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A Tiny Screw Shows Why iPhones Won't Be 'Assembled in USA' (nytimes.com)

An anonymous reader shares a report: 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. [Editor's note: the link may be paywalled; alternative source.]

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.

13 of 499 comments (clear)

  1. Re by pele · · Score: 5, Funny

    The article never showed the actual screw, I was hoping I'd see a screw...

  2. Impossible! by Pyramid · · Score: 5, Insightful

    If only it was possible to engineer a product using readily available parts instead of custom items specifically designed to stifle repairs and create vendor lock-in. ...if only it was possible...

    --
    ~Any apparent grammatical or typographic errors are caused by defects in your display device.
    1. Re:Impossible! by omnichad · · Score: 5, Insightful

      Let's not stop there on the excuse train. They could still import the screws and manufacture in the US.

  3. Re:$3,000 laptop by SirSlud · · Score: 5, Insightful

    The Mac Pro was not a laptop.

    --
    "Old man yells at systemd"
  4. I've made "not Apples" here. by pecosdave · · Score: 5, Insightful

    Apples can be made here just fine. If they give up on their image mandates and want to just infiltrate the market they're perfectly capable. People who recognize my user name recognize me as being highly critical of Apple. What few know is that my first electronics industry job back in 1996 was related to Apple. I manufactured Mac Clones. Legal, lawful ones under contract from Motorola. They weren't far different from normal PCs of the era, they were little beige boxes with standard PC components, they had an electronically ejected floppy drive instead of the standard mechanical push button of the era, and everything was SCSI instead of IDE, but I must say there was an appeal to using off the shelf components. I lost my job when Steve Jobs got his job back, killing clones was one of the first things he did.

    If Apple was having trouble getting a particular screw in the computer world then it wasn't a normal screw.

    Indeed their reliance on tri-wings and other "don't you dare fix this yourself!" products instead of normal, mass produced, easy to get screws is half their problem.

    What this article leaves out is the United States used to be like China is now when it comes to manufacturing. Our politicians sold us out. We've been financially punished through specific taxes and targeted labor practices from that are designed to keep us from succeeding in the manufacturing world. Most of this was done in the George H.W. Bush era, but it wasn't exclusive to him. Every president between Reagan and Trump, and I'm not so sure about Reagan in his second term, has sold the United States to foreign interest. The reason we aren't setup to do what Apple is bitching we can't do was government sabotage of our own industry.

    #1 Use normal fucking screws
    #2 Stop allowing our politicians to sell us out - flush the toilet occasionally and replace the contents up on the hill
    #3 Educate yourself about what's going on

    --
    The preceding post was not a Slashvertisement.
  5. Supply chains are difficult by sjbe · · Score: 5, Informative

    Soooo if you don't have enough screws produced locally, you just order more from China... exactly what Apple did.

    When you have to do that often then it makes more sense to just assemble the product in China rather than blowing up your supply chain and incurring huge freight and logistics costs and hassles.

    That kind of basic part seems like it should be easy enough to predict need of ahead of time, and cheap enough that pre-ordering a rough amount of material you might need would not cost much.

    It's just an example of the sorts of difficulties that happen when you try to manufacture something physically far away from the bulk the supply chain. It's not just one component for one product - the screw is just an understandable example of the bigger problem. There are hundreds to thousands of components in the bill of materials for a typical computer and new products are being made all the time. These components are very often not made in the US because they have a high labor content so US firms aren't cost competitive on those parts. My day job is general manager of a small electronics assembly company. I deal with this every day. I don't think you even begin appreciate the problems with ordering stuff from halfway around the world for manufacturing.

    It seems like lessons learned will mean that Apple will have been more careful about what they can produce locally vs. what they still need to order from China in order to assemble computers in the U.S. I'm pretty sure that is still a big goal for them.

    Ordering from China isn't nearly as easy as you make it sound. I do this for a living. First off you immediately incur a 6-14 weeks of additional lead time (no they aren't going to ship it by airplane except in emergency - that costs a fortune) because it takes that long to make the product and send it on a boat across the ocean. So you end up stocking a lot of unnecessary inventory to guard against supply chain disruptions. Second, you have to have people working closely with your supplier in the foreign country or else you get serious quality and delivery problems. This adds a lot of cost and hassle. Yes there are plenty of Chinese suppliers who would think nothing of screwing even mighty Apple and Apple knows this. Third, you are grossly underestimating the advantage of having your engineers and supply chain people close to the suppliers. Problems happen and fixing them from half a world away is never easy. Fourth, when you cannot get components locally you incur a lot of currency risk. Fifth, a big part of the reason China produces so much of the world's electronics is because nearly the entire supply chain is nearby. This reduces costs tremendously.

    I could keep going. If it were economically practical to assemble electronics in the US (even ignoring the labor price disparity), companies would be doing it. US companies would love to be able to buy their stuff locally but it's just not economic. I've bid on jobs where the target sale price was less than my cost of materials because the supply chain in China for electronics is that advantageous. Getting the supply chain back to this side of the pond will take decades to happen.

  6. The Expected Result by fuzznutz · · Score: 5, Insightful

    This is what happens when you ship all your manufacturing overseas for 40 years and suddenly expect manufacturing to ramp up overnight after 40 years of neglect.

    1. Re:The Expected Result by Moof123 · · Score: 5, Interesting

      +1.
      The best and brightest would have to be completely foolish to go into manufacturing in the USA today. Similarly since most remaining manufacturing left behind is of niche nature, don't expect that the supply chain will all be here waiting for your order to show up.

      Apple in particular is a VERY demanding customer, and will pull shit like expecting tens of thousands of sample chips built to their oddball specification, for free, just to be considered for an eventual slot in their designs. Their vendors have to go WAAAAY out on a limb by pre-purchasing materials and equipment on the hope that they win. Fail to compete? Bankruptcy. Fail to win? Bankruptcy.

      One of the more obvious ones was the sapphire manufacturer that tooled up to be a phone glass supplier, and was driven out of business when they only got a fraction of the expected business. Many more cases of critically wounded companies abound without the same headlines.

      So I have no sympathy for Apple in particular when they don't have manufacturers lining up to produce some artisinal screw on demand.

    2. Re:The Expected Result by Anubis+IV · · Score: 5, Interesting

      One of the more obvious ones was the sapphire manufacturer that tooled up to be a phone glass supplier, and was driven out of business when they only got a fraction of the expected business.

      While I don't disagree with your overarching point, the way you describe it is not what happened. That sapphire manufacturer bankrupted itself by overpromising and underdelivering on a contract that they bet the company on. Simple as that. Apple not only upheld its end of the agreement with that manufacturer, it went above and beyond what was contractually required. It was only after months of missed deadlines and delays that Apple finally refused to fund the failed initiative any further, which ended up being a lose-lose for everyone involved, since the manufacturer went bankrupt and Apple only got back a small fraction of what they put in.

      More or less, Apple wanted sapphires that could be used for iPhone displays, presumably for the following year's iPhone. They went to the manufacturer and offered to front the manufacturer a large sum of money (for the capital expense involved with buying furnaces and other equipment) if the manufacturer agreed to ramp up production according to a rather aggressive timetable, with additional funding coming in stages as the manufacturer hit various milestones. Pretty standard stuff. As a nice bonus, there was the promise of a massive purchase order if the manufacturer succeeded in fully ramping up.

      After the manufacturer failed to produce just one sapphire boule to spec by the original deadline, Apple could have pulled out, but they didn't. Instead, the timetable was renegotiated and Apple agreed to fund the next stage of development. The manufacturer eventually produced a boule to spec, but then they couldn't hit the yield levels they had promised with the revised timetable. Once again, Apple could have pulled out, but they didn't. They negotiated a revised-revised timetable and funded the next stage of development, though there was apparently a rather stern warning this time (the manufacturer is quoted in bankruptcy court proceedings as claiming that an Apple exec told them it was "time to put on your big boy pants"). After the manufacturer failed to meet yield milestones according to the revised-revised timetable, Apple refused to fund it any further. There was no hope that production could ramp up in time for their uses, so they put the final nail in the coffin.

      At that point, the manufacturer was sunk. They had bet the company on receiving the purchase order so that they could repay the money that Apple had fronted them. Without the purchase order, they had no hope of repaying Apple, so the company went bankrupt and Apple ended up being the owner of a large building (which they turned into a data center) and a lot of sapphire furnaces that they didn't have a clue how to use. Again, it was a lose-lose for everyone involved, despite Apple going above and beyond what they had originally agreed to do. If the original timetable was too aggressive, the manufacturer could have simply said "no" and the whole situation could have been avoided, but instead they bet the company on something that they couldn't deliver.

      While Apple is a very demanding customer, and they do indeed make insane demands, the only ones obligated to accede to insane demands are the ones who agreed to fulfill those insane demands. No one is forcing companies to get into bed with Apple, and if yours is the only one in the world with the know-how to do what's being asked, you shouldn't agree to terms that you can't keep, and you certainly shouldn't bet the company on it. That's just bad business.

  7. Re: no one in the usa will work for $2.15/hr 60-80 by Thud457 · · Score: 5, Funny

    For want of a screw the computer was lost.
    For want of a computer the contract was lost.
    For want of a contract the worker was lost.
    For want of a worker the taxes was lost.
    For want of the taxes the infrastructure was lost.
    For want of the infrastructure the country was lost.
    And all for the want of a miniature screw.

    --

    the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff

  8. Re:no one in the usa will work for $2.15/hr 60-80 by ElizabethGreene · · Score: 5, Interesting

    This is correct. Americans commonly have a mental picture of illiterate workers toiling on dirt floors making "cheap Chinese goods". That is not modern Chinese manufacturing and the preconception is one of our big blind spots.

    Here's an example.

    https://www.youtube.com/watch?...

    This company makes beautiful multi-color silk-screened multi-layer through-hole plated PCBs for cheaper than I can buy bare copper plate board to etch them myself.

    When I want to go to production I can have the boards shipped directly to an assembler there and I get finished machine assembled, soldered, and tested boards for less than the cost of shipping everything here and assembling it myself.

  9. Re:America Did Not Outsource Manufacturing by caseih · · Score: 5, Insightful

    Except that the American manufacturing sector is doing just fine, better than it ever was. See https://www.forbes.com/sites/t... . But the nature of manufacturing has changed over the years and involves fewer jobs before. And the things that are manufactured tend to not be consumer goods but big ticket items. For example agricultural equipment is still made in the US and exported all over the world. China imports this equipment. There are cottage industries in the US making all sorts of goods (with a lot of Chinese components). All told, American industry is quite healthy despite what some folk say loudly.

    As was said earlier, labor is not really a part of the equation when it comes to overseas outsourcing. It's the supply chain that draws companies to China. For example this company making pinball machines in China: https://www.youtube.com/watch?...

    Attempts to start a trade war with china do nothing to help American industry. In fact it hurts it by cutting off the supply chain we need to make cool things here at home.

  10. Re: no one in the usa will work for $2.15/hr 60-80 by fat+man's+underwear · · Score: 5, Funny

    "C&C"

    Oh like a music factory?