“What would it take to make iphones in the Unites States?”, asks Barack Obama when he joined Silicon Valley’s top luminaries for dinner in California last February. Each of the guests were asked to come up with a question to ask Mr. President, but when Steve Jobs got his turn, he was interrupted by this question.
Few years back, Apple’s products were made in America. The scenario has changed quite a but since then. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple that were sold last year were manufactured overseas, mostly China.
Why can’t that work come home? Mr. Obama asked.
Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said, according to another dinner guest.
It is obvious that labor is cheaper abroad, but that’s not the only reason why those jobs aren’t coming back, Apple’s executives believe. The vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that “Made in the U.S.A.” is no longer a viable option for most Apple products. The reason why Mr. Obama, economists and other policy makers were intrigued to ask this question is that Apple alongwith its high-technology peers, are not nearly as avid in creating American jobs as other famous companies were during their heydays. According to New York Times,
Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apple’s contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple’s other products. But almost none of them work in the United States. Instead, they work for foreign companies in Asia, Europe and elsewhere, at factories that almost all electronics designers rely upon to build their wares.
“We sell iPhones in over a hundred countries,” a current Apple executive said. “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.”
When it comes to outsourcing, it is not just Apple or other electronics giants. Hundreds of industries, including accounting, legal services, banking, auto manufacturing and pharmaceuticals have been considering this option for their growth.
Original Source [The New York Times]