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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: 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.

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  • (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!