In 2014, shortly after Mr. Guthrie left his job 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, is a professor in the Thunderbird School of Global Management at Arizona State University.
When he started at Apple, Guthrie said, executives knew they were relying too much on China to diversify. India and Vietnam were the top contenders, but Guthrie concluded that neither was a viable substitute.
Vietnam’s government is cooperative, but the country simply does not 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 attitude made Apple vulnerable, especially as China’s new leader was looking for 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 world’s largest iPhone factory, contract workers made up half the workforce, according to a report by China Labor Watch, an advocacy group. Following the report, Apple confirmed that the factory had broken the law.