Apple CEO Tim Cook has recently underscored major obstacles in moving iPhone production to the U.S. During discussions about U.S. manufacturing, he pointed out that a lack of tooling engineers hinders this ambition, reflecting broader concerns about the country’s workforce capabilities compared to China.
The opportunity, challenges, and intricacies behind U.S. manufacturing have increasingly inspired the interests of those in the public policy sphere as well as manufacturing leaders themselves. No wonder the Trump administration viewed domestic iPhone production as an especially alluring form of job creation. They understood the very great advantage, particularly as the task of putting together these machines needs a gigantic manpower. Recent developments in Washington have made it uncertain whether those plans are still realistic.
The Foxconn Plant’s Shortcomings
For example, in Wisconsin, the Foxconn plant was sold to citizens as an Apple factory that would provide around 13,000 jobs. It has so far only succeeded in bringing in 1,454 jobs so far. In August, Commerce Secretary Howard Lutnick declared the project a failure. He underscored the many hurdles that U.S. manufacturing faces in reaching aggressive production targets.
California’s minimum wage is currently $16.50 an hour, which contributes to much higher labor costs than overseas manufacturing hubs. These costs fuel the general skepticism about the feasibility of a possible “Made in the USA” iPhone. Experts have raised serious concerns about the tech giant’s odds of bringing its most popular device home. These challenges risk causing the company to incur enormous debt.
Apple has reaped an enormous windfall from tariff exemptions on critical devices like the iPhone. These same exemptions have made it easier for the Commission to operate in foreign markets. The company’s tactical approach has included multiple pivots in its production plan at the Foxconn plant. Its latest turn would be to produce face masks in response to the pandemic—a dramatic departure from its core business of smartphone assembly.
Manufacturing Innovations and Efforts to Keep Production in the U.S.
Yet Apple is resurgent after its own self-inflicted wounds. The company is looking into producing some of their lower-volume products or accessories in the U.S. to curry favor with the current administration. This approach is a reflection of a pledge delivered during late 2019. At the time, Apple had just announced that it would be manufacturing its $3,000-plus Mac Pro at a Flex factory in San Antonio, Texas.
The difficulties are further exasperated by recent events in Apple’s supply chain. At Taiwan Semiconductor Manufacturing Company (TSMC)’s new factory in Arizona—barely operational yet—hibernates a reward of sorts, for the successful, pernicious establishment of this factory. TSMC’s progress represents a positive step for domestic chip manufacturing and could influence Apple’s future production strategies.
Apple’s news is the latest indication that companies are serious about investing in the U.S. They intend to invest $500 billion globally from semiconductors to manufacturing AI servers in Houston, Texas. Yet Cook’s remarks underscore one of the biggest hurdles. Changing the iPhone assembly process to a U.S.-based operation would require massive leaps in labor and engineering.
Industry expert Jeff Fieldhack voiced skepticism regarding the timeline for shifting manufacturing back to the U.S., stating:
“It’s just not a reality that on the time frame of imposing tariffs that this is going to shift manufacturing here. It’s pie-in-the-sky.” – Jeff Fieldhack
Howard Lutnick further emphasized the scale of labor required for iPhone assembly, suggesting that:
“The army of millions and millions of human beings screwing in little screws to make iPhones, that kind of thing is going to come to America.” – Howard Lutnick
Author’s Opinion
Apple’s push to move iPhone production to the U.S. highlights a critical challenge in balancing cost, labor, and logistical feasibility. Despite the allure of domestic job creation and the government’s push for American manufacturing, the sheer scale and complexity of iPhone assembly make it increasingly unlikely that Apple will achieve this goal in the near term. The labor costs, lack of specialized engineers, and the economic pressures involved in scaling operations may force Apple to re-evaluate its strategy or explore hybrid solutions.
Featured image credit: FMT
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