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posted by janrinok on Tuesday January 29 2019, @11:45AM   Printer-friendly
from the screwed! dept.

Submitted via IRC for SoyCow1984

A Tiny Screw Shows Why iPhones Won't Be 'Assembled in U.S.A.'

In China, you will also find one of Apple's most important markets, and over the last month the risks that come with that dependence have become apparent. On Jan. 2, Apple said it would miss earnings expectations for the first time in 16 years, mostly because of slowing iPhone sales in China. On Tuesday, the company is expected to reveal more details about its financial results for the most recent quarter and its forecast for the coming year.

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 company could face more financial pressure if the Trump administration places tariffs on phones made in China — something the president has threatened to do.


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  • (Score: 3, Interesting) by looorg on Tuesday January 29 2019, @12:09PM (14 children)

    by looorg (578) on Tuesday January 29 2019, @12:09PM (#793508)

    Doesn't it seem a bit odd that they can't find a single shop or factory in America that can mass-produce something as simple as a screw?

    At the same time it's quite obvious that the reason Apple, and everyone else, makes things in China it's cause of the wages. Every other excuse is really just bullshit. Still what is the cost breakdown of an Iphone? How many hours does it really take to assemble. I'm not quite sure which is the latest iphone model etc, I went and looked online here and looked for the most expensive iphone I could find and I just assume that is the latest and greatest they got (Apple iPhone XS Max?). It retails here for about $1500. So that is quite a few workhours if you pay your factory slaves in china $2.1 an hour. Sure the engineer in America etc wants a bit more per hour then that but still. How much of the iphone cost is just "branding" and stupidity-tax?

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  • (Score: 3, Interesting) by MostCynical on Tuesday January 29 2019, @12:24PM

    by MostCynical (2589) on Tuesday January 29 2019, @12:24PM (#793512) Journal

    Apple probably did the supply model based on Chinese experience - 1,000 per eight hour day, makes 3,000 per day, 21,000 per week.

    Buuut gorram American worker doesn't work 24 x 7.

    Also "short notice" meaning "starting next week, 125 screws an hour, and keep going until we say stop"

    --
    "I guess once you start doubting, there's no end to it." -Batou, Ghost in the Shell: Stand Alone Complex
  • (Score: 1, Insightful) by Anonymous Coward on Tuesday January 29 2019, @12:32PM (3 children)

    by Anonymous Coward on Tuesday January 29 2019, @12:32PM (#793515)

    Wages and every other kind of regulation, e.g. environmental. In China you can do pretty much anything, especially if you pay a few peanuts to the right guy.

    While many products are relatively cheap currently in the west the actual cost when external costs are included is absolutely crushing.

    • (Score: 0) by Anonymous Coward on Tuesday January 29 2019, @02:05PM (2 children)

      by Anonymous Coward on Tuesday January 29 2019, @02:05PM (#793540)

      >the actual cost when external costs are included is absolutely crushing
      What do you mean by that? Like t-shirt costing 2 eurodollars WITH shipping and being sold for 40?

      • (Score: 0) by Anonymous Coward on Tuesday January 29 2019, @07:36PM

        by Anonymous Coward on Tuesday January 29 2019, @07:36PM (#793695)

        I mean I can buy stuff for 5 bucks but the price includes slave labor and destruction of environment.

      • (Score: 2) by sjames on Wednesday January 30 2019, @03:52AM

        by sjames (2882) on Wednesday January 30 2019, @03:52AM (#793896) Journal

        External costs (externalities) are costs directly caused by your action that other people get stuck paying.

        For example, you could put a scrubber on your smokestack for a total cost of $250,000 but you didn't. As a result, the surrounding community sees $1,000,000/year in excess medical costs for pollution related illness.

        If those bills were coming to you (if the externalities were internalized), you'd spend that $250,000 on the scrubber in a heartbeat, but they aren't, so you pollute the air.

  • (Score: 5, Interesting) by VLM on Tuesday January 29 2019, @12:54PM

    by VLM (445) Subscriber Badge on Tuesday January 29 2019, @12:54PM (#793521)

    Its actually worse in that the kilobuck apple product made in China has identical to inferior hardware specs to a $500 android phone probably not made in China.

    Weirdly LG makes washing machines in Tennessee and phones in Korea, with screws, and it only seems to be Apple corp that fetishizes manufacture in China exclusively by Foxconn corp. Apple is basically the marketing arm of foxconn because Apple is not really an independent company.

  • (Score: 5, Insightful) by rigrig on Tuesday January 29 2019, @01:34PM (5 children)

    by rigrig (5129) Subscriber Badge <soylentnews@tubul.net> on Tuesday January 29 2019, @01:34PM (#793529) Homepage

    Doesn't it seem a bit odd that they can't find a single shop or factory in America that can mass-produce something as simple as a screw?

    No, because the Chinese can mass-produce screws cheaper, so every US company that stuck to mass-producing simple screws has gone out of business.

    That is how they found Stephen Melo, the owner and president of Caldwell Manufacturing in Lockhart. Employees of Flextronics, the company hired by Apple to build the computers, in turn hired Caldwell to make 28,000 screws — though they would have liked more.
    When Mr. Melo bought Caldwell in 2002, it was capable of the high-volume production Apple needed. But demand for that had dried up as manufacturing moved to China. He said he had replaced the old stamping presses that could mass-produce screws with machines designed for more precise, specialized jobs.

    --
    No one remembers the singer.
    • (Score: 2) by looorg on Tuesday January 29 2019, @01:51PM (4 children)

      by looorg (578) on Tuesday January 29 2019, @01:51PM (#793535)

      Yes that was included in the article. The question really was that they couldn't find someone in the entire USA that has a machine that can do screws, nuts and bolts anymore? Not a single one on an entire continent. Or if the order was just large enough could get a couple of machines, program or set them up and then let them go to work. It's not like screws are made manually where some poor worker is sitting there with a metal rod and a file and doing them by hand one by one. That sounds like epic bullshit really. Like it's somehow only an option to do it in China anymore.
      Flextronics is massive, one of the largest in the world, and have assembly-plants etc all across the globe and they can't find a single factory that makes screws except in China? Sure it might be volume and price but still it sounds like bullshit and excuses all around from Apple.

      • (Score: 4, Interesting) by AthanasiusKircher on Tuesday January 29 2019, @03:40PM (3 children)

        by AthanasiusKircher (5291) on Tuesday January 29 2019, @03:40PM (#793579) Journal

        The question really was that they couldn't find someone in the entire USA that has a machine that can do screws, nuts and bolts anymore? Not a single one on an entire continent.

        Agreed. It sounds like a complete BS tale. And I say this as someone with decent second-hand knowledge of the machine-shop industry in the U.S.

        You see, my father was a machinist who retired a few years back. He worked for a company that produced very specific and very common items that most households have (I'm not going into further detail), and they had only one major U.S. competitor. My father's company did well in competition partly because they had a group of machinists, engineers, and mechanics who worked well together and created custom machines from scratch that could do things at high speed that competitors couldn't. For the last several years he worked, he was the head of the machine shop.

        Anyhow, my dad witnessed the gradual destruction of that shop as they laid off more and more machinists over the years, eventually (after my dad retired) trimming down a shop that had 30-ish full-time machinists 35 years ago to just 2 machinists. Everything else was farmed out. The two machinists were kept on mostly for emergencies: where a major machine broke down and they needed a custom part within a few hours or else they'd lose a lot of production.

        So I've heard lots of stories from him about the changes over the years, and it's very easy for me to believe that there aren't a lot of machine shops left in the U.S. who could handle large custom orders. But it's also very difficult to believe they couldn't find a single one to do it.

        Not least because any reasonable machine shop would realize an Apple contract could potentially be gold. There are large-scale production plants for screws and such in the U.S., but even a smaller shop might be tempted to invest in a high-volume machine in exchange for an Apple contract.

        I mean, how much did this small machining company charge Apple for 28,000 screws? They apparently occupied a significant portion of the shop's production for days. And TFA says the owner of the company even hand-delivered them himself and "often made the one-hour drive himself in his Lexus sedan." Huh. A machine-shop owner who makes house calls in his Lexus? That's gotta be pricey.

        If Apple really wanted a significantly larger volume than 28,000 (as the owner in TFA claims), at some point it become reasonable (especially given the price I'm sure a company would have charged for a rush custom hand-delivered order) for this small company to even invest in a higher-volume machine in order to get a long-term Apple contract. Or, honestly, at my dad's company they would have just built one from scratch if they needed to back in the day, though this company doesn't sound like the type with the resources to do that.

        I could believe that if Apple wanted these screws "tomorrow," maybe it could be difficult to book time at a larger shop and get them made in short order. But it strains credibility to think that no U.S. machine shop (large or small) would be willing to invest the time and/or equipment to make this happen for a large Apple order (that would likely lead to future large Apple orders).

        Instead, TFA spins a tale about some poor little shop owner cranking out a few screws per hour as fast as he can and driving an hour in his Lexus to hand-deliver them.

        This isn't just a fairy tale. It's Apple propaganda designed to convince the Apple fans that paying a premium for their hardware is justified. (I can just picture the young couple in Brooklyn reading this story in the morning paper: "Ooh, honey -- look what lengths Apple goes to for quality! The screws in my computer were hand-delivered by a guy in a Lexus! Too bad they couldn't find a single machine in the entire continent that could produce these in volume... oh well, I guess that's why we need to accept the iPhone worker suicides in China... it's just the only way to get Apple products!") The NY Times should be ashamed for running it without questioning it further.

        • (Score: 0) by Anonymous Coward on Tuesday January 29 2019, @08:21PM

          by Anonymous Coward on Tuesday January 29 2019, @08:21PM (#793716)

          I could believe that if Apple wanted these screws "tomorrow," maybe it could be difficult to book time at a larger shop and get them made in short order. But it strains credibility to think that no U.S. machine shop (large or small) would be willing to invest the time and/or equipment to make this happen for a large Apple order (that would likely lead to future large Apple orders).

          Instead, TFA spins a tale about some poor little shop owner cranking out a few screws per hour as fast as he can and driving an hour in his Lexus to hand-deliver them.

          This may not be the case. Who knows what other requirements are involved.

          Stealing ideas from The Other Site, apparently working with Apple is a bear. They'll demand 10,000 of an item upfront during the selection process just to be considered in the competition, and of course they'll pay for none of it. I'm not sure if that's true or not, but I could imagine there being onerous terms that a US manufacturer isn't desperate enough to accept. ("We'll order between 200 and 2,000 screws a day based on market demand, we expect a 1-day turn-around-time for scaling up or scaling down production, we only pay for the screws we order, if we have a defect rate higher that 0.00001% we will claw-back half the contract fee, etc.")

          This isn't just a fairy tale. It's Apple propaganda designed to convince the Apple fans that paying a premium for their hardware is justified.

          Agreed. There has to be more to the story.

          If nothing else, with the cash reserves Apple has, they could literally build the factory themselves from scratch (including hiring all the staff to run it). Clearly that would be uneconomical, but it does demonstrate that the fact Apple didn't make the iPhone in the US was a strategic business decision, not one due to literal impossibility.

          I don't know who is trying to spin what, but this trying to be some whitewashing of Apple does seem high on the list.

        • (Score: 2) by JoeMerchant on Tuesday January 29 2019, @09:35PM (1 child)

          by JoeMerchant (3937) on Tuesday January 29 2019, @09:35PM (#793762)

          my father was a machinist who retired

          These aren't your father's screws. Not only is it required to make them to engineering tolerance, it is also required to make them to a cost tolerance, and for screws of that size that requires machines that aren't found in your father's machine shop.

          --
          🌻🌻 [google.com]
          • (Score: 1, Interesting) by Anonymous Coward on Wednesday January 30 2019, @12:01AM

            by Anonymous Coward on Wednesday January 30 2019, @12:01AM (#793839)

            Nah, you could do 1000 a day of these on a CNC swiss lathe for $0.25 a piece. The tooling to make them properly with a press would be around $45,000 up front with minimal marginal cost for the screws. The story here is that Apple would sooner delay time to market than pay 20 cents extra at US market rate for the quantity of screws used in prototyping. Apple screwed themselves!

  • (Score: 5, Insightful) by Immerman on Tuesday January 29 2019, @04:53PM (1 child)

    by Immerman (3985) on Tuesday January 29 2019, @04:53PM (#793614)

    > it's quite obvious that the reason Apple, and everyone else, makes things in China it's cause of the wages

    Not true. It's also because of the incredibly lax pollution regulations. Every little bit of cost savings helps line the corporate coffers and executive bonuses..

    • (Score: 1, Interesting) by Anonymous Coward on Tuesday January 29 2019, @11:57PM

      by Anonymous Coward on Tuesday January 29 2019, @11:57PM (#793836)

      This...

      We have outsourced our pollution. China is just starting to clue into that.

      Think about it. Lets say a screw cost an extra 1 cent to make here. Lets say you use 10k of the things. Hell, that is a rounding error in some productions. But 2 extra people to run the OSHA and pollution management. Plus the 5 inspections a year. Plus getting rid of any ways is as easy as calling the right guy and you have China in a nutshell.