Spot on.Contrary to the popular belief that companies flock to China for cheap labour, Cook said that this narrative is outdated. "The popular conception is that companies come to China because of low labor costs. I'm not sure what part of China they go to, but the truth is China stopped being the low labor costs country many years ago," Tim Cook stated, clarifying that the decision to manufacture in China is driven by a different set of factors.
Cook highlighted the unparalleled concentration of skilled labour in China as the primary reason for Apple's manufacturing presence there. He elaborated on the advanced tooling and precision required to produce Apple's products, noting that China's vocational expertise in these areas is unmatched globally.
"The reason is because of the skill, the quantity of skill in one location, and the type of skill it is," he explained. "The tooling skill is very deep here. In the US, you could have a meeting of tooling engineers, and I'm not sure we could fill the room. In China, you could fill multiple football fields."
This extensive pool of skilled workers, Cook argued, is essential for the intricate manufacturing processes that Apple products demand. The CEO's comments got a comment from Tesla CEO Elon Musk who responded with “true” in comments.
I worked for a company from 2002 to 2012 that had significant offshore manufacturing in China. The change we saw just during that time, primarily related to increases in labor costs, was very significant. All manufacturing was eventually brought back to the U.S. after I left. The labor class has become much more skilled and proficient at solving problems on the fly, very quickly, incorporating changes into manufacturing processes. China is kicking our a$$ in teams of development of these types of positions.