In 2014, shortly after Mr. Guthrie left his position as dean of George Washington University’s business school, Apple hired him to teach its managers and advise executives about China. He also did research and his first project was the company’s supply chain. Mr. 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, executives knew they were relying too much on China to diversify. India and Vietnam were the top candidates, but Mr. Guthrie concluded that neither was a viable substitute.
Vietnam’s government is cooperative, but the country just doesn’t have enough workers, he said. India had the people, but its bureaucracy made it complicated to build infrastructure and factories. Aside from these issues, most of the smaller suppliers that made Apple’s screws, boards, and other components were already concentrated in China.
Apple has still made its way into India and Vietnam in recent years, including building a smaller iPhone assembly plant in India, but Tim Cook, the company’s chairman, has publicly said its supply chain will remain concentrated in China.
For Mr. Guthrie, this stance made Apple vulnerable, especially as China’s new leader sought ways to leverage its influence on American companies in the country. In 2014, the so-called mail order labor law came into force in China, which limits the proportion of temporary workers in a company’s workforce to 10 percent. From Day 1 onwards, Apple and its suppliers broke through.
At a Foxconn plant in Zhengzhou, China, the largest iPhone factory in the world, contract workers made up half the workforce, according to a report by the China Labor Watch advocacy group. Following the report, Apple confirmed that the factory had broken the law.