Apple’s Screw Problem and a Quick Question For You

0
428

This is an amazing article, one that illustrates the manufacturing gap between the US and almost everywhere else. WAY back in the early 90's, when talk of NAFTA was building momentum, I heard an experienced CEO say, "when trade agreements are signed there are two stage. The first is Rationalization – which side makes it cheaper. The second stage is Displacement – one side loses jobs."

That is the message in this article. There is one major quote that says it all. It is about Apple but it could just as easily have been about YOUR industry. The quote is, "Apple has found that no country — and certainly not the United States — can match China’s combination of scale, skills, infrastructure and cost".

Scale; Skills; Infrastructure; and Costs.

Here is the core question – is there a third stage to trade called Replacement? Does production come back? Can entire displaced industries be returned to somehow? Do we have the motivation, the skills, the investment, the work ethic? Is our country, or yours, planning their work and working their plan to grow?

What commitment do you have to get back into your industry's version of the tiny screw opportunity?

A Tiny Screw Shows Why iPhones Won’t Be ‘Assembled in U.S.A.’
NYTimes, Jan. 28, 2019

SAN FRANCISCO — Despite a trade war between the United States and China and past admonishments from President Trump “to start building their damn computers and things in this country,” Apple is unlikely to bring its manufacturing closer to home.
A tiny screw illustrates why.

In 2012, Apple’s chief executive, Timothy D. Cook, went on prime-time television to announce that Apple would make a Mac computer in the United States. It would be the first Apple product in years to be manufactured by American workers, and the top-of-the-line Mac Pro would come with an unusual inscription: “Assembled in USA.”

But when Apple began making the $3,000 computer in Austin, Tex., it struggled to find enough screws, according to three people who worked on the project and spoke on the condition of anonymity because of confidentiality agreements.

In China, Apple relied on factories that can produce vast quantities of custom screws on short notice. In Texas, where they say everything is bigger, it turned out the screw suppliers were not.

Tests of new versions of the computer were hamstrung because a 20-employee machine shop that Apple’s manufacturing contractor was relying on could produce at most 1,000 screws a day.

The screw shortage was one of several problems that postponed sales of the computer for months, the people who worked on the project said. By the time the computer was ready for mass production, Apple had ordered screws from China.

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.

In China, you will also find one of Apple’s most important markets, and over the last month the risks that come with that dependence have become apparent. On Jan. 2, Apple said it would miss earnings expectations for the first time in 16 years, mostly because of slowing iPhone sales in China. On Tuesday, the company is expected to reveal more details about its financial results for the most recent quarter and its forecast for the coming year.

The company could face more financial pressure if the Trump administration places tariffs on phones made in China — something the president has threatened to do. Read More

LEAVE A REPLY

Please enter your comment!
Please enter your name here