Some new iMacs are ‘Assembled in USA’

Well, this is interesting. In its teardown of the freshly released 2012 Apple iMac, iFixit found an unexpected detail: the words “Assembled in USA” etched on the back.

The folks at AppleInsider did a little digging, and they found that the Federal Trade Commission establishes pretty clear guidelines for the “Assembled in USA” label. Turns out paying an American worker just to slap in a hard drive and RAM doesn’t cut it; the machine actually has to undergo a “substantial transformation” in the U.S. to qualify. Here’s the skinny from the the FTC’s Bureau of Consumer Protection:

A product that includes foreign components may be called “Assembled in USA” without qualification when its principal assembly takes place in the U.S. and the assembly is substantial. For the “assembly” claim to be valid, the product’s last “substantial transformation” also should have occurred in the U.S. That’s why a “screwdriver” assembly in the U.S. of foreign components into a final product at the end of the manufacturing process doesn’t usually qualify for the “Assembled in USA” claim.

As AppleInsider points out, this might not mean Apple is transitioning manufacturing to the States. CEO Tim Cook reportedly mentioned supply constraints during Apple’s quarterly earnings call in October, so perhaps Apple is merely supplementing Chinese supply with domestically built systems. Then again, something else might be at play here.

Apple has certainly been at the center of repeated controversy over working conditions in China. Most of that controversy has involved Foxconn, which makes Apple’s iPhones and iPads (among other devices) in its Chinese facilities. There have been worker suicides, allegations about underage labor, worker riots, and other unsavory stories. Foxconn agreed to raise wages and reduce working hours earlier this year, but the damage to Apple’s image is already done. SNL’s recent iPhone 5 skit proves as much.

Comments closed
    • cRock
    • 7 years ago

    Labor costs in China are rising rapidly. The Chinese currency has also been rising against the dollar considerably (eh, ignore Mitt Romney). The cost of shipping is not insignificant and variable. Add it up, and manufacturing in China is not what it used to be. I know people in the business that have spent many years in China but are now moving to sites in Thailand, Mexico, and (gasp) the US. The fact is, our labor costs are pretty competitive and labor costs are, frankly, a pretty small part of the total cost in a lot of modern manufacturing. The automation is only getting better, and I’d feel a lot safer investing millions in a highly automated production line in Iowa, where there is a functional legal system, than China.

    Apple isn’t stupid. They’ve run the numbers. We’ll see more of this.

    • odizzido
    • 7 years ago

    I guess I could write “assembled in canada” on my computer made of foreign parts then.

    • MadManOriginal
    • 7 years ago

    My guess is that this is temporary. The latest iMacs were delayed for whatever reason, some sources say it’s parts production related – specifically the screen assembly I think, so Apple decided to get all the parts to the US and assemble them in order to prevent the slow boat from China from causing any additional delays. It’s easier to get parts sent over fast than entire PCs. Once the supply chain is running smoothly I bet they’ll go back to assembly in China.

    Either that or they want to make sure there are no problems with the initial runs, but again once thigns check out it will be back to China.

    • brute
    • 7 years ago

    THANK GOD. NOW I CAN FINALLY ENTER CALIFORNIA AND TRUTHFULLY TELL THEM I HAVE NO FOREIGN FRUITS.

    • kamikaziechameleon
    • 7 years ago

    The number one overvalued american company doesn’t make an american product. lol

    Good to see them changing that stigma.

    • End User
    • 7 years ago

    I wonder if their use of friction stir welding has anything to do with it.

      • sweatshopking
      • 7 years ago

      it doesn’t.

        • End User
        • 7 years ago

        Don’t keep us in suspense. What do you know? URL?

          • sweatshopking
          • 7 years ago

          url’s are for babies. THIS ONE IS ALL GUT. LIKE A MAN.

    • Beelzebubba9
    • 7 years ago

    What’s interesting to me is how most people just totally glossed over the interesting points of the fantastic NY Times articles that kicked off much of these discussions and can’t seem to get past talking about the cost and conditions of the labor aspect of it.

    The reasons why companies like Apple, Microsoft, Asus, and darn near everyone else builds their devices in China isn’t because of cheap labor (there are many countries where it’s much cheaper), but more because of a combination of favorable economic conditions for capital investment and the fact that basically their entire supply chain can be contained within a small geographic area. The additional cost of labor to assemble an iPhone in the US came down to about $2/device, which Apple would easily save in shipping costs if that were actually their prime motivator.

    • BoBzeBuilder
    • 7 years ago

    And the iMacs will fail to pass China’s quality control. LoL

    • Chrispy_
    • 7 years ago

    I wonder if Apple gets around this by using Aliminium unibodies made in the US.

    It’s the sort of thing that I would imagine the US to have facilities for in abundance and also since that’s the bulkiest, most-expensive-to-ship-around-the-globe part of most Apple’s lineup.

    • Aveon
    • 7 years ago

    Who knows if they even paid billions to the FTC to get that label printed on em >

    Sarcasm: Millions should be fine for now unless they win more patent lawsuits

    • nico1982
    • 7 years ago

    [quote<]That’s why a "screwdriver" assembly in the U.S. of foreign components into a final product at the end of the manufacturing process doesn’t usually qualify for the "Assembled in USA" claim.[/quote<] What if the parts are glued together, instead? 😛 Jokes aside, it all depends how strictly they interpreted that 'substantial transformation'. Given that being 'assembled in the USA' is considered as added value for the american consumer - I suppose - I'm more inclined to think not very strictly.

      • derFunkenstein
      • 7 years ago

      On the contrary, if it’s such an added value you’d think they’d really want to control it as tightly as possible. Otherwise if everyone can claim it, it loses its value.

    • Arag0n
    • 7 years ago

    Chinese salaries are getting higher than American ones. No kidding.

      • colinstu12
      • 7 years ago

      Nope

        • rrr
        • 7 years ago

        Such an elaborate, well-thought and thoroughly explaining everything response. You sir win at internet.

        </sarcasm>

          • Metonymy
          • 7 years ago

          Sort of like the original post?

            • rrr
            • 7 years ago

            Doesn’t mean what I said is false.

        • adisor19
        • 7 years ago

        Chuck Testa.

        Adi

      • Geistbar
      • 7 years ago

      I am rather skeptical of that. What you might have meant instead is that the total price to manufacture and sell is changing such that it doesn’t favor China as much as in the past. Labor wages are part of that, but so is shipping, management and legal affairs for dealing with foreign businesses, and even electricity prices. I believe that it still favors China in most cases, but it’s been shifting slowly over time.

      Of course, there’s no guarantee that they’ll move to a high wage area in that case, instead of just going somewhere else with low enough wages to bring the total costs back down — such as Burma/Myanmar or various states in Africa.

        • Arag0n
        • 7 years ago

        Nope, I’m trying to find the article, but there is some regions in China that use to be target for a place to setup factories for outsourcing that currently average workers salaries are higher than American ones. Tianjin is one of them. Of course, the average salary of factory workers is stupidly low comparing USA, but you should understand that China is more like USA + Canada + Mexico + Central America + Caribbean Countries together. There is a huge gap between diferent regions, some areas have a PPP of only $3500 while others already have higher than $20.000, with some locations surpassing the average American PPP ($49.000).

        Think about it this way. If American’s statistics included the statistics of all the countries I mentioned to you, American average was going to in line with Ukrania. Another good example is the European Union. The differences between Rumania and Luxemburg, from less than $5000 to more than $80.000. The working conditions in Rumania are totally different than the working conditions in Germany or UK.

        You have to separate China in the different provinces reality, and even the different provinces have huge gaps between urban population and country side population. The average level of China is both, misleading and meaningless. There is some areas of some cities that the average FLAT price (remember, flat, not villa, not house, just a flat) is between $2M and $5M dollar, and in the very same city there is areas that flats may only cost $100k. Why? Because there is a huge gap between people that was born in the city and people that moves from countryside to work in the city. Most of the families that lived in the cities developed successful business while countryside people comes from areas that average income is less than $100 per month.

        Chinese reality is far more complicated than what USA’s TV and newspaper publish. China is not just a developing country, it’s a mix between far-more-developed areas than most western countries and areas that look-like and feel like Europe and USA in early 20th century.

      • no51
      • 7 years ago

      Maybe growing at a higher rate. Then again, would you take a 100% increase off $1000, or a 10% increase off $50000?

        • Arag0n
        • 7 years ago

        Nope, I truly meant higher, better paid. Of course if I take the best paid area of USA and the best paid of China, USA win. But some of the best paid areas of China right now are more expensive than the lowest paid areas of USA. To put it in perspective, did you know that American’s working in agriculture in the sate of Massachusetts have a minimum paid rate of $1.6 per hour? That’s equivalent to RMB 10. To put it in perspective, average paid rate for shop assistances in Beijing and Shanghai is around RMB 15 (~$2.4).

        The global average minimum wage in USA is around $7.25/h. Commonly, office workers in Shanghai/Beijing will get around RMB 5.000 to 10.000 with 40h per week schedule. That translates to RMB 28 to 56/h, or $4.5 to $9.

        I know in USA, the average salary for several professions is between $50k to $100k, and common Chinese office workers (professionals) will only make between $10k and $20k per year in the main urban areas. However, I can tell you that there is several professional sectors that pay rate is more than double.

        And then, you should remember that China is China, prices are dirty low for all basic needs and most of manufactured goods besides international brands. It’s estimated that $1 in China equals $2 in USA. To put some life costs in as example, the average spending for mobile phone bills of an american person is around $50 per month, while in China is around $10. It’s not that Chinese spend less, they call the same, the text the same and they surf the net equally, it’s just that fees are way lower. Sames goes for water, electricity, transportation and food.

        So it’s not just that Chinese salaries are becoming equivalent to American ones, since the average office worker (do not missunderstand the average worker with the average wage of office workers) getting $10k to $20k is equals an American one getting between $20k to $40k, but also some people in some sectors, in some companies is getting the same if not higher salaries than their American version, but in a dirty cheap country. That’s why there is so many Chinese that buy branded products like crazy. Dirty cheap life expenses + American wages = stupidly high disposable income.

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