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CASE INCIDENT 1 Apple Goes Global It wasn't long ago that products from Apple, perhaps the believe the intrinsic characteristics of the labor force availmost recognizable name in electronics manufacturing able to them in China-which they identify as flexibility, around the world, were made entirely in America. This is diligence, and industrial skills-are superior to those of not the case anymore. Now, almost all of the approximately the U.S. labor force. Apple executives tell of shorter lead 70 million iPhones, 30 million iPads, and 59 million other times and faster manufacturing processes in China that are Apple products sold yearly are manufactured overseas. becoming the stuff of company legend. "The speed and This change represents more than 20.000 jobs directly lost flexibility is breathtaking," one executive said. "There's no by U.S. workers, not to mention more than 700,000 other American plant that can match that." Another said, "We jobs given to foreign companies in Asia, Europe, and else- shouldn't be criticized for using Chinese workers. The U.S. where. The loss is not temporary. As the late Steven P. Jobs, has stopped producing people with the skills we need." Apple's iconic co-founder, told President Obama, "Those Because Apple is one of the most imitated companies in jobs aren't coming back." the world, this perception of an overseas advantage might At first glance, the transfer of jobs from one workforce suggest that the U.S. workforce needs to be better led, betto another would seem to hinge on a difference in wages, ter trained, more effectively managed, and more motivated but Apple shows this is an oversimplification. In fact, some to be proactive and flexible. If U.S. (and western Europesay paying U.S. wages would add only $65 to cach iPhone's an) workers are less motivated and less adaptable, it's hard expense, while Apple's protits average hundreds of dollars to imagine that does not spell trouble for the future of per phone. Rather, and of more concern. Apple's leaders the American workforce. Perhaps, though, Apple's switch from " 100 percent Made in the U.S.A." to "10 percent company completely, but as one of the best cainosin wi Made in the U.S.A." represents the natural growth pat- global ingenuity. tern of a company going global. At this point, the iPhone is largely designed in the United States (where Apple has Questions 43,000 employees), parts are made in South Korea, Taiwan, 1-15. What are the pros and cons for local and overseas Singapore, Malaysia, Japan, Europe, and elsewhere; and labor forces of Apple's going global? What are products are assembled in China. The future of at least 247 the potential political implications for country suppliers worldwide depends on Apple's approximately relationships? \$90.1 billion in orders per quarter, And we can't forget that 1-16. As a U.S. corponation, does Apple and its manApple posted $16.1 billion in resenue from China in the agement have a moral obligation to provide jobs first quarter of 2015, up 70 percent from the first quarter of for U.S. employees first? If this is the case, then 2014, perhaps in part because its manufacturing in China does this put international employees at a distinct builds support for the brand there. dishdvantage? As maker of some of the most culting-edge, revered 1-17. Is it possible for U.S. managers to organize, motivate, produets in the elecuonics maketplace, perhaps Apple and ensure quality in their Chinese manuficturing serves not as a failure of one counuy to hold onto a facilities