In 2014, shortly after Mr. Guthrie left his job as president of the George Washington University business school, Apple hired him to teach its managers and advise executives on China. He also did research, and his first project was the company’s supply chain. Guthrie, now 52, left Apple in 2019 and is a professor at Arizona State University’s Thunderbird School of Global Management.
When he started at Apple, Guthrie said, Apple executives knew they were too dependent on China and wanted to diversify. India and Vietnam are the leading contenders, but Mr. Guthrie concludes that neither is a viable alternative.
The Vietnamese government has cooperated, he said, but the country does not have enough workers. India has people, but its bureaucracy makes it complicated to build infrastructure and factories. In addition to those problems, most of the smaller suppliers that produce Apple’s screws, circuit boards, and other components are already concentrated in China.
Apple has still pushed hard into India and Vietnam in recent years, including building a smaller iPhone assembly plant in India, but CEO Tim Cook has publicly stated that the supply chain Theirs will remain concentrated in China.
For Mr. Guthrie, that stance makes Apple vulnerable, especially as China’s new leader is looking to use his influence over American companies in the country. In 2014, China’s so-called dispatched labor laws went into effect, limiting the share of temporary workers in a company’s workforce to 10%. Since Day 1, Apple and its suppliers have violated.
At the Foxconn plant in Zhengzhou, China, the world’s largest iPhone factory, temporary workers make up half of the workforce, as reported by China Labor, an advocacy group. Following the report, Apple confirmed that the factory had broken the law.