In 2014, shortly after Guthrie left his job as dean of the George Washington University business school, Apple hired him to teach its managers and advise executives on China. He also conducted research and his first project was the company’s supply chain. Guthrie, now 52, left Apple in 2019 and is a professor at the Thunderbird School of Global Management at Arizona State University.
When he started at Apple, Guthrie said, his executives knew they were overconfident in China and wanted to diversify. India and Vietnam were the main candidates, but Guthrie concluded that neither was a viable replacement.
Vietnam’s government was cooperative, but the country simply didn’t have enough workers, he said. India had people, but its bureaucracy made it difficult to build infrastructure and factories. Beyond those problems, most of the smaller suppliers that made Apple’s screws, circuit boards, and other components were already concentrated in China.
Apple has still made its way into India and Vietnam in recent years, even building a smaller iPhone assembly plant in India, but Tim Cook, the chief executive, has publicly said that its supply chain will remain focused on China.
For Guthrie, that stance left Apple vulnerable, especially as China’s new leader was looking for ways to use his influence over American companies in the country. In 2014, China’s so-called dispatch labor law came into effect, limiting the proportion of temporary workers in a company’s workforce to 10 percent. From day one, Apple and its suppliers were in breach.
At a Foxconn plant in Zhengzhou, China, the world’s largest iPhone factory, temporary workers made up as much as half of the workforce, according to a report by China Labor Watch, an advocacy group. After the report, Apple confirmed that the factory violated the law.