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Jobless Benefits Bill Stays Alive Amid Talks on Offsets

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The fate of Democrats’ effort to revive long-term unemployment benefits that expired Dec. 28 will hinge on meeting Republican demands to cover the bill’s $6.4 billion cost.
A small group of Senate Republicans are seeking a bipartisan compromise to pay for the benefit extension, the opening bid in Democrats’ 2014 election-year agenda focused on helping low-and middle-income Americans.

A three-month extension proposal survived yesterday when, in a surprise 60-37 vote, six Republicans joined with Democrats to provide the 60 votes needed to advance the bill. Several of those Republicans said they may vote against final passage without a way to cover the price tag.

Maine Republican Senator Susan Collins said she told President Barack Obama, when he telephoned to court her vote on Jan. 6, that the “bill would definitely pass if there were a pay-for.”

“We need a concerted effort to find an offset,” Collins said in an interview at the Capitol yesterday.

Senate Majority Leader Harry Reid, a Nevada Democrat, told reporters that if Republicans “come up with something that’s serious, I’ll talk to them.”

The emergency jobless benefits expired for 1.3 million Americans. The push to extend them marks the start of the party’s election-year focus on income inequality, in which Democrats also will push to raise the minimum wage and increase spending on infrastructure projects to create jobs.

‘Way Forward’

Republican House Speaker John Boehner of Ohio hasn’t said his chamber will take up the measure, though he said any extension of the jobless benefits must contain financing. Senate Republican Leader Mitch McConnell told reporters yesterday that if both parties can agree on a way to fund the extension, “there may be a way forward.”

In a sign that House Republican leaders are wary of potential political ramifications, they sent a memo to members yesterday urging them to be careful about how they talk about jobless benefits. “For every American out of work, it’s a personal crisis for them and their family,” read one of the talking points in the memo received from a House leadership aide who requested anonymity.

The expanded program started in 2008 and at one point provided as many as 99 weeks of benefits for the long-term unemployed. At the end of 2013 the maximum was 73 weeks, including 26 weeks of state-funded benefits.

11 Renewals

The emergency benefits have been renewed 11 times since President George W. Bush put them in place in 2008, when the U.S. jobless rate was 5.6 percent. All extended benefits are covered by federal dollars, while initial jobless insurance comes from federal, state and employer funds.

Besides casting the measure as a moral imperative, Democrats are stepping up efforts to demonstrate the economic benefits of restoring the weekly payments. After yesterday’s Senate vote, Obama emphasized that argument in a speech at the White House.

“There’s a whole lot of people who are still struggling,” Obama said. He was joined by a group of 20 people who the administration said were affected by the expiration of the extra benefits. “This is not an abstraction.”

Democrats say extended jobless benefits are an emergency measure that doesn’t need funding. “Congress has done this before, many, many times,” White House spokesman Jay Carney told reporters yesterday.

Six Republicans

In addition to Collins, Senate Republicans who supported advancing the legislation were Dean Heller of Nevada, Dan Coats of Indiana, Kelly Ayotte of New Hampshire, Lisa Murkowski of Alaska and Rob Portman of Ohio.

Collins is the lone Senate Republican seeking re-election this year in a state Obama won in 2012. Coats, Heller and Portman all represent states where the November jobless rate was higher than the nationwide rate of 7 percent.

Coats said his vote on final passage will depend on whether the bill is amended to offset its cost.

“Why end the process before it’s even started?” he told reporters in explaining his vote to advance the measure.

“I would like to see offsets, yes,” Murkowski said, adding that she voted to take up the bill because it’s “an important issue” to Alaska.

Ayotte and Portman are among Republican senators planning to announce today an amendment to pay for the jobless benefits extension by requiring those who seek additional child tax credits to have Social Security numbers. The measure is aimed at stopping undocumented immigrants from collecting the credits.

Finding a way to cover the benefits’ cost may be difficult. In a conference call last week, Representative Steny Hoyer of Maryland said last year’s budget compromise left few options on the table.

‘No Secret’

“There is no secret back-pocket” way to offset the cost of extending benefits, Hoyer said.

Heller said Republicans haven’t determined what they might ask for in exchange for an extension. Options may include restrictions on collecting disability and unemployment benefits at the same time, or reallocating money from funds that federal agencies didn’t spend before the end of the year.

South Dakota Senator John Thune said he would back a payroll tax break for businesses that hire long-term unemployed workers. Thune’s proposal would include low-interest loans to long-term unemployed workers who would have to relocate to take a new job.

None of those proposals have gained much support so far, and neither have ideas from Democrats. New York Senator Charles Schumer, the chamber’s third-ranking Democrat, has floated paying for the benefits by ending a tax break that lets U.S. companies deduct expenses when they move operations overseas. Republicans have opposed that idea.

Subsidy Cuts

Maryland Representative Chris Van Hollen has suggested paying for the plan with cuts to agricultural subsidies.

Many Republicans say the expanded benefit program is a disincentive for those without jobs to gain long-term employment and that it feeds a culture of dependency.

Before the Senate’s procedural vote, McConnell proposed paying for the extended aid by delaying for a year the 2010 health-care law’s requirement that most individuals obtain insurance. Reid told reporters that was “a non-starter.”

McConnell faulted the economy during Obama’s presidency, saying “record numbers” of poor and working-class people “have been having a perfectly terrible time.”

Democrats are seeking to help U.S. workers weather the longest period of high national unemployment since the Great Depression, and if they fail, to put Republicans on defense before the election. Amid talks, Jobless Benefits Bill stays alive.

For every dollar the U.S. government spends on unemployment insurance, $1.55 returns to the gross domestic product, said Reid, citing an analysis by Mark Zandi, chief economist
of Moody’s Analytics.

To contact the reporters on this story: 
Kathleen Hunter in Washington at khunter9@bloomberg.net; 
Heidi Przybyla in Washington at hprzybyla@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

SOURCE:  Bloomberg News

Companies in U.S. Added 238,000 Jobs in December

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A pickup in hiring at factories is helping to support the increase in employment. | Photographer: Justin Ide/Bloomberg
Companies added more workers than projected in December as U.S. employers grew more optimistic about the prospects for demand, a private report based on payrolls showed today. Companies in U.S. Added 238,000 Jobs in December.
The 238,000 increase in employment was the biggest since November 2012 and followed a revised 229,000 gain in November that was stronger than initially estimated, according to the ADP Research Institute in Roseland, New Jersey. The December tally exceeded the most optimistic forecast in a Bloomberg survey in which the median projection called for a 200,000 advance.
A pickup in hiring coupled with wage gains are helping to spur faster growth in the consumer purchases that make up almost 70 percent of the economy. A Labor Department report this week may show private payrolls rose by 197,000 last month, according to the Bloomberg survey median.“The job market ended 2013 on a high note,” Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said in a statement. Moody’s produces the figures with ADP. “Job gains are broad-based across industries, most notably in construction and manufacturing. It appears that businesses are growing more confident and increasing their hiring.”

Stock-index futures fluctuated after equities rebounded yesterday from a three-day retreat. The contract on the Standard & Poor’s 500 Index expiring in March rose less than 0.1 percent to 1,830.8 at 8:39 a.m. in New York. The yield on the benchmark 10-year note climbed to 2.99 percent from 2.94 percent late yesterday.

Survey Estimates

Estimates in the Bloomberg survey of 36 economists ranged from gains of 170,000 to 225,000 after a previously reported increase of 215,000 in November.

The December gain brought the 2013 average to 179,600 compared with 163,000 per month in the previous year, according to ADP data.

Construction increased headcount by 48,000 in December, the biggest gain since February 2006. Factories added 19,000 jobs. Goods producers in 2013 added 286,000 workers, with almost 75 percent of the gains coming from the construction industry, ADP said.

Employment in trade, transportation and utilities increased 47,000, today’s report showed. Professional and business services employment rose by 53,000 last month, the most since November 2012.

Payrolls at service providers climbed by 170,000 jobs in December.

Company Size

Companies employing 500 or more workers added 71,000 jobs. Medium-sized businesses, with 50 to 499 employees, took on 59,000 workers and small companies expanded payrolls by 108,000.

The Labor Department will release its December employment report on Jan. 10. The economy probably added about 195,000 jobs after 203,000 a month earlier, according to the median projection in a Bloomberg survey.

“Consumer spending has accelerated and sentiment has improved, which is likely indicative of better labor market conditions,” Bank of America Corp. economists led by Ethan Harris wrote in a research note last week. “We look for notable gains in manufacturing, retail and construction jobs.”

A pickup at factories is helping to support the expansion, now in its fifth year. Manufacturing grew in December at the second-fastest pace in more than two years, according to the Institute for Supply Management. The purchasing managers group’s factory index eased to 57 from the prior month’s 57.3, which was the highest since April 2011, the Tempe, Arizona-based group said last week.

Factory Orders

Orders reported by purchasing managers were the strongest since April 2010 and an employment gauge reached its highest level since June 2011 in the ISM data.

Among companies pointing to a brighter economic outlook is Dearborn, Michigan-based Ford Motor Co., even as the automaker’s December sales trailed analysts’ estimates.

“We’ve had pretty good growth in manufacturing, ongoing, well sustained,” Ellen Hughes-Cromwick, Ford’s chief economist, said on a Jan. 3 conference call. “Housing sector gains likely to improve again this year. Job and income gains have been relatively stable. Inflation has been well contained and long-term interest rates are likely to be edging up, but remain low by historical standards.”

Housing Market

Sustained momentum in the housing market recovery is supporting payrolls in the construction industry.

Purchases of new homes exceeded projections in November, holding near a five-year high. Sales declined 2.1 percent to a 464,000 annualized pace from a revised 474,000 rate in October that was the strongest since July 2008, according to Dec. 24 figures from the Commerce Department.

“The housing market remains on track for a solid recovery and is likely to continue to improve over an extended period of time,” Stuart Miller, chief executive officer of Miami-based homebuilder Lennar Corp., said on a Dec. 18 earnings call. “The short supply of available homes and pent-up demand, along with a generally improving economy, will continue to drive the housing recovery forward.”

ADP in October 2012 changed the method it uses to calculate its employment figures dating back to 2001. The report is now derived from a larger sample, and is released jointly with Moody’s Analytics.

To contact the reporter on this story: Michelle Jamrisko in Washington at mjamrisko@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

SOURCE:  Bloomberg News

Maker’s Row and Cotton Incorporated Partner to Bring Back "Made in USA"

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Maker’s Row and Cotton Incorporated have announced their partnership that aims to further educate and connect textile brands with U.S. cotton suppliers and manufacturers. Through the efforts of their partnership, Maker’s Row, an online platform providing product-based businesses direct access to domestic manufacturers, and Cotton Incorporated, the research and marketing company representing America’s cotton producers and importers, will be able to reach and inform a far larger, more diverse audience on the cotton production process and associated benefits with domestic sourcing.
“The partnership with Cotton Incorporated was a natural choice. This partnership provides brands with a deeper understanding of one of the principal materials used in apparel today. With that understanding, brands have a greater opportunity to push the boundaries of their own products with our manufacturers on Maker’s Row.” said Matthew Burnett, CEO, Maker’s Row. Maker’s Row and Cotton Incorporated Bring Back Made in USA.
To steward their efforts, Maker’s Row and Cotton Incorporated have created a video titled, American Cotton Part 1, designed to assist businesses in the understanding of cotton production as it moves through the supply chain. By revealing the production process, businesses–from first-time entrepreneurs to big brands–are now able to make more informed decisions which will ultimately curate a better product.
“There are more than 70 cotton producing countries in the world and the United States is the third largest. And in the United States, we have more than 10,000 cotton farmers committed to high standards of cotton production. That starts at the farm and continues all the way through the grading and classing systems that exists for every pound and every bale of US cotton.” – Mark Messura, Senior Vice President, Cotton Incorporated.”This is such a great collaboration and we are very excited to finally launch the campaign.  What we loved about the Maker’s Row team is their passion and enthusiasm for American manufacturing coupled with the fact that they are great storytellers through their video documentaries. We have a great story to tell about U.S. cotton and you will see from American Cotton Part 1how passionate the cotton farmers are about their crop and the many things the U.S. cotton industry is doing to produce the most responsible and traceable cotton in the world.  Everyone who sees this campaign should feel good about using American cotton as an ingredient in the products they create or source.” – David Earley, Sr. Director, Supply Chain Marketing, Cotton Incorporated.

Maker’s Row has also launched a page (makersrow.com/cottoninc) which features over twenty domestic cotton mills and suppliers of cotton-based materials that all comply with Cotton Incorporated’s stringent quality and responsibly-produced cotton requirements. The added platform will generate a larger community for businesses to discover and communicate with cotton-based suppliers and manufacturers across the United States.

Maker’s Row

Maker’s Row (makersrow.com) is an online marketplace that connects American manufacturers with  product-based businesses. Their mission is to make U.S. manufacturers universally accessible, and the production process simple to understand. Maker’s Row has created a community of makers, entrepreneurs, designers and businesses that are collectively coming together to bring back American manufacturing.

Cotton Incorporated

Cotton Incorporated (cottoninc.com), funded by U.S. growers of upland cotton and importers of cotton and cotton textile products, is the research and marketing company representing upland cotton. The program is designed and operated to improve the demand for and profitability of cotton.

For more information on the Maker’s Row and Cotton Incorporated partnership, or more information on Maker’s Row, please contact Matthew Burnett, CEO, Maker’s Row.

Media Contact: Matthew Burnett, Maker’s Row, 347-860-9333, matthew@makersrow.com

Top US Manufacturers Returning Jobs Back to US from China

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American corporations that off-shored manufacturing to China for two decades are bringing jobs home.
A decade ago, jobs were on a nearly one-way street to the People’s Republic. In 2003, when 150,000 manufacturing jobs went to China, 2,000 came this way, says Harry Moser, head of the Reshoring Initiative, a nonprofit group that tracks U.S.-China job flows. Top US Manufacturers Returning Jobs Back to US from China.

Today “it’s a wash,” Moser told the Tribune-Review. Last year, 30,000 to 50,000 jobs left the United States for China, but 30,000 to 40,000 left China for the United States, according to an analysis of hiring by Apple, Motorola, General Electric, Ford and more than 140 other American-based companies.

A survey by Boston Consulting Group showed this trend is poised to accelerate. More than 50 percent of $1 billion-plus U.S. companies with operations in China are considering bringing all or part of their production to American shores, the consulting group reports.

Twenty-one percent told surveyors that they are doing so or plan to do so within two years. The 2013 figure is double that of 2012, the group noted.

Jerry Jasinowski, former president of the National Association of Manufacturers, cites as reasons: high Chinese energy prices, escalating wages, land prices, lack of protection for intellectual property, and air pollution.

It’s difficult to recruit managers willing to relocate families to Shanghai or another city where pollution levels are considered a serious health threat, he said.

Greg Hall, a senior vice president of Wal-Mart, told Site Selection magazine that the economics of manufacturing are changing rapidly: “In previous decades, investment mainly went to Asia where wages were low. The price of oil was low. … (Today) labor costs in Asia are rising. Oil and transportation costs are high and increasingly uncertain.”

Wal-Mart plans to shift at least $50 billion in manufacturing to the United States.

At the same time, a movement in China is impacting reshoring to America, Jasinowski said. Educated and wealthy Chinese increasingly want to move their families and money elsewhere.

About 30 percent of wealthy Chinese have moved some assets offshore, according to a 2013 survey by Boston-based Bain & Co. Among the high-net-worth Chinese without overseas investment, Bain found that more than half plan such investment. Only one in 10 said they did not plan to migrate assets out of China.

The Huron Report, which has tracked ultra-wealthy Chinese for more than a decade, reports that 16 percent of Chinese millionaires have moved or applied for visas to move out of the country. Forty-four percent are considering doing so.

Moser said he reviewed the Bain report and has told others: “The Chinese are taking their money out. Why should you (American companies) be putting money in?”

The change in job direction is not simple, however. Over the years, China acquired manufacturing from so many firms — and its domestic partners acquired so much foreign technology — that it developed essential supply lines. Just as American auto manufacturers remained competitive in part because domestic supply partners are strong, industries that relocated to China have long Chinese supply chains.

During the past three years, the Trib has chronicled how China leveraged its control over the mining and processing of rare-earth elements to lure manufacturing.

Paul Gillis, a professor at Peking University’s Guanghua School of Management in Beijing, said, “Parts and supplies can be hard to find in the U.S. While China has lost its labor cost advantage, it is a lot harder than some think to just pull up stakes and move the factory to Pittsburgh.”

Don’t expect a publicity campaign by any company planning to pull up Chinese stakes and move to the United States, experts warn.

“Manufacturers don’t like to call it ‘reshoring’ or ‘onshoring,’ ” said Paul Cicio, president of Industrial Energy Consumers of America, a Washington manufacturing lobby. “They’re sensitive. They don’t want to tick the Chinese off” because China represents the largest market in the world.

If Wall Street banks are a barometer for the change in economic outlook, they appear to have made their bets. This year Goldman Sachs finished selling its stock in the Industrial and Commercial Bank of China, the world’s largest bank, ending a relationship begun in 2006.

In September, Bank of America cut ties with China Construction Bank Corp. with a sale of $1.5 billion in stock. It acquired 9.9 percent of the bank in 2005. In December, HSBC dumped its final shares in the Bank of Shanghai.

Although the reasons for the breakups are varied, banking experts say the underlying reason is uncertainty about bad debts owed to banks in China.

Lou Kilzer is a staff writer for Trib Total Media.

Turn America’s Job Prospects Around Through Reshoring

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Workers at a Foxconn plant assemble electronic circuit boards (AFP)
Reversing a Decade of Job Losses

What does a manufacturer do when it’s struggling with excessive costs?  One of the most common reactions in recent years has been to pack up and move to another country or continent where it can bring its costs of production down.

And this is just what’s happening to a number of factories, except these are Asian plants moving production to the United States. Turn Americas Job Prospects Around Through Reshoring.

The Bureau of Statistics shows that close to six million manufacturing jobs were lost in the decade from 1999 to 2009, representing over one third of the sector’s workforce.  But since 2010, this trend has turned around, recovering 550,000 jobs over the period, the first uptick since 1997.

Leading the Pack: Large Manufacturers Build New Facilities

The Wall Street Journal reports that Zhu Shanqing, chairman of Keer Group, is to spend $218 million in South Carolina to build a plant to spin yarn, adding 500 manufacturing jobs to the state’s economy.  In another twist, China’s largest air conditioning manufacturer, Gree Electric Appliances, which manufacturers air conditioners sold in the US under a variety of different brands, is planning to build a plant in the US in 2014, although it wouldn’t say exactly where until the deal is sealed.  And Hankook Tires, South Korea’s largest tiremaker, is planning to build a factory in Tennessee, to be in production by 2016, which will produce 11 million tires per year for the American market.

In a further strengthening of the trend, Chinese Lenovo Group, the world’s second largest manufacturer of personal computers, is planning to produce its ThinkPad laptop computers in North Carolina.  Also, the world’s largest electronics contract manufacturer, Taiwan-based Foxconn Technology Group, which produces well-known brands under contract such as the BlackBerry, iPhone, Kindle and PlayStation, is to invest $30 million in a new robotics plant in Pennsylvania, with the possibility of a second plant in Arizona.

It’s Not Just Public Relations: the Myth of Cheap Asian Labor

Moves to reshore their manufacturing jobs have been driven in part by public pressure, for companies such as Apple, Hewlett-Packard and Walmart.  However, the story isn’t only about labor costs.  Walmart CEO Bill Simon told a recent manufacturing conference that in addition to rising Asian labor costs, oil and transportation costs are high and becoming increasingly uncertain.  While in absolute terms Asian hourly wages are significantly less than the hourly wages of American manufacturing jobs, labor only represents about one tenth of total production costs, on average.

A series of reports from the Boston Consulting Group predicts that the US will reach cost parity with China by 2015 and that by the end of the decade as many as five million manufacturing jobs will be added.  Chinese labor rates are rising 20% per year, according to the Manufacturer Alliance for Productivity and Innovation (MAPI), at the same time that the financial crisis has hit US wages.

How the American Trade Deficit Works in its Favor

The trade deficit that the United States has with China is having an unexpected result when it comes to exporting goods from the US to China.  With transportation being one of the biggest expenses in overseas shipment, containers and cargo ships which leave for China empty after having arrived filled with Chinese-made goods allow American exporters to move their products to the Chinese market at a fraction of the cost of goods coming inbound.  MAPI points out that American manufacturers actually have an advantage when it comes to shipping costs.

Transportation and Energy: a Key Reality

Shipping from China can be a major cost and headache which is set aside when manufacturing in America.  Eliminating this factor from the supply chain can save both time and money.  In a recent cost teardown, market researcher IHS found that Google is paying somewhat less overall to produce the Moto X smartphone in Texas, creating 2000 manufacturing jobs, than Samsung is paying to make its popular Galaxy S4 smartphone in Korea.  Although the wages of manufacturing jobs are higher in Texas, they amount to only 5% of the total cost of the Moto X.  With as little as four days lead time to deliver orders, Google is able to provide customized products to its customers while customers of its overseas competitors are waiting weeks for delivery.

Energy costs are falling rapidly in the US as shale gas is exploited, making the US a net exporter of energy, and oil finds are reducing or eliminating the need to import oil from shaky overseas suppliers.  This translates into lower costs for electricity and transportation for American manufacturers, adding to the incentive to add manufacturing jobs here.

It’s Not Only About Costs: Quality, Proximity, Simplicity

China has long been seen as the place to manufacture to obtain a competitive advantage in terms of price.  But as the price advantage is being eroded, manufacturers are becoming less tolerant of other problems that come with importing from the other side of the globe.

Quality has always been a problem.  Rigid controls and inspections need to be conducted from a distance to ensure that products are produced with appropriate quality.  A number of other problems have cropped up, such as worker exploitation, with quality of the production facility and methods coming into the public limelight.

Manufacturers are increasingly looking to eliminate these problems, with less of a cost incentive to work around them.  When the manufacturing jobs are close at hand maintaining control over quality is relatively simple, in comparison to overseas production.  Having production closer to the customers also has a significant effect in improved customer service.  These factors can help boost sales, ultimately helping the bottom line.

These are a number of great reasons for bringing manufacturing jobs home.

Do you have more stories of reshoring manufacturing jobs?

Join the conversation and add your comments below.

US-Made Moto X’s Cost Comparable to Asian-Assembled Smartphones

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Conventional wisdom says it’s cheaper to produce things in Asia than in North America, which is why U.S. electronics brands have steadily outsourced nearly all their product manufacturing to companies based  in the Far East during the last few decades. US-Made Moto Xs Cost Comparable to Asian-Assembled Smartphones.
However, with just one product—the Moto X—Motorola may have overturned this truism, building a smartphone assembled in the United States but with a combined bill of materials (BOM) and manufacturing cost in the same range as market-leading products made in Asia. Motorola has also delivered a smartphone that merges state-of-the-art hardware with differentiated features. Yet the phone is priced affordably enough to attract wireless operators interested in offering a cheaper alternative to the leading models now on the market.
The total BOM of the Moto X amounts to $214, according to preliminary results of a dissection conducted by the Teardown Analysis Service at IHS Inc. (NYSE: IHS), a leading global source ofcritical information and insight. When the $12 manufacturing expense is added in, the cost to produce the Moto X increases to $226.

At this cost level, the Moto X comes roughly in the middle of the combined BOM and manufacturing costs of the leading smartphone models, Apple Inc.’s iPhone 5 and Samsung’s Galaxy S4. The U.S. version of the Galaxy S4 with 16 gigabytes (GByte) of NAND flash memory carries a total BOM and manufacturing cost of $237. Meanwhile, the 16Gbyte iPhone 5 costs $207.

While the manufacturing expense of the Moto X is $3.50 to $4.00 more than these phones, the total cost to make Motorola’s smartphone is only 9 percent more than the iPhone 5—and about 5 percent less than the Galaxy S4.

“With the Moto X, Motorola is reaping the public-relations and customization upsides of producing a smartphone in the United States, while maintaining competitive hardware costs,” said Andrew Rassweiler, senior director, cost benchmarking services for IHS. “The Moto X’s electronic components are comparable to other cutting-edge smartphones on the market today. However, the product doesn’t break much new ground in terms of its hardware. Furthermore, in spite of its ‘Made in the USA’ label, overall costs are still competitive with similar smartphones. Our initial estimate suggests the additional costs of onshoring the Moto X are relatively low.”

Made in the USA—and priced to sell

“Motorola has been generating a great deal of publicity regarding the Moto X’s production in Texas,” said Wayne Lam, senior analyst for wireless communications at IHS. “However, beyond the public relations boon, the domestic manufacturing allows Motorola to rapidly assemble custom versions of the phone for customers in the United States. Motorola can deliver a customized Moto X to AT&T wireless subscribers in just four days.”

The 16Gbyte Moto X has a full retail price of $540 or $580 when customized with Motorola’s Moto Maker purchase and design service. With a two-year service contract from AT&T, consumers can obtain a Moto X for $199.

“An examination of the retail and contract pricing indicates that Motorola receives carrier subsidies of slightly more than $300 per handset when purchased on contract, whereas Apple’s iPhone and the Samsung Galaxy S4 command larger subsidies of more than $400 per contract,” Lam noted. “Therefore, Motorola is definitely vying to become the lower-cost alternative to Apple and Samsung for the wireless carrier partners.”

On the beaten path

“One of the most remarkable things about the electronic design of the U.S.-made Moto X is how unremarkable it is compared to Asian-assembled smartphones,” Rassweiler said. “IHS Teardown has already seen almost all of the components in Moto X in other products. With its use of a Qualcomm-based design, the Moto X could easily be mistaken for a smartphone made by HTC or Samsung, if it weren’t for the Motorola logo. The use of components that are already shipping in high volume allows Motorola to keep costs down.”

Qualcomm in quantity

The Moto X is based on a Qualcomm turnkey design and makes maximum use of the supplier’s semiconductors. Qualcomm-made chips in the Moto X include the MSM8960 apps/baseband processor; the WTR1605L radio frequency (RF) transceiver; the WCD9310 audio codec; the PM8921 power management integrated circuit (IC); and the WCN3680 Bluetooth, frequency modulation and wireless local area network companion IC.

While most of the design was familiar, this was the first time that the WCN3680 was seen in a product torn down by IHS. This device supports the 802.11ac WLAN standard, which is in the initial acceptance stage, but soon will become the standard in smartphones.

Figure 8

The MSM8960 Snapdragon S4 Pro Apps Processor appears to be a variant of the same part that has appeared in other devices, including the HTC One X, the Blackberry Z10 and the North American version of the Galaxy S III.

At the same time, Motorola is promoting its X8 Mobile Computing System.

Company marketing materials strongly suggest, based upon a visual examination of a Motorola-labeled integrated circuit and other observations, that its X8 Mobile Computing System is a system-on-chip (SoC) solution from Motorola featuring eight cores.

Upon further inspection, the X8 is not an SoC, and is not a Motorola chip. Rather, the X8 Mobile Computing System is a design architecture that spreads the eight cores across at least two integrated circuits—including the Qualcomm MSM8960 and a Texas Instruments digital signal processor/microcontroller.

The Moto X also uses microelectromechanical systems (MEMS) microphones from Wolfson Microphones, marking the first time that IHS has seen these parts from this supplier in any product. Wolfson’s forte in the past was audio codec chips.

Battery life

The Moto X makes very efficient use of its battery by managing the power consumption of its apps processor and display.

Instead of taxing the apps processor for simple tasks like displaying notifications, the Moto X employs a secondary low-power contextual core to run the display when the phone is powered off. The Moto X’s active-matrix organic light-emitting diode (AMOLED) display only lights up small portions of the 4.7-inch screen to display time and notifications like email, text and missed calls, extending the battery life to a 24-hour usable experience.

As with all AMOLED displays, each pixel illuminates and thus is inherently more energy efficient than LCDs, where the entire panel is illuminated.

User Friendliness

The Moto X includes several features designed to enhance ergonomics and the user experience.

On the ergonomics front, the smartphone employs a 4.7-inch display with minimum bevels and a rounded/curved backside with an indented index finger rest. While not the largest display available on a smartphone, it makes the Moto X easier to hold and use.

In terms of user experience, the Moto X is the first smartphone to include an “always-on/listening” or “open-mic” front end. The always-on/listening system is trained to listen for magic commands from the owner’s voice to activate Google Now interactions.

The system also supports ge
sture-based interactions using the gyroscope. For example, a double-twist gesture will launch the Moto X’s camera application.

SOURCE:  IHS

The Street Aesthetic of New York City

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With this Florida theme, you get to design your own page with ease and convenience even if you do not have programming background in minutes. Let your readers take your stories with them wherever they go with its mobile adaptation capability and full responsive coverage

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How to do Levitation Photography

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Backing Out Of China To Reshore

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More companies from Europe and the United States are returning home as labor and raw material costs rise in China. Provided to China Daily

As benefits fall in China, many overseas firms are going home

More companies from Europe and the United States that used to outsource production to China are returning home as price gaps narrow.
For Dutch engineering and electronics conglomerate Philips NV, improved automation and smarter robots meant it made more sense financially to build a new factory in Drachten in 2012 than extend its operations in China.

Philips found the robots to be more productive than workers in Guangdong in southern China, where it, like many other foreign multinationals, had to contend with rising labor and raw material costs and occasional staff shortages.

General Electric Co took arguably a bigger gamble by opting to reshore some production from China to its Appliance Park in Louisville, Kentucky, in 2012.

There, GE was able to redesign one of its water heaters and slash the time it takes to get them to warehouses. Efficiency rose and material costs fell by more than 20 percent, enabling it to lower the US retail price of its GeoSpring heater from $1,599 to $1,299. GE also returned production of some washing machines and refrigerators to the US.

Similar cases have been popping up over the past five years as more European and US companies find it makes more sense to return jobs and production home, a strategy known as reshoring.

These moves mostly involve companies that sell mainly to their domestic markets. And they indicate that China.s competitiveness as a global low-cost production base is waning.

“A number of German companies operating in China have told me that it makes less and less sense for them to manufacture their products here and export them to Europe,” says Stefan Gessner, general manager of Linder + Wiemann GmbH, a German company that sources equipment for stamping tools in China.

“This is mostly because labor costs are rising while subsidies and other forms of support from the Chinese government are shrinking,” he says. “For those that decide to remain or expand here, it seems to be more a case of go local to stay local.”

Labor costs have shot up by as much as 500 percent in China since the turn of the century. In line with the changing expectations of Chinese factory workers, the average annual urban income jumped to 41,799 yuan ($6,850) in 2011, up from 24,721 yuan in 2007, according to the National Bureau of Statistics.

Boston Consulting Group, which has published a series of papers on reshoring, predicts that ongoing trends could “virtually close the price gap” for most products sold in the US in a couple of years. A similar argument can be made for Europe.

“Within five years, the total cost of production for many products will be only about 10 to 15 percent less in Chinese coastal cities than in some parts of the US where factories are likely to be built,” BCG wrote in 2011.

“Factor in shipping, inventory costs and other considerations, and — for many goods destined for the North American market — the cost gap between sourcing in China and manufacturing in the US will be minimal.”

Small in scale

The number of reported cases of companies that have returned their manufacturing operations back home is limited. There are around 100 in the US, even fewer in Europe.

In July, the Financial Times described the trend among United Kingdom companies as “modest”. Meanwhile, French Industry Minister Arnaud Montebourg said recently that “only a few” French companies have decided to go down this road, or given it serious thought.

Ioana Kraft, general manager of the Shanghai office of the European Chamber of Commerce in China, says,”I have not heard of any major reshoring moves recently (among our members). I recall one or two companies having done so in 2012, but nothing in 2013.”

Yet even such fledgling moves hint at the changing dynamics of the global playing field. The US, for example, now has highly competitive energy prices and its workers are among the most highly skilled and efficient in the world.

According to Harry C. Moser, founder and president of the US-based Reshoring Initiative, a nonprofit organization, Europe is starting to follow in the footsteps of the trailblazing Americans. In this context, the trail being blazed can seem more like a retreat to safer shores.

“Europe is behind the US, but it.s starting to push hard,” says Moser. “It is spreading in the Netherlands and France and there is interest in the UK, Switzerland, Italy and Belgium.”

Local academics say they expect it to keep gaining momentum. “This reshoring trend is quite prominent — and it.s going to continue in the near future,” says Xu Bin, a professor of economics and finance at the China Europe International Business School, which has its main campus in Shanghai.

Lower margins

According to a report published by the Reshoring Initiative in July, higher wages have been the main reason for most of the reshoring activities by US companies. By the same token, the European Chamber of Commerce.s Business Confidence Survey 2013 reports that 63 percent of European companies it polled rank this as the most significant challenge they will face in their future business in China.

“Tougher business conditions, both globally and in China, have led to a diminished financial performance for European companies in China in recent years,” the report said. “Profitability is on a clear downward slide and high margins may be increasingly a thing of the past.”

Despite this, 86 percent of respondents said they were considering expanding their operations in China, with 41 percent now considering mergers and acquisitions. Moreover, while some 22 percent of European companies were thinking of moving their current or planned investments in China to a different country in 2012, the number has since fallen to 10 percent.

As the logic of “going local to stay local” increasingly rings true, 75 percent of respondents to the survey said their primary reason for being here was to serve the Chinese market, up from 72 percent in 2012.

Other reasons for leaving cited by US companies were the unfavorable exchange rate, quality issues, freight costs, delivery problems and deadlines not being met, as outlined by the Reshoring Initiative.s report.

Among the examples it gave were Sleek Audio LLC, which took manufacturing jobs back to Florida after losing hundreds of thousands of dollars in scrap — and more in lost sales — because of poor quality control in China. Scovill Fasteners Inc cited rising salaries and the fact that a quarter of its staff failed to return from their annual holidays in explaining its decision to go back to Georgia.

Other drivers compelling companies to jump ship include high oil prices, which make international shipping more costly, and friendlier investment climates in the US and parts of Europe.

“Current research shows many (US) companies can reshore about 25 percent of what they have offshored and improve their profitability,” says Moser.

He provided statistics showing that the number of manufacturing jobs offshored from the US grew by 100,000 to 150,000 annually from 2000 to 2008, compared with about 2,000 a year that reshored.

That equation has since changed dramatically to between 30,000 and 50,000 jobs a year being offshored versus 30,000 a year that are reshoring, he said. If true, this illustrates how the mass exodus out of the West five years ago has been replaced by a growing sense of equilibrium.

“New offshoring is down 70 percent to 80 percent, and new reshoring is up about 1,500 percent,” he says.

However, while high-profile companies such as Caterpillar Inc, Google Inc and Ford Motor Co have followed the reshoring trend, finance professors and business consultancies in Shanghai warn against overplaying the situation.

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