Low cost is no longer the only reason why US companies outsource manufacturing to China.
Despite Apple’s commitment to make a Mac computer in Austin, Texas, the inability of a US supplier to mass produce screws led the tech giant to order the items from China.
This situation exemplifies the challenges facing US manufacturing. Not only is it impossible to beat Chinese labor costs, but it is also difficult to compete in terms of scale, skills, and infrastructure.
Video Spotlight: Why the iPhone can’t be made in the US
This post is based on the New York Times article, A Tiny Screw Shows Why iPhones Won’t Be ‘Assembled in U.S.A.’, by J. Nicas, January 28, 2019; and the YouTube video, Why the iPhone can’t be made in the US, by Bloomberg, June 29, 2017. Image source: (c) Ingram Publishing / SuperStock.
1. In general, why does Apple rely on China for a large portion of its manufacturing?
Guidance: Lower labor costs and ability to produce huge quantities fast enough to meet demand. This ability stems from an abundance of skilled workers, huge infrastructure (building and equipment), and loose labor protections laws.
2. Why was the Continue reading