More than 30 years ago, Jobs failed to revitalize manufacturing in Silicon Valley.

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 More than 30 years ago, Jobs failed to revitalize manufacturing in Silicon Valley.


Picture: Workers assemble Macintosh computers at Apples factory in Fremont, California, on March 5, 1984.

Netease Technologies News Dec. 17, according to foreign media reports, Apple co-founder Steve Jobs tried to create a manufacturing culture in Silicon Valley, but failed. As one former Apple engineer put it, Its not good for the whole business.

When Jean-Louis Gassee looked closely at Apples so-called highly automated Macintosh plant in Fremont, California, in 1988, he was not satisfied with the picture.

Garcie, an office automation expert from France, has just been promoted to President of Apples product division by John Sculley, then CEO of Apple, responsible for Apples engineering and manufacturing. At first, Garcie decided to spend two days personally participating in the factory production line to understand how the company actually produces its products.

Garcies bad experience of assembling Macintosh computer monitors on production lines and then stuffing chips into computer motherboards. This is precisely the forerunner of the story behind the subtle phrase Designed by Applein California. Assembled in China on the back of the previous iPhone.

Picture: Apples corporate headquarters in Cupertino, California, September 2, 1980

Apple has just announced the establishment of a large park in Austin, Texas, which will create as many as 15,000 jobs, but none of them are manufacturing jobs. In the 1980s, however, the company was keen on participating in the development of advanced manufacturing in Silicon Valley. Steve Jobs, the co-founder of Apple, is deeply fascinated by the large-scale manufacturing of Ford, a traditional automaker, and by the refined manufacturing processes of Japanese companies such as Sony. He tried to replicate the success of the two companies in California, but ultimately failed.

In 1983, Jobs personally built a state-of-the-art factory to produce new Macintosh computers. Journalists who visited the factory earlier were told that it was located across the San Francisco Bay from Apples headquarters. The factory is so advanced that the cost of workers accounts for only 2% of the manufacturing cost of Macintosh computers.

Randy Battat, a former Apple electrical engineer, recalls: Steve had a strong fascination with Japanese manufacturing processes. The Japanese are known as making geniuses. The idea was to build a factory with zero defect parts. But its not a good thing for the whole business.

Years after Jobs was forced to leave Apple, Garcie found that the reality of manufacturing was too different from Jobsoriginal dream.

Picture: Apples factory in Fremont, California, has been in operation for eight years.

In a recent interview, Garcie recalled, I was embarrassed when I used a screwdriver to fix the monitor on the computer frame. After work, Garcie picked up a broom and swept away parts that had fallen off the production line. Its really disgraceful, he said of the apparently sloppy process.

Eventually, the Macintosh plant closed in 1992, partly because it never achieved the output Jobs envisioned.

Now it seems that companies like Apple can design manufacturing supply chains around the world, using low-cost labor and lax policies and regulations, which is the real success story of Silicon Valley.

Figure: On December 7, 1990, the manufacturer of Next Personal Workstation used a large number of automation equipment, but ultimately failed.

We dont have a manufacturing culture, Garci said of Silicon Valley. We dont have a foundation, school education, apprenticeship and subcontractors.

However, it took Jobs a long time to realize this.

In 1990, just a mile and a half from the original Macintosh plant, he built another $10 million plant to produce Next personal workstations. However, like the early Macintosh computers, he had never been able to achieve mass production of Next personal workstations.

That failure taught Jobs a lesson. He returned to Apple in 1997 and hired Tim Cook as Apples senior vice president for global operations the following year. Cook is an artist on the global manufacturing supply chain. He was previously in charge of the personal computer business at IBM and then worked at Compaq Computer.

Like many companies in Silicon Valley, Apple outsourced manufacturing early on. Shortly after its advent in the 1970s, Silicon Valley shifted labor-intensive jobs such as packaging semiconductor chips to many of Asias relatively low labor costs. With the development of the company, this trend will only accelerate.

Picture: Jobs, then CEO of Next, October 30, 1991.

When I started my career, all flights went to Japan, said Tony Fadell, hardware designer for Apples iPod and iPhone. Then all my flights went to Korea, then to China.

Today, with the explosive growth of electronics manufacturing worldwide, millions of jobs have been created worldwide, compared with the smaller manufacturing workforce in Silicon Valley. The small amount of manufacturing still under way in Silicon Valley is mainly done by professional outsourcing companies focusing on rapid turnaround prototyping systems.

Todays challenge is that to make products for the mass market, a huge manufacturing ecosystem is often needed, which has been transferred to China to a large extent.

In the early 1990s, when Andrew Hargadon was a product designer at Apple, the manufacturing ecosystem had begun to shift to Asia, Hargadon dealt with a complex network of suppliers.

Now Hargadon is a professor of technology management at the Graduate School of Management at the University of California, Davis. Because of these complex networks, you cant bring back the whole manufacturing industry, he said. Unless you can move the whole ecosystem back.

When Jobs was on medical leave in 2009, he appointed Cook as the companys future CEO. This is an important statement about the nature of Silicon Valley and the maturity of the local computer industry. The dream of mass-producing computers in California was largely abandoned.

In the 1980s and 1990s, many people thought that the flight of manufacturing would mean the end of Silicon Valley.

When I did my research, I began to focus on chip companies that were moving to low-cost manufacturing areas in the United States. Anna Lee Saxenian, Dean of the School of Information at the University of California, Berkeley, points out when she talks about her book, Regional Advantage, a successful analysis of early Silicon Valley. Their executives told me that Silicon Valley was going to die because labor costs were too high. I wrote this book because I tried to explain why Silicon Valley is different.

Indeed, outsourcing of manufacturing has not killed Silicon Valley, which remains the worlds leading industrial and software design center. This is totally different from Detroits car manufacturing model in the mid-20th century. The middle class in Silicon Valley has relatively few jobs, and the wealth of the region is mainly concentrated in the upper white-collar class. In Silicon Valley, hourly workers come to work more than 100 miles a day, and Tesla, with a local population of $100,000, is common. The median house price in Fremont has reached $1.1 million. It used to be the site of Jobsill-fated manufacturing plant. (Han Bing)

Source: Responsible Editor of Netease Science and Technology Report: Wang Fengzhi_NT2541