While just producing a Macbook Pro, Apple had a hard time getting enough screws. The dream of an “American-made” iPhone is very unlikely right now.
Despite the escalating US-China trade war with President Donald Trump’s production equipment requirements, Apple could hardly bring his chain back to his homeland.
The Difficulty Lies In The Screws
In 2012, CEO Tim Cook appeared on television in a prime time to announce that Apple will produce Macs in the US.
This will be the first product of the apple apples produced by American workers after many years. The high-end Mac Pro will wear the words “Assembled in USA” (Assembled in the US).
But when the company started producing this $ 3,000 device in Austin, Texas, difficulties began to happen, which was very hard to come by: Three staff working in the Austin project could not find enough supplies. screws for Mac.
In China, Apple has a number of partners who can produce large quantities of fasteners on demand in a short time. But with Texas, where everything is bigger, it’s impossible to “divert” a supplier of screws.
The testing of the new Mac version was hampered by the existing 20-person mechanical workshop that produced only a maximum of 1,000 screws a day.
This is one of many problems that delayed the Mac production in the US for several months. When the Mac was at a time of massive production, Apple had to order screws from China.
Challenges in Texas show that the problem Apple will face if it tries to bring a large number of its lines out of China.
Missed apples now realize that no country, including the United States, can compare to China in terms of size, skill, infrastructure and production costs.
Apple has intensified its search for multiple options to diversify its supply chain. India and Vietnam are among these names.
The company itself is also concerned that over-reliance on chains in China could lead to risks in the context of escalating trade war.
“Chinese people have such good skills,” Tim Cook told a conference in China at the end of 2017, “In order to produce Apple devices, you must have sophisticated machines with people who know how to control them. they “.
“In the United States, if I hold a meeting of machining engineers, I’m not sure if enough people will fill the meeting room.
But in China, you can cover many football fields,” he said.
Skills, Infrastructure And Labor Costs
The final assembly process is the most laborious phase. Therefore, where to place this line will be the place to decide the origin of the product to tax.
Tim Cook often objected to the idea that the iPhone was made in China.
Apple also said that Corning, with its factory in Kentucky, produces multiple iPhone displays with a company in Allen, Texas, has developed laser technology for face recognition systems.
Cook argues that cheap labor is the reason why Apple also puts chains in China.
The minimum wage of the world’s largest iPhone assembly plant worker in Zhengzhou, China is about $ 2.1 an hour, including benefits.
The starting level for product assembly workers is 3.15 USD / hour.
While the amount paid to such workers in the US is significantly higher.
“No one invests in a screw production line in the US, because such components can be purchased at very low prices abroad,” said Stephen Melo, owner and president of Caldwell Manufacturing, a supplier part screw for Apple in the US said.
An anonymous Apple executive said that the size of US supply companies is much smaller than in China. Jobs in China are also completed by many workers.
While in Texas, workers are often overloaded, work progress is also slowed.
American workers are also not ready to work day and night. In China, workers accept to work all day, or have multiple shifts in every time frame for the right person.
“Not only cheap labor, employers in China can also force workers to work overtime. You can arrange 100,000 people to work all night for you.
This is a must in the development strategy. “, Susan Helper, professor of Case Western Reserve University economics said.
Susan thinks that Apple can produce more in the United States if it invests time, money, robots and specialized engineers instead of cheap labor.
Governments and industry in the country also need to improve vocational training, supply chain infrastructure development.
“It is difficult for all the above factors to take place,” said Susan.
Apple will assemble the Mac Pro at a factory on the outskirts of Austin, because they have invested here in complicated expensive machines.
But sales of Mac Pro will still not be satisfactory because since its launch in 2013, Apple has not updated it anything.
In December 2018, Apple announced the recruitment of an additional 15,000 workers for its Austin office, about 1.6 km from the Mac Pro factory.
However, none of these workers will be devoted to production lines.