Why Apple Can’t Make iPhones in America

Something like two months before the iPhone had been announced and the release date had been announced, and everybody couldn’t wait for the iPhone, Steve Jobs discovered a huge flaw. He had the phone in his pocket with his keys, and after a while, the plastic that was the screen got scratched repeatedly because of his keys. He pulled out of his pocket, he showed his design team, and said, “I’m not taking this to market. I don’t care. If you can’t fix this in five weeks or four weeks, we’re pushing back the release date. Can’t do it. You get it done. I want a new screen. I want a non-scratchable screen on this phone in six weeks.”

The first thing Jobs did… He had heard about something that Corning had invented called Gorilla Glass. So he went to the Corning CEO. The Corning CEO said, “Oh, yeah, we’ve got Gorilla Glass. We designed it. That’s 30-year-old technology. We don’t make it; we’re not geared up for it.” Jobs said, “Don’t be afraid. You can do it.” Gorilla Glass came into existence, the Corning people did it. The ChiComs at Foxconn were able, in six weeks, to redesign and remanufacture millions of iPhones with this new screen that had been demanded six weeks prior. The environmental studies necessary for this kind of change would have taken years in America, plus the other obstacles. There simply isn’t and never has been a factory in this country that could produce this.

They’re gonna produce something like 50 million iPads this year. The number of iPhones is almost twice that. They sell these things worldwide — and that’s just one factory of 230,000 employees. Sixty thousand of these people live and work at the factory. “Many of the people at ‘Foxconn City’ work six days a week, twelve hours a day, and they earn less than US$17 per day. It may sound inhumane by American standards, but these jobs are in high demand in China — so much so that Jennifer Rigoni, former worldwide supply demand manager for Apple, told the New York Times that Foxconn ‘could hire 3,000 people overnight.'” That’s how many people want to work there. “Those are just a couple examples of how the scale, speed, and efficiency…”

There’s another aspect of this. All of the parts that go into an iPhone are made within 25 miles of the factory that assembles them. So if Apple wanted to, they’d have to ship all the parts either by air or by boat across the Pacific Ocean. It makes no economic sense to do it any other way that they’re doing it, and they got hold of some Apple executives for this story, and one Apple executive (who’s not identified) said, “We sell iPhones in over a hundred countries. We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible,” and they found out how to do it, and found out how to do it the cheapest and most efficient way. Really, it’s a fascinating piece. The one thing that is not mentioned in this whole story is unions.

Of course there aren’t any in China. You couldn’t get any of this done in modern day America. So all the clamor for manufacturing jobs and why evil American companies leave: The systems, the ecosystems, the supply chain, it just doesn’t exist. Nor does the labor price, obviously. But it is a fascinating thing. In World War II we used to do it, yeah. In World War II we used to build things. We built the Golden Gate Bridge, the Bay Bridge, and the Empire State Building in the same five years. You know that? In the Depression. In the Depression, in the thirties. What we did in World War II, the world has never seen in terms of manufacturing, output of major, big, large things. There’s no question.

Here it is. The Foxconn “central kitchen cooks an average of three tons of pork and 13 tons of rice a day” to feed these people. Three tons of pork, 13 tons of rice a day! This factory’s in Shenzhen, by the way, but there are Foxconn factories all over the place. What US company could find 3,000 people overnight and convince them to live in dorms to work 12 hours a day, six days a week? Here’s another thing: “Apple’s executives had estimated that about 8,700 industrial engineers were needed to oversee and guide the 200,000 assembly-line workers eventually involved in manufacturing iPhones.” You need some engineers watching this. “The company’s analysts had forecast it would take as long as nine months to find that many qualified engineers in the United States. In China, it took 15 days,” and that’s how they were able to get the iPhone out on time.



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