It's ironic that Apple introduced the first MAC with a TV ad showing a sledgehammer wielding person demolishing Big Brother's big screen spewing propaganda to the masses, and the company eventually became Big Brother hiring human drones by the boat load in China to assemble its gadgets.
18
This is truly a laughable article. The only reason issues like this exist in the US is because we've been outsourcing fabrication and manufacturing for decades. Seriously, what do people expect when more than a century of skilled hand labor is transferred out to other locations??? Yeah - we forget how to do really important stuff.
$$$ can and do lead to unexpected ignorance...
15
So Apple needs a dictatorship to make their products as they see fit.
Hmmmm.
15
Why was Apple trying to manufacture in Texas? Labor laws maybe?
Next time they should try Connecticut which is home to precision machine shops building aircraft and jet engines.
15
This article doesn't put enough emphasis on the technology (both product and manufacturing) that was handed over to the Chinese when our factories were literally unbolted from the factory floor and shipped over there. The thing is, there is no loyalty or patriotism among corporations and very little among U.S. consumers. I strive to purchase American made products when possible, but it is often NOT possible. As DJT often tweets, "SAD".
14
I don't see many commentators noting another reason that manufacturing is vanishing from the US: consumers, including the ones who vote Republican and drive around with USA flags on their SUVs, have created the consumer economy. People have demanded dirt cheap products that they can buy at insatiable levels and consume like crack.
Let's not forget locally owned businesses. I recerntyly looked at my high school yearbook from 40 years ago. None of the shops and restaurants
7
Two thoughts come to mind.
First, there is simply no way Apple could make the immense profit it does on its overpriced devices without offshoring manufacturing. Consumers in the US are creating the incentive for Apple to keep prices high and labor costs low. Android devices represent ~85 percent of device sales outside the US.
Second, there is no functional way for domestic manufacturing to begin to replicate the manufacturing ecosystem in China. It's not just the hundreds of thousands of workers but also the huge array of suppliers of every component part and/or assembly — all nearby —combined with the ability to change models being produced on assembly lines literally overnight to reflect requests from Apple and others.
That said, other countries such as Vietnam and Thailand are also in the supply chain business. With even lower labor rates, it is little wonder that those marketing devices seek best pricing for assembling these devices. The offshoring of US jobs is old news from another decade and not reversible.
Eclectic Pragmatism — http://eclectic-pragmatist.tumblr.com/
Eclectic Pragmatist — https://medium.com/eclectic-pragmatism
2
A lot of negative comments about Apple here. Even though Apple products are not assembled in US, a lot of their pricy components are made in America.
According to Apple news release, in 2018 alone, Apple spent $60 billion with 9,000 American component suppliers and companies, supporting more than 450,000 jobs in US.
Since 2011, the total number of jobs created and supported by Apple in the US has more than tripled — from almost 600,000 to 2 million across all 50 states.
Just some perspective to keep in mind when passing judgment.
11
There are too many people out in this world that are NEVER happy with what they have. And, many more will criticize anyone, and anything, that does not fit their alleged "high standards". Most demand they want something better and, therefore, there are too many iterations of various products. The manufacturers "kow tow" to these people because they are chasing the "almighty dollar" and therefore make unreasonable predictions about their abilities to sell their "up-graded" product. When they do not make their inflated predictions it throws a "monkey-wrench" into the whole system and the "Stock Market" goes bonkers and everyone has a conniption fit. People cannot be happy with what they have. I am quite satisfied with my three-year-old MacBook Pro, I am very happy with my 10 year old +/- iPod shuffle and my 6 year-old +/- iPhone 6S. I am NOT in competition with anyone else to see who has the latest and greatest of whatever. I have item that work and for that I am immensely grateful and to my personal "tech-rep" that helps me keep these items working.
6
We should demand from importing countries similar labor benefits that we provide our US workers!
For too long we have agreed to shut our eyes and ears to horrible labor conditions in developing countries for the price of cheap products...resulting in the loss of US labor force and over purchasing of cheap imports that we often do not need that many in the first place ( e.g. T shirts for $2...)
When was the last time you bought a product that was wholly made in the USA?
6
Corporations will always maximize profits and minimize costs. Lions will always eat zebras. It's just their nature. They will only behave differently if required by regulation to do so.
What I find most unfortunate with respect to China, however, is revealed by the sentence about how having an authoritarian government allows them to marshal thousands of workers in the middle of the night.
I-Phones and other Chinese made goods are thus being manufactured using slave labor. I don't own an I-Phone or any other I-products, but I have from time to time bought Chinese goods. This makes me sick to my stomach.
14
I don’t believe the current US hostility and belligerent behavior towards China is due to a concern over the plight of Chinese workers. No way. Impossible!
So what is the motive?
3
Apple has given China important technologies through their sharing manufacturing of the Apple computers in China! Greed is the basis for this! These traitors are destroying America's strengths and jobs! Cook should be cooked! Boiled in oil!
10
Slavery has its utility?
4
Mac updated the Mac Pro recently with a new cylindrical model. The author needs factchecking.
The cylinder or ‘trash can’ model was introduced in late 2013. The article begins by talking about Cook’s statements in 2012. And the picture at the top of the article shows part of one of the ‘trash can’ models.
So that’s not a problem with the article. I’m not sure why you thought there was a problem.
There is supposed to be a new Mac Pro this year. In theory.
1
How about we roll up in a ball and give up?
Or, let's get after it! I think we have enough creative resources to solve a screw manufacturing puzzle! We can do this folks.
Don't give up.
4
A Tiny Screw (indirectly) reveals America's lack of intellectual cognitive capacity (STEM Skills). The fact is, America has become an intellectual backwater (ranked 37th) compared to other industrialized nations. Sadly, Americans are correctly seen as exceedingly ignorant, mongrelized, ridiculed by advanced societies. Why is this? How did this happen? Of course, the obvious answer is politically incorrect, is not allowed to acknowledge or discuss in Orwellian land. The Radical Left won. America lost. Alas, we are embarrassed..
3
Screw Apple!!! What was created here should stay here!
4
Sounds like very poor planning on the part of Apple and Flextronics. For some reason they had to change the design, which necessitated the need for a new screw in large volumes on short notice. Of course they are not going to find that kind of capacity here so they give up.
If we are ever to have volume manufacturing again, some of that basic capability of making fasteners and other high-volume manufacturing for small parts is going to have to be rebuilt. Apple should have stuck with their U.S. made products and allowed some time for the support structure to build up around it. If companies give up at the first sign of problems, we'll never get there.
8
Hilarious! Everyone moves all their manufacturing out of the country and cause the domestic manufacturing base to collapse. Come back years later and complain that there is no manufacturing base.
I thought Apple was big enough to have heard of a concept called "supply chain", but I guess these days they just employ designers cranking out 3D models of $2,000 phones and $5,000 computers that then get built overseas.
I wonder how they manage to build cars here, you now, without any screws to be had...
10
I work in a part of the United States with an active manufacturing industry, including small business, small parts manufacturing firms, low electricity costs, a pool of workers with machining experience, and a community college system that offers manufacturing courses. I am wracking my brains to understand why Apple would set up shop in Texas. Why not Michigan, or Pennsylvania, or Washington?
Except perhaps so that some journalist would write up about the failure of American manufacturing as the reason Apple doesn't mark their products Made in the USA. It's all about not wanting to pay people.
I wish the journalist had been just a little more creative, instead of reporting the Apple company's talking points.
12
"Chinese factories have shifts working at all hours, if necessary, and workers are sometimes even roused from their sleep to meet production goals."
American workers also work all hours, especially law enforcement and health care workers, but large manufacturers also work around the clock. Many processes like paper manufacturing cannot just shut down at 5PM. Same with steel and other metals which are still made here.
Happily American companies don't have to have nets below their windows to keep workers from committing suicide. Also we don't want to live in dormitories. Might have worked in the Depression, hopefully we've grown beyond that.
11
There is a lot to be said for being able to walk down the street to another company that can manufacture some specialty component for you in record time and record low cost
In other words it's not just about all the tooling and Manufacturing having been historically offshored to China... so that even if you wanted to buy American, you really can't because the capability no longer exists to do so ( especially at scale)
The other issue is the broad infrastructure that exists in large manufacturing hubs in China.
If you are a business making something, anything, you can get every component you need in any quantity you would need in any quality you would need very quickly and at the lowest price globally available
This Paradigm still exist in the US but not in many places.
For example, it is still the case in Los Angeles that certain manufacturing can be achieved with largely locally-sourced materials, contract manufacturing, packaging, and shipping.
And whether you're in China or the US it also helps to be located near ports
Here's the thing though, this is a devil's bargain
What you gain is manufacturing jobs and a booming economy
What you lose is excessive pollution (all forms) congestion and unsafe living conditions.
I don't even want to imagine what these large Chinese manufacturing cities are going to look like in 15 years when everyone owns a car. You'll either have smog from the cars, or smog from the coal fired power plants for all the battery powered cars
4
I tend not to think of Chinese (or Indian) labor in terms of $3 an hour vs $15 an hour for US labor. I think of it in terms of beef once a week and commuting via motorcycle/bicycle vs beef two times a day and commuting via SUV. There'd be great sadness and despair if Americans had to eat less beef and drive smaller cars, but I'm sure we'd manage. In light of CO2 pollution, a lower energy lifestyle for Americans would be a good thing.
On the flip side of the coin, a forced all-nighter is brutal.
. I'm a quality-of-life person myself, and a good part of that metric is how much free time I have while still having food and shelter. Mandatory overnighters, 60 hour work weeks. . . if I was going to slap a tariff on someone, it would be for overwork or unsafe labor conditions.
4
These products are manufactured in China via indentured servitude, that Tennessee Williams' song "I Owe My Soul to the Company Store" comes to mind. Multi-national capitalism is the epitome of GREED and AVARICE, all based in the way our corporations are chartered. Chartered to promote the "bottom line" by maximizing profit to share holders at the expense of a viable ecosystem that supports life and well being. So we now have a world wide economic system operating within undemocratic and increasingly authoritarian governments, sucking up limited resources and buying our electoral process via pacs. These elected officials bought by corporate monies then work with corporate paid lobbyists to write and pass laws that foster the further accumulation of wealth to the wealthy. As long as it costs massive amounts of money, multi- millions of dollars to be elected to a measly 2 year term to the US House we are screwed. My question: is there a way to change any of this beyond a rebellion?
3
@ridgewalker1 Tennessee Williams????? Nah!!
@ridgewalker1
Tennessee Ernie Ford.
2
I cannot believe that a single screw could prevent the assembly of theses computers. Anybody in the fabrication and manufacturing business always leaves their options open when it comes to sourcing materials such as these. This is a necessity since delays can be caused by other delays, such as the factory providing the screws has a fire, even if they could manufacturer to the required capacity.
And why could they not just order the screws fro a manufacturer in China and have them shipped to the US? Given the size of this screw, shipping cost were not going to impact the cost of the product. I cannot believe that Apple currently sources all their required materials from a single country.
This sounds more like an excuse.
10
As a retired Product Design Engineer having worked on numerous high-tech products in Silicon Valley (computers, analytical instruments, etc) my first thought when I saw this story was: Why in the heck would you design a product that required a non-commercially available totally custom fastener? This particular screw would be described as a star (Torx) socket head shoulder screw. Of course, with the margins Apple can achieve on it's products I guess cost and availability of components are a secondary consideration to styling.
8
You'd think that Apple could help a little supplier to scale up (or, in this case, to scale back up).
4
The harsh truth of capitalism is that it is blind to borders and deaf to plaintive cries of workers.
3
Ah, the value of the Chinese factory worker. Wasn’t long ago we read about some of them leaping off their dormitory roofs to their deaths.
4
the American worker is going to price himself/herself out of the market... it's a global economy today, boys and girls.
@john: The capitalist ideal sort of labor is purchasable in infinitesimal bits, anywhere, at any time, at the minimal price. Anything that interferes with obtaining that sort of labor decreases efficiency, right: Downtime, vacations, families, religion...
Yup, our economic system has us in a race to the bottom.
7
Key sentence here is “China is not just cheap. It’s a place where, because it’s an authoritarian government, you can marshal 100,000 people to work all night for you,”
7
Manufacturing is hard work and the margins are often low for products. People who work in manufacturing are held in a certain contempt. The same contempt workers often had in the 50's for businessmen and company men. The later got the last laugh.
1
This is part of the cost of all of the offshoring that has been done over the last 40 years. Parts suppliers arise where there is a market. If you don't build domesticallly, domestic parts suppliers will not survive. Designers of such parts and the machine tools that construct them will not survive. Offshoring, while being fabulously profitable, undercuts the manufacturing infrastructure and starts a circular process that forces more and more to offshore as domestic parts get rarer and more expensive. This is the slow rush to the bottom. And it will be exponentially more difficult to build up a supply chain once it has disappeared.
Along with the materials supply chain, there will follow a hollowing out of the skill sets need to support such a supply chain. Rebuilding this will make the material supply chain reconstruction look easy and fast.
We get what we ask for; offshoring optimizes one part of a process, profit, sacrificing other parts of the process that are just as valuable but perhaps not immediately rendered in cash.
In data structures, a simplistic approach like this s often called 'greedy optimization'. It seems analogous to every company simply optimizing for its share price to the detriment of the national interest.
Solving for that is difficult organizationally, let alone politically in this environment. And those who are paid handsomely to optimize for themselves are not likely to step back and look for a better societal solution.
5
Yes, do please make Apple products in US. After all, who would not pay an extra $100 towards "made in US" products? Shame on Apple for making superior products at affordable prices.
2
So, Apple does move the assembly to US. And with higher costs, the iPhone price is now $5,000. How many can they sell at this price? The entire iPhone business that is based on globalization - American design & technology, Japanese & Korean components, Taiwanese foundries, Chinese assembly etc. can collapse.
3
The entire "iworld" would not exist without Chinese manufacturing -- that's the sad fact. And the reason is that Apple wants the highest profit margin.
Here's an idea for the richest company with some $200+ billion in cash alone: design and build your *own* manufacturing plant in the US so that it could make all the parts you need, exactly to-spec.
I'm amazed Apple has not done this, as there are big perks: massive tax breaks for the plant and profits; positive media coverage for being in US and employing US workers; and having complete control of the facility to expand as needed.
7
@cyclist
Would you expect a car company to make all the parts that it needs? Of course not. That would be needlessly expensive because they couldn't take advantage of their suppliers' economies of scale. Why would you think that it would be efficient for Apple to make everything that it needs, from glass screens to memory chips?
1
@Barry Short
I didn't say everything -- I meant all these machine parts. Why not control this? Apple can easily afford it. They can also plan to make the move to the next-gen manufacturing, which will be 3-D printing. Why are metal screws needed at all? Apple no longer innovates.
2
Free trade is the best option, but if the US feels it can't compete and must take steps to protect its domestic industries, let there be tariffs, and let companies like Apple continue to decide freely how and where they want to manufacture their products. If the US wants to preserve its leadership in innovation, product development, design and marketing, it should not hogtie its great companies. The combination of these qualities with Chinese manufacturing ability has produced amazing results, and is capable of producing more. When the US finally gets around to addressing climate change through electrification Chinese manufacturers could be a great help, in fact without them it may not be possible.
@gbc1:
" If the US wants to preserve its leadership in innovation, product development, design and marketing,"
If this is the goal, and it should be, then tariffs are the last thing that we want. Protected companies don't innovate because they have no incentive to do so because their competition has been reduced.
1
@Barry Short
Would competition be reduced? Wouldn't the tariffs apply to all goods of foreign manufacture, whether the manufacturer is a foreign company or an American company? If Apple and Samsung are both faced with a tariff on their imports to the US, they could each decide to manufacture in the US for the US market, so prices would go up for US consumers do to higher manufacturing costs but the same competition would remain, would it not? And both companies would have to continue to manufacture outside the US for other world markets.
Let's say a metal nail stamping equipment costs $100K each and they need 10 stampers to supply the demand. Why couldn't they acquire the machines through a bank loan, or maybe, with the generosity of an Apple lending program to suppliers, get a low interest loan? My guess, is that when you have profit margins of 36% and sitting on $237 Billion cash, you're using the 'maximizing shareholder value' you're strictly looking at the short term gains and not the long term impact of hollowing out middle class jobs. For those that argue that all our stuff is made overseas and it would cost too much to produce here, it is only a matter of political will. For high cost products like Apple's, a slight reduction in profit margin will create many new consumers who can afford your products.
6
Asians are the hardest working people. In China and in the US.
And they have the right training from early on. The educational system and parents in Asian countries emphasize skills, training, education and excellence. Mediocre is just not good enough.
It’s something that the US could learn from. Maybe then America could be great again.
The photo of the screw in question appears to be a shoulder screw but there is no information about the manufacturing specs included. Why not publish this info and see what manufacturers can come up with and when? A simple supply chain problem.
1
How about making the tiny screws in China and shipping tens of thousands of them to Texas? Seems like a pretty weak excuse for outsourcing MFG to China at very low cost.
78
@Ted Yesssssss...exactly. This story is totally bogus. We use this service at Caltech all the time...its called FedEx and DHL....totally remarkable. They can ship stuff all around the world, in just a few days, for not much money. True story. Not to mention the fact that you could put about a 100K screws into a pretty small box. Tim Cook should really look into this service.
Why would the writer of this story not ask: what about FedEx?
7
@Ted
A couple problems with your proposition:
1 - Apple did what you suggested.
2 - Evolving need (the screws ordered can become obsolete during the design while fabricating). Delay.
16
So Import the tiny screw already
3
All Apple would have to have done is invest/loan money to the machine shops inventory of screw machines. Problem solved.
"Jobs, jobs, jobs!" Someone has a screw loose. Could be "Tariff Man" Trump and his trade war with China? Such a "stable genius," but once again the American worker ends up getting sc***ed.
How does one compete with an economy that pays workers 4 bowls of rice a month?
The reason we cannot produce things like the iPhone in the US any longer are manifold. For one, yes, it's cheaper to produce in China. But, there are other factors... skills, yes, I know Americans don't want to hear it, but we lack the skills since manufacturing jobs left. We have lost the skills, and they are hard to reestablish. Supply chain is another reason. If you go to China, you have 500 companies in a supply chain competing, here in the US you sometimes have less than 10. I tried to prototype / produce a custom chip and enclosure in San Diego, and the turn around time with a local vendor was 10 days. Turnaround time in China: 3 days, at cheaper prices. Last but not least, environmental concerns. China frankly dumps all kinds of chemicals and metals into their rivers with no regard for environment laws / enforcement. Here in the US, that's very difficult (Texas) to impossible (CA) to do, due to tough laws and enforcement. If you take skills and laws out of the equation, you are still faced with the fact that China now has a significantly better infrastructure for moving raw materials, etc. They have organized for manufacturing. We have organized for financial services.
3
Anyone who has taken an International Economics course knows trade benefits both parties. If China can assemble iPhones for much less, than Americans can buy them for less. The problem is that the benefits of trade are not evenly distributed. In the US, bastion of capitalism, workers are "displaced" while corporate profits go up.
The US is the world's largest manufacturer, by dollar volume. We make things that are hard to make and sell for big money, like jet engines, not low value screws.
Some manufacturing is returning to the US as world wages rise. Lest anyone think that means huge numbers of new jobs, think again. In 1900, about half of americans were farmers. Today, less than 5% of us are farmers and they produce much more food. Manufacturing will be automated and much more efficient.
5
Looks like American manufacturing has been screwed.
5
The federal govt mandates that public transit projects utilize 100% American-made products. It's called "Buy America", and it's tough making it work, but if you see a new subway or light rail being built, all that stuff and the vehicles were made here. It can be done, you just have to work harder to find the screws you need.
Yet the same federal govt has thousands of Chinese made computers and phones in its offices. If all levels of government mandated that they would only buy US-made electronics, you can bet Tim Cook would set up a plant to make screws.
3
The Department of Defense used to have an office of Research and Development that was tasked with maintaining a list of resources available to continue our sovereignty. Was this department abolished as these screws surely would be on the critical list?
2
Uhhh, there's this word, "Greed."
52
Whoa... the fault also lies w/ Apple. Why use a custom made screw when a standard screw, spacer and washer will do the job -- at a lower cost and near infinite availability? Why do you think the hardware from IKEA is so "standard" -- and available at nearly any hardware store if you lose one?
As a a retired design engineer, I love the beauty of a fine design - but admire the simplicity of using off the shelf hardware!
Then think about the cost of making the screw -- one needs a Swiss screw machine (not cheap), has to design/proof the tooling and qualify the parts -- for only 28k parts? At even a dollar a part -- tis barely worth the effort -- and Apple will cry bloody murder at that price and try to cut you down to around a nickle (which should be about the fair price for a small fastener in bulk)... I'm surprised they found even a single vendor!
4
While demonstrating the decline of US manufacturing, this story also shows off a flaw that appears across all of Apple's designs.
There are a tremendous number and variety of standard-size fasteners available. As an engineer, I try to design devices that use these standard sizes. It saves the customer money and means that replacement fasteners are readily available.
Apple has always made a practice of customizing everything that goes into their machines, whether hardware or software. This gives their devices a marginal edge in appearance and performance, but it greatly increases their prices and means that replacement parts are available only through Apple - and that when Apple decides a device is obsolete customers can get no further support.
Apple could probably have used a standard screw for this application. By not doing so, they are telling their customers "screw you."
5
If there has been no demand for that particular piece of hardware, then I imagine it would take a minute or two to get production ramped up to Apple levels. But it's simply not credible that that screw could never be made in this country in the quantities Apple required. In other words, this sounds like an excuse rather than a reason.
3
The headline should have highlighted the slave-labor conditions workers face in China, not just a tiny screw.
1
If vulture capitalists had not closed factories and outsourced our manufacturing base, we would have had the ability to make a simple screw, not only for our own use, but to export too.
3
So...manufacturing is screwed?
Not sure why people want these jobs. Moving away from manufacturing started after WWII. There is a reason we did that.
1
How many of the posters here have ever worked in a factory? From the comments posted not-a-lot.
When something isn't used a lot it goes away, until it's needed again...but it takes a while to come back. Want to have factory capacity/GDP again? Start making more things....it's that simple. Been making things exclusively in China since Walmart turned over that stone.....maybe they have a head start....catch up....don't make up false excuses.
Want to destroy the Democratic party and make it a one party government, destroy the unions that manage labor information and outsource everything and hire domestic workers from other countries first.....oh, we already did that. Accidents? don't just happen, in some cases they are planned...by really stupid people.
I have a degree in BS in Electronics engineering and computer design.....and also worked in a factory and a lumberyard. We need a true GDP not a false one, In 2003 the Bush administration started counting paper traded as GDP....though it produced NOTHING....to hide the outsourcing problem, and build up for the crash of 2008. Think no one made money on that?
4
So in order to have cheap mass produced goods you need to treat human beings like disposable property, like machines that must work at your beck and call 7X24 or be disposed of as defective? Maybe there's something in Chinese culture that allows their workers to be so easily exploited - even to the detriment of health, family and sanity - but is it morally just for Americans to permit that Better the phone and our other disposable commodities were made by robots than the blood, sweat, tears and bile of millions of faceless Asians who will die younger than us because their communist masters have perfected rapacious predatory capitalism. Maybe we should be paying more for the luxuries we mistakenly treat as necessities in our digital age?
2
The headline makes no sense. Assembled in the USA means exactly that, and does NOT mean Made in the USA. Relying on global supply chains for difficult-to-obtain items in no way prevents anything from being “Assembled in the USA.”
2
I know where there are 11 million hard working, self sacrificing workers who would work their tails off under stressful conditions in exchange for some security that they wouldn't be arrested in the middle of the night and sent to a third world country. Just saying.
6
When I was working my way through college in the 1950's, I had an after school job at one of San Francisco's most exclusive men's store. Buyers would go to Chicago several times a year to buy American made garments such as Hart, Shaffner & Marx and Society Brand. The prices were marked up 100% for retail. That is, a $100 suit would sell for $200. Today, an iPhone made in China for $100 is sold in the U.S. for $800 - $1000. Am I missing something?
2
When I was working my way through college in the 1950's, I had an after school job at one of San Francisco's most exclusive men's store. Buyers would go to Chicago several times a year to buy American made garments such as Hart,Shaffner & Marx and Society Brand. The prices were marked up 100% for retail. That is, a $100 suit would sell for $200. Today, an iPhone made in China for $100 is sold in the U.S. for $800 - $1000. Am I missing something?
The problem here, in the USA, is that parents do not provide their children with direction to prepare for providing for themselves and a family later in life. Their children don't prepare for a trade or a college education.
When they graduate from HS, they expect to earn a "living wage." And they do.
They earn enough to support only themselves, but not a family. Too bad they were too cool for HS or college.
1
The USA is paying the price of losing its manufacturing skills.
They can be regained - but only if trade with China and other high-skill Asian countries is dramatically reduced, and it might take a war to do that.
2
You need to make your vendors successful if you expect to have a reliable high quality supply chain. How about giving some of the screw business for phones assembled in China to the US screw vendor? That being said, it's all about the basic wage disparity. China will continue to become the manufacturing hub of the world until this is resolved. My fear is that the lack of political fortitude will translate into Chinese levels of wages, here in the States. More billions for billionaires,...sounds about right.
5
Before I became an educator, I was an advocate of Apple computers due to Microsoft's heavy-handed manipulation of the market. But Apple proved to be even worse.
They refused to provide interoperability across platforms which would truly benefit users. They continue this anti-consumer approach to this very day.
They need a lesson in providing a good product to enjoy the fruits of their labor and their investments.
1
I think Mr. Nicas got it all wrong. It's not the screw and it's not the low labor cost of assembling an iPhone; it's the logistical and management workforce that's required which keeps iPhones being made in China. On the other hand most of Apple's market is in the Far East so keeping manufacturing closest to it's distribution point makes sense too.
I am surprised by the lack of clear thinking on this issue. As for the Apple bashing, it is unwarranted. They were among the very last tech company to try to build in America. Virtually every single electronic product is built in China/Asia. Americans do not want to be working at two to three dollars an hour for 12 hour shifts. Comments about Apple's poor planning and managing supply chain are superfluous. It is an impossible task and has been for decades.
The cost of manufacturing an iphone is less than $100, and sells for over a thousand. The US and US companies profit enormously from this high end product, largely because the profit margin is so great. If manufactured or assembled in the US, the labor cost would push the cost per unit to somewhere about $600 per unit, and the iphone would have to be priced at about $2,000. At this price, everyone would have a Samsung phone, and Americans laborers would soon be unemployed.
The fact that every electronic is made/assembled in Asia should really tell you that it is impossible to do it in the US. We can be cynical and question the motives of CEOs, but hard to argue against a 100% vote to manufacture outside of NAFTA zone. Sadly enough, the "Made in America" slogan is largely for artisanal and perishable items.
6
Let me tell you something about Apple computers.
Firstly, they're the best computers I've ever used; and if they have issues at all, it's primarily for their hardware, rather than software. Which is a trade-off I would always favor.
That having been said: Apple doesn't like you trying to fix anything yourself, and they'll stop at nothing to create an obstacle to that endeavor.
That is not an exaggeration; it is, sadly, a pernicious distinction of Apple culture. Which is why, I propose: they're playing dumb, frankly, while they complain about fasteners that only they insist upon using.
For sure, many of the best educated personnel in the world are employed by Apple. Do you honestly mean to tell me: that among their hundreds of engineers--many of whom are American-born--not a one of them is familiar with Phillips-head screws?
That is to say: why do the fasteners have to be Torx, Tri-Wing, or some even more obscure variant? Do those really make Apple products more holy somehow? I mean: if the reliability of their hardware is any indication, I beg to disagree. Stop doing deals with the devil. The bottom line is: Apple simple does not want you taking things apart. It doesn't matter if you have less than nefarious intentions.
Incidentally, if you ever want to give a geek at the Genius Bar a heart attack, do what I do: go into the Apple store with chunks of hardware that you've extracted yourself. The sheer look of horror alone makes the trip worth it.
8
@Francis Ziegler Yo! I'll bet those screws you refer to are "cross-points" not Phillips Heads".
So basically Apples' phone and computers rely on a work force
that is one step up from serfdom and a step and half up from slavery. Available to the corporate overlords 24 hours a day. Thanks for making that clear.
8
It illustrates that our national focus should no longer be getting jobs that can be done by low-wage and low-skill workers overseas back to the USA. Instead, we should focus on training people on skills that cannot be easily replicated overseas, such as tech talent. Americans must be comfortable to be re-tooled and learn new skills. We can do it.
3
"'China is not just cheap. It’s a place where, because it’s an authoritarian government, you can marshal 100,000 people to work all night for you,' ... 'That has become an essential part of the product-rollout strategy.'”
Wait, what? We no longer call this slavery, but that's what it is. If I recall, having a labor force that we could effectively work to death used to be the cornerstone of our agricultural strategy, before we fought a civil war over the principle that it was simply wrong to treat people this way.
I guess, in the 21st century, it's OK to treat people of a different race as slaves, as long as they live in a different country and their government says it's OK.
If this is the only way we can produce these baubles cheaply enough for the American consumer to afford, maybe we should reconsider our taste in baubles.
Next stop, Soylent Green?
3
Silly me---
I thought capitalistic markets were the answer to everything!
2
I'm not sure which screw Apple is referring to, but their pentalobe screws have custom-designed heads which Apple created just to try to stop non-Apple techs from working on Macbooks. Result: Every Mac tech owns a pentalobe screwdriver.
China can make screwdrivers just as fast as they can make the screws, Apple.
8
How can Apple be so surprised? When you move to China, what you leave behind suffers, downsizes, and disappears. For Apple of all companies to then show back up and expect large-scale production while paying their workers a fair wage with reasonable hours is naive and makes all parties look bad.
2
Apple was never and never will be known for manufacturing excellence....it's not in their DNA and we should stop thinking they are a benchmark that reflects the capabilities in the US because they are NOT.
Foxconn has announced plans to replace 80% of its workforce with robots, because they are less expensive than human workers. Even IF we can return manufacturing to the US, we will find that the only way to compete is with robots. Returning manufacturing to the US will not result in good paying manufacturing jobs (of the past). Anyone who believes otherwise is living in the past. P.S. There are a number of folks in the GOP who want to return to the past, that is not an achievable goal.
6
It would seem to me that with all the cash Apple has on hand they could have built their own supply chain in the US, hiring the jobless along the way.
More likely the decision to make a Mac in Texas was more of a publicity stunt than anything else. But then that's Apple, expensive flash and not much else.
4
Slave labor is why Apple manufactures in China. It’s not because of a tiny screw. I have a macbook pro and there are two different size screws on the back, one being the tiny one pictured. “Because china is an authoritarian government, 100,000 people can be roused in the middle of the night for production.” A $2.15/hr minimum wage. That’s why Apple manufactures in China. It’s not because they can’t find American suppliers although that is the excuse American multinational corporations will say every time. I think it’s time to boycott apple and every single other corporation who does this.
4
Apple can have it all done in the USA it's profit margin simply wont be as big.
They assemble it in China as cheap as possible and sell it in the USA for a large profit margin.
If the entire operation was done in the USA Apple would still make a lot of money just not as much as China. This is plain and simple greedy capitalism.
Apple couldn't make the effort to find the right screw for it's computers? Give me a break.
6
Why can't the screw be outsourced from China? It is the most efficient solution. It is still made in the USA if 90% of the parts are US
3
Apple is not a manufacturer. They are a design company. It is stupid for them to invest in manufacturing infrastructure, since it is outside their wheelhouse. They should be contracting out to a contract manufacturer that has a campus and scale that they need.
Now if you can show me a contract manufacturer in the US that can compete with the output of China, then I'll show you the manufacturer that Apple could use.
It isn't solely labor costs. We don't have the infrastructure. We never did. Large companies owned their own dedicated factories at a huge expense, until companies in Asia were able to create factories that could retool quickly. Companies could offload the cost of factory ownership to the contractors. In turn, those contract manufacturers could make more money by doing short, but large runs for multiple companies. And now with data analytics, companies have a more accurate projection of how much they'll need, which makes it even more profitable to farm out their manufacturing to a contractor.
2
For what they cost, you'd think Apple products were made in the US...
5
It’s likely the national work culture, not government orders that make the Chinese workers willing to work long and unusual hours. Rice cultivation and small farm operations demanded nearly non-stop effort and merging life and work. This tradition has now been supplemented by an opportunity to earn cash relatively quickly. This, probably few workers there ever questioned the requirement work long or unusual hours and those who accepted it were reliably paid And escaped poverty. These are not the cultural or economic conditions anywhere in the West.
2
@atomek there is no shortage of farmers in North America that work long and unusual hours merging life and work.
4
In the late 70's, I worked in the engineering department at Harley-Davidson. We were developing the new line to be introduced as the Tour-Glide. The bike required a new design for the instrument panel. Harley had been using Stewart-Warner instruments for decades. S-W was asked to bid on the new panel design, but when told the quantities involved and other parameters, declined to bid. The contract went to a Japanese supplier who was more than happy to bid. The instruments were of excellent quality. A similar sequence of events resulted in the use of Keihin carburetors and various other components including the electric starter, alternator and suspension components. Harley would have preferred American suppliers, but the American suppliers were not competitive.
5
Sounds like a screwy excuse for Apple to maintain their cheaper Chinese option that results in a more profitable bottom line.
Are big successful American companies and their masters supposed to support their stake holders, free markets and enterprise or a nationalistic type of socialism that results in higher costs and less competitive pricier products but that benefits the larger American workforce and tax man?
There are conflicting conflicts of interest here?
1
In other words when Apple (and other companies as well) outsource their manufacturing process to other countries to save money and increase their profits they destroy the manufacturing base in their home countries. No surprise there. The surprise is that they then complain about the results of what they've done. In the meantime we pay for this in unemployment, lost skills and manufacturing processes, a lower standard of living, and then, irony of ironies, higher costs due to tariffs. Businesses that can outsource win while the rest of us lose.
Apple and other companies are perfectly happy to locate various pieces of their operations in countries that abuse their citizens more than the United States does because it's better for their bottom line. Then these same companies have the nerve to whine when they can't find people here willing to drop dead for the same privilege. It's great to be able to abuse everyone involved: the Chinese employees and Americans. I do hope that Tim Cook and others enjoy being caught in the middle of this where everyone is upset.
The problem isn't that Americans have no work ethic. The problem is that many employers have NO ethics except for one: make as much money as possible while being as inhumane as possible.
12
If the modern era has taught us anything, its that liberty, freedom and democratic values are bad for business. Oh there was a sweet spot - when the production curve and middle-class lifestyle curve crossed each other in the 70- 80's. Once executives and shareholders identified labor costs as "a problem" and cheap offshore labor as "the answer," it was all over. Robotics may be the next step, and if trends are reliable will be the nail in the coffin of our liberty, freedom and democratic values? Why? Because human beings without purpose lose their humanity. Drugs, war, inter-cultural strife. Ugh. Wish I could be less pessimistic. Better get that universal income policy along with other policies that will help the common man flourish in place before we loose it all.
9
the wages of Globalism: we. went in search of workers at the lowest wages,without unions or occupational health protections in order to make our shiny things at lowest price for consumers and highest profits for our billionaires. then we woke up and discovered we could no longer make these things because we had no more highly skilled workers at home. then we picked fights with the economic behemoth to which we had outsourced production of our shiny things. we tried to stop it from inventing new things as it changed from doing our dirty work to taking over the technology all we could do is shut down our government
the end
9
Between the lines, this article explains exactly how American manufacturing was hollowed out since the 1970s. Amazed that an executive of a large corporation would be ignorant of that history and not understand the reasons why restarting manufacturing here is so difficult.
11
What's the incentive for a factory owner to sit around with specialized manufacturing capacity that isn't being used on the off chance someone will approach them out of the blue with a big order? That's not the way it works.Certainly not here and not now. That owner will, instead, will determine the best, most reliable, and profitable use of his staffing, space and equipment...and making short runs of specialized fasteners for Apple just isn't "it". To hear about Apple bemoaning the loss of manufacturing capacity and flexibility in the U.S. is ironic, as they have obviously contributed to the situation.
6
Apple is in exactly the same situation as your specialty manufacturer in trying to to determine the the best, most profitable and most reliable location for its manufacturing base. Why would it make a product such as the Mac Pro where labor is costly, parts supply is shaky and demand is unreliable? All companies are looking for that magic combination of low cost coupled with great quality, reliable manufacturing capability and decent onshore demand.
A country’s manufacturing prowess ebbs and flows as the Queen Mary turns her bow; slowly and deliberately. It seems the US government in partnership with industry, must either act as a catalyst to get all manufacturing pistons firing in unison and / or go after the high tech route by incentivizing education in the required field for cost effective robotics. We need a 20 year time horizon as opposed to quarterly tactics. This is where the Chinese are eating our lunch. Who’s fault is that ?
5
While this article takes Apple to task, it leaves out one important fact - Apples sells over 35 million iPhones in the US every year. Can’t even imagine what worldwide sales are. Apple would be shortsighted if it tried to limit manufacturing only to the US. Globalization - dictated by global wealth - is here and smart American companies recognize and adapt.
1
While we have got a short term profit and prosperity for Apple, but it provided greater opportunities for China to develop their manufacturing skills and a large pool of talented engineers. Not to mention their 5G capability is ahead of us, even their cell phone makers such as Xiaomi, Huawei, and OPPO produced cell phones are as good if not better as Apple's iPhone. But the real question is "Can we accept a lower profit margin for the greater good for US companies?"
2
This shows how incompetent one of the world's leading businesses, for a moment a trillion dollar business, can be! With all of their savvy, this should have been contemplated by their management and tech years ago!
3
it's not only about "being able" to manufacture in the US... it's the working morale as well.. who wants to marry a blue collar .. when a lawyer is far more socially "attractive".. manufacturing is not sexy.... if that attitude doesn't change young students will still go for the "hedge funds" etc... just putting "make America great again" on your hat... doesn't get you there ... trade wars will only go so far... there has to be a willingness to build ... not consume..
4
How much would it have cost Apple to purchase the required tooling forCaldwell Manufacturing? How much decimal dust off its bottom line or its 100 billion plus dollar cash pile? And ditto for other critical items in its supply chain? What percentage of the billions of what they just spent on their new spaceship looking HQ building in Cupertino? It sounds like they really don’t care about making stuff in the US. I guess they prefer slave labor that can be driven through the night, even though this will soon be replaced by robots. Actions speak louder than words, and Apple is screaming, “Give me slaves!”
7
Look, to make "tiny screws" all you need are a few old screw machines. The problems to do with making iPhones in this country have to do with the assembly lines and not the parts.
3
What I love in the NYT is that an article about a tiny screw can generate thousands of comments and reveal a lot more about the economy. Waiting for the article about the clothing industry, probably will start mentioning about a shirt button or a zipper that can only be made in another Country.
3
What is the realistic thing to do about all this? I suggest that we accept the "globalism" that we have demanded and created. Why do we insist on this ridiculous "made in America" debate.
1. We wont pay the price for a phone made in the US.
2. The Chinese deserve to have jobs, too.
3. We could embrace the fact that it is one big interconnected world. It can be win win.
4. We could continue to apply pressure on companies to improve working conditions, etc.
5. We need China for manufacturing and to buy our debt.
6. We should focus on protecting our intellectual property rights.
7. Trade talks should be never ending and almost never be in the headlines.
Lets get real and accept some reality blended with compassion. Iets be tough without being stupid.
4
There are numerous companies in CT that will make this fastener in volume. Holochrome being one. Check out their website. There are few to none in Texas. Apple is used to having Chinese stand out side their door in offer to make anything that they want. We can make anything we want in the US. There are commodity fasteners shipped to China from the US. It requires a tremendous focus on the part of everyone to make it work. Finance, engineering, capital equipment producers and government, education. China has this the US does not.
6
Humanitarian and national health are often left out of the algorithms that dictate profit strategy for investors and shareholders. Some day the A.I. will figure it out for themselves.
4
"Apple has found that no country — and certainly not the United States — can match China’s combination of scale, skills, infrastructure and cost."
Sadly, this statement is true. And it has been the result of U.S. corporations, aided and abetted by U.S. economic policies and trade deals over the last 40 years, placing profits and shareholder interests above all other stakeholders' interests, especially American blue collar workers and the communities in which they reside. If American capitalism had been done the right way, we would not have a large swath of the United States deemed the "Rustbelt"; a shameful reminder that greedy corporations and lap dog politicians gave birth to the age of Trump. And here's the sad part - there's no fixing it. That ship sailed a long time ago.
6
Has Apple learned anything from its lack of flexibility and poor comprehension of its own supply chain? Have any of our CEO's learned anything? Manufacturing moved to China in thirty years. Surely, it can move elsewhere now much quicker.
2
The reason our manufacturing infrastructure is weak is because the Chinese pay lower wages, and we eliminated all tariffs, then sat by as the US was deindustrialized.
Wages (and working conditions and pollution regulations) are the essence of this and always have been. That's why it was such a terrible mistake to eliminate tariffs with low wage countries, and, in fact, have trade arrangements that *favor* those countries over us -- to an extent that people would march on Washington with torches and pitchforks if they knew (the Times ran a wonderful article about that a few years back).
5
It does not come as a suprise that the necessary supply chains for computer manufacturing are nonexistent in the US a quarter of a century after last producers left the country.
Apple’s claim is like that of a misled customer yelling at a financial advisor: “why can I not buy my kitchen appliances from you now that you have offered me a mortgage?”
If the guys from Cupertino would be serious, they would inwest in partner firms that can reconstruct, automate and train workers to operate those supply chains.
I wonder what that computer would cost - nevertheless, there will be a market for such products in times of “buy local” and consumer responsibility.
2
In the end it is essentially slave labor that produces iPhones
9
It turns out tech companies are as greedy as all other industries before them. Then they smugly lecture the rest of about how to live our lives. They don’t care about their workers or the communities they live in. California has some of the worst homelessness in the US. Maybe they could build a plant there. These geeks act like they are smarter and more deserving than the rest of us. With few exceptions, such as the Gates foundation.
3
Followers stop at the roadblock. Leaders find a way through.
1
Fellow commenters: If Chinese factory workers are paid $2.10 an hour, why are iPhones so expensive?
5
Brilliant article! Explains a lot why I find China so appealing. Americans, you could really learn a lot from China. Don't be so negative. There are some things the Chinese do better than westerners. One of them is being focused, doing things one mindfully. On a big scale… Your President thinks big is beautiful. But he cant even build a wall. Your leader is conning you… China is by no means perfect, but it does know how to survive.
But of course--Americans are too busy playing with these Chinese electronic toys to bother to learn anything useful like how to produce one.
1
Work harder and longer for less money? Hey, isn't this how America gets its fresh veggies and cheap chicken processed - except its by "illegals" in this country instead of China? So before we start gnashing our teeth about Apple (although for $32 billion of taxpayers money you would think they could do better than this) we should remember that this is kind things - and those kinds of workers - are what our lifestyle and standard of living depend on. God knows we're not gonna work like that.
3
How many screw factories has Apple built in China because that was/is a requirement by the Chinese government? Yet American companies do not get the same funding.
Communism/Authoritarianism has eaten our lunch willingly fed to them by our own hands. Now we cannot muster the resources to meet the demand if called upon. Apple now whines 'we wanted to make things in the US but can't'. Make no mistake, this is by design.
Between the intentional destruction of the US K-12 education system and the rampant discrimination against US citizens in STEM jobs is it really any wonder why it is difficult to get "qualified" workers?
Now H1B visa holders are being hired by school districts because they are supposedly better teachers. Any motivation a US citizen had to become a teacher has been diminished. There are thousands of good to very good teachers who get laid off every year. Then districts cry that they cannot find qualified teacher.
Apple can do what it wants, I will continue to not buy their overpriced, outdated, underpowered i-stuff regardless of where they make it.
3
H1B visas as supposed to be for scarce resources holding difficult to find skill sets. But greedy American CEOs have twisted that to disgusting advantage. Now the skill set that demarcates ‘difficult to find’ resources is the willingness to work for 60-70% or less than what the market normally pays. Who will work for 2/3 to 1/2 of market? H1B visa holders. Capitalism. Always disappointing and ugly at the limits.
2
That's what I would call poor planning. Apple is one of the culprits in the decline of American Manufacturing, and may have been looking for an excuse, so they could say "see, we tried". While Mr. Cook want's to make out the problem of the screw being as big as Apple, itself, the fact of the matter is that the problem was as small as the screw, in relative terms. Where there's a will, there's a way, and Apple clearly has no will to manufacture where they design.
3
I worry about my role as I pick up my iPhone8. I have seen some of the Guandong Province’s factories and the long human warehouses from the Guangzhou-Shenzhen train. I wondered: who could possibly live there? The cost of living is in China is, in fact, high -depending on city- radically out of proportion to the hourly pittance Apple is reportedly paying workers, which include benefits. Moreover, these working families are commonly fractured as both parents go to work in Guangdong, China’s most industrial province , from all over the country, leaving the grandparents to raise the children. My next computer will be a Austin-built Mac Pro.
2
If I recall my economics professor, he stated over and over that as a country moves up the economic ladder, the products that it can produce/manufacture tend to become more complex, e.g. there's a reason why microchips are manufactured in only a select number of countries, including the U.S. but not China.
Countries then opt to specialize in what they are good at and leave the lower level manufacturing to up-and-coming countries.
So why is this so surprising? A screw is a simple product. Technology for facial recognition is a complex product. Hence, final production taking place in China (or eventually another cheap up-and-coming country) is nothing new - at least to former students of economics like myself.
1
Too bad their quality has gone downhill. My new macbook pro has lots of issues, things that don't work properly, and when I take it to be looked at, all I get is, "Everything's fine, no problems." I guess that's the new normal.
1
I have to disagree with the statement that the reason you can make 100k workers run the factories round the clock is because China is an authoritarian country. The reason you can make workers work when and as much as you want is because there are plenty of low skill assembly workers and not enough jobs that pay as much as Foxcom pays to assemble iPhones. Workers have no power against the employer. The same situation, requiring work on demand already exists in many service industry jobs in the US.
China's government does contribute to the problem in a couple of ways. Workers cannot organize, except though government approved unions, which are useless for bargaining. Also, corruption allows many well connected companies to ignore legal protections for workers with impunity. There have been enough investigations of Apple's supply chain for me to assume that the factories making Apple products operate within the law. Even so, non-compliance in other factories dresses wages everywhere, including for Apple.
3
What is it with engineers that they have to design things that use parts that aren’t readily available.
1
As the author makes clear, there are several reasons for the US corporations and their employees not being prepared to compete in the world markets.
I would like to focus on the American views on the value of an education. Many Americans tout their lack of an advanced degree and emphasize their "common sense." I had Jr. and Sr. HS students who reflected this attitude cultivated at home.
I'm not saying everyone needs or should have a college degree. But this "common sense" superiority complex needs to be tamped down.
6
@Glenn Thomas , Apple comes to the US after decades in China and expects us to be specifically trained to make their specific screws. We are to blame our educational system for not instantly satisfying them as they are accustomed to in a place they've already conformed to their demands. Not fair. But a company that holds out the carrot of employment and watches great cities jump through hoops to lay windfalls at their feet doesn't have to be fair. We don't have to join them in that though. We'll ultimately find suicide nets around our high-rise dorm factories like in China if their demands are our bosses.
1
I am 78 and in my life time I have seen favorite brands disappear or made out of a America replaced with inferior products . I first encountered this with women’s briefs that I bought for years at JC Penny’s. I looked everywhere I could and found the same brand at Walmart but they were so inferior that I stopped buying them
Then it was women’s dresses at Penny’s , once made in the south and giving jobs to America and good Quality .
But they all disappeared Penny sold out and we lost jobs and good quality .
I make some clothing and always have to alter everything and will not wear the sloppy things that flood the market .
My heart aches for the loss in the south of the good clothing and of the jobs gone forever
7
This article begs the age old question of wherein lies the balance between corporate social purpose/obligation vs profits for profits sake. Somewhere between the extremes of raw, unfettered, “eat what you kill” capitalism and “free stuff for everyone” socialism there must be a happy medium. The vision, wisdom and character to articulate that future has been missing in America’s leadership for decades but could very well define a Democratic resurgence begun in 2018 and built upon in 2020.
8
@Concerned MD, I really don't think free stuff for everyone has been tried. I don't think it's ever even been actually suggested. It's what some folks say when they hate an idea like food stamps or universal healthcare such as other nations pay for as public goods.
2
So it turns out that nationalism and global capitalist production don't really work together. And that a cheap, non-union workforce with a virtually totalitarian one-party government ruling them will do what they're told. Who knew?
11
As Trump sets tariffs on goods other countries will fill the void with their products and America will be left out .
1
By allowing the wholesale loss of business to other countries, the industrial support infrastructure - machine shops, specialty parts manufacturing, electrical contractors and specialists, etc. - has been eroded to the point of dysfunction. The hollowing out capabilities is one of the consequences of corporate greed.
Share holders should not get to trump the economy, especially when capital becomes predatory.
8
@Rodger Parsons
Sure hate to think what would happen if we had to gear up for a war, say with China. It feels like we gave up not only our key industries, but our ability to resist a takeover. We will be ruled by these same authoritarians some day. Either through passive capitulation through our economic, education and social policies (most likely) or a hostile business takeover involving only bonds/banks. It won't even be necessary for the Chinese to use weapons of war.
2
Apple's margin on their stuff is huge. They could make a little less and employ American workers without making the product much more expensive to buy. It seems to be all about corporate greed anymore. Higher profits mean more money for the executive team. Where is their patriotism. How many million does one need to make per year. We have lost the supply chain for electronics and other products in the US because of this kind of greed.
9
Maybe govt needs to invest more in schools and education, hm? Maybe set up engineering scholarships, subsidising engineering firms and encouraging more apprenticeships?
Non of the problems in that article are insurmountable - it could all be solved by investment and cash. But therein lies the nub, as no-one wants to spend money on it. “America First” is just pure hot air, as I don’t see Trump and his ilk putting money towards grooming talent (well, not counting pornstars anyway...). “Tax cuts” for the richer percentiles aren’t going to do it.
4
It comes to this for me, and please forgive the sporting metaphor. It's not a question of capabilities here in America. We are more than capable. It's more a question of depth. Our population, in its entirety, would only be a fair sized province inside greater China. Think about what that means. Football field stadiums worth of engineering talent as commented on by Apple's Mr. Cook for instance. We simply cannot match that.
This is not to make light of our position and capabilities. Team America is certainly talented; but we lack a depth in that talent across all the various roles and positions. A depth China has in spades. The more educated they become, the more capable in all the arts of our technological civilization, the more they will command the center of the field.
Because with our civilization today it's never about talent. It's all about scale. If China has a problem, and they have myriad ones, their main issue is how to unleash that human potential to maximum effect in less "central planning top down" style. Our technological civilization needs a free-wheeling character to it in order to truly manifest its glories.
In this America excels. And it's something which cannot be taught, it is inculcated. This we have at depth. So it will be interesting to see how the two of us dance into the future, together.
John~
American Net'Zen
1
In the 1980’s, I designed clothing and we wanted to buy American. We tried.
It was impossible to find factories willing to produce less than gargantuan volume in fabrics, with multiple thousands of yard minimums (no, not meters) per color, in cheap polyester.
So we decided to buy fabric overseas and have it sewn here. We found beautiful quality natural fiber goods from Italy, Japan, Germany, Austria, Portugal.
But sewing factories here were unresponsive on styling, inflexible, with huge minimum requirements.
So we had clothes sewn in Italy or Asia. This is true for almost every quality American clothing label. Including Ralph Lauren and others.
Apple could easy set up an entire supply chain in China within weeks. It would add about 24 hours more to the delivery cycle for assembly here.
Fixation on big volume, big automation, big executive pay, big profits, killed off the USA clothing industry. Also known as Corporate Greed. Just as it will kill attempts to revive manufacturing with hi tech.
Hey, the stock holders gotta be paid! It’s the American way.
21
@Pauline
There were plenty of small sewing shops that would have taken your business back in the 1980s and charged a fair price. There were small mills that did custom materials. Your company chose not to use any of them. Instead your company went for the high profit.
Businesses rise up to meet demand and will stay in business as long as consumers buy their products. There are several people trying to make sewing a profession for poor people with design and sewing talent. The skills exist here in the US. Companies have become addicted to the profits from using forced/prison labor.
I worked part-time in a decent sized sewing shop in the 1980s that made custom clothing for fashion houses in small to medium sized lots. The company tried to get more customers but Asia, not Michigan/WI/MN, was the cool (read cheap) place to sew. So I call shenanigans on the above post.
3
@Pauline
Stop with the lies. There is no way your company nor the others would do business with an American specialty fabric manufacturer. Demand for high quality designer fabric in the US is too small to be profitable, which is why you are doing business with mills in Asia. You want cheap more than you want quality.
America has always been about making a buck (few millions due to inflation) and if there was a demand, there would be US suppliers.
@skramsv
Sadly you’re right that the the company chose profit over struggle. It’s why countries like China do well as they support the infrastructure that makes doing biz easy. The worst part was that China offered deals if US shops invested in their factories. So our own biz leaders invested in the rush away from US to Chinese made.
This story seems to boil down to Foxconn only assigning one supply specialist to the project instead of the usual ten or more - that doesn't tell us much about US manufacturing infrastructure one way or the other. The author failed to note that, for example, Tesla is able to manufacture high tech cars in California and high tech batteries in Nevada.
3
Tesla, by the end of 2017, had sold about 300,000 vehicles worldwide. Apple sold about 216 million iPhones in 2017 alone. We keep betting on the fantasy that there will be a big robotic industrial revolution in the US and it will somehow allow for a manufacturing industry comeback, and it will not, not in fifty years; who in their right mind will invest in that here (for the sake of the middle class, ha!)?. You need to first have a working (people) manufacturing model to understand what functions a group of automated equipment will replace: did you read the article? : 100k people line up to work on iPhones alone. Can you understand how many robots you’ll need to replace?
Wake up.
And most of the people in China and the rest of the world that iPhones are made, get paid a wager that we Americans will definitely never accept: To do what at what salary -lower than Walmart, McDonald’s, Burger King?!
America has a disease called GREED which is beyond taming. Keep believing the hype that someday is coming where the middle class is going to be healthy again. America’s slogan should be “get greedy or get gone “... the wall is going to help Mexico in the future keep Americans out, and we built and paid for it, how ironic. How did we get here we’ll ask? Thank you for the wall Mexicans will say.
If there is a non-nuclear WW-III one day, China will win on its manufacturing capacity alone.
6
“China is not just cheap. It’s a place where, because it’s an authoritarian government, you can marshal 100,000 people to work all night for you,” said Susan Helper, an economics professor at Case Western Reserve University in Cleveland and the former chief economist at the Commerce Department. “That has become an essential part of the product-rollout strategy.”
So, where does Mr Cook live?
And why?
How would he feel about being one of those 100k people being marshaled to work in the middle of the night?
Does he see no connection between the products he wants to make and the life he thinks humans should live?
16
Reading through the thread initiated by Times Pick "HCM," I am struck by the biggest point missed by all the America 1sters (whether engineers or reflexive Apple bashers): you can't overhaul the US education system quickly enough to deliver the quality of precision Chinese workers routinely deliver.
Do you want to wait 15-20 yrs for the next generation of iPhones or MacPros? That will cost at least 8 times more than what Apple delivers today, to eager customers all over the world, driving the cutting edge in gadgetry for every other rival (including Huawei) to emulate?
It is a bitter truth that as far back as Jimmy Carter, all Americans were warned about the decline in US public schools. That decline came about because of the willingness to employ under-qualified teachers who did not have the actual gift of great pedagogy -- that I benefitted from in San Francisco's public schools (1965-1975), when the requirements to obtain a teaching position were more rigorous, when curricula were more rigorous & schools more traditional, rather than today's relaxed social lounges for America's bored & sloppy young.
It's a fact that Chinese schools, while not perfect, deliver more competent graduates into the workforce. We could, too, if we prioritized actual 'hard subjects' (including foreign languages, that were taught to fluency when I was a high school student in CA) over sports, cheerleading, proms & Fun. Chinese families invest emotionally in their kids. Americans are distracted.
17
@Maria Ashot
The decline in US schools is intentional. The new pedagogy is bad and designed to not teach the majority of kids. Add to it the fact that teachers with a masters degree can make more working at Walmart in many areas is an indication that the best and brightest are not teaching.
6
Apple has helped to destroy the American manufacturing economy and then later complains that there is no manufacturing infrastructure in the United States!
It brags that Chinese labor, working for near slave wages and under a ruthless authoritarian regime, are cheap and efficient. Then, it won't even give a thought to investing in the United States, choosing instead to move some of its manufacturing operations to India or Vietnam.
America: Boycott Apple! Dump your iPhones; don't buy iMacs; scrap your iPad.
3
“China is not just cheap. It’s a place where, because it’s an authoritarian government, you can marshal 100,000 people to work all night for you”
If if this not some new definition of slavery, I don't know what it is. Why do we put up with this? Our gadgets are not worth it.
7
Just another example of how Trump's unpredictability, this time on trade policy, has messed up American business interests.
Apple, perhaps the largest American company that exports our goods and services, has been hamstrung by Trump's amateurish, makeshift tariffs.
Hopefully Apple will find adequate, reliable suppliers, be it in Asia or elsewhere, so that it can regain its global leadership position in the computer industry.
1
The real question is how long those in other countries will continue to be bullied and terrified into working longer for less than typical American workers, and begin to feel entitled to and demand and expect a better life. And for Americans to expect people in other countries, who are probably not white, to work for less than they do.
5
The result of bad product design.
1
Why on earth would apple pay US engineeris more than Chinese if they did the same job? Their shareholders would revolt.
Sounds like a slave labor economy to me. But heck, who cares as long as we can use it to make profit for Silicon Valley billionaires and fun gadgets for the rest of us.
7
Multinationals crave dirt cheap labor combined with technical know how and corporate friendly tax breaks. When countries like China have vast labor pools that can undercut our cheapest worker with the willingness to work 12 to 16 hr shifts. Then we won't be able to compete unless American workers are willing to work for slave wages with no benefits.
1
Americans proved they are willing to work for whatever, given the right situation, just look at the shutdown and their stories.
Apple looks for the cheapest labour possible, and the cheapest production cost possible.
Yet, they sell their iPhone at a 1000+ $ price.
And iPhone are still one of the, if not the most sold smartphone in Europe and North America.
I hope this bother you.
2
Supply chain. Mass production of anything requires a supply chain that can handle it. Have to build both. The source this problem still resides in decades of chasing cheap labor and weak environmental (if not other) regulations.
All I can think is if any of this is true why is Foxconn (Chinese Comany) building a 12 billion dollar plant in Wisconsin? Maybe the Chinese are just better managers and can find the parts they need.
2
@Kurt
They found a state that showered money on them,no matter how much it cost the taxpayer
3
@forester6291 Lame, I do not support the 4 billion that Wisconsin offered Foxconn but they are still spending almost 10 billion of their own money.
We Americans complain about "jobs have moved overseas" but we insist on buying the cheaper products made overseas. I am in the parts-machining business. Machine shops complain about precision parts being sourced from overseas...yet they themselves are invariably populated with precision manufacturing machinery made in other countries. Why? When I ask them they tell me "USA machines cost too much".
Every American who cares about USA jobs needs to hunt for items made in USA - or failing that, engineered in USA by USA companies. And be ready to pay a bit more. This means cars, tires, clothes, wine, candy, liquor, razor blades, appliances, and countless other consumer and industrial products.All of these items DO have American manufacturers.
If you don't proactively buy American products, you are part of the problem and your opinion does not count...
6
Now we know the truth - it's not about the lower cost of labor - it's about the fact that China does it better, with a work force that cannot be compared anywhere else, and quote "certainly not in the United States". We must face the facts - our manufacturing expertise is exclusively for armament - weapons of every description for war or home made terror - 'stealth' aircraft. China will supply us with our daily needs, perhaps even our daily bread. "The Yellow Race will rule the world". The Rise and Fall of the Great Democracy.
@Pauline Hartwig
Work in manufacturing, or is your information just from what filters thru the media?
Add commercial airliners, spacecraft, surgical instruments, IT servers, silicon wafer chip-making machinery, robotics and much, much more to the list of items with a majority of Made in USA metalworking content - which often hold tolerances in tenths of a thousandth. That iPhone metal enclosure is a very low-tech part.
2
There are hundreds of thousands of Americans and thousands of shops making precision parts of made of metal throughout the country which would take exception to this. Aircraft, spacecraft, weapon systems, surgical instruments, IT servers and much more are loaded with made in USA metalwork. This is another piece of skewed, out-of-tolerance writing which has become the norm for the media - left and right...
8
Wouldn’t it be great if the United States had the full spectrum, from conception to finished product, to be able to fully design and produce within our country? A lot has been lost since the high watermark of America’s independent manufacturing capability has eroded.
I hear you say ‘sorry, things change and you’ve got to want to change with it or be left behind’.
But what about the country that is well rounded enough that it largely depends on no other country as far as its manufacturing needs, self sufficiency nurtured and guaranteed to never be sold off... so China/others have the capability of quick prototypes and fast bulk manufacturing, oh, it’s believed the Fentanyl that’s helping destroy our citizens is coming from, primarily, China!? They/ others get our once proud and leading manufacturing capabilities, we get their drugs and products. I did read some news that this drug issue has been addressed in recent summits, good, on the other hand consider that we don’t share a border with China and the drugs are flowing, no WALL on any border is going to stop drugs. the strongest nation, the strongest workforce, is the most diverse skill set workforce and the nation that makes sure those elemental skills are never cast aside, there ARE people in this country who would live happy lives manufacturing, creating with their hands. A wide ranging and fully capable manufacturing sector should be considered a matter of national security.
2
"But the Mac Pro has been a slow seller, and Apple has not updated it since its introduction in 2013."
Gee, I wonder if no real updates in 6 years may be a factor, perhaps coupled with a crazy huge price tag (3000 in 2013).
It's really past time for an updated Apple management team with fewer dissemblers, including folks who don't spend all their time in corporate spaceships and who understand that most serious work isn't done on iPhones.
5
We devastated our own ability to implement our own innovations. Then, we gave out our skills to China to take advantage of possibilities available mainly in dictatorship countries (cheap labor of 100 000 can be mobilized any time).
We had this working environment during the industrial revolution, but I thought we grew up into a better society.
By relying on manufacturing in China we are demonstrating mindless regression not only away from our values, but by now gradually into a zone of existential danger to us.
It is our own betrayal of our principles which led to our success and innovation in the first place. Now we are empowering hostile powers by willingly & mindlessly transferring the byproducts of our hundreds years old Western culture away from us, thus depleting our ability to benefit from our own progress.
To correct this problem, we need insightful and knowledgeable leaders. I have doubts that the current occupants of the Oval Office are interested and capable of understanding what it really takes to make America great again.
5
So the factory did get up to speed but by then Apple had dumped them? That doesn't sound as though the situation is hopeless — it sounds as though some leadership is needed to restore manufacturing capability.
4
Corp America,
You are at a decisive breakpoint in survival of America and, indeed, the west. At this point in time, your coffers are full. You need to take a very long look at the choices facing you.
Apple followed the choices of others making untold fortunes from outsourcing and now the Grim Reaper comes to take his just salary for that short term profit gorging. The kids of most of the US cities as well as well as the kids of outback places like Appalachia rural USA are not prepared to even begin to do a good self defense in the competitive manufacturing labor supply chain.
If the business tycoons want a future that includes much of America and American espoused values, drastic steps must be taken to redirect the paths of the X Generation. All schools must become magnet schools, not just some for profit charter places designed to maximize the profit bottom line for legislators and bribepaying lobbyists. Some real investing in real America is absolutely necessary AND quick.
6
Henry Ford, as right-wing in his thinking as they come, was smart enough to know that he had to pay his Michigan workers a sufficiently high wage to buy the cars which they built. He figured out how to do it, although a generation later, he and other automotive manufacturers in America fought young labor unions in a struggle that continues to this day.
Large chunks of the automotive industry shifted to Japan and then Korea, where cars were built by workers who often could not afford to buy them. Those cars soon began appearing on American shores and in American driveways. Today, those cars from the Far East are often assembled in America, and “American” cars are built in Mexico.
This struggle has occurred in all industries. Cheap overseas labor makes parts for American products. The American companies come to depend upon that low-cost labor for survival. The countries providing the cheap labor begin to turn out their own products, which soon compete favorably with the American products.
Why would the corporate leaders in Silicon Valley believe that they could avoid this cycle?
1
A nice discussion 20 years to late.
It would be simpler to build up the needed infrastructure in Africa than in the industrially deserted US. In 1995, the US could hold the manufacturing, if they were willing to invest and educate their workforce. Now all advantages lie on the Chinese side. The Chinese are not firstly cheaper but better trained and often better working as well.
In 8 years Chinese (electric) cars will dominate the market as well. They own solar panel and battery production already.
8
And guess who is building up the infrastructure in Africa, poised to be the cheap labor reservoir of the next generation? China, of course.
1
Like many of the engineers who have commented here I worked in cell phone manufacturing for may years. The car manufacturing business aside the US has transformed from manufacturing to a service economy. There is just no reason to make small and very complex electronic products here anymore. The jobs are not coming back. Remember when there was cheap labor in Japan and South Korea? Well there isn't anymore. They too manufacture in lower cost countries. We live in a global economy. I seem to remember a very good book written by a Times columnist, The World is Flat. Very true.
7
Some kind of arrangement through which Indian workers work here on temporary visa and low wages?
No, we do not need to bring people over here to be treated as indentured servants and undercut the employment costs of American workers. We see the effect of that with STEM employment and do not need to replicate.
6
This article proves that Trump is right about one thing (and only one thing), the United States must be made into an industrial nation again.
Don't confuse this point with the absolutely meaningless "Make America Great Again" slogan.
We have allowed the international slavers like Walmart to de-industrialize our country. That is a very bad thing. If you don't know why, it is because you have been spending too much time in Universities and too little time in Factories.
Factories provide a deep environment that provide jobs on many levels - lots of them. Factories allow you to survive a war; long supply lines are a disaster in war time. Factories provide an environment that breeds engineers and craftsmen.
And when you breed craftsmen, before you know it, you start to breed artists.
In fact, Universities feed factories, and factories feed Universities - how can you do a physics experiment, if you don't have the capability to manufacture highly specialized parts and equipment? And who do you call in as a consultant in your factory, when some process isn't working the way it is supposed to be working? Someone from a nearby University, of course.
This article takes a defeatist viewpoint; let's rebuild our factories - we will all be better for it.
15
My whole family came from working in manufacturing. I am nearly fifty. Are you suggesting I should of spent my life preparing and waiting for a job that was never going to be there? Where would I be now? Let’s get this straight, the workers never left, the jobs did. There was little choice. The training centers for the manufacturing jobs went away too, because there were no jobs to train for. The scale in the shift was massive. In 1982 GM employed almost 90,000 people in Flint, MI. Nice middle class pay with overtime and benefits. They now employ less than 8,000. In addition to overseas labor, we are competing for work with automation. The blame is easily spread around. Exploiting cheap labor is not good for anyone, Walter P. Ruther knew this would hurt American workers.
1
@JRoebuck
My dad spent his whole life working in factories, and was very proud of what he did - until the factories went away.
Thank you for documenting the problem so precisely. This is exactly what has to be fixed.
1
@Peter Zenger
To amplify, each of the US universities where I have studied and worked has had machine shops with expert machinists to manufacture instruments to my specification. Each pharmacy in the hospitals where I have worked has had the ability to produce pharmaceuticals from raw materials, albeit at great expense.
Commenters here suggest the United States can’t have a robust manufacturing sector without compromising worker safety and the environment. This is bunk. Manufacturing represents 12% of our economy. It represents 24% of Germany’s. They haven’t compromised worker safety or the environment and they don’t have transportation issues because their industrial policy makes absolutely certain manufacturers can move goods easily and cheaply. This is a question of national will. Are we capable of supporting higher education so that manufacturing workers have skills requiring them to think? Are we willing to pay to maintain highways and railroads? Can we provide healthcare for everybody so that American corporations don’t carry a higher burden than European ones? Is the United States capable of having an industrial policy in which the government supports jobs by paying manufacturers to keep their workers employed in a downturn? Americans scream “socialism.” Germans respond with a whisper: “Look how well we’re doing.“ As long as our government is owned by an oligarchy that doesn’t care about American workers, as long as the Republican party continues to turn the word “socialism” into an obscenity, we’ll have a manufacturing sector of 12%, if we’re lucky, and Germany’s will be 24% and rising. We can manufacture anything we want. All we have to do is decide it’s in our national interest and pay for it. That’s unlikely with a Republican Party more interested in being fascist than socialist.
19
On the one hand US is stiffening it' VISA rules and on the other hand, they are relying on other countries for cheaper manufacturing and labour.
On the one hand, US is announcing Trade war, on the other hand, they can't assemble their own parts.
I think this problem doesn't belong to Apple it's a political issue.
8
Do you know what you are talking about? The screw that you show to illustrate your article is NOT a small screw. Perhaps if you bother to consult with a person that actually builds small appliances such as an i phone would let you know that a small screw is perhaps in the 1-2 mm dimension and smaller, not the manually able screw that you present. I have a difficult time with people who think they know what they are talking about but don't, you are definitely included. The USA did place a man on the moon. Perhaps if we as a nation placed more importance to our society as a whole and not just PROFITS we could educate and train our own technically sufficient workers to make whatever we want. We have the talent and the hunger for knowledge and a decent wage that if training were made available we will have no shortage of able intelligent candidates to build whatever we want. Why import talent when we have so many or our OWN people who would do whatever is demanded of them to continue out vanguard into the future. Unfortunately, USA companies prefer to value the dollar and not out natural resources, us.
9
America has not the ability to make a screw. And scale or skill is not the issue. Cost is the only issue. I think this a PR piece to cover Apple's behind for when they announce that they were wrong about bringing their production back to the US.
Chinese manufacturing, on the whole, sucks. The products from China suck. My hair cutter that used to last 15 years when it was made in America, now lasts 3 if you're very lucky. The electrical outlets in my house that used to last 30 years when they were made in Long Island, now last 5. Formerly brand name toasters last a year, blenders sometimes less, unless of course you buy a super premium brand that costs a couple hundred bucks. And of course that's probably made in Switzerland or Germany.
The super premium products work well. Without the hype Globalization would be unmasked as a con job, designed to enrich the globalizers.
11
Made disposable on purpose. I try to look for higher quality products that may cost more, because it is a waste to shop and replace items frequently. Even buying norelco Phillips shavers. The cheapest priced one are made in China , but for a bit more you can buy one made in the Netherlands.
2
Pathetic excuse. I am sure our great nation can produce an appropriate screw. Our ancestors built this country with screws Made in America.
4
I have owned a machine shop for over 40 years. I have no problem getting special screws made. I do not have screw machine capabilities in my place. However, there are screw machine houses all over Connecticut and the Northeast. There are high volume CNC machines that run, (lights out), day & night, that load barstock with automatic loaders. I know one man shops, with the right machines, that could produce thousands of those screws every day. If the people at Apple knew what they were doing in outsourcing in America, they would have done better homework. America has the capability to keep up with Apple's needs, if they just knew where to go. Yes, it costs more in the USA, but production output is not a problem. It sounds more like Apple didn't want to pay more, I mean how long did it take to figure out this shop could not keep up? It really sounds fishy to me. The right machines should spit out finished screws in seconds.
19
My TEN year old MacBook still works. Mind you, it crawls with its dated guts, but iTunes still works, and with 11,000 songs on it, I'm not about to give it up. I did, however, recently purchase an iMac with super fantastic speed. I'd rather buy from the 'smaller guy' and avoid anything with a Windows product as an operating system. Plain and simple. Them or these guys. I'm happy with these guys. While NYT is busy reporting, I'd like to know how many screws or widgets have overseas manufacturing for all those other computers on the market. Truth be told, I bet it's almost all of them.
4
Seriously? Apple had one supplier of screws in (of all places) Texas?
Seriously? Give me a break!!!
8
Making precision parts, even tiny screws, is no easy job. My brother-in-law in Germany, a machinist, worked on a computer-controlled lathe that produced parts of jet engines. He once showed me a piece of titanium that had required over twenty different procedures to make. He said, one slip or miscalculation with the machine and he could throw the piece away. In Germany, trained machinists are highly sought after and highly paid. They work for Mercedes, BMW, Audi, Volkswagen, and MTU - the company where my brother-in-law turned out precision parts.
I guess the same is true in China although I doubt they have the same support from a machinists union that Germans do. German machinists are very well paid and have all kinds of benefits and up to six weeks of paid leave a year.
And what about machinists in our country?
11
American workers? My "made in America" Chevy needed 3 transmissions within the first 2 years (all of which were made in Texas). Meanwhile, Trump's coal miners keep waiting for government handouts instead of moving to where the jobs are (even though immigrants risk their lives to cross oceans and deserts to get to those same jobs coal miners are too lazy to move to).
6
I would not be quick to blame the factory workers who produced the transmissions and cars that are substandard. Consider that possibly the issues are caused by design decisions based on cost rather than longevity and performance.
Companies such as GM are run by money managers now - not people who are trying to build the best car or truck.
3
Yes, shareholder value above all and pouring money into hedge funds and venture capital,the CEOs of which buy 250000 dollar penthouses in New York for their own use.
1
There is evidence to suggest what Tim Cooke wants is something akin to slavery. https://www.scmp.com/magazines/post-magazine/article/1955023/life-chinas-migrant-workers-dorm-looks-prison
4
Since China is the world's best, perhaps Apple should move all it corporate executives and their families there. Soon the U.S. won't be safe for them. The pitchforks are coming.
6
Please read Factory Man by Beth Macy or just Goggle It . Or google John Bassett .
This book will give in-site into the loss of manufacturing in America . And will break ones heart.
3
Jack Nicas perpetuates a false narrative about American manufacturing. It is a story we here over and over again - American manufacturing is defeated and incapable.
Nothing could be further from the truth. I run a machining company with about 35 employees. Looking at the screw, I can tell you there's nothing special about it. It's a trinket. There are many capable suppliers in the US who could deliver that screw in volume, on short lead time. Many big OEM's such as Boeing, GM, Caterpillar and GE have plants in the US where they purchase fasteners in vast quantities. Why is it that we don't hear of these companies losing production and missing shipments to their customers because they also can't find screws? They are well oiled machines. I guess the Flextronics factory is not.
If you dig a little deeper in the article, I think you'll find the real story here - supply chain ineffectiveness. Later in the article, we learn that the Flextronics team was under staffed which lead to problems. And lack of screws was not the only problem they had. The article mentions there were others but doesn't go into detail. I wonder what they were?
It's facile to believe that the US can't produce screws and that you can only get them in China. What's most bothersome is how such a small problem has been blown out of proportion. Three people in one factory reported they couldn't get screws (while other OEM's can). So that's why we can't build iPhone's in the US. That's hogwash.
19
This article is clever, but it seems superficial to me. There are many factors that inhibit the return of industry, including health and safety laws, environmental protection laws, excessive cost of land in urban areas, and high transportation expenses due to the neglect and removal of railroads and to the terrible traffic on major highways in almost all major urban areas. To restore manufacturing, we would either have to go back to the days of pollution, poor worker safety, rampant discrimination, and crowded housing, or have government support of industry from new taxes, plus deficit spending for infrastructure and education. Trump has chosen the former program, which no sane person would want. But can the Democrats accomplish the latter? I hope so, but the obstacles are many.
5
That US can assemble cars and SUVs but it can't assemble computers? Really? I can build a computer in my basement. We are not talking anything close to the complexity of a car assembly. So there are supply chains connected to the assembly operation. As the Japanese automakers did when they moved assembly to the US in the 1980s, they brought their supply chains with them. The article really should be saying that Apple after contracting out their manufacturing for so long, no longer knows how to do it themselves anymore. I suggest that Apple talk to Elon Musk. He's come up the manufacturing curve.
6
Think about this there are 160 cities in China with populations over 1 million, the US has 10. China has an infinite supply of workers and due to market demands it has a supply chain that can change quickly to meet the demands of a manufacturer that can not be done in the US. Don’t blame Apple blame basic economics of supply and demand.
4
"Another frustration with manufacturing in Texas: American workers won’t work around the clock. Chinese factories have shifts working at all hours, if necessary, and workers are sometimes even roused from their sleep to meet production goals. That was not an option in Texas."
And it's not an option because Texas is "open carry".
--
Bob
5
A fundamental issue undermining the cost competitiveness of U.S. manufactured goods is that foreign import pricing is government controlled, which mandates a forced lower cost of living for their citizenry. For manufacturing workers in those countries, the alternative to not working in that environment is imprisonment or certain poverty.
To even the field for U.S. workers, as well as to pressure foreign countries to ease up, would be a U.S. import tax on those goods. The tax is justified as it would represent the value of U.S. economic, political, and military influences that are benefiting the world but heretofore are not cost captured in U.S. exports.
4
Google the book ‘Factory Man’by Beth Macy and you can read how the Furniture manufacturing was taken over by the Chinese . The book is about John Bassett and about his fight to Save his company .
This book can answer lots of questions about the plight of companies in America. And how the Chinese outsmart them.
And why can’t we invest in Mexico helping them set up companies that would solve the problem of immigration by giving work to the Mexican people that are hard working people willing to work and wanting work and do excellent work .
Mexico is right here we should feel an obligation to help build their country and stop degrading the people and building a wall to shut them out . Embrace what would heal this immigration problem and give America the product we need.
6
This is a very misleading article which regurgitates Apple's talking points. We still manufacture some of the most hi-tech stuff here. The article lazily states that the US doesn't allow night shift work. That is simply not true. Most factories have shifts that allow it to run 24x7 and the law supports it. While it may be true that we don't have the ecosystem to assemble electronic components here, it isn't an insurmountable problem. Given enough motivation (aka tax breaks or levies) we can incentivize companies to assemble things in the US. Apple simply botched the assembly of their mac pros. It is as simple as that. Too bad that Apple doesn't have top notch engineers.
15
My former plant ran 24/7 for 360 days a year.
5 days down at end of December for maintenance and holidays.
It was tremendously efficient.
Standard operating procedure for many continuous production facilities in the USA.
10
@Sam
Democrats have consistently backed incentivizing manufacturing. Republicans have consistently voted against such incentives. Democrats have consistently backed infrastructure investment. Republicans talk about it and do nothing. I leave it to Trump supporters to explain why. But everybody should remember that Mitt Romney was willing to let the American auto industry die — an industry comprising 10% of the American economy — and that Obama had to fight Mitch McConnell to keep our economy from crashing further into the pit dug for it by George Bush (and yes, Bill Clinton when he repealed Glass-Steagall). It’s not in the Republicans’ interest to support mid-level manufacturing. Those aren’t the kinds of companies that deliver bags of cash to Capitol Hill. If you want to jump on that, chill. It’s a metaphor for everything the Republican Party does. They aren’t about what’s good for the American economy or the American worker. They’re about what’s good for themselves.
4
This is a very misleading article which regurgitates Apple's talking points. We still manufacture some of the most hi-tech stuff here. The article lazing states that the US doesn't allow night shift work. That is simply not true. Most factories have shifts that allow it to run 24x7 and the law supports it. While it may be true that we don't have the ecosystem to assemble electronic components here, it isn't an insurmountable problem. Given enough motivation (aka tax breaks or levies) we can incentivize companies to assemble things in the US. Apple simply botched the assembly of their mac pros. It is as simple as that. Too bad that Apple doesn't have top notch engineers.
Apple, like all publicly traded companies, are beholden to their shareholders. Long term strategies, i.e., Apple investing in US engineering innovation and infrastructure, would risk short term profits - that simply isn’t tolerated in today’s Insta-everything world.
6
@Las iLopnom
“Today’s insta-everything world” that you decry isn’t the entire world. It’s the United States. American corporations chase short term returns not solely because of the markets, but also because it raises the payout to executives. The same does not happen in Europe. You can look at the numbers; they’re self-explanatory. The ratio of CEO pay to workers’ pay in Germany is 12 to 1. The same ratio in the United States is 450 to 1. As long as we allow executives to loot corporations at the expense of workers and long-term investment, as long as we allow short-term gains as an incentive for chief executives, as long as our markets punish long-term goals, we’ll have an economy in which manufacturing is half the percentage of GDP than it is in Germany. All of this could be fixed. Well, not really. It can’t be fixed when the Republican Party does everything it can to stop it from being fixed. Under Eisenhower the highest marginal income tax rate was 90%. The economy did just fine. Raise the marginal income tax rate to 90% and you’ll see a significant shift in how our resources are used and spent. That’s not going to happen, as we saw from the Republican response when AOC suggested it should be 70%.
6
Unrelated to Apple's issue, but regarding "no country — and certainly not the United States — can match China’s combination of scale, skills, infrastructure and cost.", I noticed that Apple's statement omits the word QUALITY.
As a consumer, I avoid 'Made in China' as much as possible due to numerous issues of quality.
6
Look, as unpopular as it will be here, we have a global economy. Certain suppliers specialize in certain items (because we can't make every last component in the U.S. or in Mexico, or in Canada, or in any given country). So the Chinese do this, the Mexicans do that, the German do another, the British yet another, the Japanese still another. And when we all cooperate, we sell things to one another. But if we insist that any one country (the U.S., China, Japan, Germany) can be totally self-sufficient, everybody loses.
That's what's happening now with Trump's tariff's. Place a tariff on washing machines, Whirlpool will gain for a while. But then they raise their prices. Put other tariffs on steel and aluminum, and suddenly Whirlpool must raise its prices a lot higher. And guess what: people buy fewer washing machines altogether, and Whirlpool profits go down, and their stock drops, and they let more workers go.
Moral: nobody ever wins a trade war. Everybody loses.
10
This article is a masterpiece of hiding political preferences in the language of "economic inevitability". The reporter sounds like they share Apple's preference for dealing with authoritarian governments and a pliant, desperate workforce and in any case they are certainly trying to convince readers that there is no alternative.
The truth is that markets are constructions of the law, and that every company's economic choices are constrained by political choices. The only people whose political choices currently count in our "democracy" are the owners of capital.
7
Do you know anybody born in the USA that aspires to work in an assembly line? Even the sons and daughters of the poor , lives in comparatively comfortable lives and has attended primary and high school; they have not been taught to work with their hands. The only people willing and qualified to work in those jobs are immigrants from Mexico, Central and South America. But the pure Americans don't want them! One option would be to builds a manufacturing infrastructure in northern Mexico; parts and assemblies would be shipped back and forth across the border.
2
Perdiz 41: Pure Americans??? Unless you a a native (Sioux, Blackfoot etc.) you are just an immigrant like the rest of Europeans....
1
Read up ! This is what we all ready do under NAFTA.
We go to Asia or other when it is CHEAPER.
Support the new trade agreement with Mexico and Canada if you think this is a good solution. I do.....
1
If the US is actually motivated to become a manufacturing hub again then the focus should be on skills and education.
In China (and most of the world), consumers prefer to buy goods manufactured in Germany because of their (perceived) superior quality.
Germany has had zero trouble retaining its manufacturing and economic might, largely due to its focus on consistently training a highly skilled manufacturing workforce.
20
Germany has strong unions and pays their workers well. The CEO-to-average worker pay gap is 12 to 1 there, compared to 450 to 1 in America.
1
This really is a National Security issue when you think about it. It’s more than just a concern when we have lost so much manufacturing capacity. What if a war were to break out or a devastating disaster were to befell us? We’d be completely without the ability to manufacture necessary components in our own country. What’s even sadder is that a multi-billion dollar company like Apple doesn’t bother to invest in rectifying the situation. They could easily create a small subsidiary to create their own special parts. They simply look elsewhere instead because it’s cheaper in the short run. That’s not very good long term thinking.
4
The economy will always dynamic when manufacturing is at a nearby place and even if saw the history all the nation prosper with their manufacturing skill whether it united state, Europe or China. the outcry for lower skill or unavailability of labour or manufacturing facilities is great mind game that the U.S as great remuneration difference between silicon valley and other industrial output facilities as more long term logical investment needed for the American citizen to again create a master product for the world that they had given to people of the world views generated because of unfair practices generated by nation has lots of reason to create economic disparities locally
I also wish apple manufacture iPhone or mac pro here in India but not at the cost of American homeless
2
For the US companies trying to stay competitive it is almost impossible to nurture compliant labor practices.
For the consumer it is impossible to avoid buying these industry standard products and stay competitive at work.
So blame Apple for hiding in Chinese slave labor, blame consumers for buying products we know are made with slave labor.
But most of all blame the White House, the House, and the Senate for not legislating ethical financial incentives to make manufacturing in America possible. And that is a failure of both parties.
2
The USA gave up its ability to manufacture over a long time period. But it really went much faster with the policies of Ronald Reagan.
4
Where’s the surprise here? When you move manufacturing out of a country you also lose the subcontractors and other supporting companies along with their equipment, knowledge and skill sets.
It’s a bit like bleaching a coral reef. All it’s surrounding and supporting life disappears as well. What took decades to grow and thrive can be devasted in a relatively short time.
5
“In the U.S., you could have a meeting of tooling engineers and I’m not sure we could fill the room,” he said. “In China, you could fill multiple football fields.”
Um...outsourcing for 25 years and using third-world economies to severely undercut US mfg's ability to compete in favor of investor quarterly returns essentilly drained the US of tooling engineers. How Oedipal of you to look around at the desolation that surrounds you and piously ask "Oh what fate has befallen us?" The fate was YOU! If there is only a handful of tooling engineers it is because of YOU and countless companies like you for the last 25 years. If you REALLY believe in building devices in the US...then build them. Put out RFQ's for all the manufacturers you will need. Will it be more expensive? Yes. But if you want to enjoy the protections of US corporate law...then I belive you should at least have a US CORPORATION. in physical reality as well as in legal name.
7
A point you miss is that foreign companies also manufacture and assemble in the US, in a global economy everybody participates and geopolitical realities have a significant amount of weight too,
2
Do we hold China to any environmental standards?
3
This is a bad example. From a supply-chain perspective, the screws don't need to come from America. They're small, light and cheap to ship. You'd order thousands at a time. Considering they're "Apple" screws, they probably take specialized CNC machines to make. Investing in these machines wouldn't make economic sense when you have a single product/customer to make it for. Yes, we have to transition away from manufacturing everything in China but the supply chain will look more like Boeing's 787 with a global footprint than Ford's Model T at River Rouge.
5
I was horrified at this article. Condemning the manufacturing base of the entire U.S.A. because of a few foreseeable errors in the engineering department at Apple:
1) Why does this product need a custom screw? Remember the fuss about "pentalobe? screws... the newest shiny bauble? Problem would not have been if the engineer had designed the assembly to use a standard screw. And would have been cheaper.
2) The implication that if Apple can't get a custom screw made within driving distance of their plant in Texas, the only next choice is to outsource it to China. Really? In a country of 350 Million people, there isn't another factory somewhere that could have made this screw for them ? (Hint: there are many).
3) Clearly the "Designed in California, made in China" is hogwash - they are relying significantly on their vendors for major engineering, materials selection, supply chain, etc., decisions. Perhaps it would be more accurate to change the logo to "Fantasized in California".
4) Why do they expect a whole team to be assigned to making a screw for them? Have they not written a clear spec? Chosen the right materials? Does the designer know nothing about the process used to make the parts they are designing?
5) I was horrified about the complaints that the slave-shop like work conditions aren't available in the USA. Apple should be shamed that their suppliers are forcing these workers to work round the clock, and waking them up for forced extra shifts.
18
David; a private company should be able to do business wherever it decides to do so. Freedom is important in all aspects of life, why should the government mandate where you manufacture?
The same goes to the freedom you have in spending your hard earned money, you don’t like the company? Then don’t but their product. Ultimately that is the most powerful tool we have as an individual.
1
1000 a day, only.
Clearly they had the wrong equipment.
If they were using swiss screw lathe with live tooling, they should be able to get at least 2900/day. Per unit with an automated bar loader, a single operator can oversee multiple units.
QC and cleaning can be fully automated.
Not sure how they select vendors but there is definitely capacity available.
9
“Apple could make more products in the United States if it invested significant time and money and relied more on robotics and specialized engineers“
This isn’t necessarily a solution either. Look at all the trouble Tesla ran into when they attempted to build a car factory based on robots. In the end they had to dump many of the machines and hire laborers instead.
1
I gotta say, when I think of U.S. manufacturing I sure don't think of Texas. Maybe Tim Cook thought Rick Scott's tax incentives were a good substitute for manufacturing infrastructure. Glad I don't own any Apple stock.
1
Perhaps it's time we finally switch to metric.
8
The fact that producing fasteners in amounts adequate to support domestic manufacturing of a product sold to Americans in vast amount illustrates the effects of business schools and economics upon the loss of domestic industries since the 1960’s. These groups tend to focus upon maximizing profits and minimizing losses without any regard to the actual outcomes from the perspective of society. Both presume that simply doing business reflects society meeting it’s material needs. They don’t think to question how well those needs are being met.
The goal of businesses is not to provide goods and services and jobs but it is to enrich those who own the businesses and those who can negotiate a share of the proceeds from those businesses’ productivity. If society wants businesses to serve the needs of everyone, government must intervene to assure that they do.
8
Apple is not the solution to American manufacturing, it is a very big part of the problem. No matter how much they try to twist reality, they are a greedy corporation just out for profit. I put zero trust in them being ethical and blame the failure of the Mac Pro on their lack of enthusiasm for the product. They had no interest in the program and never will. They just did it to say they make something in the US. If they were serious it would be a major product line like MacBook or iMac.
The US cannot compete with China on manufacturing because we can’t match quantity, quality or wages. There is zero chance of those jobs coming back to the US. No ridiculous government policy or false hope on trade schools will ever make manufacturing a reality in the US again. We need to concentrate on what we are good at and move on.
9
There's one thing all presidential administrations in my lifetime have had in common: non-existent industrial policies. Unlike China and Germany, we have no stated national goals for our industrial base. The closest we ever came was the project to put a man on the moon.
5
My fave find-a-bolt story: A college friend bought an old Ferrari and tried to maintain it. One damaged bolt could not be replaced. Until, that is, he discovered that the bolt was a Ferrari special part - an imperial bolt with a metric head.
Back to this article. Contrast it with one from November: https://www.nytimes.com/2018/11/28/style/made-in-america-flannel-shirt.html
Niche manufacturing is different from large-scale manufacturing. Small steel can work where giant foundries fail, etc. etc. The research literature is extensive.
The political problem is how to ensure full employment when part of the population is unable or uninterested in acquiring needed skills. Niche manufacturing is often of limited term and contracts may not provide insurance. Niche industries tend to cluster and regions with low human capital are not attractive.
What to do?
4
Apple's MacPro line has suffered slow sales for the last 3-5 years because they are offering a 6 core E5 Xeon with only 16g ram and a 256 SSD for $3000, all in a case that limits upgrades.
For $3000 (US) you can buy or build a computer with much better hardware for less money in a case that will enable upgrades for 10 years.
11
People worry about what Mr. Putin has done to the US
Mr.Cook has done far more damage to the US, ruining US manufacturing , urgently needed should we ever get into a conflict with China.
5
So FIGURE IT OUT! ….via a thousand different ways/means! This is utterly bogus obstacle/hurdle. Of course any change/shift will bring problems. Are we to believe when manufacturing (incrementally?) shifted to China, that Apple experienced zero problems?
If we want a product as essential to our lives, and personal information, to be made by our countrymen, whose employers share our laws and values, we may have to deal with some issues, AND EXTRA COST$. Stop sniveling and figure it out, Steve Cook. Or accept that the Chinese government has access to every bit of personal info conveyed by EVERY iPhone "made in China".
4
There are many valid reasons to manufacture offshore, but the example you cite should not be one of them. That one minor component could be the cause of the problems that you describe would be better blamed on design, procurement, and planning error bordering on incompetence.
5
My husband is a highly trained and experienced machinist who currently is working 12-hour days, seven days a week, right here in the USA. His base wage is just under $25/hour, plus a generous benefits package. He limits himself to one no-overtime 40-hour week a month so he doesn’t burn out, and thankfully, he loves his job. He has some college, in engineering, but prefers to work with his hands and enjoys not having to check email or bring other work home with him.
This is his first time working in a union shop, which means he’s getting time-and-a-half for many of those hours and double time for 12 hours on Sunday. Overtime is voluntary but he’s happy to work as many hours as they’re willing to pay him for. We live in an area with a low cost of living, so this means I can stay home with our kids and we are comfortable on one salary. He has plenty of vacation time, and we use those days wisely, again to help him avoid burnout and maximize our family time.
Of course, there’s always a catch: he’s not making iPhones for Apple but rather bombs for Raytheon.
30
People who think this is being driven by exploitative low wages in China are decades out of date. China's wages used to be extremely low, but have gone up a lot now that China is more developed. For example, according to this article, Apple is starting Chinese workers at $3.15 per hour. Adjusting for the lower cost of living in China, this is about $6 per hour, only slightly below the $7.25 federal minimum wage in the United States. This is not a slave wage.
The fact is, the Chinese are now competing on quality as well as cost. It is complacent to think they are just providing low-quality low-wage labor.
11
Checked minimum wage for govt workers in Pa recently? Not $7.25/ hr.
1
Sounds like slave labor to me.
$6/hr at a straight 40 hour work week is $240/week, $12,480/year.
Not sure how one would live on $240/week anywhere in the US.
(Unfortunately, I imagine there are many who do know.)
3
your point is?
She discussed the FEDERAL MINIMUM WAGE, And guess what? she’s right.
Per the US Dept of Labor Website, $7.25 is the FEDERAL MINIMUM WAGE.
To try & help you understand, I copied & pasted the following from the USDOL website. If you still can’t figure out why the Federal Minimum Wage is $7.25 after reading it....
“The federal minimum wage for covered nonexempt employees is $7.25 per hour effective July 24, 2009. The federal minimum wage provisions are contained in the Fair Labor Standards Act (FLSA).
Many states also have minimum wage laws. In cases where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.”
1
The inability to plan and organize their manufacturing process is the reason why Apple can't assemble their products in the US?
Have they never heard of air cargo, UPS, FedEx?
My dentist can digitize my teeth in 3d and share that with other dentists via email.
The technology to overcome even some of the poorest manufacturing planning exists today.
Globalization works both ways, you know.
How gullible do they think we are?
6
Something is absurdly wrong about the world.
3
Lots of talk about why, oh why. The answer seems to be, as always with us humans, a contest of wills.
Americans overall don't care what happens to their country. The Chinese do, and that's the story.
8
So this is all the problem of one severely understaffed plant in Texas, that couldn’t make the screws fast enough to keep up with demand?
In the beginning of July I had a 7 month old MacBook Pro sent to Texas for what I was assured was a 5 day repair. Every other week until the end of August I was given the same excuse: the parts had not come from China. There was a tariff situation, not enough workers, etc.
Towards the end of August I told them to cancel the repair and give me my MacBook back. That they cannot work here because the overseas workers can and are able to supply immediately is debunked. They are there because they can pay people $2.10 an hour and have them work 12 hours a day, seven days a week. This is obscene and they know it.
This company is now worth well over a trillion dollars because of the United States, our workers and our consumers. Yes, payback should be here.
7
Only an exceptionally dumb company would only look in Texas for screws. Texas really doesn't do screws. A quick google will tell you where and who. Overnight shipping immediately negates distance in the U.S. Apple needs to plan, not just demand.
6
The economic theory behind how this will benefit is that every country should be producing the goods and services that it has a competitive advantage in, so that skills are optimally used in a way that benefits all. So while China produces relatively cheap manufacturing screws and other products, the US should produce high value manufacturing products (eg. precision devices, tech intensive tools etc.)
The problem is that while China is producing low cost products en masse, it is also starting to produce high end products so that the workers in US that are supposed to do so won't get a chance to do it in the future.
It is a mistaken notion to keep thinking that China is 'authoritarian', therefore it can be more efficient because it can amass a huge pool of labour force. This is a misguided perception and complete misunderstanding.
Instead, one should think the country as 'authoritarian capitalism', which is different because its goal is to suppress labor so that it can develop its exports and therefore, manufacturing can be more competitive.
One should not forget that it is essentially companies in China that allocates resources, and therefore, also benefits enormously from labor. Labour in the US and China is still labour working in service of corporations.
3
Granted, I don't profess to have the expertise of some other commenters here, but do present an alternate viewpoint:
As others point out, there are domestic suppliers who no doubt could produce the specified screw, with excellent finished quality, in the quantities demanded.
The rub would be, though, that if produced in the requested timeframe, would incur hefty rush markups, as well as expedited shipping charges.
For any competent outfit that provides high quality goods and services, these markups are fair and reasonable, and serve to enact economic sanctions onto customers with sub-optimal logistical forethought.
I would also add that Chinese suppliers (or other low-cost nations) won't be able to do this indefinitely, either. There are tradeoffs with what's effectively a race to the bottom, and that should to be kept in mind.
4
It used to be America had a skilled workforce, and precision manufacturing resources that could handle such requests. Now everybody sells "products", makes an inordinate amount of money maneuvering around questionable legal requirements, works in AI, medical fields, or works in the service industry. American politicians and industry (it's so much cheaper to get this in China!) brought this upon all of us. Think.
7
My countervailing view on Chinese screws:
I use a Chinese Lenovo computer. It's a good computer and I'm writing this post on it. But the screws stink because they use coated threads and Philips heads, which cause the screwdriver to ramp out before applying enough torque.
For a single screw removal and re-insertion, that's no problem. For two, it's marginal. But a third removal and re-insertion is impossible. Attempting it will crumple and destroy the circuit board.
Square-hole and/or Torx screws are much better because they have no head-ramps. An American screw manufacturer using Torx would annihilate a Chinese manufacturer using Philips.
6
We used to have all this skills, but they were all outsourced and lost to other countries. Also Apple has such huge profits, it could afford to start it's own screw manufactory. However all the tool and die people need years to acquire skills, but we have no respect in this country for the skills of hands. Coming from a family of trades people, we all knew these days are coming.
These screws are just the first canary. Wait until the lights go out.
11
Perhaps Apple should consider outsourcing its CEO and top management team. Chinese management (like Chinese workers) might be willing to work for significantly less, and thus significantly increase Apple's value.
18
It saddens me to read this flimsy rationalization for what is clearly a price-driven policy, selling out the US for a fatter profit. Apple uses China for assembly because it is cheap. Period. The government in China is horrific on human rights, imprisons many thousands of dissenters and political prisoners (those lucky enough to not be summarily shot by firing squads a week or two after their arrests and sold to "Body Worlds" and "Bodies: The Exhibition") while both environmental pollution and worker safety are flagrantly neglected. Not to overlook China is spying on the USA as hard as they can and laying the foundation for taking the role of world-leading superpower away from it. But Chinese labor is cheap. Senior leadership such as Tim Cook are paid ridiculous salaries, stock options and bonuses because they have the "discipline" to ship jobs overseas to our nation's longtime adversary, China. It saddens me to think how cheaply we will sell out.
14
No point to get angry at businessmen who seek and find compliant and cheaper components in China (that are acquired to companies that follow applicable laws in their home country) to make their companies as profitable as possible. This is just capitalism at global scale. 99.9% people with commonsense would do same, wouldn’t you?...
2
Sold. They own our debt.
3
@ATS I pay extra for "Made in USA" products. Maybe I'm the exception - but I also work with a number of companies which have chosen to improve their manufacturing processes to the point the net cost of their American-made products is equal to or less than imports. My job is to improve productivity and efficiency, and there is often much room for this. Meanwhile, in China, they are using our old, slow machines, making the same pieces in hundreds of tiny factories, and carrying them on bicycles to be consolidated at a central shipping point. When the costs of quality defects, back-and-forth air travel by US staff, trans-oceanic shipping, a minimum six week supply chain, customs delays, and production inefficiencies are considered, in many cases there is no net advantage to importing from China. The businessmen you mention who have common sense find this out when they do a lifecycle cost analysis. Or, they can play follow-the-leader, as we do here, and compare only the hourly labor costs to make a knee-jerk decision.
7
Absolute Nonsense. Amazon's service, MFG.com, and Design2Part trade shows and guides provide access to many thousands of US machine shops providing world-class service and rapid turnaround for these types of parts--and parts far more complex, smaller, machined from exotic materials, etc. Apple needs to be called on this.
10
Sure, first big business hollows out American manufacturing capabilities, then it complains that you can't make anything in the USA anymore...
14
@Roberto
Same as the Republican party dismantling effective gov't services and then running on a "government is dysfunctional" platform.
15
1975, suburban Chicago: Finish your dinner, there are people starving in China!
2019: suburban Beijing: Finish your dinner, there are people starving in America!
22
@Melissa
In this country, one of the richest societies in the history of humankind, 30% of the people go to bed hungry. Why do we allow it? Why do we tolerate it? That’s not so difficult to answer, it’s just unpleasant.
1
Interesting how these corporations can pay lip service to the wokeness/equality crowd here in the West while at the same time outsourcing their manufacturing to Chinese sweatshops that function as de facto 21st Century slave plantations.
13
@Rob
What is the other option in China growing rice?
2
@Ray China is large and has a variety of options. You might want to do more research.
2
The screw that Apple wants is the one that prevents ipad owners from being able to repair their own devices.
USA businesses that have to compete with China's child labor laws and lax pollution controls can't succeed.
Congress do your job!
11
@Craig
Not defending Apple, but this is clearly not the case. Consumer demand dictates that handheld/tablet devices increase capability, while at the same time offering lightweight portability. Hence, fasteners such as the type shown here won't work. Instead, components are integrated and often glued together.
Outside of iOS, there are plenty of comparable Android and Windows products, where the same form factors (and construction methods) apply. This market segment has few issues finding ready buyers.
Outfits such as Apple and Microsoft do exhaustive market research. It's pretty certain that if market demand dictated it, there would be more serviceable (and much heavier and bulkier) offerings.
1
@Karl Kaufmann -
(and much heavier and bulkier) ?
Everyone thinks they are Designers.
@LouAZ
Regardless of what "everyone" thinks, compare the products of today with their older counterparts. It's pretty telling. This is abundantly clear both with tablets and laptop computers, as well. Pulling out older versions (of both form factors) from storage recently underscores this.
"Designer" or no, are there comparable (serviceable) products on the market eating into the sales of the current offering? Any aesthetic considerations aside, bottom line factors heavily into this. Especially for Apple, whose margins still handily beat competitors.
I do not buy Apple’s explanation. So they have a problem in Texas finding a specific screw with a perfect pitch, black anodized and recessed to a few thousandths of an inch. It’s probably heat treated or milled from, you name the material. Apple, what do you pay engineers for? You are telling me your engineers cannot figure out how to source the screws regionally. The explanation is beyond belief. Whatever the problem is it has nothing to do with engineers knowing how to source something within cost rules.
9
@Dan Holton
The problem is not the screw but manufacturing the screw that Apple wants/needs.. His Supplier in Texas could not fulfill the order in a timely manner.
2
I saw several pictures of the type of screw in question. I visited the website of the vendor in the article. The socket head or hexagonal pocket in the top of the screw might be difficult for the vendor to put in after reading his equipment list. Apple's purchasing personnel should have seen this and asked how is the vendor going to perform that operation prior to giving him a purchase order. The vendor probably should have no quoted the job.
I know there were a lot of other issues presented in the article. The perception that no shop in the U.S. can make this crude looking screw is unfair. I am a toolmaker and I own a small shop that makes can tooling so I am a bit biased, but I believe Apple needs a more competent purchasing department. I'm sure there are hundreds of shops that can make that kind of screw stateside.
9
@ray stanis
I think the real question is can you crank out 20 million custom screws in the next 2 weeks or a month..
2
@Ray - as soon as Apple SELLS 20 Million Computers of the same Part number in 2 to 4 weeks !
2
I think the story of the tiny screw that could not be mass produced on time is just a metaphor for the reality that the U.S. cannot compete right now with China in terms of production scale and cost per unit.
With ingenuity I'm sure U.S. companies could manufacture sufficient screws but as a comedian recently phrased it "I don't want the U.S. manufacturing iPhones because I don't want to pay $9,000.00 for one."
2
It's not the ingenuity we're lacking. Rather, it's the dearth of investment in capital equipment and vocational education, and a lack of imagination that is killing us.
1
The United States has lots integrated manufacturing capacity, which is national security, especially if the only place you can get parts is from adversary. During the World War II the United states overnight turned its factories producing cars and consumer appliances into facilities churning out defense equipment overtaking Germany that had a head start. This was possible because there was integrated industrial capacity to manufacture all parts. Imagine if the US had to source parts from Germany. The United states has got richer as country because of outsourcing, but it has lots its industrial edge as well. Even in the domain of smart manufacturing and IT China is taking over. Wake up. The screw is a metaphor for the times.
5
I worked in electronics design and manufacturing in the Northeast. We had the type of talent and can-do attitude Apple now finds in China. We looked on helplessly as factory after factory closed because China could deliver fully assembled and tested product for significantly less than what it cost us for parts alone. Any questions?
4
@Bert
I worked in the defense industry and we used a manfacturer from Mass. I remember plugging in the component backwards (no directions or no keyed connector. Anyhow the board consisted of 1 chip and cost $500..
I think Americans dont really appreciate how cheap it costs to make electronics today.
The first TVs made in the 50s cost half as much as a car..
1
An typical work week at Foxconn in China is 12 hours a day, 7 days a week and living in an on-site dorm.
Vacation? Family leave? $15 minimum wage? No, no, no, and no to all the other questions.
7
@Brad
Let’s be honest about it. China is a prison state. It’s factories are prisons. The worker does what he’s told, or he starves to death or goes to actual prison. We’re buying our iPhones without thinking about the people who make them.
1
@ADN
Fair point. US history shows it was like that here in my grandparents age pre-emerging middle class / pre-WWII.
@Brad
Yes, sir, indeed, a very fair point, and perhaps our history explains our present. 1900 to 1943 was not a pretty era in this country. The oligarchy doesn’t behave much better now than it did then. And the rest of us have become insensate when the spiritual descendants of the Triangle Shirtwaist fire are on the other side of the globe.
It's not a question of whether Apple can manufactur it's products in the U.S.A it's why they didn't preform due diligence on the location they chose to manufacture. Shouldn't they have already secured a supplier before committing to this location in Texas?
Apple is slowly failing and I could care less...Steve Jobs took the integrity of the company with him.
2
My guess is that when Stephen Melo upgraded his pressing machine, the old machine he replaced went to China, like so many other machines and technologies.
In this country we are practicing "lean manufacturing" where technology replaces people. The Chinese on the other hand are throwing smart strategic technology as well as people at their industries. The central planning in China seems to be working for the its economy. I am not a proponent of central planning by government but maybe the private sector in the USA could work together more instead of competing each other to death. And, maybe they could throw in a little more social responsibility.
3
@Citizenz - How did that "central planning" work out in the USSR ? Remember the USSR ? It was replaced by Rampant Capitalism and Robber Barons just like the USA from 1900 to 1930. Remember the USA ?
A very frightening article.
One shudders to think, should America ever find itself in a situation similar to WW II where there is all out global warfare, whether we could rise to the occasion?
I seriously doubt that we could.
5
Apple is shocked that after sending an entire industry to China that when you try bring a tiny bit of it back home it is difficult. They are shocked that when you create a supply chain in China and ignore domestic production that they have problems with the non existant supply chain. And the best of all is that it's harder to build in a place where you can't drag 100k workers out of bed in the middle of the night from their dormitories to revamp a phone. Every electronic product I own is an Apple but articles like this make me want to take a hammer to all of them when I realize the harm to American industry outsourcing production has done.
8
@Todd
It is not an Apple problem perse...Consumer electronics have been outsourced for years..
1
“The skill here is just incredible,” Mr. Cook said at a conference in China in late 2017. Making Apple products requires state-of-the-art machines and lots of people who know how to run them, he said.
“In the U.S., you could have a meeting of tooling engineers and I’m not sure we could fill the room,” he said. “In China, you could fill multiple football fields.”
It's everything. China has built over a thousand miles a year of high speed rail since 2006. China can throw up a Golden Gate Bridge in about four years. In China, you can get a digital file of the design of a circuit board turned into a printed circuit board in a few days. In China, it is understood that infrastructure doesn't have to be profitable, but it makes everything else more profitable. In China, the government thinks a housing bubble is evil and tries to prevent the kind of "wealth creation" we experienced in the years leading up to the crash of 2008. And so fourth.
5
Made in USA = overpriced garbage.
Made in China = best quality products.
2
@czubek That is not a rule, either way.
How about not having to invent a new screw. I know - crazy idea. Of course, we know the real reason Apple wants to invent a custom screw - so that customers can't repair the computers.
12
It is amazing how they can get a whole phone to Texas, but not a small screw. Have they tried ordering it from Amazon?
7
The real shame is the design failure; how did it happen that Apple's vaunted engineering came up with a specification for a screw that could not be sourced at a reasonable price and with *at least* a second source anywhere but China?
Or perhaps it was a precipitous and ill-considered executive decision by the CEO who did not consider the implications of a hasty edict to manufacture a device in the US. A good decision would have considered whether whether the design needed to be adapted to more be more easily and economically manufactured here.
4
Hardware manufacturers in the USA are scarce. All the distributors and manufacturers reps source from China. The quality is spot on.
4
The single most important reason why companies shifted manufacturing and production to overseas is the fact that the US dollar is the world's reserve currency. Being the world's reserve currency makes the US dollar relatively more expensive than other currencies especially those in developing countries. For companies seeking to maximize profits and remain competitive, shifting production overseas is a given.
Having the US dollar as the world's reserve currency affords Americans a higher standard of living since imported goods are generally cheaper due to the exchange rate. It is a trade of that many Americans are not aware of.
9
@Paul - Correct but incomplete . . . you left out the part about dealing with the Devil.
“In the U.S., you could have a meeting of tooling engineers and I’m not sure we could fill the room,” he said. “In China, you could fill multiple football fields.”
Right. And why is that?
Apple now says it can't only because before Apple did not want to do it. It left the suppliers to be driven out of the business, and so surprise! they're gone.
How to get them back? Pay for them. At first it will cost more to re-establish what was wasted.
Nobody wants to pay extra? Well then as relations deteriorate with China, they can just go without.
That would be sort of like the suppliers went without, when relations with China were built up on the basis of pretend-its-all-okay, and what-could-possibly-go-wrong with depending on a communist state supplier on the other side of the world.
The US can't make a screw? Of course we can. We just haven't made even a screw for too long.
5
Apple is making excuses.. .
5
That’s merely an accusation without either specifics or fact-based arguments, and therefore dismissable.
2
Yet more proof of how the current education system in the US and constant demands for tuition-free university are a road to ruin, unless the ratio of liberal-arts (BA) degrees to BS degrees is reversed in the Sciences favor.
The US needs more trade-schools and high tariffs on some Chinese goods. The combination would help spur investment and a growth in manufacturing jobs to meet need of “assembled/made in US”
2
OK, so China has lifted itself out of third-world status, in part, by a population which never seems to stop working. An opinion column in today's Times examines "extreme poverty" and notes that sub-Saharan Africa as one of the "most challenging places in the world" in dealing with poverty.
Might there be a lesson learned here?
1
@J. Cornelio The reason of such ceaseless effort? No or few worker protections. Low pay. Intense competition due to population size.
Do you want to swap working conditions?
Essentially, when companies outsourced they limited competition by buying cheaper but also by breaking the home market for equipment and companies that would support competitors. Having import licences and quota systems locked out more competitors.
2
Apple products are made with unusual screws to prevent people being able to open or repair their own phones.
Not a good example to support the argument because most phone makers will use standard size screws.
8
Actually, you can find quite inexpensive tools to open Apple products at IFixIt.com.
2
@Rik Myslewski - and Ace Hardware offers several Forged Steel Hammers that will also correct any Apple "issue".
Not to worry. Every American can work as a hedge fund manager in the future. THX138 here we come.
1
The reality is that unregulated capitalism is not good. Apple and others went to China because there are no regulations protecting the rights of workers. In China workers have to live in company dorms... “China is not just cheap. It’s a place where, because it’s an authoritarian government, you can marshal 100,000 people to work all night for you,” said Susan Helper, an economics professor at Case Western Reserve University in Cleveland and the former chief economist at the Commerce Department. “That has become an essential part of the product-rollout strategy.” The workers rights are highly restricted...This is only 3 steps away from slavery.
13
@Thinking California
Chinese workers go on strike all the time to get their grievances resolved. You get fired for that in the US. Oh, excuse me, that would be illegal. Its merely "permanently replaced".
Chinese wages and the minimum wage have advanced at double digit rates for years. China creates 13 million urban jobs a year.
3
Story seems a rather convenient excuse for Apple not to manufacture in the US. Unless they can manufacture everything in the US then they won't manufacture anything in the US ?
Clearly after years of neglect the supply chain eco-system to make a computer nearer home needs to re-built. Surely Apple knew it needed to mix and match in the stages with some components such as these screws needing to be sourced overseas. It is a hiccup not a deal breaker.
6
Show of hands - who's using an Apple right now?
9
The problem is obvious . . . a SPECIAL screw ! Apple is so enthralled with their own "design superiority" that they won't even consider using something off the shelf from Home Depot.
Common fasteners are supposed to be just that . . . common.
The design should include "special" fasteners only when there is some stress/strain/material/assembly issue that can't be handled with an off the shelf item. Design 101 !
6
Good try, but this is probably more hyperbole than substantive example. Souring parts for any technology product can be complex but without the details we can only speculate about this case. What were the specifications? How many vendors were approached? What were Apple’s terms and conditions? What was the delivery schedule? And on and on. Is this an emblematic example? I have my doubts.
There is still a significant infrastructure in place in the US specifically for electronics assembly. Here is Silicon Valley there are many highly automated contract manufacturing plants. And there are many customers who won’t do offshore manufacturing fearing IP theft.
2
I bought a really nice shirt a couple of years ago. It was just a long sleeved t-shirt, but small batch and very high quality, and made 100% in the USA, including the fabric. That shirt cost me $90 and I am thrilled with it, but had it not been April and closeout time at the local ski store, that shirt would have cost me $180. For a long sleeve t-shirt. Yes, it's high quality, but it's $180. For a t-shirt.
I think an honest discussion about the realities of manufacturing goods in the US is long overdue.
13
@RS Looking at some old clothes on the weekend, thanks to Marie Kondo, I saw something I haven't seen in a long time: and ILGW (International Ladies Garment Worker) tag showing the sweater was made in the US.
I could afford clothes made in the US then, even those made by Union workers.
This situation has been contrived and we can have larger-scale manufacturing back in the US and produce less expensive clothing that a $180 t-shirt.
One step is to introduce tariffs to make the off-short products less attractive to produce offshore when we can make the products here.
Thanks for responding. My concern with tariffs is that they only hurt the cost another country’s products; they do nothing to lower the cost of our own. Only a reduced cost of living can do that, but that’s impossible with our current currency & banking systems.
'"government and industry would also need to improve job training..."
...Job retraining was one of candidate Hillary Clinton's signature initiatives.
Democrats work to bolster education and teachers. Republicans give us Scott Walker, Sam Brownback and Betsy DeVos. The GOP is frightened of an educated electorate and prefers to lure them with promises of bringing back jobs in dead industries. That's how we got here.
13
@Alan
Sorry, but you are so wrong.
Democrats are obsessed with one type of education - higher education. And most particularly - liberal arts. You know, the kind that leads to an MBA, law school or a masters in education. This is the bailiwick of one of their biggest constituents - public school teachers and professors - and the Dems biggest contributors - the NEA and the UFT.
Dems do not care about basic STEM and jobs that lead to engineering and sciences. Dems do not care about tracking HS students to appropriate careers in vocational and technical fields.
Why? Because most of teachers in America today are based on a liberal arts education. That is the 'virtuous' circle the elite of this country have created for themselves - and benefited from by allowing Wall St to hollow out our manufacturing base.
Face it, most American teachers are book smart. They're not versed in knowing and teaching common sense skills.
For us to adapt as China has done, 2/3 of our high school teachers would be let go and 3/4 of universities and colleges would be closed down - all to be replaced by science, engineering, vocational and technical experts.
1
Your assessment of ‘democratic’ educational priorities is nothing more than right wing media talking point. Offer factual citations to support your claims if you disagree; I won’t hold my breath.
2
Come on folks, you are all being played.
I'm a PhD engineer and claims like "a 20-employee machine shop that Apple’s manufacturing contractor was relying on could produce at most 1,000 screws a day" ... are pathetic. it is Apple's fault for both a design that requires a custom machine screw (why?) and depending on that "machine shop."
This whole story smacks of made up blarney. The claim that the USA doesn't have enough "tooling engineers" to fill a room is ridiculously false.
What is true is that Chinese manufacture is low cost, in part due to low wages and in part simply due to very high volume and scale now.
But this story is bunkum.
16
Having been a materials manager for ten years, I can assure you that you are wrong. Further, do you really expect a company like Apple to design around our country's shortcomings? It just doesn't work that way & it shouldn't. I can't think of too many better ways to slow technological advancement.
6
@Lee Harrison
Chinese wages keep going up. If it is a matter of cheap labor, China is far beyond that and getting further. You want cheap labor? Go to Nigeria, Bangladesh, or even Latvia.
1
Oh please. Cry me a river. This article just shows that when companies move their manufacturing jobs to low wage countries, the jobs in their supply chain also get lost. Their supplier only had 20 employees because there wasn’t consistent demand to hire more employees.
Free trade has been wonderful for companies like Apple and their shareholders, but not good for low to moderate skilled workers. Free trade has played a role in creating the enormous wealth and income inequality we are experiencing. The benefits of free trade have not been equitably shared. (Better education can help, but note that IT and engineering jobs are already being outsourced to lower wage countries and we may be on the front edge of seeing the outsourcing of medical jobs.)
Democrats have to win on 2020, but we need someone closer to Bernie than to Clinton (and, with all due respect, the NYT) on trade policy. Fair trade, not unfettered free trade.
6
Apple and most other manufacturers spent the last 30 years outsourcing our entire manufacturing industries and jobs. and now they claim no domestic capacity or skilled workers.
Like a bank robber who refuses to do business with the bank he robbed because "they have no money."
I recommend a tax of 50% on gross revenue generated outside the USA. The proceeds will be used to recreate the manufacturing supply chain within the US. Just as China did 30 years ago.
This is one reasonable solution. There are other less reasonable ones. See French, Russian, Chinese revolutions.
16
Globalization reflects reality. I believe only one golf club is manufactured in the US.
4
"...working at all hours, if necessary, and workers are sometimes even roused from their sleep to meet production goals."
“China is not just cheap. It’s a place where, because it’s an authoritarian government, ..."
Ah, yes, slave labor, the capitalist's dream. Who can compete with that?
12
Exactly. Slave labor. Exploitation of the poor and disenfranchised.
6
@Kevin McGowan
And how many American factory workers don't show up but go deer hunting on 'opening' day, or just decide they need a 'mental health' day off. Funny how many American workers complain how they 'hate' their jobs, are looking to move on or are dissatisfied with the job they have. They complain about how much work they are expected to do, or they don't like their boss or some other lame excuse. the American worker is not a happy dependable employee that a boss can count on. That's a big problem with the American manufacturing scene.
1
@Allen Palmer
Part of that problem has been dysfunctional management and harsh working conditions. Between the insecure egos of many managers and the corporate drive to maximize profit and wealth, the workplace is more of a torture chamber than a place for people to be productive and creative.
And yes, a lot of people are not strong workers, but it isn't all their fault.
It is no surprise. 30 years of neo-liberal free trade policies have seen the off-shoring of most manufacturing from western economies to low-cost labour destinations. So it is no surprise that there are no manufacturers left to produce components for Apple in the US. However, this situation has been created by neo-liberal policies - it wasn't inevitable and it could be reversed by the appropriate Government policies. For all his failings, Mr Trump has shown that it is possible to think in a different manner about how international trade could work.
2
A long time ago, a wise friend put it to me this way...
You buy the $225 drill at the local hardware store instead of driving 45 minutes to be the big box store that's selling the same drill for $150, because if you don't... when you need to buy one $0.50 bolt, you'll have to drive 45 minutes because the local hardware store went out of business.
16
Why would anyone study engineering in this country?
Seriously, think about it.
I'm not talking about sexy stuff, like cool apps, and game design.
I'm talking about manufacturing, civil, mechanical and electrical engineering, material science.
The college curriculum is one of the hardest at the undergraduate level. The starting salary is pretty good, but you tend to plateau quickly, unless you veer off into management.
Which doesn't require an engineering degree.
On top of that, you live with the constant fear of your job and your products being outsourced, and you hitting the bricks and never finding another job, because your skills are obsolete, while an accountant or MBA is considered evergreen ( and business is much easier than solid state physics).
Just like we've driven the seamstresses into extinction, we've driving engineers into extinction in our economy. And throwing all the money in the world at STEM programs won't change that.
14
@maryann
I heard from lots of classmates in engineering programs that their fathers had been fired from aerospace engineering jobs in the 70s. My classmates were going to study engineering to go on to an MBA so they wouldn't end up like dad. You are spot on.
2
Wow, do those Foxconn employees look happy.
6
Wait, can’t they just use a different design for the screw?
1
So import that one screw.
Simple solution. And make those phones that sell in China in China. This is just an excuse, and also shows that they don't have a proper supply management system. Prior to deciding they needed to have all parts properly sourced.
2
"The minimum wage in Zhengzhou, China, home of the world’s biggest iPhone factory, is roughly $2.10 an hour, including benefits."
Workers in Zhengzhou are not paid in US dollars, but in renminbi, making it difficult for readers to calculate their effective remuneration.
Chinese companies pay thirteen percent of wages into a tax-exempt fund for employees’ housing deposits and a further[1] thirty percent into retirement, medical, unemployment, maternity and occupational injury funds–which employees match one hundred percent.
Adjusted for PPP, productivity, regulations and benefits, Chinese workers cost employers more than their American cousins–partly because they are much better educated, finishing high school three years ahead of our kids.
Chinese factory workers are mostly young, gossiping, listening to music and–except in bigger corporations–wearing what they please. Their base wage, which rises with seniority, comes with annual bonuses up to one hundred percent plus a thirteenth monthly payment at Chinese New Year.
Adjusted for purchasing power, Chinese manufacturing wages average $1500 monthly. Overtime, bonuses, company housing and free meals let workers send money home.
Early this year Mentech, a Dongguan telecom manufacturer, was offering regular monthly wages, plus $1,100 guaranteed overtime, air-conditioned dorms, free Wi-Fi and birthday presents.
7
@godfree Why would you adjust for PPP? Parity Purchasing Power is irrelevant when comparing the
salary costs for a company between two groups of workers.
2
America's GDP is high compared to many other developed countries. America has lots of money. It's just not distributed evenly.
5
If China is such a great manufacturing country, and it obviously is, then why are there no cars being imported from there? Japan, Korea, Germany, etc, yes, but no China. Why? Surely if they can produce high quality products for Apple and many other companies, they could produce high quality cars. And motor cycles.
2
pete,
There is a huge difference between manufacturing a car versus a smartphone
American workers are as good as any in the world. It would be great if more American manufacturing companies made their products here.
3
@joe parrott
Agree Joe, but how did Japan, South Korea learn to do it? Surely if China can land a spacecraft on the dark side of the moon, built tanks and other military equipment, including jeeps, trucks, surely they can build cars. But if that hasn’t happen, why not? And if they do built cars, how come they aren’t imported here?
I am surprised that this article does not link Apple factories in China with rare-earth metals. China has a monopoly on production of these metals, which happen to be critical to operation of many hi-tech products.
For the last 40 years, China has been mining and processing more than 90% of all rare-earth metals in the world. On the top of that, it has been exercising strict controls on their export. That is the main reason for many US companies setting up their factories in China. They simply go there to circumvent Chinese export restrictions on these metals.
That is one of the reasons for the US economic pressures on China getting no where. If the US "tariff war" on China start to harm Chinese economy, China can always stop supplying rare-earth metals to US hi-tech companies, effectively shutting them down.
So far China has been reluctant to use weaponize its monopoly on rare-earth metals. That is partly because China will be shooting itself in the foot.
The Trump administration is obviously aware of the problem and has been trying to tackle that. They have been trying to improve US relations with North Korea (NK), in part because of NK's immense rare-earth mineral resources. That is, however, a very poor solution, since China wields much influence on NK's trade with the outside world. Moreover, assuming China does not control NK's mining activities, it will take NK many years to become a competitor of China in rare-earth metal mining and processing.
9
“China is not just cheap. It’s a place where, because it’s an authoritarian government, you can marshal 100,000 people to work all night for you.” This is the most important sentence in this article. This is the real issue. Screws and cheap labor are just window dressing. The #1 resource that Apple (and all other western companies using Chinese labor in China) have been using to its economic advantage is the mentality/ tone of the Chinese populace, cowed by their brutal, authoritarian government. This is what Apple is using to its advantage. And the Fourth Estate @NYT focuses not on the moral outrage but on screws and profits.
4
China gets manufacturing jobs because they have a comparative advantage in that sector. This is basic economics - we should not go back to a manufacturing economy, because we can't do it as efficiently as can China. We need to train workers to take jobs that America has an advantage in, not artificially propping up a sector that died a long time ago.
4
It all depends on how you want to define efficiency. If you're fine with excluding the costs of paying laborers middle-class wages, such as we used to do in this country--which unions fought hard for--and if you want to exclude the costs associated with safety and environmental regulations that were also hard-fought-for, then sure, developing and authoritarian nations are definitely much more efficient at production than mature, liberal democracies are.
But we could enrich our investment class even further and provide even cheaper consumer goods for Americans if we could find a place to produce under actual slave labor. That would be the ultimate in efficiency. Perhaps we could reinstitute it here and reduce the shipping inefficiencies.
3
@Steve We paid manufacturers middle-class salaries because manufacturing was prohibitively expensive in much of the world. Most other industrial powers were rebuilding after WWII. Now, thanks to actual competition and more affordable technology, manufacturing isn’t the cutting-edge of the economy. And before you accuse me of being some heartless capitalist - outsourcing manufacturing to China and Southeast Asia has raised hundreds of millions of people out of poverty. The global poor are winners in outsourcing.
1
@O
Manufacturing labor in this country earned middle-class wages during the middle decades of the 20th C due to unionization and collective bargaining of the workforce, as permitted under the National Labor Relations Act of 1935. Under those constraints, mfg was highly profitable to owners, management and labor. The economy grew rapidly. Productivity gains were shared. This is still the case in Germany, where mfg is far from dead.
The reduction and elimination of trade and investment barriers under treaties such as NAFTA freed capital from from the prior noted constraints to seek far cheaper labor. The new ability to outsource to developing nations poorer than Mexico with standards--even basic human rights-- far from tolerable in the US freed capital to seek even lower cost labor.
Yes, offshoring to China and other East Asian developing nations has lifted millions out of rural poverty into urban near-poverty. And now that Chinese factory wages have risen to around $3.50/hr., capital is seeking lower costs in India.
The relentless need to increase return to capital drives offshoring. Indeed, returns have increased spectacularly. Investors, the financial sector and corporate officers are the real winners in the current ultra low wage trade regime. Income and wealth polarization in America has returned to 1920s levels, our working class has been hollowed out, and high-tech firms such as Apple (mkt cap $1Trillion, last Aug) are the new robber barons.
1
Tesla seems to be doing just fine. Why don't you cover that success story?
It appears that Apple didn't have the personnel in the US with the required expertise to make the project a success. They had the option to hire outside experts or bring some over from China but apparently failed to do that. Things sure have changed, I remember plant managers moving to China to oversee the building of state of the art plants to replace the ones they ran in the US, and then they just faded into the sunset.
4
Amazing all these comments about how greedy Apple and other American companies are because of their overseas operations and yet these same people are always looking at the performance of their IRA/401k, glad when the stocks that their mutual funds hold go up and worried when they go down. Someone needs to remind them that those stock companies are the same ones with overseas operations that are pouring their profits into their savings accounts.
These same people would scream and holler if they had to pay the cost of American made shirts or electronics or the 1000's of other things we import from low wage countries.
They also need to remember that when looking at pay scales in a country you must look at the cost of living. What does gasoline or food or housing cost - or said the metric of social scientists - how many hours of work does it take to buy a comparative item across different counties. We have the same things here in America, lower wages in the middle of Iowa than San Francisco but then house are a lot cheaper in Iowa that in the Bay Area.
9
The Foxconn plant production in Racine County, WI, has been hobbled by a lack of qualified engineers. How do you get an in-demand engineer to relocate to.... Racine, were??? So they are looking to import them from ... China. https://www.jsonline.com/story/money/business/2018/11/09/foxconn-need-engineers-asia-wisconsin-consultants-say/1934260002/
2
The only thing manufactured here is outrage.
6
There is no shortage of Americans willing to work with their hands for a living wage. There is no shortage of intellectual capacity either. If a computerized loom or screw-making machinery can be set up in Africa, how much easier in Poughkeepsie, Akron, or What there has been is a consistent, determined effort by America's elite to export manufacturing capacity and shelter the resulting wealth abroad.
Apple's management certainly isn't the first or the only company to do so, but a look at the tax dodge of their sham "subsidiary" in Cork, Ireland is an eye-opener.
We're headed for collapse if "We the People" continue to vote against our own interests even as the 1 percent scheme to divide us along blatantly racist, religionist, misogynist, heterosexist, or nationalist lines. It's almost too easy. As Caesar said of Gaul, "Divide et conquista."
7
Blaming the screw is a ruse pure and simple. With a global supply chain, there is no reason you can't get any component anywhere. Apple produces in China due to low cost - labor and currency. They should just say it. While I do understand this to be competitive for the $30 sneaker or $200 phone, going low cost for a $200 sneaker or $1000 phone is profit pure and simple. Just say it.
4
Most white kids study courses related to business administration, communications, marketing type of skills or become lawyers. At 25, they want to be become managers or VPs. How about get the technical degrees first, do the leg work, get experience and then become managers? But Nope! they think they are too classy to study tech or do those kind of jobs in their lifetime !
3
We lost:
Technology
Medicine
Industry
Science
Research
All that’s left are double wide trailers, corn sugar and tooth decay.
14
The reason Apple's iPhone doesn't cost $2,000 is because it's 'assembled' by cheap labor working in Foxxcon 'mega-factories' in China. The one Apple product, manufactured in the US, the Mac Pro is an expensive flop. Sorry folks, but this is reality. US companies benefit from cheap labor, US consumers benefit from cheap goods, and US factory towns die. It's a Faustian bargain.
3
@Dersh - the MaPro is an expensive flop because it a nothing-special computer in extremely fancy packaging, at a very high price.
Apple's "Mac" computers use Intel micro-processors and standard component peripherals that anybody can buy (this is in contrast to their cellphones BTW, that use custom ICs that Apple designed). You can put together the hardware for a "MacPro" in a commodity housing for less than half the price. Everybody who uses computers like the MacPro knows this.
“Ms. Helper said Apple could make more products in the United States if it invested significant time and money and relied more on robotics and specialized engineers instead of large numbers of low-wage line workers. She said government and industry would also need to improve job training and promote the development of a supply-chain infrastructure.
But, she added, there is a low chance of all that happening.”
To put it another way Apple is China’s slave because that is the easiest thing to do. That is just what the authoritarian government of China wants. The United States rejected the slave system a long time ago but there are still plenty of people in the world who want it back here.
3
Ok let's look at the Chinese worker.
They are eager and willing to work to make the money. They are easily replaceable by others who will also put up with long hours and living in workers dorms sometimes very far from their homes to make money. They know striking, protesting, demanding better conditions will just be the end to their dreams or worse.
They don't have drug problems.
They are cheap but thrifty. They are not use to having money and save it.
Plus they are competent and use to hard work.
We here can not compete with that.
The tool makers and die markers of yesteryear
disappeared when Detroit was no longer the center of the car world. Those that stayed in business had to retool to do specialty work not mass production. Companies are totally international and the USA is just another customer.
Yogi said it's not over til its over-- well it's over.
2
With all billions Apple doesn’t pay in taxes they could easily invest in helping a US company develop the ability to manufacture those little screws at the volume they need. Same for any other component.
10
Why would we assume maintaining US manufacturing competitiveness would be easy?
The question is are we satisfied with a situation where the US is dependent on a global supply chain, or do we need to maintain capability to manufacturer US goods in the USA?
If the global economy is truly interdependent, maybe we are OK exporting our low-wage, polluting industries in return for US goods, but we run the risk of being held over a barrel if we need China, but China doesn't need us.
Neodymium magnets in 2011 were a good case study where China cornered the market on a commodity we decided was too expensive to refine without destroying our environment (we are happy to outsource our pollution, like our recycling), and China decided to use their market dominance for political advantage.
My guess is ensuring our economy is diversified, even if it costs more, is in our best interest. Clearly the Chinese are willing to protect their own national interests.
3
This is a fake problem. Apple cannot get custom fasteners made? I seriously doubt that. Fasteners are cold headed out of wire, all you need are the blanks and the wire and a stamping machine and it's no problem, we have all of this stuff in abundance in North America, including people to observe the stamper. I actually feel insulted that anybody would believe such a lame excuse is going to fly - it's not.
Oh well I can buy other equipment than Apple. No problem.
3
We invented a pen that cost thousands that wrote upside down in space while the Soviets took a pencil. That old joke still applies to us today.
4
The focus of this article should start out with how when American companies shipped work to China, of course, the U.S. companies lost work and capacity so now are not able to meet the demands from corporations like Apple. It takes chutzpah for anyone to blame the suppliers. Reminds me of the joke about the man who has killed his parents and then pleads mercy from the judge because he is an orphan.
5
3D Printers
Problem solved
4
Really! I could given 6-8 months and some financing get a plant up to speed and produce these screws … talk about feeble … And Mr. Cook is the CEO of possibly the largest company in the world and can't move, inspire, finance and create a manufacturing base in the U.S.
What's he getting paid for … a tap and dance show … because he does that well! or an interview on CNN?
5
if you need an anthem for this problem, I recommend James McMurtry's "We can't make it here anymore."
This is where I see interesting manufacturing changes due to AI, 3D printing and robotics.
3
We manufacture in our own facility in the USA. We started with American suppliers for many parts, until the American factories failed to meet our quality requirements and showed very little interest in doing so. We then moved our supply chains to China, where factories are obliging and responsive. We ended up saving money, but that was not the reason we moved. We have found time and again that American suppliers have lower quality and less interest in our business than Chinese suppliers. A sad truth. It's not about the money.
6
The only way to level the economic situation between the US and China, and also ensure peace, is for the two nations to create a frictionless, customs union with regionally adjusted, parametric minimum wages, and greater cooperation. The anti-Chinese sentiment of the American 19th century must be placed in the dustbin of history.
1
“In the U.S., you could have a meeting of tooling engineers and I’m not sure we could fill the room,” he [Cook] said. “In China, you could fill multiple football fields.”
Donald will put our coal miners up against China's tooling engineers any day ... or maybe not.
2
Here, let me solve this one for you: Order the screws from China. Use a telephone or web site to place the order. FedEx them over. Build the rest of the thing in the U.S. Problem solved.
3
The screws are just one example of the supply chain problem. There are thousands of other parts with similar issues. It is more efficient to ship the glass and a few other components to China.
1
I see multiple issues with the death of American manufacturing. One is a lack of interest from American companies, certainly. Another is lack of interest from American government. The government has plenty of resources they can use to kick start supply chain and manufacturing infrastructure development. From tax and regulatory incentives to infrastructure and technology projects they could make the push if they wanted to. Lastly is a lack of interest from Americans themselves. I work in education and for years have seen trades and hands on work being devalued. From the removal of shop classes to the idea that a pursuit in the trades is for people "not good enough" for college, we devalued hands on work and the idea is sticking. Going to college and getting a degree, any degree, is somehow better than working with your hands.
3
A significant part of the high cost of labor in America is due to the fact that American workers do not have universal tax-supported health care. While the Affordable Health Care plan helps, employers are still on the hook for health care benefits for their employees, or employees need to make a higher salary to be able to afford to pay for health care on their own.
Add to that the huge salaries of CEOs and executives that are siphoned off the top of profit and there is a significant pressure to cut costs by not paying the workers who actually produce the product -- or assemble it.
U.S. manufacturers are not only competing with low wages overseas, they are competing with lower employee benefit costs, and other tax-supported infrastructure.
4
Still hard to live on $2.10 an hour, but I agree that we are “life out of balance”
Apple had plenty of cash and cash equivalents to front the purchase, installation and training for equipment that would have allowed the small vendor to meet their needs.
Instead, it outsourced and, more recently, bought back its own stock rather than investing to the benefit of its home country. No sympathy here for Apple.
5
And a few other things in China’s favor.
No NIMBYs or BANANAs: people who object to construction of anything, anywhere, for any reason. (But all of whom demand the benefits of the things factories and power plants produce.)
No eco-extremists: there is no such thing as an environmental free lunch. If you want computers (or solar panels, etc.), you have to dig things out of the ground to make them. China does that. Here? Try – I dare you, go ahead and try – to dig a hole anywhere in the country.
No SJWs: China produces engineers. We produce gender studies majors.
Remove regulations to permit construction and extractive industries. Cut taxes to make us competitive. Stop demanding “free” college and train more people to work with their hands.
4
@Brenda It is simply ignorant to rant about ditching environmental concerns to compete woth China when air quality in Beijing is often nearly unbreathable (as any resident will tell you,) and 8.6 percent of China’s considerable adult population suffers from chronic lung disease. That’s the price for China’s manufacturing success. That’s what you want for this country?
I have nothing against training people to work woth their hands, but clearly we are also in need of training people to think with their heads.
6
Screws, and similar components, may be part of the issue against manufacturing in the US. But those are surmountable issues.
What can not be addressed (unless the US becomes an authoritarian regime) is buried near the end of the article;
“Another frustration with manufacturing in Texas: American workers won’t work around the clock. Chinese factories have shifts working at all hours, if necessary, and
workers are sometimes even roused from their sleep to meet production goals. That was not an option in Texas.
“China is not just cheap. It’s a place where, because it’s an authoritarian government, you can marshal 100,000 people to work all night for you,”
3
I am a retired mechanical engineer. This article points to a simple notion for the smallest of items can be most important. For want of a nail. The devil in the details. Believe it.
Any good transition to production project engineer would have identified this odd part shortage as critical to the project and acted accordingly, in time for production success.
Three decades ago, I had two nuts of slightly different designs and sources approved for production, but the one nut insert supplier we had the most of in inventory started failing in production.
So, the buyer needed to find millions of "good ones", same PN, asap, as I made that point loud and clear, pressing him in person while he was dialing the phone.
And he did. He called various part suppliers and other vendors looking for our part number aka whatever part number was in stock in other warehouses and customer inventory nationwide. I authorized on-the-spot immediate overnight air shipment of a half million nuts.
It sounds silly, but a crew of 50-100 people would have been "out of work" for several days but for this stupid nut insert.
These skills, experienced engineers and buyers knowing sources, "supply chain management" are lost skills without special people engaged in these experiences, just like the skills of making things like special nuts, or small screws, or anything, are all lost if we Americans stop making things in volume here with our own tools, using our own hands.
8
So the ability to abuse people to fulfill quotas is one of the reasons? Did you think about it before writing that paragraph?
3
I can’t help wondering if the problem is that the produce truly requires a very special screw or if it is a special screw to help ensure that the product requires special tools and is not easily repaired by anyone but Apple. ;<))
3
You mean it’s not because it’s cheaper? The result for cheaper is the West dropped out of the race, and now you got only China to turn to.
If Apple had the will to make its products in the US, they would be made here. But it's always going to be easier to do the wrong thing vs. doing what is best for society.
But society is supposed to forget that you sold us out for some tiny screw manufacturing that we could have ramp up easily with political intervention.
Please!! We could send astronauts to the moon and back but we can't manufacture Apple's junk? Not buying it...literally.
3
Article fails to mention that American manufacturing has been decimated by government regulation, particularly by the EPA, who started suing smaller manufacturers back in the 70's in order to finance their larger goals.
2
@cjhsa It has more to do with the natural tendency of capitalism to seek lower labor costs. It has occurred throughout history. Nothing stays the same, economies are always in a state of change.
2
Seriously? Apple Corp's ill-preparedness to begin manufacturing in USA is the reason that iPhones won't be assembled in USA?
What if that wasn't an oversight but sabotage because Apple insiders really didn't want to make the shift and knew the best way to ensure it was to act with incompetence?
My wife is a recently retired scientist from a local university.
Fifteen or eighteen years ago she and a colleague were building a device that would melt ice cores retrieved from glaciers and ice caps.
They needed a stainless steel (inert) compression spring of a certain dimension and "strength".
After an unsuccessful search she asked if I would search around.
I finally found one small company in Ohio that produced something close to what was needed but not close enough.
Ultimately, the springs were ordered from a company in India.
To my knowledge they are still working and additional devices have since been built using their springs.
We could not find a simple spring anywhere in the U.S. of A. Sad!
3
@Fred If you needed less than 20, it would have been easy to make them by hand. I've done it and it's easy.
@FRONTINE LeFEVRE
It was never an option.
People fail to realize that a negative trade balance is not bad, it's not just that the exporter gets all your dollars - but also that you freely gave them your dollars in exchange for less costly and better quality products. We should be thanking China for our very high standard of living.
2
Not enough tooling engineers? In a flash, Apple could open a tech university to teach the skills it needs. It could even pay enrollees while they take classes and learn. Ridiculous that this is an impediment to Apple's push to manufacturing in the USA.
2
I teach at a CUNY school, and our Mechanical Engineering program is one of the most highly subscribed. But at the same time we are in a fiscal emergency because the government has been lowering our funding slowly But consistent lay over many years
1
This is exactly how Trump got elected. Corporate greed and the Democratic Party selling out to Wall St starting with Bill Clinton. To think the Democrats still went ahead and nominated one of those culprits for president in 2016- Hillary Clinton. The Times in all of the wisdom continued with their facade of being a progressive newspaper by endorsing her. Now they have the gall to print a story such as this. Hypocrisy at its finest.
The screw in question is somewhat more difficult to make because is has been designed to frustrate the products owner. A conventional screwdiver will not work with this screw and thus discourage the owner from changing the battery in the product when it fails. This is good for Apple but not the consumer.
6
@Peter E. Rosenfeld Wish I had a dollar for every "special" screwdriver I made to defeat this kind of nonsense. High end camera companies were notorious for this. If they can make it, so can I.
I used to joke only babies would be "Made in USA." Thanks to the ways of Corporate America, reality may be depressingly close.
1
Why did apple need such a special screw anyways? So it would be pretty enough for Jobs? So that it would use a proprietary driver to prevent independent repair?
i have a hard time believing the screw in anyway enhanced the function (number crunching) of the machine for the end user.
Standard screws can be had by the million, even in the USA. That apple would become stymied by a screw says more about the greed, vanity, and lack of practicality on behalf of apple's engineers and executives than it does about american supply chains.
5
This is nonsense "A Tiny Screw Shows Why iPhones Won’t Be ‘Assembled in U.S.A."
Apple makes stuff in China because of the low manufacturing cost.
2
This is what happens when you ship your industrial base out of the country over a period of decades. Knowledge, equipment, and competent operators all work together to make the assembly lines run efficiently. It's interconnected. It won't come back instantly, it will take sustained effort and long-term planning, along with government policy to enable it. The kind of strategic thinking that's lacking these days in the USA. But that's what it will take. We better find a way, as a matter of national security, as well as jobs for the machinists and operators. Unless we are content being unable to have any domestic capacity to make cutting edge stuff.
2
This article is misleading, I have a 2009 8-core Mac Pro made in Austin. Apple could make and assemble all of their products here. It would not be that much more and they already cost a lot more than their competition.
As far as desktops go, Apple beats everyone in quality and performance.
2
Sic erat demonstratum -- why American can no longer compete with China. Exactly when the problem began -- in the 60s, 70s, whenever it accelerated, this is the new reality.
I blame ALL THE FILTHY RICH in the INVESTMENT SECTOR who really don't care about their fellow Americans. May they all move to China where they can indeed appreciate the fruits of their labor.
Of course, what's most impt is Wall Street -- just ask all American presidents since Clinton certainly -- if not Reagan.
2
As anyone who has successfully changed the battery on their iPhone can tell you, the screws used in iPhones and similar products are exceedingly tiny: ~0.25 mm wide and 1-3 mm long. They can barely be seen with the naked eye and require precision tools, magnifying optics and above average manual dexterity to work with them. Screws that small can only be fabricated using computerized numerical control (CNC) milling machines operated by people who are capable of programming them. The intellectual capability required to successfully operate a CNC machine is considerably above average.
Despite the ubiquity of computers in contemporary life, most Americans cannot program their home thermostat let alone write computer code for a CNC machine. They think Python is a snake and not a dominant programming language used in industry.
The IQ in Asian countries (e.g. Vietnam, Japan, Korea, China, etc.) is ~8-12 points higher than in the US. That is a significant difference. Given that the Chinese population is 5 times that of the US, that translates into a much larger qualified talent potential. China churns out 4.7 M STEM graduates per year; India: 2.6M; US: 0.6 M.
From a manufacturer’s standpoint, it would be stupid not to base manufacturing where the largest qualified talent pool is located.
17
The screw in the photo looks big to belong to a Mac Pro...can’t figure out what its function was.
Ridiculous! Apple cannot source a single screw means they are NOT innovative, but looking for an excuse to skip USA production.
3
The reason why they couldnt produce enough screws is because of companies like Apple pulling manufacturing out of the US in the first place. It would be like giving a inner-city kid with a 8th grade education a scholarship to MIT, and then act surprised that he or she dropped out.
3
I'd love to see what a screw looks like that takes ten minutes to create. Also, I bet there are many machinists reading this that could have easily satisfied this order and would have really used the income.
1
@Steve M This is probably a rolled thread. Despite what was mentioned above, they do not require sophisticated CNC machining. I can probably buy "exceedingly tiny" 1mm or .8mm screws by the pound from Switzerland.
2
Make the computers here and buy the screws from whoever an supply them. Is that so hard?
2
What is shocking is that this story is far from a "new" story.
In 1900 Philadelphia had the most manufacturing jobs of any city and with that came jobs in banking, insurance, etc. It also had the most tool and die makers in the U.S. All of that changed when shipping switched from railroads to tractor trailers that could not navigate narrow city streets and container ships for which the Delaware river wasn't deep enough
At first the relocated firms continued to use Philadelphia banks et al. but over time those firms to resources in their new communities so Philadelphia lost at all levels despite politicians claiming that it could transition to a white collar economy
The lesson being that skill sets at all levels follow manufacturing as well as the industries that service manufacturing - impossible to just retain the high paid jobs
And even more importantly innovation follows manufacturing as is shown by where highly technical patents are from
3
Apple products are (and always have been) overrated and overpriced.
1
I believe the statement that China has great resources and personnel for something like the screw project example, but it's pretty clear that Jack Nicas was picking and choosing facts to paint a skewed and incomplete article. Journalism today is based on controversy rather than objective presentation of facts, which takes effort and time.
The truth is that it might be harder to find a manufacturer in the US, and that the finished product will very likely cost more that in China. What percentage of total costs do the screws represent, what is the cost difference, and how many are in a device? Are there better alternatives? Lots of questions not asked or answered - intentionally.
The capacity for innovation in the US is exceptionally high. I don't know who is informing Tim Cook but I live in the 30-something biggest city in the US and don't work in manufacturing but I know enough about industry here to be confident of finding 20 engineers with experience in machine tooling.
I'm saying solving these issues is easy. It's not. Now do your job and quit making excuses. That applies to newspaper employees as well.
3
It isn't mentioned that these are the same proprietary screws designed specifically to prevent owners of their products, along with 3rd party repair companies from gaining easy access to the devices in question.
5
Greed is GOOD. Well, maybe not.
When our middle class, production workers, teachers, healthcare workers are all earning lower and lower wages ((the case for the .01 percenters getting the piggy share of gdp is established at this point)who will buy those electronics, make those new drugs, repair our roads, take care of an ever increasing older population? Can it be done from China?
For the sake of pennies, Capitalism has lost its mind. Squeezing out a larger and larger profit has shrunk the very consumers, workers,and innovators who made the USA the world power. Shucks, we can't even offer decent medical care to a large segment of our population or have the trains run on time. Hmmm, that last one remind anyone of what occurred in the 30s? Hint- fascism.
For want of a screw a nation was lost. Capitalists, expand your horizon or you will be with the let them eat cake group. Err, didn't Wilbur just say that?
3
This isn't news.
Once you can find a supplier for parts, or even bolts and nuts, you're done.
When you deal with the Chinese, you're lucky if your products don't come back adulterated or tainted. You know, like toothpaste and toys.
2
I meant "can't find."
This article clearly demonstrates why our current model of globalization is leading to disaster. There is simply no way a manufacturer in the U.S. can compete with a Chinese company that is directly subsidized and aided by an authoritarian government.
Workers complain? Have them arrested. People complain about environmental problems? Arrest anyone who dares open their mouth. Company needs a cash infusion from the Chinese government to keep people employed? No problem. Need IP data? Just have your intelligence agency hack into your competitor's system and tap their phones.
But hold on a minute, won't Western governments do something about this? Nah, their leaders are such cowards and traitors the only thing they'll do is write angry letters. Besides, they don't care about whether their people lose their jobs.
Also, it seems pretty clear that drone swarms and other robotic weapons will be the military tools of the future. If China becomes the world's factory and we aren't even able to manufacture a screw, it doesn't take a historian to tell you what will happen next.
6
I'd not say that this article endorses China's command economy, but that a command economy is certainly what works best for capitalist profit.
The capitalist race to the top in profit requires a race to the bottom in wages - and that means that slavery is ideal for capitalism. Indeed, the US became powerful due to cheap energy and slavery (a form of cheap energy) rather than so-called freedom.
Our authoritarian leadership and their corporate cheerleaders are headed in that direction. If one prefers freedom, we must change our mental programming from pro-capitalism to pro-socialism. That would also stop our forever wars, reverse income inequality, and bring back one person one vote.
Note that in 2016 both the corporate parties - Republicans and Democrats - stepped harshly on Sanders' quite mild democratic socialism that hoped to help the People. But such talk was not what the two parties' corporate donors wanted to hear.
1
Given the present pace of automation, almost all of iPhone production will be automated shortly, eliminating the cost advantage of cheap assembly labor. Likewise, cheap engineering labor is also being rapidly replaced by computerization and AI. So the cost advantage of manufacturing in Asia instead of the US will soon become unimportant. Given the increasingly manifest risks to national security posed by dependence on Chinese supply chains, companies in the US and its allies, with backing from US and allied governments, should embark on a program to rebuild the manufacturing supply chain outside of China with the highest possible degree of automation. This would not only secure our manufacturing supply chains, but it would drive advances in IT, including to integrate manufacturing with other internet applications, and thus create new investment opportunities.
1
Manufacturers in the United States can't find workers because there are very very few American workers with the knowledge and experience of doing precision work. American boards of directors made the choice to strip America of its tool and dye expertise when they decided that such expertise was too expensive compared to cheap, subsidized labor in Mexico and Asia.
We are reaping what the executives have sowed; a workforce that needs to be educated because American business "leaders" chose to stamp out generational and institutional memory.
12
@Bill
I don't think BoDs chose to stamp out institutional memory exactly. They were just cutting costs. It's like going to a store and buying the lowest priced item that meets your requirements.
The offshoring of major manufacturing was an issue as early as the 1980's, when it was called "hollowing out of America." And the first Chinese semiconductor factories were disasters. They had open windows, although ultra-clean air was needed. At the time the U.S. had no industrial policy, with some exceptions for military needs. And blind loyalty to free market ideology means there is still none.
I agree with those who blame deficiencies of K-12 education, but as a nation we haven't done much about that either. Interestingly, in thje 19th century agricultural colleges ran remedial programs to prepare farm boys for university level work. We don't do much pre-college catch-up training any more, although we probably should. There is a lot of wasted talent in young America.
Semiconductor manufacturing won't come back, but we still have some time to recover some lost leadership and certainly time to remain competitive in such current technologies as renewable energy, artificial intelligence and personalized medicine.
4
The United States didn't adapt a free-market economy, as folklore suggests in the 1980s. The U.S. adapted a pro-business policy, where innovation, competition and investment were replaced with short term goals of low investments and instant high yields.
The Conservative Revolution of the 1980's made the conscious decision to abandon long term investments in the public sector, and solidify the "rent economy" in the private sector.
Now after an entire generation of folly, America may be coming to terms with its foolish economy ways. However, this last second panic towards reliving America's manufacturing glory days may also prove equally foolish.
4
There was a time in the fifties and sixties when virtually all the electronics whether consumer or industrial was made domestically. Design, parts, assembly, the lot.
What seems to be missing in this narrative is historical perspective.
The camel's nose under the tent was not Chinese but Japanese. Japan for years after WWII made junk and trinkets of no consequence.
Then one day a company called Sony (who?) came calling with a fairly expensive reel-to reel tape recorder. It was feature laden and it was good. It sold reasonably well and was followed by less expensive products. It wasn't very long until the pricy Sony Trinitron became the standard by which all other TV's were measured. In short order Panasonic, Toshiba, Hitachi, Pioneer, Sansui et. al. were selling here.
The domestic makers RCA, Zenith, Fisher, Scott, Harman-Kardon, and dozens more were under the gun. The Japanese were building better performing competitively priced goods AND as importantly redefined the product cycle. New products replacing recent old ones were appearing throughout the year which stymied our industry.
And so primary parts manufacturing here shrank. By the time anyone cared, there were only small production facilities and small expertise left and that had turned to specialty product.
So here we are. no screws. (or fuses, or resistors, or capacitors, or transformers, or switches, or infrastructure). This capability cannot be brought back by edict. We're all global now.
Very sad?
Maybe
9
Reads like a fundamental reason for not getting into a shooting war with the Chinese.
4
So Apple makes its billions off the backs of masses of Chinese laborers for a pittance, $3.15 and hour. Then, when it tries to manufacture Macs in Texas, it fails to plan for the screws it needs to build them, and knows it can obtain them in China because the dictatorship there forces its citizens out of bed at all hours to be at Apple's beck and call.
Why does Apple so often come off as some heroic, celebrated company here? The firm for many years has exploited very large numbers of vulnerable, underpaid Chinese workers and can't get its act together to provide the products for American employees to manufacture what Cook and company seek to tout as "made in America." It's a combination of callousness and poor management.
7
Don't worry about the Chinese workers. They live in dormitories and don't spend money.
1
Are we so bereft of leadership that a group comprised from industry leaders cannot help to re-seed some core U.S. manufactures? If the demand and commitment were to come from Apple and a few like-minded companies it could be done.
The lack of screws is an excuse. A seemingly valid one but whose existence is due to companies like Apple themselves, and which can be overcome if they truly wanted to.
1
Donald Trump has more credibility than this story. Mr. Nicas presents a fable concocted by Apple, explained by academics who have never run global electronics manufacturing operations, and intended to preserve Apple's business model.
In fact, the sine qua non of modern electronics manufacturing is location independence of manufacturing activities. Common processes, equipment, and standards routinely allow rapid protyping, ramp to volume, and production at diverse sites to exploit currency exchange rates, logistics, and demand balancing.
Effective supply nets, including supplier development, operate with precision -- accuracies of 99.999% are common. Design methodologies are intended to prevent "the trees that only a single monkey can climb" -- like Apple's screw.
Product migrations and transfer from one outsourced supplier to another happen routinely and generally without hiccup.
Mr. Nicas swallowed Apple's BS story hook, line, and sinker. Flextronics, for its part, won't criticize either its customer or its own work. Products many times more complex than anything Apple sells have been transitioned often and frequently.
Any examination of the successful value propositions of companies like Flextronics and its rival Jabil will reveal that the villain here is Apple.
4
Apple would have the resources to put screws on the North Pole if it needed to. Maybe even the moon. So asking us to believe that it couldn't get enough screws in Texas is preposterous. This story is fishy and so full of excuses, it leave the strong impression that Apple never actually intended to manufacture in the United States. Was this just a publicity stunt and these Texas workers are going to be laid off now that Apple has "proven" that it can't be done?
6
It has clearly never occurred to American tech companies that they should help to train Americans to do the jobs they need.
6
Would the problem be at the design stage? Why not use a screw that is readily available?
3
The predatory behavior tendencies of Big Corporate Capitalism have relocated from US to hide across oceans and behind compliant governments. Our tradeoff is giving up decent jobs in return for cheap addictive shiny toys.
3
Maybe the problem was not in the manufacture of the screws but in the design of the product that needed such specialized screws.
4
No, the screws need to be what they are.
As a tooling engineer, my father was called upon to design all sorts of specialized items for the jets his company manufactured. In those days, Americans made everything.
By the time my dad retired, he was disappointed with the work ethic of the new guys he had to supervise.
3
Whatever makes the most money for your shareholders.
1
OK... Poor Manufacturing Resource Planning (MRP), inadequate addressing of start up costs and scheduling, and an understanding of lead times down not equate to a concrete reason to fold on US manufacturing of Apple computers. If folks are looking for a way to bow out, they will. If the company REALLY wants to build here they will and do an excellent job at it. There isn't much manufactured anywhere in the world that doesn't not depend on parts from Asia and elsewhere. If this is planned for then there is no cause for an issue! BUNK I say... Shame on you Apple.
2
3D printers can make the screws now, either way automation is going to take over in China in the future too. We might as well have American servicing the robots.
1
@akeptwatchoverthewatcher 3E print screws...how is that faster? Answer: It isn't.
1
Those of us who also read or write business journalism are used to the half story one finds in the NYT. There's been many a time when I wanted to cancel my Wall St. Journal subscription or considered the time I could save limiting my daily ingestion of a handful of other hard news sites. But I don't because I need to know the full story, not the partial one that the NYT doles out. For this article on Apple to be published the same day as the one below from Reuters that is as good or better makes me question what value I get from the $600+ I spend annually on the NYT.
https://www.reuters.com/article/us-apple-suppliers/apple-says-spent-60-billion-with-u-s-suppliers-in-2018-idUSKCN1PM1UH
3
Apple complaining that it is forced to buy from China because no one manufactures anything in the U.S. anymore is like a man pleading for leniency on the grounds he's an orphan after having killed both his parents. Sorry if I can't muster much sympathy in either instance.
5
@Earl W. Great post, LOL
1
I scratch my head on this one. The USA has plenty of facilities with screw machines and plenty of facilities with cold rolling to manufacture screws or "fasteners". It seems to be that the price per screw wasn't right for Apple. GM, Ford, Chrysler...the screws for these vehicles are not all made in Detroit or even the state of Michigan. A lot of the screws come from plants in Wisconsin and elsewhere. Was Texas the only state that Apple sought out a screw manufacturer? A small screw could be made anywhere in the states and ship by the thousands, next day delivery. At a pretty low cost. It's not clear to me that Apple made the decision based upon ability to manufacture in the USA. It was made on price per screw.
4
And this is what we get for our $32B tax gift to Apple?!?!?!
7
This story and the comments about “America lost its ability to manufacture” is really a tale of modern capitalism. Companies look for good cheap labor, period. My grandfather worked for a company that moved its factory from northern Illinois to Mississippi in the 60s because labor was cheap. In the eighties the factory then moved to Mexico.
Costs, profit margins and the insistence of higher stock value every quarter is what killed manufacturing.
4
Does anyone really think American engineers want to spend 4 years in college only to go make iPhones? And seriously, who is going to pay $1,800 for an iPhone anyway? Globalism has given us what we have, all the advantages at the expense of Americans no making t-shirts anymore. So we can adapt and embrace change or keep building walls and blaming immigrants. One of those options has a future, the other does not.
3
@Josue Azu The clothing industry has taken a big hit because they tried selling t shirts and other clothing from overseas that is substandard. Thrift shops are making big money from vintage made in America clothing. Just one example where cheap overseas manufacturing is catching up with corporations and it seems they need to change.
1
What Americans do not realize is that China's manufacturing capability and capacity is far beyond that of the US. They have better innovation and quality. It's not just about lower costs anymore, although they have that too. If manufacturing jobs returned to the US, we'd have to be content paying more for lower quality goods.
Made in China is now about the same as Made in Japan.
Note they both started with cheap trinkets and ran up the value chain. Not sure Americans workers have what it takes to do that.
4
@Fourteen. Are you serious? I have never ever heard anyone say they wanted something made in China. Usually they say with disgust they have no choice but to get the item from China or India. That isn't about choice or quality, that's about being held hostage.
1
@Hellen
Yes, many items are still lagging in quality. But they are sophisticated manufacturers doing very specialized high quality work. They are far ahead of us in many ways. Including innovation. The Chinese innovate at about ten times the rate of Silicon Valley (which is far ahead of Europe).
Asia does not stand still. The Chinese kid studies or is in school for 74 hours/week. The work week averages 72 hours.
Their product quality, and fit and finish, and design is now world-class - and at a lower cost. They are outcompeting the world.
We need to upgrade our thinking. Best to not think of China as "China," but as Japan.
2
@Fourteen Nice PR but not at all accurate. China manufactures junk.
Churchill knew that the UK would win WW2 when the US, the arsenal of democracy entered the war. The country most able to win WW3 is China which will dominate manufacturing of war material and who can field the largest military. Those capabilities make them the "superpower" of 21st Century. Get used to it.
2
When the Chinese fight with America, they can take comfort in our inability to manufacture uniforms, rivets, medical supplies, and so on.
America has lost its industrial infrastructure because the U.S. dollar is overpriced, vis-a-vis other currencies. The dollar is overvalued is BECAUSE the the value of the dollar is tied to the price of oil, RATHER than to goods produced by the United States. When the Saudis price in Euro or Chinese juan, we are going to wake up with a much weaker currency, and no means of production. That is the writing on the wall, my fellow Americans. Buy some freeze dried food for your bomb shelters.
Apple is having all kind of stories to tell but the real one. If they are serious about it than they should have a professional team to build the Supply Chain and the manufacturing that they need for building in the US. I am a Supply Chain and a Manufacturing Engineer and will be more than happy to be part of this team. Just to make it clear that some parts will be purchased from suppliers around the world.
It is time for Apple to take on new challenges since the company is at a stand still right now.
3
In all my years and all my travels I well remember when people asked for and wanted products made in America. In all my years and all my travels I have never heard anyone say they wanted something made in China or India. Actually it is always the opposite. That says a lot about their so called superior qualifications.
2
The loss of labor to other countries is certainly about about working conditions that are a hard if possible sell in Western countries and should not be compromised too much, but to a larger extent the cultural narrative of manual labor is at the heart here.
As long as we glorify an ivy league education and service jobs in tech, banking etc as the only admirable career goals, while looking down on and accordingly underpaying manual labor, the US will never really "bring back" Made in the USA. Unlike other Western countries we have no significant educational system such as apprenticeships for manual labor. We need to start valuing quality over quantity, craft over mass-production, conscientious over shallow consumerism, and most of all manual labor as an integral part of our social pride, before we can expect change. It is the narrative that must change.
7
When I first came to the US as young engineer from the UK in the early 70's , I was amazed at how easily and fast a host of local US manufacturers would make any sort of mechanical and electrical component. I was used in the very conservative UK to planning every detail long in advance and placing orders months ahead and committing to large quantities in order to get suppliers to even listen.
Fast forward to the 80's when I was running my own US start up. Then every Venture Capitalist we approached for funding insisted we do all manufacturing in China for maximum short-term profitability. And so they treated all other stuart ups.
Fast forward to 2010 - Guess who has full, fast manufacturing support and advanced manufacturing capabilities. And guess who caused that.
12
It sounds like Apple went through the motions in Texas and gave up far too easily. Lack of tooling engineers? Up in Michigan we still have lots of tool and die companies that know a few things about designing and building sophisticated, specialized machine tools for the auto industry. Does Apple even know about that talent pool? Or care?
6
Steve B. in Michigan has it exactly right. For all of Apple’s vaunted smarts, they can’t figure out suppliers and supply chain in the United States? The article reflects poorly on the reporter, too, who didn’t spend even a minute to do a bit of Internet research on all the fastener makers in this country.
2
At $3.15 an hour for workers, why ain't Apple products cheaper?
6
@mikekev56
Or you could buy a Samsung phone for $900+...the same price as an iPhone.
1
For want of a screw a phone was lost.
For want of a phone a factory were lost.
For want of a factory a workforce was lost.
For want of a workforce a job market was lost.
For want of a job market an economy was lost.
For want of an economy a country was lost.
And all for the want of a phone screw.
8
For an Iphone that sells for over $1,000, the manufacturing cost is only about $100. The real value add is with the software, design, and marketing where Apple employs tens of thousands of people in the USA, many of whom are migrants. The US education system is failing to produce enough talent with technical skills.
American's needs to stop complaining about unfair competition with the rest of the world and do something about it.
2
@Joseph B A perpetual lie oft told does not make it true. We have a highly qualified work force that is often hired as contract workers to either train the cheap foreign workers or clean up their messes. Everyone in the tech field knows this.
6
"Apple has found that no country — and certainly not the United States — can match China’s combination of scale, skills, infrastructure and cost."
What lot of Bernie Sanders! Karl Marx had it right; capitalist swill sell the rope on which they will hang.
1
The Apple opinions are self-serving because their decision to outsource to China (along with many other companies) caused the conditions they now complain about. It was highly profitable for awhile, to develop Chinese manufacturing capability. You were culpable in undermining American capabilities. Shame on you, Apple.
1
Seems to me Mr. Cook and Apple are doing what they're supposed to be doing, what they are legally bound to do as profit-making companies with a primary responsibility to shareholders and employees. It's not a social work organization. And insisting that outsourced/off-shored jobs be brought back is just foolish. It's Trump-thinking. "Let's all get into the time machine and go back to the 1950s!" Reminds me of the 1970s when the auto industry watched as ITS business went off to Japan and much of its manufacturing went South (literally). In some ways, it seems like America getting beat at its own game and it's embarrassing. If the fools in Washington would look forward instead, how about us acting like we really ARE the people who invented this game. We are begging as a nation for new transportation technology. We have the know-how. We have the resources. We have the need. New environmental & energy & infrastructure technologies. We have the know-how. We have the resources. We have the need. We should be creating and building new. Not resurrecting or trying to re-capture old. Besides, too many Americans are addicted to running into Walmart and buying inexpensive tool, and inexpensive clothes that are being made in China and Vietnam. For heaven's sake, why do you think they're all so inexpensive?
6
For those of you up in arms about Apple manufacturing outside the country, why don't you take an inventory. Where is your TV/display made? DVR? Blu-ray player? Cable box? Wi-Fi modem? Do you play music in the house; who makes that equipment? How about computer peripherals: hard drives, printers, scanners? Phones? Refrigerator? Dishwasher? Washing machine and dryer? Got any cameras in the house? Power tools? And on and on. Not a lot made in the USA, is there?
5
Sorry but this article is pure nonsense.
In the sixties we put people on the moon. China was murdering its citizens because of the Cultural Revolution.
It has been shown many times that there is no skills gap regarding American workers.
There is only one reason that manufacturing is not in the US any longer and that is Wall Street/Investment firm greed.
That the US does not manufacture was a police decision pure and simple.
If the infrastructure is now lacking, which would be temporary if there was a true effort to re-industrialize the US, the problems would be over come soon enough.
This entire article and Apple in particular is like a person who kills there parents and then pleads to the Court for leniency because he is an orphan.
It is nothing more then a rationalization for the elimination of manufacturing in the USA.
3
I wonder if the story is true that we built a USN battleship during
World War 2 and forgot to design and install toilets in that ship?
1
Reading between the lines here (actually it’s pretty obvious), the culprit is corporate greed. Every decision, every choice is dictated by bottom line profit. China’s legions of highly skilled workers be damned. They’re prepared (or compelled) to accept such low wages in their worker’s socialist ‘paradise’ that Apple executives would need their heads read to go anywhere else. The end game is also quite obvious. Apple will shift to AI driven plants in the US. Their machines will be home grown, built by robots that don’t need to be paid at all. Bleating about jobs that disappeared overseas is increasingly going to be an anachronistic exercise. The jobs are disappearing alright, but not to China. Automation will create poverty and misery like the world has never seen without some seismic political shifts to compel more equitable sharing of the wealth generated by manufacturing. Though I suspect climate change will put paid to our ridiculous species before then.
Cop out! They didn't have enough screws!? smh.
Well, stick with it!
Give it a couple of years. Gee, maybe three. Apple has a billion dollars in the bank. They can wait while their support systems gear up.
1
More lame excuses from a corporation that wants to suck consumers dry, while reaping windfall profit. from off shored resources.
Apple is just another of Mr. Trumps tax shelters
1
American Capitalism at it's best in 2019
1
This sounds suspect to me. I run a machine shop in Northern California with a focus on aerospace and semiconductor products. If Apple approached us and needed 3000 of these screws per day, and we were give 1-2 weeks fr ramp up, we would have no problem delivering.
The screws are not the problem. Maybe something else is going on here.
5
These corporations destroyed American manufacturing and then portray themselves as the victims of a lack of American manufacturing. So invest in manufacturing and training like they did in foreign countries and how it use to be done in America. They don't want to because it would mean paying decent wages. This sob story article for Appld is disgusting.
2
1000's of screws could be airmailed in weekly from Germany or China. What happened to innovation at Apple?
3
Jack Nicas article reveals Apple's corporate values don't stray far from its founder's personal values. Apple is rotten to its core. Not only does it exploit Chinese laborers to grind out excess profits. Its investment in China supports an authoritarian government. It implicitly supports unfair trade practices against the United States and the theft of intellectual property. Apple's refusal to purchase and support American manufacturing is precisely why middle class America is getting gutted. It is absurd to imply that a simple screw can't be manufactured in America and using said excuse to wipe this country away as a capable and cost effective manufacturing base. There are hundreds of American manufacturing firms capable of producing small, custom order screws in large quantity. The pendulum is beginning to swing against China's trade aggression and Apple's market dominance.
4
This is truly the stupidest article that has even been printed in the New York Times. First, needing to initially order special screws from China doesn't make manufacturing high end Macs in the United States impossible. Apple might have had a teething problem, but the argument that our economy is incapable of making large numbers of the IN THE LONGER TERM is ridiculous. I can't believe that you published this nonsense. Not only that but you are quoting "anonymous sources" who CLAIM to know something. When what they "know" is so obviously incorrect, you really need to think about how you are curating youre news articles. I'd expect this kind of reporting on MSNBC or FOXNEWS, not in the Times.
2
This article misses the point entirely: Apple lacks fundamental project skills. Lacking components for an assembly is a failure of planning and therefore management. Period.
The most rudimentary analysis of this “high-end product” prior to production would identify this shortfall and correct either the part at the design level or diversify the supply chain PRIOR to production.
The obvious solution, in my mind, is that this pivot required vertical integration and supply chain investment/buttressing.
The analysis by the author overstates the skill necessary to manufacture and neglects the political opportunity that manufacturing is a strategic capability and not simply an economic concern to be optimized for profit alone.
Manufacturing does exist in the US, however, you might need to do a little more than have a “great idea” and rely on for profit industries to maintain unused equipment to birth your brain child. Pathetic performance by Apple project team, truly and unequivocal fail.
The worst part is this article, reinforcing an idea that humans living in America can’t make screws! What an ignorant narrative.
1
I think there is a huge difference between "Designed by Apple in California" and "Made in America".
A recent experience with Lenovo, which makes its laptops in China but service them in the U.S., suggests that not only have we lost the know-how, but that we don't even know how to do the simplest tasks. It suggests that we have lost the work ethics to perform.
Recently sent a Lenovo Laptop with a faulty touchscreen for repair at a repair center somewhere in the U.S. The laptop came back in worse shape than I sent it in. They had supposedly replaced the motherboard, but the touchscreen was not repaired. The keyboard was missing a key, and the case had not been screwed together. To compensate for this snafu, Lenovo offered onsite repair. It took over a month for the correct parts to be shipped to the local technician, and another 2 weeks to ship the replacement screws to put the case together.
Now fast forward several months. The laptop is out of warranty. I ordered a replacement fan from Lenovo to fix it myself. Received via FedEx a package clearly labeled as a fan, but it was a heat sink. Had to return it for a replacement. So a total of three shipments for a $9 part.
What's wrong with the American worker?
3
Apple wants to reward shareholders, thus it outsources to an authoritarian country with low wages. When companies go public, the workers suffer. But, if we want cheap technology as consumers, we put up with the nastiness that is the reality of our unregulated capitalist economy.
1
The US pushed for globalization in everything except education.
The US education system lies well below world standard for primary and secondary school
because it is strictly controlled by post code, with no thought to how we as a country can make it into the next century.
1
Most US factories that pay middle class wages for mass produced products will eventually be relative deserts with a few people running high tech machines. The relentless march of automation will continue, regardless of slogans or politics. Those companies that 'do the right thing' and maintain the status quo in industries with worldwide competition will be roadkill if they can't compete on cost and quality. It's just that simple.
What's necessary is to protect our intellectual property, pay all workers a living wage, encourage innovation and new product development, make allowances for worker turnover throughout their careers, and provide for universal portable healthcare and adequate retirement benefits.
We should expect to see increasing numbers of Americans working in the service sector. We should also expect people to have more leisure time. This is time they can spend with friends and family and on other fulfilling activities. There's no reason most people can't enjoy the fruits of a productive and sustainable economy.
4
The first photo of this piece portrays an Apple campus for some 15K new workers who have nothing to do with productions. In contrast, the fifth photo depicts the throngs of laborers in China to assemble the much demand Apple products. The Marx Theory of Economics appears to be working in China courtesy of Apple. Karl Marx described the prescient 21st century.
3
Factory workers are not working through the night because the government is authoritarian. The professor is either quoted out of context or wrong. Worker mobility in China is high. If they work at night, they will be compensated appropriately, or they will quit. These quotes provide readers with the wrong picture of China today. Factories have trouble hiring laborers. It is a very competitive labor market. They are not slaves. What the article should highlight is the difference in work ethic. It is just harder to get people to labor through the night in the US. Both in terms of the work culture, regulations, and the amount of extra wages you would have to pay people to do so.
11
One American expertise that Apple cannot replace is its fiscal fraud in Europe like the others US companies do by getting fiscally settled in Ireland and moving the benefits through London via its US fiscal paradise banks in the Caribbean islands.
Of course while invading the European market and paying zero taxes.
4
David Ricardo on Comparative Advantage (Investopedia)
"Also, among the notable ideas that Ricardo introduced in Principles of Political Economy and Taxation was the theory of comparative advantage, which argued that countries should specialize in production of goods in which they not only have an absolute advantage but also a relative advantage over other countries in order to promote benefits of international trade."
1
Well, we're not the world leaders in providing universal health care to our citizens, and we certainly don't have a good record for infant and maternal mortality rates, especially during birth, and we don't have an un-frayed social safety net. We do have cereal aisles filled with garishly colored junk food, and all the sweetened drinks and yogurts anyone could want, but why would we have anything useful like standardized machine parts and pensions and real wages is beyond me. The 1% and big businesses and government have all conspired to make us into a nation of shoppers for cheap food and cheap junk, and in the process we've lost the ability as a country to make things that other countries now can make more quickly and efficiently than we can.
7
It seems pretty simple. Bring back US jobs, but say goodbye to low prices. Be a patriot and be prepared to shell out $3,000 for your iphone, $50 for your tee shirt and $300 for your new Walmart sneakers. Make America expensive again!
5
These are not insurmountable problems and supply chain issues are absolutely expected when moving major manufacturing from one country to another. However, they should have known this in advance and that is on Apple. It by no means suggests that American factories can't provide the same supplies and on similar time-frames as they had in China.
2
I do not buy a conclusion that it could not have been made in the US. I suspect that that Apple did not want to give up large profits they are making by having all of their devices made in China. Same goes for many big companies - they want profits before anything else. They make your profits by moving operations to cheap labor markets, and give donations to politicians at home to keep this system unchanged.
6
@atk
::sigh::
The U.S. has not been Apple's or Samsung's primary market for many years now. It is China, India and even across South America. Ditto, Europe is not a primary tech market, either. This is basic math: where the human consumer populations are largest - in the billions - and where new baby billions will be born. Why would any tech manufacturer make stuff where their consumer don't live?
3
I own a small mom and pop machine shop, 28,000 is really not that many. I would need to tool up and add a few machines but that is not really a huge order. And that's going the CNC lathe route not using punch pressing. It's all set up and automation today, very few people are required. Sounds like a cop out from Apple really.
13
Readers curious why Chinese workers can be relied upon to get up in the middle of the night to work on Apple products while Americans will not should read the speech George Soros gave last week at Davos on the danger of China's use of artificial intelligence to engineer a "social credit" system to make every individual person accountable to its government's goals. This is nightmarish, but very real. He warns that China is developing an AI totalitarian advantage to that will overwhelm every other country because AI makes it so much more effective than in the past. See this link. NYT did not cover the speech.
https://www.wired.com/story/mortal-danger-chinas-push-into ai/
3
Good designers would have used standard off - the - shelf screws. There does not appear to be anything extraordinary about the screw in the illustration.
3
If only politicians understood the nuance of such business scenarios. We lost our manufacturing knowledge base over a decade ago and all the tax breaks in the world won't bring that home.
4
My company uses small AC motors for a medical device. We have tried to find a US manufacturer, but they simply don’t exist, even at a premium price. The US industry has been wiped out.
That said, a company with the vast resources of Apple should be able to make their own screws, if they can’t find a supplier.
6
OMG shame on the NYT. This seems like a set of corporate excuses neatly regurgitated for the masses. The quote by Susan Helper is ridiculous. This has nothing to do with an authoritarian regime and everything to do with the abdication of responsibility by the corporate cabal.
5
Spend forty or fifty years moving our expertise and jobs overseas, then cry poormouth when you can't find people who can do the work necessary to accomplish a task. Then gripe because the workers want to be paid a living wage.
Cry me a river...
6
The problem is not the screws. It's the engineers! A good designer should be able to make great designs from off-the-shelf parts. This is a poor excuse, especially since plastics can be made to accept off the shelf screws.
2
I'm a mechanical engineer who does this type of work. If you are only talking about a product produced at relatively low volume then I agree with you. But your comment is naive for a product produced at this scale. There is no "off the shelf". It's all made in large batches per order. When I saw the fastener availability was an issue I chuckled out loud at the truth of it from my own experience.
3
Why not design with standard, off the shelf parts? Using custom made, "proprietary" components right down to assembly screws makes it harder to find compatible, third party "add-ons" (hard drives, optical drives, expansion boars etc for computers), something as simple as a charging cable for a phone in some cases (one of many reasons I won't buy an "Apple" anything).
1
@JeanneWhite
Great, go start your own global #1 consumer tech company and then get back to us.
1
Agreed! This is particularly true about their smaller consumer products such as the iPhone and iPad. I don't know it the same is true of the huge, round Mac Pro except that I would never consider one. Where do you put a round computer? OK- I know some people who need it's power will find a home for it but it's lagging sales seem to indicate people who need a large desktop are looking elsewhere.
I knew I felt something in my pocket all these years--the culprit is Apple and its tiny screws.... Hmm...
How gullible does the Times think its readers are? Screws are an obstacle? Apple's products are sourced from 20 different countries, but screws are the insuperable logistics challenge?
I'm speechless that the editors let this go to print. Trump is a doofus, but good on him for putting Apple in the hot seat if this is their idea of an explanation. They must have supermodels working in public relations for Jack Nicas to have accepted such rubbish.
12
"Apple has found that no country — and certainly not the United States — can match China’s combination of scale, skills, infrastructure and cost."
And whose fault is that, I wonder? Oh yeah....
"When Mr. Melo bought Caldwell in 2002, it was capable of the high-volume production Apple needed. But demand for that had dried up as manufacturing moved to China. He said he had replaced the old stamping presses that could mass-produce screws with machines designed for more precise, specialized jobs."
"Chinese factories have shifts working at all hours, if necessary, and workers are sometimes even roused from their sleep to meet production goals." I'm sure the plutocrats running our country are drooling over that autocratic ability as they complain their $1.5 trillion in tax cuts is not enough.
Wait until the Chinese "Lincoln" emerges out of the digital dust and emancipates the worker class from autocratic slavery. Then what?
If America can't keep up with China in producing mere screws, that does not bode well for a military confrontation where our sophisticated capability is grounded for lack of screws.
Indeed, is an F-22 or F-35 any match for a thousand armed little drones at a tiny fraction of the cost produced in a militarized iPhone assembly plant? Stealth? No need. See them come by - the millions!
So much for trump's protection of steel and aluminum based on national security yet has done nothing about screws - and who knows what else the plutocrats off-shored for profit.
American plutocrats do not want an educated work force that demands better pay. Indeed, they won't even provide the training to workers they need unless someone else pays for it (tax payer or student). There's a reason they like vulnerable highly educated and indebted graduates desperately accepting puny wages with no way to pay off the loans for the education their masters are profiting from - let alone afford a Mac Pro.
Plutocrats need to be demoted to just as Pluto was.
6
Having worked at the Company that invented the Cell Phone, my first assignment was in assembling handsets, the chicanery and Cacophony of the setup, we brought in the chief of Motorola manufacturing to manage the process, soon enough the setup folded and sold to another company. Back then Motorola was the King, three decades ago the Forrester and others had concluded Smartphones were the future, Apple, iOS, and android were unknown.
Too much of Confucianism, the Chinese are not Mind controlled, they are Mindless robots, Give them a "Malrboro and an Screw driver".
An Indian would not do such labor, mostly the weather is amazing, An Indian can always rely on Hindu Non-materialism to circumvent hard labor, atleast remain home and chat. Those low-esteemed Indians who rely on expensive Baubles are Apples fanboys..
As a US manufacturer, I find this article and Apple's response disappointing. Because this article accepts obvious excuses as fact.
To manufacture in the US, one does not need the whole supply chain in the US. For tiny screws which are not costly and don't use a lot of space, one could easily import 10,000 from China and not have any issue manufacturing.
You buy parts anywhere in the world you can get the best combination of cost, shipping cost and inventory optimization. You assemble in the US with efficient labor and you use automation where possible. This allows you to build in the US efficiently and keep lower inventory and lead times. You shipping costs are lower.
Tesla has figured this out and done a remarkable job ramping much bigger manufacturing challenges in a short time. Apple is just making excuses, they are lame and a disgrace.
7
This really just shows how little we know regarding manufacturing these days. The Precision Machined Products Association has 93 member companies using the high precision Swiss machining process that would love to produce these very simple screws. As well as circuit board standoffs, connector pins etc. It's difficult to find manufacturers if you don't know how things are made. Please send me your RFQ's I have hundreds of members that will delight you with American quality and on-time delivery. Try connecting with manufacturing Trade Associations to solve your procurement problems.
5
This is unconvincing. There's nobody who can make screws in the whole United States? Come on. They make them in China because they make more money that way. And continue to.
6
The parts for Apple equipment or really any equipment comes from all over the world.
For the iPhone, the A12 processor chip is manufactured in Taiwan, the OLED and LCD screens from Korea, and the special protective glass from the US.
It would be trivial to have the needed screws manufactured in China and shipped to the US.
There are experts on supply chain management and manufacturing who could have written a reliable article or they could have been interviewed by the Mr. Nicas.
As for hourly rates, it would help to know how much assembly time goes into each phone or other device. The overall difference in manufacturing cost may not be the much and it is helpful to cities, states, and the federal government to not support unemployed or underemployed workers.
Another intangible not measured is the difference in self-esteem that a worker would have vs being unemployed or underemployed and the effect it would have on the individual and their spouse and children.
Overall, I'm disappointed in the depressing mood of the article written by someone who has no manufacturing or engineering expertise.
4
This apologia for outsourcing couldn’t be more absurd if it tried. Can we ask WHY there are no screws available in Texas? Might it be because outsourcing all the manufacturing to China resulted in very little demand for screws? And those skills that Chinese workers have and Americans don’t - when industry started outsourcing to China, were the skills already there - or were workers trained because a demand for those skills was created. And yet somehow, this didn’t stop outsourcing. Now Apple is outsourcing to other Asian countries that coincidentally have lower wage levels than China, where wages have gone up recently. Are the skills and screws magically already in those places? I understand that Apple and corporations in general are in the business of making profits off of their workers surplus labour. But at least we should have the basic honesty to acknowledge that this isn’t about screws or skills. It’s about wages.
2
This is NOT a United States problem, this is an Apple problem. It is insulting for such a large corporation to complain that no one could make screws for its computer assembly. If it had properly ordered the screws in advance, the screws would have been there for assembly. This is a boy-cries-wolf lame excuse for enslaving the poorest Chinese to make iPhones under conditions which cannot legally be duplicated in the USA.
5
It sounds to me like the problem isn't that the US doesn't make the right screws but rather that Apple's engineers don't like to check in with their supply chain before making a design decision.
8
Have all the tool and die makers retired?
Why can't these screws be made in Texas?
3
I don't believe this rubbish. Apple gave away the work for cheaper labor, not because they couldn't find the right screws...
5
It is very strange that the USA pushed for Globalization... now is just the opposite. Soon enough the countries of the world would stop paying attention to the USA policies and politics.
2
Am I alone in seeing that the deficiencies in American manufacturing demonstrate a clear and present danger to our national security?
Corporate greed, governmental greed/incompetence & shortsightedness, have led this nation from preeminence in manufacturing to a role as "primary contractor" for foreign manufacturers.
From gauze bandages to precision goods we have lost self- sufficiency and are hence imperiled. We can't now rely on America to adequately serve its own needs in a national emergency.
The "screw" is unfortunately an apt metaphor!
4
There is literally at least one outsourcing fair every month in the Carolinas for this.
The people who show up are ...
- screw machine houses (they make screws/anything with a thread)
- punch press (makes dies, design progressions, degrease parts)
- injection molders (plastics people; also design mold cavities and runner systems)
- job shop boards house (yup, low/high volume circuit boards runs)
- metal platers (metal deposition onto metal or plastics for aesthetics, environmental, conductivity, etc.)
... etc.
Trust Me: I was a process engineer for a manufacturing plant for five years where I validated - and outsourced to - these job shops.
How Apple cannot find a screw machine operator in America that can only make 1000 screws a day - and especially since Tim Cook is an Auburn grad, but more importantly, a Southerner - makes this extremely hard to believe, but definitely pathetic.
7
Right, that tiny, bizarre, and unnecessary five pointed custom screw that makes a $75 trip to a MAC store necessary to replace the battery. Sorry I can't offer Apple my sympathy.
4
Did Apple need the tiny screw for engineering reasons or as a way of distinguishing their product?
2
So now it's no longer "for want of a nail" but "for want of a screw" that the entire venture falls apart.
2
This screw is a poor excuse. I'm sure China would happily sell us all the screws we want, and ship them overnight for a bit more.
During R&D, and early in a product's lifecycle, the design often changes, and you might need a few custom-machined parts until the design settles down. Then you either buy them in bulk or ramp up manufacturing to make them yourself. As soon as possible, you arrange for alternate suppliers.
This is Product Development 101.
3
I'm just looking for that one tiny screw. The one that keeps falling out of the bottom of the case to my 2012 Macbook Pro.
2
For want of a screw, the iPhone was lost?
Nonsense.
Apple preferred the ease of serfs living in penury under an authoritarian regime.
4
Really, a lack of screw prevented a Apple product being made inn the U.S.? I don't believe it. Chicago formerly was full of component makers, there was a specialty screw manufacturer on Clybourn Ave near the Union Pacific north line viaduct, but of course the shop has been closed for years now, probably because the owner died and the orders dried up.
3
"Another frustration with manufacturing in Texas: American workers won’t work around the clock...."
Not true. Intel's fabs (fabrication plants) run 24 x 7 and are staffed around the clock.
3
Wow. I urge the New York Times to step back and actually read Jack Nicas' article on Apple. It is not possible to do any research on Apple's manufacturing facilities in Communist regime China, and not know about the slave labor, forced labor involved, which incredibly never actually gets mentioned. Like the labor that commits suicide by jumping off roof of plants? But we do see those making $2.00/hour, we do see remarks on how American workers (you know, who aren't actually SLAVES) are working "around the clock." And really there is no sense of embarrassment or shame here? Wow. Please reflect.
2
@Jeff
Don't be naive. Foxconn is not Apple.
Foxconn is:
"Foxconn manufactures electronic products for major American, Canadian, Chinese, Finnish and Japanese companies. Notable products manufactured by Foxconn include the BlackBerry, iPad, iPhone, iPod, Kindle, Nintendo 3DS, Nokia devices, Xiaomi devices, PlayStation 3, PlayStation 4, Wii U, Xbox 360, Xbox One, and the TR4 CPU socket on some motherboards. As of 2012, Foxconn factories manufactured an estimated 40% of all consumer electronics sold worldwide."
https://en.wikipedia.org/wiki/Foxconn
Every device in your home was made or assembled by "slaves" in China. Samsung does things the same, just using their own assembly factories but with the same components from all over the world as everyone else.
2
You can get anything that you need, anywhere in the world as long as you are willing to pay for it. Guess what, Apple doesn't want to pay for it. I would like Breakfast in Bed every morning, unfortunately I have a beer and burgers budget with a Champagne and Caviar taste!
3
Aww... China's so good... Apple is so good as well.... Do the factories in China still have nets under the windows to catch the employees who try to commit suicide on the job?
3
Lesson for designers: Whenever possible, use off-the-shelf parts!
2
So - China is the place to assemble things, because in China you can legally abuse your workers.
Nice, Apple.
5
because it’s an authoritarian government, you can marshal 100,000 people to work all night for you
I would like NY times and professor show some evidence for this. Chinese government do not control private sector employees. I found it hilarious that NY times are publishing something like this.
2
I am sick of companies putting profits before the American people. Maybe we need to nationalize or partially nationalize parts of the economy to ensure that people are being out before profits.
That is called Socialism, and judging by your nic, I possibly could conclude... you are for “small” government?
2
So logistics is the driver and not operations. Nothing new as any great general could tell you.
1
What a lame article. It looks like Apple does not know how to plan a hardware product launch (which I doubt or I should apply for a job there and help them). Any self respecting company would do a forecast, identify strategic suppliers, and select those who can deliver.
China did not become a manufacturing juggernaut and the USA did not hollow out its manufacturing base overnight. Reversing the trend will likely take a decade at least.
1
$3.15 an hour to assemble I phones but Americans want $15.00 + to work at McDonalds and do a far worse job.
This story is nonsense. There is this amazing service called FedEx and DHL which will move small things around globe really fast and pretty cheap. True story.
1
Reminds me of an article in the Harvard Business Review on efficiency that is out right now.
Efficiency in the short term is not always the same as efficiency in the long term because the former leads to unsustainable centralization.
https://hbr.org/2019/01/rethinking-efficiency
I thought some of you guys might be interested.
1
THIS is one of the main reasons why things are made over in China!
“China is not just cheap. It’s a place where, because it’s an authoritarian government, you can marshal 100,000 people to work all night for you.”
1
What a surprise! A "simple" problem is much more complicated than ignoramuses like our president think they are. "Just move the production back to the US". What could be hard about that?
3
Shame on Apple (not shame on US manufacturing capability). As an engineer who spent a good part of my career planning and managing supply chains across the globe, I am shocked that Apple did not do its homework before making an announcement to make their Mac in Texas.
It looks like Apple has outsourced its supply chain management and manufacturing engineering to its Chinese suppliers. I guess supply chain management and manufacturing are not as sexy as cool designs and fun application software.
309
@HCM
You are missing the Big Picture: nothing technological in your home or office - regardless of brand - is made in the U.S.
By the 1990s, Apple was the lone U.S. tech brand hold out that purposefully made products in America. Steve Jobs had several pow-wows with Democrats and Pres. Bill Clinton prior to 2000 in which he outlined the future was already upon us, that the global tech supply chain and thus manufacturing already was owned by Asia, that U.S. policy had to change in order to bring manufacturing back to America and, at least, some of the supply chain in order to make that happen. No one in government listened then, and that was pre-internet of everything and even the iPod, let alone the iPhone that came a decade+ later.
55
@HCM
It's a pretty big assumption (and unwarranted) that "Apple did not do it's homework".
Consider instead, we live in a country where an entire political party believes that global working is a hoax, the bible is historical fact and evolution & creationism should be taught side-by-side.
While other countries invest in education; science, math, and engineering programs, half our country depicts teachers as "the enemy"; overpaid "liberal indoctrinators" and believe that universities are "bad for our country".
97
@HCM
As another engineer (controls and robotics on my end, but I have done my fair share of machine shop work too) I was wondering why they didn't get this set up right to begin with. Certainly, Caldwell could have (and was) set up to run these.
This article almost seems clickbait'y. The headline should have been "Apple doesn't give suppliers enough leadtime to get set up to produce".
36
Wait, you mean a red state that treats employees like disposable objects only one be used as absolutely needed and at the lowest possible cost with no benefits can't produce world-class products? Man, I am SHOCKED!
I don’t recall any outcry when textile jobs moved from New England or auto jobs from Detroit to the South. In both cases looking for cheaper non union labor. Is the movement of low level jobs to China any different ?
5
@GC
A lot of those jobs moved overseas, too.
To prosper, companies need poorly-paid (and therefore poor) workers and well-paid consumers who can afford to buy what the companies produce. Every company tries to provide as few consumers as possible and hopes other companies will furnish them while it increases profits by cutting down on the consumers it supplies by employing them.
When all companies do this (because it makes economic sense) only investors can afford to consume lots and live well, and the economy slowly implodes. What then makes economic sense is for all companies to pay more so their employees can also be the consumers who drive a booming economy. But the only way this economic sense can be implemented is for all companies to be forced by government to pay more and thereby provide the consumer basis for prosperity.
Left to their own devices, each company will try to be the low-wage company benefitting from the high wages of its competitors; this works only in places with Lake Wobegon logic (in which everybody can be above average). For some reason, this sort of logic is endemic in business circles.
6
"...no country — and certainly not the United States — can match China’s combination of scale, skills, infrastructure and cost."
And which of these four is the most important? Does anybody really think that if the US had the scale, skills, and infrastructure then Apple would have its plants here? Of course not! The biggest requirement for corporations and conservatives is this: cheap labor. That's all they care about - not how the workers are dealt with by management, not how many jobs they take away from the US. Just cheap labor.
7
When I attended HS in the 70's many of my classmates and I took mechanical drawing. It was a prerequisite to take other industrial arts courses. Anything we wanted to fabricate in wood or metal shop had to be drawn to scale with three views using a T-square and other drawing tools. Our school system believed it was important as a course of instruction. Now designing is done with CAD and fabrication is achieved with computerized lathes and milling machines. With the loss of manufacturing came the loss of support or need for machinists that kept production going. It is not something that can be brought back with legislation or wishful thinking.
8
There will be no level playing field for American and European workers until China is forced to adopt the same protections for human beings and the environment that we adhere to.
The idea that people don't have a right to sleep, and that they have no choice but to work non-stop all night should be enough to unsettle every Apple consumer. Of course it's easier to produce things cheaply when you can abuse your workers, pollute your rivers and where people have no rights. Until we see ethics in purchasing, starting with government bodies insisting on green public procurement, the Chinese will always win the race to the bottom.
21
@gf
Yes. Well said. As you say, these things ought to "unsettle every Apple consumer." Mr. Trump and the Trump Republicans are undoing protections for human beings and the environment as fast as they can. Moreover, they couldn't care less about Democracy. They apparently believe they can beat the Chinese in the race to the bottom. It will take decades to rectify the damage.
gf wrote:
"There will be no level playing field for American and European workers until China is forced to adopt the same protections for human beings and the environment that we adhere to.
The idea that people don't have a right to sleep, and that they have no choice but to work non-stop all night should be enough to unsettle every Apple consumer. Of course it's easier to produce things cheaply when you can abuse your workers, pollute your rivers and where people have no rights. Until we see ethics in purchasing, starting with government bodies insisting on green public procurement, the Chinese will always win the race to the bottom."
3
@gf Good on you gf. I've been thinking the same thing for years. Sounds to me as though Apple has been hoisted by its own petard. Yeah, you can make anything you want when you have slave labor involved but most of civilization gave up on that idea centuries ago.
2
@gf
Yes, it should cause one to pause in their purchases but, are we to believe any other manufacturer is very different in philosophy or application?
We should see/have the comparison to Motorola, Nokia, etc.
1
I would like to know more about the professor's statement that "because China has an authoritarian government" "100,000 people can be mobilized to work all night." Does the Chinese government order people to go and work in a factory? Do American companies in China, or their contractors, ask the Chinese government for this kind of order?
8
@hepcat
Of course the Chinese government orders people to work in a factory. In a fascist state (which is what communism is in reality) you do what you're told to do or you are imprisoned or killed.
@hepcat
If the government controls the corporation, as they do most large ones, they can. If the company knows the government won't mind, they can. If American companies invest in China, they have to abide by the rules, good and bad, and they are happy to let their independent contractors manage themselves.
All of the Chinese economy is how it is because it's what the government said it will be.
The hollowing out of American skilled trades capabilities will continue until US consumers find it fashionable to buy "ethically sourced" consumer goods.
9
@Anon
Right. But, how many American consumers will ever have a notion like 'ethically sourced'?
While the lack of some components are a short term excuse for poor production efficiency in the US, I’m not sure the excuse has legs. My company, Toyota, made a dedicated decision to produce in the US. After more than twenty years, more than 80% of Toyota’s sales in the US are produced in the US. If Toyota can efficiently line up suppliers in the US for just in time production, I’m sure that Apple can do it too, if they dedicate themselves to it.
27
@Robert Powell
Of course Apple can do this. I suspect the relentless focus on their bottom line prevents the company from making the necessary investments.
19
@Robert Powell
I couldn't agree more. They deliberately designed the screw in question. They could have designed it with available screws, of which there are plenty. It's not as if we're considering an exotic chip or battery. This excuse is lame.
3
@Robert Powell
I think you exaggerate how much of the content of a Toyota is manufactured in the United States. Assembly in the US of parts manufactured in Japan does not American content make.
1
I remember during one of my biannual trips to China, back in 2007 when I just bought my very first (and THE very first) iPhone, telling my friends "it's amazing, you guys have to get one of these as soon as possible"! That was Shanghai, before the first iPhone had become available in China. What a difference a decade makes. In today's world, while I saw China surpassing Japan as the world's second largest economy in a few years, they did it faster than I expected and will surpass us faster than we expect as well and guess what? Through their diligence, investment in infrastructure and nurturing of their skilled labor force, they deserve to reap what they've sown.
12
@ManhattanWilliam
Nurturing of slave labor is admirable now? I think not. There's a reason Chinese factories have nets around the buildings under the higher floors' windows.
I’m a bit bemused by the comments here, they’re not what I’d come to expect of NYT comments.
The population of China is 1.4 billion. The population of India is 1.35 billion. The population of the US is just 325 million. That’s less than a quarter the population of either of those nations — and shrinking. Do we not understand how manufacturing works? The bedrock is skilled labor. Which requires people - even if it’s people to work the machines. Thus in China or India, wherever the infrastructure is present, manufacturing is almost infinitely scalable.
In the US, we have utterly and completely failed to invest in our native human capital. We have squashed immigration and flung shut the doors. Slowly but surely we are allowing competing corporate interests to short sightedly wreck our healthcare, our education system, and our democratic processes. Workers in China have healthcare. Only elite workers have access to, say, Boston-quality healthcare. But there are probably, head for head, more people getting quality healthcare in China than in the US. Likewise India. Check out the list of Joint Commission accredited hospitals in India if you doubt it. Check the number of International Baccalaureate schools. If China fails to educate 6 out of 10 children, they will STILL have more brainpower than we do if we manage to educate all our kids. And we don’t. Time to reframe how we think of ourselves, and quick.
38
@LA The problem is mostly capitalism. The corps are rewarded by investors when they cut costs. They cut costs by eliminating labor costs. They do this by shipping it out or replacing labor by automation. Labor is just another replaceable piece in the corporate profit making engine. Until we decide that our corporate boards must include a significant labor representation (who will protect labor) by law then we'll continue sending labor to the cheapest vendor.
9
My children all graduated with International Baccalaureate degrees, the world standard for university preparation. This high school degree is pretty thin on the ground in the US, but the US should adopt it nationwide starting from the primary school years if it wants to be competitive and catch up. IB students work to the same high standards worldwide, instead of competing against each other for marks. Ironically, when applying to universities in the US, our children felt disadvantaged because a big weight was given to “extracuricular activities”, the more the better. No other country did this. The IB is like a strenuous Freshman year at a good university over secondary years 11 and 12. There’s little time for anything else outside of debating, music and arts except buckling down and studying. In Australia there was sport and Saturday competition with other schools. Many years ago when our first child was applying to universities there was hardly much recognition of the IB in the US, but fortunately this had changed by the time our youngest was applying. The second oldest IB school in the world is in Yokohama, and it was founded in 1924. The IB allowed our children to move seamlessly between Singapore, Japan and Australia, even as they changed countries and schools. The IB would allow US children the same portability to move between the states or around the world. The US Department of Education could do for some heavy lifting under an educated and competent administration.
3
@LA
Best comment on this thread in my opinion. Completely agree.
2
This begs to address our education system. My middle schooler is deeply interested in building, electronics, chemistry. The hands on experimentation is pathetic. Science teachers in elementary and middle schools are mostly apathetic or teach rigid, rote and outdated material. It's no wonder the kids who get out and who may have technical aptitude for building infrastructure are simply snuffed out. It is time schools evolved. We need better and more qualified teachers and I don't mean those with college degrees, we need folks who work in industry to come and teach kids in school. It is time we removed this education degree nonsense, lets get the best folks to teach our kids. Then we can innovate at every level.
13
Hard working Chinese people have nothing to do with an authoritarian government, look at the Chinese restaurants here in the US, they always be the ones open early and close late, not to mention the hardworking Chinese railway workers who built our transcontinental railways a 100 years ago. That Case Western professor should apologize.
8
@Phillip
Your post seems illogical. The professor was not impugning Chinese workers, merely pointing out that they don't have the protections workers in the US have. Americans are hard working, too, and exploitation is always exploitation. Are you saying that there is no labor unrest in China. If so, educate yourself. If you think the waitress at your favorite Chinese restaurant serving your late-night meal is there because he or she is simply a hard worker, I have a deal for you on a bridge in Brooklyn.
@Phillip That's because they come from an authoritarian country where working all night for little money was the norm.
@Phillip
They actually have a brutal authoritarian government that owns many large corporations and controls many others. It's quite apart from whatever work ethic the culture has. Are you worried about hurting Xi Jinping's feelings?
Apple is not the only one company. All companies want to maximize profits and minimize costs, that's why for decades they have been off-shoring jobs. Trump can threaten, coerce all he wants, these jobs won't be coming back to the US. They will be moved from one low cost country to another. This leads to the next question: will Trump put high tariffs on all products, not made in USA to force these companies to bring jobs back?
8
@Jim
Yes, we need American workers to think more about making money for their corporate masters than selfishly thinking about themselves and their families! Great idea!
“China is not just cheap. It’s a place where, because it’s an authoritarian government, you can marshal 100,000 people to work all night for you,” said Susan Helper, an economics professor at Case Western Reserve University in Cleveland and the former chief economist at the Commerce Department. “That has become an essential part of the product-rollout strategy.”...So those of us buying iPhones are benefiting from exploitative labor practices. Let that sink in.
13
“China is not just cheap. It’s a place where, because it’s an authoritarian government, you can marshal 100,000 people to work all night for you,”
It says it all.
The question is how are we willing to let that happen?
Are our gadgets so important that we are willing to accept what we, Americans and Europeans alike, fought against for centuries?
10
Hey America: invest in education. Start paying your teachers decently, fund opportunities for continuing education for teachers, provide up-to-date books and materials, learn the difference between belief and evidence, drop No Child Left Behind, provide more support for high achieving students, increase apprenticeship-style opportunities in high schools, start paying college instructors a real professor's salary instead of the adjunct's pittance, stop deriding college professors for being out-of-touch or lazy, and stop acting like every person's uninformed opinion is just as valuable as every other idea in existence. This might help.
60
@reader
A bit of a rant, but I agree with it all. Well said.
I still trust Tim over Don to do the right thing.
And I trust AOC and RBG even more.
10
Don’t like it?
Don’t buy iPhones.
6
@R.W.G., Esq.
Right. Buy only mobile devices produced and assembled in America by American citizen workers... Oh wait, never mind. There aren't any.
1
American workers are too expensive, demanding, and less productive. I see it everyday: immigrants with impressive work ethic and natives with 2 hours break, calling sick every Monday, and asking for insane accommodations just working at an organic Vietnamese herbal tea shop with 5 customers a day.
7
@Marie Condo would you like to be summoned from your bed to work at the factory all night to make richer people's phones for $3/hour?
1
@Marie Condo
Yes, Marie, American workers need a bit of existential horror in their lives to make them compliant. Their attitude is hard to understand, especially if you are their supervisor. Maybe we should rob them of job security, pay them below the poverty level, and deprive them of affordable health care. Then they would know whose hand to lick!
1
@Marie Condo
Hey, if you don't like it here, move to China and see how great it is to have the government tell you what to do with your life!
If we cannot build the cheap consumer products that we want, it's debatable whether this is much of a problem. If we cannot build the military systems that we need to defend our country, fast, and without imports, we will lose the next major war we find ourselves in.
2
WWMFS?
What would Milton Friedman say?
I recall his case for Hong Kong on educational
television.
"Mutual Advantage" is a phrase for justifying
"free trading."
DJT apparently isn't accepting the semi terrific dogma, and has apparently shutdown some international commerce.
Apparently our POTUS has incurred the wrath
of various interests for doing so.
Meanwhile, I am vaguely recalling Ross Perot's
free trade critique in the early nineties in the prior
millennium.
There will be strategies/tactics of inserting
third and fourth independent candidates to
syphon votes from the two major parties a la
Perot's and Nader's.
Even if DJT gets merely 40 percent plus or minus, he'll perhaps win again.
I try not to be depressed, but sense tragedy
In the making.
2
"The company’s executives are increasingly worried that its heavy dependence on China for manufacturing is risky amid the country’s rising political tensions with the United States and unpredictability, this person said."
“'The skill here is just incredible,'” Mr. Cook said at a conference in China in late 2017. Making Apple products requires state-of-the-art machines and lots of people who know how to run them, he said."
“'In the U.S., you could have a meeting of tooling engineers and I’m not sure we could fill the room,'” he said. “'n China, you could fill multiple football fields.'”
There are many dilemmas in today's world. The above is a perfect example of one.
13
@HapinOregon -- and it's completely false. The idea that there aren't a roomful of "tooling engineers" in the USA is absurd.
As long as corporate boards only report to stockholders, profits are all that matter. American workers, jobs, technology and security? Pffft!
The only answer is for corporate boards to be required to be made up of one person representing stockholders, one representing employees, one customers, one suppliers, one the community, and perhaps one the environment.
Honestly though. It may be too late for America. When we exported our semiconductor fabrication capabilities we lost the ability to wage modern war. Without our engineers, our manufacturing we are a superpower on paper only.
19
@Wade Nelson _ Agreed. With out the capacity and desity of skillsets to suport these high end,high skillset jobs we cannot support thecapacity requirements to meet the demands of the businesses that will design and manufature these high quality products. Our human infrastructure has been hollowed out by the systematic destruction of our schools and the reliance on global supply chains in a world where nationalistic divisions persist. As some would put it, we are a predator on paper on;y. Or to paraphase Napoleaon might have put it, our industry travels on its engineering stomach....
5
Although accurate in its descriptions of Chinese manufacturing capabilities, together with the shortcomings of America's current production supply chains, this article totally lacks any perspective of how we got here.
I know the story, because I helped make it happen. Here goes...
Low labor rates attract American suppliers of simple consumer products to explore the what can be produced in China, a country with primitive infrastructure and very crude manufacturing capabilities, but a desire to leverage it huge labor pool.
Production moves to China, drying up demand for all of the upstream parts of the supply chain, while fostering their growth in China.
Chinese factories gain expertise in increasingly sophisticated products, creating demand for an increasingly sophisticated supply chain. Production keeps moving from the U.S. to China.
Somebody tries making a sophisticated product again in the U.S. and finds a total lack of parts suppliers. Big surprise!
This story is a miracle of capitalist innovation. But, that miracle can run in reverse. If production moves back to the U.S., a supply chain will develop to meets its needs. Higher income jobs will return. We can do this!
13
@George whitney HIgher income manufacuturing jobs mean higher priced products. Right now an iPhone Xr starts at $749. If it was made in the USA it would be at least 3 times that maybe more for Apple to make a profit. Manufacturing returning to the US is a pipedream.
12
@bg. How about a bit less profit for the billionaire owners to keep the price down? Do you really think if Apple products HAD to be made here, they would just triple the price and no one would buy them? That's a bigger pipe dream.
5
@bg The manufacturing WILL return! The jobs won't, sigh.
So let's cut to the chase -- did China need the famous "backyard blast furnaces"? No, and the US does not need to manufacture every single item needed or wanted in a complex economy. People need to be employed, but there is no inherent need for them to be employed making hundreds of thousands of precision machine screws every year. And let's add, you can't sell into markets where you do not also buy. This was all demonstrated more than 200 years ago and it hasn't changed.
3
@David: The Chinese are selling more into the American market than they buy, and putting the difference into a) moving up the value chain in manufacturing, and b) buying American real estate and companies.
I seem to remember a cautionary (but historically debatable) tale about a tribe of Native Americans who sold Manhattan for trinkets. We're selling them San Francisco for TVs and iPhones.
10
So, Apple needs almost weightless parts in quantity & fast. Why not do what Japan would have done. Temporarily fly the screws to the factory. Then, get the govt and banks involved for the funding to learn the technology. Then get a consortium of other manufactures in Japan to share in the cost. Then build the factory in Japan. We can learn a lot from the mercantilist economies.
8
Good Article.
1. It is not hard to buy screws in China and have them sent via 5 day air service to Texas.
2. Susan Helper needs to go to do some factory visits in Shenzhen. She might learn the real facts. Children are not chained to work benches. Sorry for the drama. We can be so dumb about China.
8
@Joe Lilly. Sure, China is a workers' paradise!
Apple and other corporations are making excuses. It's as easy as making a decision to support Americans and America, to put country and people (as China does) before obscene profits. To bring manufacturing back it is as simple as making the decision to do so. After all, someone (Jobs) initially made a decision to off-shore everything to China. Now make the decision bring everything back home. It really is that simple unless you complicate it. So you don't get your screws quickly or cheap enough? Invest in coordinating with a American manufacturer to get them up to speed. Instead of $100 billion that quarter your company may only report $50 billion. Still obscene.
16
The screws, they only need specialized and impossible to open screws only to fight the ability of the end user to access the hardware and make modifications to it (namely changing the HD or the RAM). This is the new apple and they really don't care where the product is made, they only care about revenue and extracting excess money from the end user.
This tale perfectly explains why products are made in China and why companies now go to extreme lenghts in order to prevent customers to hit the bottom line and not using normal screws or parts, which can be easily found on shops around the world.
9
@Camilo Blanco
Yes spot on. No real reason why so many different specialized screws are needed in these devices: most (not all) are about the same size and length
2
The depiction of US manufacturing seems unresearched and based on hearsay.
Multiple shift work occurs in the US and is the norm in most operations. A supply chain breakdown to not have screws is also on Apple. Apple should ensure that the supply chain has sufficient capacity before starting production. Has Apple come to rely on China to solve similar problems simply by sheer size and force?
Verify your stories NY Times. If I wanted to find unsubstantiated news I would tune to Fox News
7
I agree. Story ends with a sentence that the jobs Apple plans for Texas "will not be in manufacturing." Ok, what will they be? Paying what? When? Or is this " commitment" just a stall tactic to let them get away with more years of vulture capitalism, followed by a retraction "due to changes in the business model." In other words , baloney all along. NYT, ask the tough questions!
The fine print: “Assembled in USA.”
There remains a vast difference between "MADE in USA" and "ASSEMBLED in USA"
The parts, the 'guts' of the product are MADE in Asia. Automated assembly of these parts provides few high paying jobs.
2
I do not understand why USA wants to spend billions of dollars creating an infrastructure to menially manufacture, allowing most workers to only earn minimal wages, be at or near poverty level, and have no formal education, when we could be spending those same dollars to educate and lift up Americans to do more critical, thinking, high level jobs which lead to creating cures for diseases, solutions for countering climate change effects, exploring space and ocean depths, solving transportation issues, resolving the upcoming water crisis, etc. Oh, and by the way, those higher level jobs should pay enough to allow for decent standard of living.
6
@PKS Because most Americans, or at least a large subset aren't particularly capable of being software developers, architects, media designers and or other high value skills. It turns out that takes a skill set not everyone has. We do have an obligation to try and provide an economy which has jobs for those folks too, even if it isn't in the highest levels of the manufacturing paradigm. There are lots of ways to do that like farming, that are alternatives to bringing back manufacturing, but those are for different articles.
3
This is the real test of who we think we are.
Can we really be the land of the free if we depend on authoritarian regimes running cheap labor to provide for our lifestyles?
One look at our current economic divide should enough to remind us that "What goes around, comes around."
It appears that it has come around already.
8
I have always been an Apple user. I also prefer American products. I want my nation to remain strong and the idea that our American manufacturing companies are moving overseas to make that extra profit makes me totally nuts! Those companies are traitors to their country! I am now looking at where my purchases are produced. America comes first...If not supported it will become an also-ran. Wake up everyone!!!
6
The reality is EDUCATION. Kids are no longer in the business of learning. In New Mexico less than 56% was graduate in high school and a lot of them when they go to work they show up only with their body without their brain.
5
I have not read all this so maybe this solution has been run up the flag pole already but:
Why not use some of that 600 billion dollars in of shore Apple cash to create a fastener manufacturing plant and provide some much-needed US production and manufacturing jobs. Just don’t do it Sunnyside, Queens cause its going to get a little crowded over there.
2
Mr. Nicas and the NYT are being used by anonymous sources at Apple to essentially "deliver" the following message:
"The challenges in Texas illustrate problems that Apple would face if it tried to move a significant amount of manufacturing out of China. Apple has found that no country — and certainly not the United States — can match China’s combination of scale, skills, infrastructure and cost."
Wow, you must think us readers are pretty dumb!
9
We can learn a lot from the Chinese, and they from us (even though we both bemoan the exchange). Until we "get over" the stigma, lets do business!
@George
Yes, we can learn things like exploiting workers, political repression, and destroying the environment. Yay.
A very important quote is buried in this article that should be the subject of more research and an additional article:
“China is not just cheap. It’s a place where, because it’s an authoritarian government, you can marshal 100,000 people to work all night for you,” said Susan Helper, an economics professor at Case Western Reserve University in Cleveland and the former chief economist at the Commerce Department. “That has become an essential part of the product-rollout strategy.”
We have to understand what Ms. Helper means by "marshal." Do these workers have a choice? If not, are we not looking at forced labor? Or, using another word we do not like--slavery? Is this any different from the forced labor in the Soviet Union, basically a slave state, that was the engine of their industrial growth and might?
If the Chinese factories are using forced labor for Apple products, Apple is responsible, as they are Apple subcontractors. The U.S. government should investigate American companies that may be using forced labor abroad to manufacture their products and if they are, there should be repurcussions. One could be: simply not allow them to sell the products in the United States. But first the New York Times should dig more deeply into this appalling revelation.
8
@Eastsider: When I worked at an American tech manufacturer in the '80s, we got a rush order and were told we would work (and get paid for) lots of overtime for about two weeks, and if we didn't want to work the overtime, we could quit or be fired.
This was clearly a form of coercion, although most of us could have found work elsewhere. In this case, I was happy for the extra bucks, so I worked and didn't complain, but I did recognize it for what it was - soft coercion.
2
Sadly under international law the responsibility falls on China.
@Eastsider Yes - it is SLAVERY. And common use of forced labor including children, who are given the "opportunity" (of forced labor) to be sent to Apple plants to build Mr. Cook's products. Imagine the future when a Free China holds American companies accountable for their role in such slavery.
America has a huge chunk of its workforce in prison (I'm talking non-violent offenders.) If we gave the disenfranchised chances to learn from a young age through adequate school funding, facilities,curricula and well paid teachers, we would have less of a workforce problem.
2
@K. T. Mitchell
Are you high? No, America DOES NOT have a "huge chunk" of its workforce in prison. There are 2 million men in prison, out of an adult working U.S. population of 248 million.
2
Relax.
Ask any Republican corporatist politician or capitalist who owns one.
It's all about the bottom line.
Period.
4
It is a cryin' shame that the US stopped most manufacturing and it's gone overseas. There's no easy solution since it is cheaper to buy things from China and the US population continues to get poorer and poorer.
4
Giving the Chinese entire supply networks and the capacity for blackmail - is this prudent and wise? Given the ridiculously overpriced iPhones, should not Apple invest some of the profit in the US - especially given that it takes advantage of its laws to design new phones and skirt taxes?!
2
Yet more proof that I need not buy Apple products.
“Americans won’t work around the clock.”
That’s bogus. Americans work around the clock in hospitals across the country. Even Walmart can find workers for their stores that are open 24/7.
9
They are not talking about steady work but intermittent work. China can keep workers on call and not have to pay them the way we would have to, to be available 24/7. Would you take a job where you MIGHT have to work tonight or not, depending on whether they need that part, working only when THEY need you?
@M Davis
For $3/hr?
For the money Apple charges for its products and the profits they
make they can make their products any place they like -- if they
stop letting the accountants run the company. When a real problem
develops in China, there won't be any new products and the
ones they've already sold will not have replacement parts.
I'm stocking up on #2 pencils, paper, and Forever stamps.
3
@KO'R It's why I have a fully functional Underwood 5 in my office.
It is true that manufacturing has been outsourced to countries with lower overhead than the USA and it's exactly the same story all over Europe too, so this is not solely an American problem. I was never an admirer of Reagan, but he didn't invent this problem, he just went with the flow, which is what politicians do. He was followed in this dogma by all subsequent presidents.
The current president is clueless too. He just harrumphs populist nonsense to a sour mob. He understands nothing about the economics of business. He said the Postal Service was greatly undercharging, not understanding for a second that wantonly increasing their pricing would greatly decrease their shipment volume and financial viability.
Apple is doing what companies and indeed people do; they are playing the hand they've been dealt.
If there is a real villain here it is vulture capitalism, in the predatory form of Goldman Sachs and its ilk and, even worse, hedge funds. These cruel and greedy companies, along with their CEOs and stockholders could not care less about the communities they have decimated, as long as lots of money flows to them.
Communism doesn't work. Socialism isn't much better, but American dog-eat-dog capitalism is a cruel taskmaster too.
9
@Anthony Taylor Nail on the head! And it certainly doesn't help when more people than ever have their future financial situation tied to the fickle winds of the stock market, through 401(k)'s, etc. They are trapped by needing success in the market while that same market works against their long-term interests.
1
China, with its huge population and government ability to control geo-economics, cannot be matched - even by India. It is folly to think that the United States can compete with them for massive-scale precision manufacturing. Most of our silicon-based high-tech products are made in the east - China, Thailand, Viet Nam, etc. The manual skills, low wages and production control are rarely matched here.
Trump is too ignorant and simplistic to understand the intricacies of this. So is Ross, for sure. His thuggish demands and promises are based upon political and real-world fallacies and delusions. Trump scams and puts up concrete edifices to his ego; he is not a businessman nor does he understand anything but something upon which he can hang his name.
We need a Chief Executive that knows facts, understands manufacturing, relationships and trade and tells the truth - and that's just for part of the job. Someone like Howard Schultz or Michael Bloomberg would be ideal - NOT TRUMP.
3
@RealTRUTH: The truth that the politicians won't say is that we're doomed to second-rate status and nothing can change that. Any politician who admits that will lose.
Countries that do not win at manufacturing things are known as the third world. We're headed there. Asia is the future; they can make everything that the world wants cheaper and better. They will be our new landlords, but at least we'll have TVs and smart phones.
Go ahead and run for office with that as your platform. You might get a couple of votes.
2
You can’t compete with $3-4 per hour. Those are sweat shop rates. Is it any wonder why China and Mexico have become destinations for US manufacturing?
The fact is Apple and any other manufacturer can make it work. They chose not to. No different than companies basing their operations in Ireland (Accenture) or Bermuda.
Anything else they say is baloney. We might have to pay more and they may have to reduce their margins but trust me they could make it work. The business press buys this PR from Cook and Dimon as if it’s gospel.
If China and Mexico terminated all US manufacturing in their countries, the Apples of the world would adjust and move on.
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It's important to remember the hollowing of US manufacturing happened during the Clinton Administration.
China received favored nation status under Clinton helping pave the way.
This was wound inflicted by Democrats many of whom supported this move wholeheartedly.
Important to consider with primaries around the corner.
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I am 63. I started as an engineer making things in the late 1970s. In the Bay Area. I watched industry after industry move first to Taiwan then to China. I helped move the technologies, it was watching a country commit slow motion suicide, led by corporations concerned about nothing but profit.
This is why we have Trump, because Democrats got bought by corporations.
Money is a proxy for productivity. What did you make today that we could trade to China for an iPhone? It’s a safe bet that cupcakes, yoga lessons and dog walking won’t cut it. No production of the things we consume means poverty in the long run.
Money out of politics or we are doomed.
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The comments criticizing Apple specifically are misguided.
Unless we impose higher tariffs or import quotas or bans or the American consumer actually decides to pay more to buy American, Apple’s competition in the U.S. market is global. How do you suppose Apple will compete and survive as a market leader if it becomes the highest cost manufacturer due to a self imposed “Made in USA” constraint? Every other foreign import will undercut their pricing or contain more premium components or will have more profits to invest back into product development.
The global trade rules and economic realities are externally imposed. Apple is just acting in the only way it can in this environment.
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