This coming January, Donald Trump will be sworn in as the 45th President of the United States. In turn, many have started to wonder if Trump will actually take steps to put into motion many of the grandiose promises he made during his election campaign. One of the more curious promises Trump made was that he, if elected President, would make sure Apple “builds their damn computers in this country.”
Trump’s promise, which obviously fits in nicely under his pledge to ‘make America great again’, was immediately met with skepticism by everyone who understands the logistics involved in manufacturing consumer electronics. Indeed, it’s hardly a coincidence that nearly all major hardware companies in the United States outsource their manufacturing to factories in China.
With respect to Apple in particular, Trump said that he’d like the California-based company to begin manufacturing a multitude of devices in the United States.
Trump’s remarks on the matter read as follows: “We have such amazing people in this country: smart, sharp, energetic, they’re amazing. I was saying ‘make America great again’, and I actually think we can say now, and I really believe this, we’re gonna get things coming. We’re gonna get Apple to start building their damn computers and things in this country, instead of in other countries.”
If Trump’s remarks were said in earnest, the new President-elect will be in for a rude awakening once he officially takes office. As laid out in a recent article in The Wall Street Journal, there’s no getting around the fact that the Asian supply chain that many companies like Apple rely on simply can’t be replicated here in the United States.
The reality is that companies like Apple have incredibly stringent manufacturing needs that can only be met by factories in China, many of which were designed from the ground-up to accommodate the needs of large-scale consumer electronics companies.
To this point, the Journal highlights the following story involving Apple supplier Jabil.
When Jabil Circuit Inc., the world’s third-largest contract manufacturer by revenue, needed to quickly ramp up production of its electronics components a few years ago, the company was able to add 35,000 workers in China in less than six weeks.
“In no other country can you scale up so quickly,” said John Dulchinos, vice president of digital manufacturing at Jabil, a St. Petersburg, Fla., supplier to companies such as Apple Inc. and Electrolux SA. “You have the ability to move quickly and there’s a really strong electronics supply chain in Asia centered around China.”
The idea of relocating specialized Chinese factories to the United States and hiring thousands upon thousands or workers with the requisite skills to operate them is essentially a practical impossibility at this point.
In a similar example which highlights how efficient Chinese factories are, the New York Times a few years ago relayed a story about how Apple needed a last-minute manufacturing change implemented on the iPhone production line.
One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.
A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.
Even we if ignore the fact that Trump’s plan, if put into practice somehow, would raise the price of the iPhone considerably, there’s no getting around the fact that Chinese factories are unique insofar as they offer Apple the flexibility it needs along with the unrivaled ability to ramp up production aggressively or quickly scale production down as demand warrants.
“The entire supply chain is in China now,” a former Apple executive told the Times on the topic. “You need a thousand rubber gaskets? That’s the factory next door. You need a million screws? That factory is a block away. You need that screw made a little bit different? It will take three hours.”
Tim Cook even addressed Apple’s manufacturing partners in China during a 60 Minutes interview last year.
“China put an enormous focus on manufacturing,” Cook explained. “The U.S., over time, began to stop having as many vocational kind of skills. I mean, you can take every tool and die maker in the United States and probably put them in a room that we’re currently sitting in. In China, you would have to have multiple football fields.”