Carolina?

    Oh, right, there's an election coming :-)
  • The feel good squishy governor Bev Purdue and the Republihacks in the state legislature have stood around for years watching the unemployment rate in NC exceed the national average by a large amount. At this point they're probably happy if someone hands them a hundred jobs as long as they can continue doing nothing.

    Thankfully though we have the highest taxes and costs in the entire south so there's that. YAAAAY the Tarheel State!

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