In 2011, over an intimate dinner in Silicon Valley, President Barack Obama directly asked Steve Jobs: "What would it take to make iPhones in the United States?" Steve Jobs, renowned for his straight talk and vision, had a blunt response: "Those jobs aren't coming back." His response was not only a statement about Apple's business decision, but something deeper about the international manufacturing framework and the weaknesses of the U.S. industrial system.
Scale is the key to the issue. China offers a level of manufacturing capacity and flexibility that the U.S. cannot match yet. When Apple needed a last-minute change to the design of the iPhone, Chinese factories would adapt in minutes. A public example was when Apple changed the shape of the iPhone screen at the last minute. In a few hours, Chinese factories had implemented the switch. Thousands of workers were roused in the middle of the night, given a biscuit and a cup of tea, and began cranking out the new screen. That type of rapid mobilization simply isn't possible in America.
Another crucial factor Jobs emphasized was the labor force. While the U.S. has a good education system and an excellent talent pool of professionals, it lacks the massive pool of mid-level skilled labor required to facilitate mass electronics production. China trains hundreds of thousands of workers every year in technical specialties to do this kind of work. The availability of these workers gives companies such as Apple the capacity to rapidly fill and scale up operations without sacrificing quality.
And then there's the supply chain problem. The majority of the parts that go into an iPhone are manufactured in Asia. From screens to chips to miniature screws, the supply chain behind iPhone production is centered around Chinese and East Asian factories. To produce iPhones in the U.S. would mean either duplicating this entire supply chain domestically, which would take years and huge investment, or importing all the parts from Asia—increasing costs and reducing production speed.
Cost is a consideration, as well. American workers are compensated more, and regulations are more complex. Apple could, theoretically, manufacture phones in the United States, but it would increase the cost of the iPhone by hundreds of dollars. Consumers may not be as willing to pay more, and Apple's profit margin may be affected. Jobs understood that in the competitive international market, efficiency and cost control were the means to stay ahead.
Speed was also a priority of jobs. Chinese factories can be built or expanded in weeks. Availability of government assistance, fewer red tape, and an available work force that can be quickly mobilized are China's major advantage. Conversely, a new facility in the U.S. could take months or years, with zoning laws, environmental assessments, and labor negotiations holding it up.
Steve Jobs' conversation with Obama wasn't about Apple. It was about the emerging world economy. Jobs wasn't asserting that America can't make iPhones. He was stating that in the system currently—without mass labor training, infrastructure, supply chain, and policy reforms—it just isn't going to be profitable.
In fact, iPhones are not manufactured in the USA not due to a lack of talent among American labor, but because the global infrastructure that supports iPhone production goes very deep in Asia. Jobs' remark addressed a broader reality of globalization: the world's most mythical devices are a product of a global alliance, built where infrastructure and labor pools already coalesce.
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In 2011, over an intimate dinner in Silicon Valley, President Barack Obama directly asked Steve Jobs: "What would it take to make iPhones in the United States?" Steve Jobs, renowned for his straight talk and vision, had a blunt response: "Those jobs aren't coming back." His response was not only a statement about Apple's business decision, but something deeper about the international manufacturing framework and the weaknesses of the U.S. industrial system.
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