Jan 26, 2012

On January 22, the New York posted an article “How the US lost out on Iphone work.”

Several highlights:

Apple sold 70 million iphones and 30 million ipads last year.

After President Obama asked Steve Jobs “why the jobs (of making Apple products) couldn’t come home to the U.S. from China,” Jobs replied that “those jobs aren’t coming back.”

The “central conviction” of Apple is that “the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that “Made in the U.S.A.” is no longer a viable option for most Apple products.”

Apple employs 43,000 in the U.S.

The story is told of when Apple did a last minute design change on the Iphone. As soon as the parts came in, 8000 Chinese workers were immediately called in at midnight to start a 12 hour shift. An Apple executive is quoted as saying that the “speed and flexibility are breathtaking.”

The semi-conductors for the iphone are imported from Germany and Taiwan, the memory comes from Korea and Japan, display panels and circuitry from Korea and Taiwan, chipsets from Europe and rare metals from Africa and Asia. The assembly is done in China.

Timothy Cook is quoted as saying the decision to turn to Asia for their products “can scale up and down faster” and “Asian supply chains have surpassed what’s in the U.S.”

In my role as your sourcing agent for manufacturing in China, this provides more evidence that having your product made there is a good choice. It isn’t often when we’re not able to locate or source a product at a competitive price.

As an American, it’s upsetting that we’ve allowed our place as the manufacturing king of the world fall apart. Some of this is because our government treats business like an unwanted stepchild. Part is because our culture derides “working for the man,” even as they demand that “the man” provides an over the top benefits package, which will eventually bankrupt “the man” who pays their way. The government’s answer, print and borrow money until we’re Greece, isn’t going to work – we need to get behind our manufacturing base.

We’re in a global economy so the U.S. isn’t going to make every product that’s out there. However, changing the rhetoric and how we treat business will go a long way towards rebuilding our manufacturing base. I read that the president of Intel said the U.S. is the only nation in the world where it would cost him a billion dollars to build a factory. Not smart. It blows my mind that we can’t figure this out.