Apple’s new CEO, Tim Cook, is having second thoughts about using Chinese companies to make components.
His outfit was dragged into stories about Chinese sweatshops and workers killing themselves as a result of its predecessor’s to keep margins on Apple gear high.
Now, according to Reuters, Cook said he would like to see more of the company’s products assembled at home than in China and contain more US components such as semiconductors.
Cook said that manufacturing in the United States was difficult because of declining tool-and-die manufacturing expertise. However he was “working on it”.
Final assembly in the US makes a lot of sense for a number of reasons. Firstly it prevents all those manufacturers using the ITC to stop the iPad being imported because as far as the US regulator is concerned it would be a home grown product.
Apple makes the A5 processor in a 1.6 million square-foot factory in Austin, Texas, owned by Korean electronics giant Samsung Electronics. The glass for the iPhone and iPad is made in a plant in Kentucky. These have to be shipped to China to be assembled and then shipped back as a final product.
The other thing is that Chinese labour is now becoming expensive as workers start to demand more than a bowl of rice and a roof over their head.
With US states falling over themselves to give Apple sweeteners to set up shop, it is probably more economically viable to use US labour after all. Besides in California they don’t need a security force, because the local police offter their time for free.