An Amer­i­can-made iPhone? Not hap­pen­ing

China Daily (USA) - - FRONT PAGE - By By ADAM AGENCE MINTER FRANCEPRESSE of Bloomberg in Lop­buri, Thai­land

FewIt is a peo­ple­feast fit took­for a Don­ald mon­key Trump­king. On se­ri­ous­lySun­day, the when cen­tralhe said Thai in town Mar­chof Lop­bu­rithat he’d put “geton a Ap­ple five-star to ban­quet­start mak­ing­for its their hun­dreds com­put­er­sof macaque­and their in­hab­i­tants,iPhones on sparkingour land,a mass­not in simian China”. But food his fight. elec­tion ap­pears to have caused Lop­buria change­has been of lay­ing heart. on Ap­plean an­nual has feast re­port­edly— part asked mer­it­mak­ing the two tra­di­tionAsian com­pa­niesand part that un­abashed as­sem­ble tourist­the bulk at­trac­tionof its iPhones— for its to as­sess mon­keys whether since they the can late bring 1980s. the work to the US. One This of year’s them, feast Fox­conn, fea­tured has a agreed smor­gas­bor­dto look of into fruit the that mat­ter. was quickly Trump’s de­mol­ished sup­port­ers by have the em­braced­hun­gry guests,this newswho squawkedas a sign of and his tus­sled­power to as per­suade­they gulped­way­ward down cor­po­ra­tions­their feast, muchto maketo the Amer­ica great again. But as Ap­ple and its man­u­fac­tur­ing part­ners know, and as Pres­i­dent-elect Trump will soon find out, it’ll never hap­pen. The US lacks the work­force and sup­ply chains nec­es­sary for Ap­ple to move its iPhone oper­a­tion back home. And more to the point, Amer­i­cans shouldn’t want it to. Al­though Ap­ple’s orig­i­nal sup­ply chain in­cluded a sub­ur­ban Amer­i­can garage, Asia quickly be­came cen­tral to the com­pany’s growth. In 1981, it opened a fa­cil­ity in Sin­ga­pore to man­u­fac­ture logic boards and other com­po­nents. It was a no-brainer, ac­cord­ing to a man­ager who ran the fa­cil­ity: “We find that no coun­try can pro­vide the com­bi­na­tion of in­fra­struc­ture, tech­ni­cal abil­ity, sup­port­ing in­dus­tries, gov­ern­men­tal ef­fi­ciency, sup­port and in­cen­tives that Sin­ga­pore offers.” In the decades that fol­lowed, China em­u­lated Sin­ga­pore’s ap­proach on a mas­sive scale, de­vel­op­ing industrial clus­ters with world-class in­fra­struc­ture and of­fer­ing land and sub­si­dies to com­pa­nies will­ing to re­lo­cate. By 2004, Ap­ple had

shut down its last US man­u­fac­tur­ing oper­a­tion, and China had be­come the industrial hub of its global em­pire.

Low la­bor costs and min­i­mal reg­u­la­tion were cer­tainly part of China’s ap­peal. But the most im­por­tant fac­tor was its huge and nim­ble work­force. The main iPhone fa­cil­ity in Zhengzhou now em­ploys 110,000 work­ers, with other fac­to­ries em­ploy­ing hun­dreds of thou­sands more. China’s 270 mil­lion mi­grant la­bor­ers have proven in­dis­pens­able to a busi­ness that prizes flex­i­bil­ity. Last sum­mer, Ap­ple con­trac­tors re­port­edly hired 100,000 work­ers to ramp up pro­duc­tion of the iPhone 6s in ad­vance of its fall re­lease.

Shen­zhen is home to 240,000 Fox­conn em­ploy­ees — and millions of engi­neers and la­bor­ers.

Noth­ing com­pa­ra­ble could ever hap­pen in the US, no mat­ter what the pres­i­dent wants. A mass mo­bi­liza­tion on that scale, and at that speed, likely hasn’t been at­tempted since World War II. And there’s lit­tle rea­son to think it would be suc­cess­ful or de­sir­able to­day, even if Ap­ple were will­ing to try.

Find­ing enough skilled la­bor wouldn’t be much eas­ier. Ap­ple CEO Tim Cook told 60 Min­utes last year that, thanks to bet­ter vo­ca­tional ed­u­ca­tion, China now has a more skill­ful work­force than the US. Ap­ple’s ex­ec­u­tives es­ti­mate that they’d need 8,700 industrial engi­neers to over­see 200,000 assem­bly line work­ers, yet only 7,000 stu­dents com­pleted univer­sity-level industrial-en­gi­neer­ing pro­grams in the US in 2014. Shen­zhen, by con­trast, is home to 240,000 Fox­conn em­ploy­ees — and millions more engi­neers and la­bor­ers.

Such a con­cen­tra­tion of man­u­fac­tur­ing and skills in one place gives China its other ma­jor ad­van­tage. Most of the hun­dreds of parts that go into an iPhone are made a short dis­tance from where the de­vices are as­sem­bled.

Those fac­to­ries also can ramp up pro­duc­tion as quickly as Ap­ple needs. It’s an industrial ecosys­tem that took decades to evolve, and it’s not go­ing to re­lo­cate to the US.

More­over, Amer­i­cans shouldn’t want it to. That ecosys­tem has made Ap­ple one of the world’s most prof­itable com­pa­nies, sup­port­ing 2 mil­lion do­mes­tic jobs. It’s what al­lows Amer­i­cans to buy some in­cred­i­ble gad­gets at a (rel­a­tively) af­ford­able price. And it’s help­ing give rise to a vast and tech-savvy Asian mid­dle class — which will pro­duce plenty of cus­tomers for Amer­i­can goods and ser­vices. All that would dis­ap­pear if Ap­ple were some­how forced to ship pro­duc­tion back to the US.

If Trump wants to re­vive man­u­fac­tur­ing in the US, it will re­quire more than hec­tor­ing Ap­ple. It will mean sup­port­ing vo­ca­tional ed­u­ca­tion on a huge scale, of­fer­ing Chi­nese-style industrial sub­si­dies and wait­ing around for decades for all of it to have an ef­fect — all in pur­suit of te­dious, low­paid jobs that are in­creas­ingly ob­so­lete as industrial ro­bots im­prove.


A fam­ily looks at Ap­ple prod­ucts dur­ing Black Fri­day sales at a Best Buy store in Los An­ge­les.

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