When President Obama sat down for dinner with Silicon Valley’s top executives in February 2011, he asked Steve Jobs what would it take to make iPhones in the U.S. According to reports, Jobs replied, “Those jobs aren’t coming back.” So, while it looks like Jobs was right, at least for now, about the iPhones, it might be that some jobs do come back to the U.S. as Apple is shifting its assembly of some of the new, ultra-thin iMacs to the U.S.
The news came up after a new 21.5-inch iMac owner reported to Fortune that instead of the usual marking “Designed by Apple in California. Assembled in China,” the iMac was marked “Designed by Apple in California. Assembled in the USA.” It’s not clear yet why the company decided to take this step and what it means for Apple. The only thing we know for sure right now, is that some jobs did come back to the U.S.
First, let’s be clear – the parts of the iMac are still manufactured in China. It’s only the assembly that takes place in the U.S. We don’t know yet what exactly is being done in the U.S., but given the FTC guidelines on using the claim “Assembled in the U.S.,” we can assume it is a substantial assembly and not just a “screwdriver” assembly.
Apple, as always, is very hush hush about this shift and refused to comment or provide information about it, leaving us only with guesses about why the company did it. Another interesting question is, does moving the assembly back to the U.S. actually makes these iMacs more sustainable?
Let’s start with the sustainability question. From an environmental point of view, will this change reduce the carbon footprint of the iMac? Looking at Apple’s life cycle assessment of the new iMac (and kudos to Apple for disclosing it), we can see that 52 percent of the carbon footprint comes from production, consumer use equals to 43 percent and the rest comes from transportation (2 percent) and recycling (3 percent).
I believe that most of the carbon footprint in the production phase is related to the materials used in the iMac, like aluminum and steel. The materials component will remain unchanged. The only part that can change is the energy use in the assembly facility. The assembly in the U.S. is conducted in Apple’s Elk Grove campus in the Sacramento area, so there’s a good chance that the footprint of the California-based facility will be smaller than the one of the Chinese-based facility. But again, it would probably be only a small and rather insignificant reduction.
When it comes to transportation the carbon footprint shouldn’t change much, if at all, since the components still come from China and the assembly facility is located next to Apple’s distribution center. Most iMacs are sold in the U.S. and consumer use and recycling won’t be affected, so the bottom line is that the carbon footprint of the American-assembled iMacs is probably only a little bit smaller.
What about the other sustainability dimensions? Bringing jobs back to America is great if you’re an American, but does it make any difference from a global perspective if iMacs are assembled in the U.S. or China? Well, from an ethical perspective it does, assuming that American workers are provided with better working conditions and are treated more fairly than Chinese workers.
Still, the mere truth is that neither the American-assembled iMac nor the Chinese-assembled iMac are sustainable. Both reflect a business model that is unsustainable at its core, and therefore the positive changes I mentioned from ethical and environmental perspective are just small steps in a very long journey.
Anyway, this probably wasn’t the reason Apple took this step in the first place, so what was it? Apple, I guess, did its cost-benefit analysis and found out that right now it makes more sense to shift some of the iMac assembly, and maybe later on all of it, to the U.S.
If you look at the reasons why Apple is manufacturing in China, you will find it is not necessarily about costs. As New York Times reporter Charles Duhigg explained to Ira Glass on This American Life the difference in labor costs between making the iPhone in China and the U.S. is somewhere between $10-$65 per piece. The main reason, according to Duhigg, is the flexibility within the Chinese supply chain that allows it to meet Apple’s requirements quickly and efficiently.
Apparently these factors are less critical when it comes to the assembly of iMacs, which represents only a small percentage of Apple’s sales. While Apple might not have too much to lose from this shift, it might have a lot to gain with growing political and public pressure on companies to bring back jobs to the U.S. That will probably become more of an issue for Apple with the re-election of President Obama.
Add to that Apple’s never-ending problems at Foxconn, as well as the approach that CEO Tim Cook has to this issue, and suddenly this shift seems more understandable. We’ll have to wait and see to what extent this change helps the company reshape its public image and block more unpleasant questions about why the most successful American company manufactures abroad.
Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and the New School, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.