Post Trump’s calls for tech behemoths to setup manufacturing facilities in the U.S., Apple has been engaged in mulling over porting its production line from China to the U.S. Though Foxconn has talked about its preliminary discussions for investments in the U.S., other key suppliers are resistant towards the decision. Reportedly, Chinese supply managers are hesitant due to labor issues and overall operational costs in the States.
Lens Technology, supplier for iPhone’s cover glass mentioned labor being the primary reason for keeping away from the shift. The labor presently hired by the company includes 70,000 employees out of which ninety percent are below 45 years while labor in U.S. is over 45 years of age. Adding to that, labor in U.S. will not comply with varying working hours and methods and demand higher wages. Though land and power costs are lower in the U.S. compared to China, most of the suppliers stick to not switching.
Furthermore, Shenzhen, another leading supplier for Apple in China stated that establishment of production lines in U.S. would lead to inflexibility. This is due to the fact that Apple’s complete supply chain lays in China including covering panels, lens modules, touch panels, flexible PCBs, batteries along side assembling which makes the suppliers respond and adapt swiftly to the problems. The company explained the same as under:
For instance, molding metal components to order takes 10 days in China, but up to a month in the United States due to the lack of a supply cluster.
Seeing the responses from suppliers and previous statements from CEO Tim Cook, it is possible that Apple may not shift its production lines despite increased pressure and tax incentives in the U.S. Tim Cook has previously also stated,
China put an enormous focus on manufacturing. The U.S., over time, began to stop having as many vocational kind of skills. I mean, you can take every tool and die maker in the United States and probably put them in a room that we’re currently sitting in. In China, you would have to have multiple football fields.
