A story of how a special screw in 2013’s iMac Pro has made it through to The New York Times and is proving to be a case study of why Apple, despite the urging of the likes of President Donald Trump, won’t make an iPhone in the United States.
That iMac Pro model was highly publicized for the fact that it would be assembled in the United States. There were some domestic parts suppliers that would also be shipping to production lines in Texas, but the majority remained outside of the country, specifically in China.
While the design was still in draft, engineers were rushing orders for screws. The one shop they ended up calling was Caldwell Manufacturing, located just about half an hour outside Austin. Over the course of 22 deliveries, the company was only able to deliver 28,000 screws — far less than the number Apple and its assembler wanted.
Sources say a combination of factors came into play for this situation, but they also lend themselves as stumbling blocks for domestic iPhone production:
- Caldwell had replaced its volume presses for more customizable presses in 2002. It turned into a boutique manufaturer as mass production jobs moved out of the country.
- There was not enough staff for round-the-clock printing. Labor costs may have been an inhibitor.
- One “overwhelmed” worker was in charge of managing inventory, leading to delays.
- In China, the minimum wage in Zhengzhou, where one of Apple’s biggest factories is, is $2.10 per hour. Apple pays a minimum of $3.15 per hour — much lower than the US federal minimum of $7.25.
- China has a massive cache of expertise and resources in manufacturing.
While Apple has new offices planned for Austin and is maintaining its Mac assembly plant in the area, no new manufacturing jobs are expected there anytime soon.
Apple stated today that it spent more than $60 billion on 9,000 American contractors in 2018. That investment has kept 450,000 jobs alive. But given that President Trump isn’t afraid to levy tariffs on Chinese imports — including assembled iPhones — consumers may have to expect premiums on top of the so-called “Apple Tax” when they next upgrade their phones.