Apple CEO Tim Cook On Apple's US Manufacturing Move

Smart PR move by Anonymous Coward · 2012-12-06 04:33 · Score: 5, Insightful

It may reduce their margins (minutely), but it will give them an immediate response to any allegations of massive offshoring of labor or anti-American sentiment. It's a relatively small investment for them that could pay tremendous returns. Smart, Apple, very smart.

Re:Smart PR move by Dupple · 2012-12-06 04:36 · Score: 5, Informative

It'll be a Foxconn plant though, not an Apple one.
http://www.bloomberg.com/news/2012-12-06/foxconn-plans-american-expansion-as-clients-seek-made-in-u-s-a-.html

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Watch those corners
Re:Smart PR move by forand · 2012-12-06 05:13 · Score: 2

This is not certain, furthermore, I see no reason to condemn Foxconn(any manufacturer) more than Apple(any design company using said manufacturer). Apple could demand better adherence to US standards in the Foxconn plants making their products. Foxconn could just buck the local trend and treat their worker better than their rivals. Why does neither Foxconn nor Apple do this? Money. Foxconn can't do it and survive and Apple wants to maintain their 30% profit margin on their products.
However when you move the plant to the US things change. Foxconn MUST meet much more stringent working standards, not only because the US has more stringent regulations but they will not find workers to work in conditions similar to those in China. Finally, almost certainly what will happen is that the majority of the manufacturing work done in the US will be done by robots and only some small points will humans be used.
One thing that hasn't been addressed in the news thus far is how Foxconn might use the robotics expertise they gain from operating in the US in China. This could have a major effect on the Chinese economy and what that effect will be is far from clear (IMHO).
Re:Smart PR move by nEoN+nOoDlE · 2012-12-06 06:51 · Score: 2

Why does that matter? It means more US workers will have jobs, and foxconn will still have to pay US taxes for the work done here. Still a win all around.

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Don't trust a bull's horn, a doberman's tooth, a runaway horse or me.

Re: PR Move by hawks5999 · 2012-12-06 04:39 · Score: 3, Interesting

If this is a PR move, it's costly. As the news of the Made in the US concept spread, AAPL lost $30 billion in market capitalization.

This needs to be a principled move because shareholders are going to complain greatly about any margin erosion for the sake of patriotism.

Re:So they aren't made in the US now? by Anonymous Coward · 2012-12-06 04:42 · Score: 2, Informative

They don't say that. They've always said something like "Designed In California".

Apparently some have already started saying "Assembled in USA" ... before that it was Made in China

Drop was margin, not Made In USA by SuperKendall · 2012-12-06 04:42 · Score: 2

The AAPL drop was most likely caused by trading firms requiring higher margins on large AAPL buyers - because some idiot bought a million shares right before an earnings release, the stock went south a bit, and he tried to claim he entered an extra zero wrongly... he's going to jail for about 20 years now.

Today is the first day the Made in USA is really mainstream news, and the stock is up a bit.

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"There is more worth loving than we have strength to love." - Brian Jay Stanley

Re:Drop was margin, not Made In USA by Algae_94 · 2012-12-06 08:38 · Score: 3, Informative

It was a fraudulent trade. He intentionally bought 1000x what he should have bought, and through some fast talking got another firm to short sell a comparable amount. I don't think the guy got beyond step 2 ???. He basically set up one firm to make a lot of money and the other to lose a lot, don't know how he expected to get any of it. Source

May be related? by bobstreo · 2012-12-06 04:43 · Score: 2

http://www.reuters.com/article/2011/08/01/us-foxconn-robots-idUSTRE77016B20110801

No Assembly jobs, just robot repair and janitors.

Re:May be related? by perpenso · 2012-12-06 05:09 · Score: 2

Assembly jobs, just robot repair and janitors.
Even if so it still keeps more of the revenue in the US, less trade deficit.

Plus where are those robots made, maybe they are US made?
Re:May be related? by Dupple · 2012-12-06 05:42 · Score: 2

Foxconn Chairman Terry Gou, who founded the maker of iPhones, iPads, PlayStations and televisions in Taipei 38 years ago, wants to bring U.S. engineers to Asia to train them in manufacturing before deploying them back home, he said at a forum last month.."
http://www.bloomberg.com/news/2012-12-06/foxconn-plans-american-expansion-as-clients-seek-made-in-u-s-a-.html

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Watch those corners
Re:May be related? by master5o1 · 2012-12-06 05:46 · Score: 4, Insightful

But are the robots made by robots made in the USA?

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signature is pants

Re:PR gimmic, if your cynical by Kohlrabi82 · 2012-12-06 04:44 · Score: 5, Funny

If they bring [...] jobs back

I knew that Apple was an evil company, but I didn't know they dabbled in necromancy.

China not as cheap by bhlowe · 2012-12-06 04:47 · Score: 3, Interesting

Manufacturing in China is getting more expensive and North America is becoming more competitive. The tax rate on repatriating money made outside of the US also makes manufacturing in the US more advantageous.

Re:China not as cheap by Anonymous Coward · 2012-12-06 05:08 · Score: 2, Informative

He said they will begin manufacturing next year for one of the Mac lines. If it was just "Assembling" don't you think he would have said that they are already doing that with the iMac?

The Insourcing Boom by terrab0t · 2012-12-06 04:51 · Score: 2

This sounds like another case of The Insourcing Boom. Companies are finally seeing at the total cost of outsourcing. Cook mentioned that Apple already has to make some parts in the US and pay to ship them out to the manufacturing plants overseas, and that's only one of the common costs.

The interview doesn't go into a lot of details on Apple's move to US manufacturing, but a big part of the outsourcing cost is what you lose when you separate your product development from the manufacturing process. This comment from Tim Cook speaks to that:

In addition, we have hundreds of people that reside in China in the plants on a full-time basis that are helping with manufacturing and working on manufacturing process and so forth. The truth is we couldn’t innovate at the speed we do if we viewed manufacturing as this disconnected thing. It’s integrated. So it’s a part of our process.

I'm guessing this move to insource is not philanthropic, it's a smart business decision in the long run, just like General Electric's.

Re:Seriously, you are critical of Apple over this? by Jeng · 2012-12-06 04:56 · Score: 2

Apple is the new Microsoft, but only because Microsoft is no longer relevant.

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Don't know something? Look it up. Still don't know? Then ask.

What would you have preferred to see? by Brannon · 2012-12-06 04:59 · Score: 5, Interesting

Here are your options:

1. Manufacturing in the USA, with manufacturing using robots, creating low thousands of well-paid jobs for Americans.

2. Manufacturing in China using hundreds of thousands of low-paid Chinese jobs.

3. Manufacturing in the USA without robots, but with hundreds of thousands of minimum-wage part-time jobs--and all Apple products increase in price by 30%.

Apple is currently doing #2 and transitioning to #1. Are you really upset that they didn't pick #3?

Re:What would you have preferred to see? by Dcnjoe60 · 2012-12-06 05:18 · Score: 4, Interesting

Here are your options:
1. Manufacturing in the USA, with manufacturing using robots, creating low thousands of well-paid jobs for Americans.
2. Manufacturing in China using hundreds of thousands of low-paid Chinese jobs.
3. Manufacturing in the USA without robots, but with hundreds of thousands of minimum-wage part-time jobs--and all Apple products increase in price by 30%.
Apple is currently doing #2 and transitioning to #1. Are you really upset that they didn't pick #3?
Your choices all have the same outcome. It is not the number of american jobs that is important to the economy, it is the number of american jobs that provide a livable wage.
In a robotic plant, most of the workers are the ones who box things up at the end of the process. Usually the minimum qualifications are a high school diploma, if that. How is that a well paying job?
Unless Apple intends to pay a livable wage to its employees at these plant(s), which would mean either a significant price hike in products or a reduction in profits, all they are doing is pandering to the populus notion of buy American.
Re:What would you have preferred to see? by Anonymous Coward · 2012-12-06 05:26 · Score: 4, Informative

> Usually the minimum qualifications are a high school diploma,
You will need at least some jobs like that. Not everyone is capable of (or wants) higher education, some people just missed the boat, others like immigrants will take the opportunity to improve their children's station.
Not everyone without an advanced degree can work in fast food joints, so #1 still gives you a boost to entry-level US jobs as well as a spectrum of jobs up the pay scale including design. manufacturing, engineering, maintenance and so on.
Re:What would you have preferred to see? by tlhIngan · 2012-12-06 05:35 · Score: 3, Insightful

Your choices all have the same outcome. It is not the number of american jobs that is important to the economy, it is the number of american jobs that provide a livable wage.
In a robotic plant, most of the workers are the ones who box things up at the end of the process. Usually the minimum qualifications are a high school diploma, if that. How is that a well paying job?
Unless Apple intends to pay a livable wage to its employees at these plant(s), which would mean either a significant price hike in products or a reduction in profits, all they are doing is pandering to the populus notion of buy American.
Well, manufacturing is an unskilled job for the most part. In fact, factory jobs tend to be some of the worst around because they're utterly dull, boring and uninspiring work putting tab A into slot B and doing so in 750 milliseconds or less.
Other unskilled jobs include janitorial, housekeeping, etc. These are unskilled because anyone who graduates high school has all the requisite knowledge and skill to actually perform them, and they pay low because well, anyone who walks off the street can do it.
Robotic factories require far more skilled labor - you have to have technicians who can repair the robots, highly paid engineers who have to figure out how to make the product manufacturable by robots, supervisors to handle robot emegencies (and to manage human-robot interactions), engineers or techs to program the robots, etc. These require specialized training and as such, are much higher paying jobs. But of course there are far less of them - a robot tech can service multiple robots each work shift, likewise a manufacturing engineer designs the whole thing out before production begins, etc.
It's why the average American is far more productive than their Chinese counterpart - you cannot simply move manufacturing from China to the US without redesigning your product around that fact. Because all that happens is you're replacing low-skill jobs in China with low-skill jobs in the US (most of which would actually be fulfilled by illegal immigrants and such - just like in other low skill jobs).
Apple probably will pay just over minimum wage, because really, that's all the job demands. Unless you think putting stuff in boxes demands more pay than flipping burgers, cleaning toilets or other stuff.
And knowing Apple, if you're making tons of the stuff, they probably won't have a human hand touching it - just robots all the way into sealing the box. The only humans in the actual line are probably there to keep it going - receiving parts into inventory and stocking the part carriers for the robots, and shipping out the finished pallets of product.
Re:What would you have preferred to see? by Dcnjoe60 · 2012-12-06 06:03 · Score: 4, Interesting

Other unskilled jobs include janitorial, housekeeping, etc. These are unskilled because anyone who graduates high school has all the requisite knowledge and skill to actually perform them, and they pay low because well, anyone who walks off the street can do it.
There was a time, not too long ago, that anybody who graduated high school had all the requisite knowledge and skill to actually do almost any job, even start and run their own business, like Microsoft.
Back in the day, most business leaders, even , weren't college educated, but instead rose through the ranks to get to their position (with the exception of maybe medicine and engineering). Today, you spend $100,000 to get a degree so you can work in an entry level position. A generation or two ago, you just graduated high school for the entry level position and somebody with a college degree want into a junior management or mid-level position.
Face. it, most work fits in the category of being unskilled and monotonous. We just don't like to think about it wheny it applies to our own field.
Re:What would you have preferred to see? by Firethorn · 2012-12-06 06:09 · Score: 2

Apple probably will pay just over minimum wage, because really, that's all the job demands. Unless you think putting stuff in boxes demands more pay than flipping burgers, cleaning toilets or other stuff.
Depends on the position. As you just noted, 'manufacturing' in the USA tends to be second order - less doing the actual assembly and more maintaining the lines and robots that do the assembly. Robot maintainer is still a skilled job that demands better pay, and it's easily justified by the increased production that robots allow.
Sure, there will be some minimally skilled janitorial jobs that will probably receive close to minimum wage. Still, I support the importation of as many skilled jobs in highly automated factories as practical. I still remember an ancient film about productivity increases being the true enabler for higher worker wages. It was from disney, WWII time frame.

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I don't read AC A human right
Re:What would you have preferred to see? by AmiMoJo · 2012-12-06 06:14 · Score: 5, Insightful

Right, but the problem is that the minimum wage is too low because people can't live reasonably on it. That leads them to do two jobs with no time left to look after the kids, or to be dependent on benefits/tax credits to survive, and to have little disposable income to drive consumer spending.
There will always be unskilled jobs and people without marketable skills to fill them, but we need those jobs to offer a viable life to the employee or society breaks.

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const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Re:What would you have preferred to see? by radish · 2012-12-06 09:22 · Score: 2

The problem is that if you increase minimum wage you create an upward pressure on all wages to maintain differentiation (why should someone with a degree working as a programmer get paid the same as an unskilled burger flipper? what's the incentive to get the education?). That just creates inflation and you're back where you started.
I don't have a great solution, but I'm a little concerned by assumption that you should be able to raise a family on minimum wage. That doesn't seem sustainable to me. I certainly support a strong welfare system to help those who find themselves in a hole. But there is an aspect to living within your means, and seeking to better yourself and thus benefit your family. A welfare system can actually help that, by removing the need to work 3 low paid jobs to feed the kids you can maybe give someone the time to get some training for a real career.

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---- Den ene knappen er powerknapp, den andre er Bender voice knapp "Bite My Shiny Metal Ass"
Re:What would you have preferred to see? by Kjella · 2012-12-06 13:50 · Score: 2

Today, you spend $100,000 to get a degree so you can work in an entry level position. A generation or two ago, you just graduated high school for the entry level position and somebody with a college degree want into a junior management or mid-level position. Face. it, most work fits in the category of being unskilled and monotonous. We just don't like to think about it when it applies to our own field.
A generation or two ago most jobs were simpler. No, I'm serious a lot more jobs have moved into the "skilled and monotonous" category. Let's take for example being a lumberjack, not that many years ago it was mostly manual labor with axe and saw. Even after you got decent chain saws, it was a lot of hard labor. Today most logging is done with lots of machinery like feller bunchers, harvesters, forwarders and other heavy machinery. You can't just get into one of these and work it, you have to learn it. Of course once you do it's the same thing over and over again, chop trees and transport trees day in and day out. There's a lot of work like that, boring as fuck but you still couldn't grab a kid fresh out of high school and make him do it.
What does that mean in practice? That there's a real barrier to entry, you won't learn it unless there's jobs available that justify the investment and you can't do it as a short time gig for some quick cash. In practice the unskilled worker who'll pick up stray jobs have had slimmer and slimmer pickings, the number of "warm body" jobs you can perform with a minimum of training have been decreasing sharply being replaced first by machinery and later with robots or electronics. And the few jobs that are left like taxi drivers, retail clerks, fast food clerks etc. have a constant draft of people seeking in-between jobs until they get a new job in their field of work, so the "career" unskilled worker is pretty much boned.
This future is not going to change, we're going to need more and more highly skilled labor. Tough for all the people that don't really can or want to be all that highly skilled and want to drop out after high school, but I don't see how we could change that without simply creating busywork like in this story:

The story goes that Milton Friedman was once taken to see a massive government project somewhere in Asia. Thousands of workers using shovels were building a canal. Friedman was puzzled. Why weren't there any excavators or any mechanized earth-moving equipment? A government official explained that using shovels created more jobs. Friedman's response: "Then why not use spoons instead of shovels?"
I'm sorry but we don't need many people with shovels. We need people with a degree to even find an entry level job for them.

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Live today, because you never know what tomorrow brings
Re:What would you have preferred to see? by AmiMoJo · 2012-12-06 21:26 · Score: 2

If you don't pay a living wage at the bottom end you just end up paying the same amount through tax breaks and benefits like subsidised rent. The only difference is that instead of the employer paying and the amount being transparent to everyone the government (i.e. you via tax) pays and the amount is hard to calculate and varies by circumstance.
I agree that people should live within their means. However I think you have to accept that we will always need people to collect the bins, mop the floors, flip the burgers etc. Should those people be denied a family? What if they accidentally get pregnant? What if you have children and then fall on hard times and find your previously marketable skills are no longer in demand?

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const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC

Re:It's better than nothing . . . by Anonymous Coward · 2012-12-06 05:22 · Score: 2, Funny

Look, it's great that you've finally decided to come out of the closet but really doing it by showing people you have an iPhone? there must be a more appropriate way to break the news to your folks.

This is good news! Good for Apple. by sdsucks · 2012-12-06 05:25 · Score: 5, Insightful

1) So what if it's a PR move? It's still a good move for Americans - no matter what.
2) So what if it's a Foxconn factory? Of course it will be one - Apple is NOT a manufacturing company, but they do work *very* closely with their manufacturers.
3) So what if it's a mostly robotic factory? This IS the future of manufacturing in all countries - accept it, and accept that even robotic factories are better than none for the local economy.

Seriously, how are so many of you trying to spin this negatively? And why?

Not just PR by mschaffer · 2012-12-06 05:46 · Score: 3, Insightful

It's a move to help keep their products from being restricted from import if/when they ever lose an IP lawsuit.

Apple is doing this by SuperKendall · 2012-12-06 05:46 · Score: 5, Interesting

Apple could demand better adherence to US standards in the Foxconn plants making their products.

Apple is doing this, they already demanded less overtime of workers and better enforcement of restrictions against child labor. And then they brought in an independent firm to audit this happening and asked FoxConn to allow them access.

The real question is, why is NO other company doing this.

Things are obviously not perfect at FoxConn but Apple is trying to make them better, in a way that anyone can keep track of. No other company is providing any kind of visibility into these issues.

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"There is more worth loving than we have strength to love." - Brian Jay Stanley

Re:Apple is doing this by the_B0fh · 2012-12-06 07:22 · Score: 2

Why are you bring facts to this debate? Come on, you're supposed to just spout talking points about why Foxconn sucks (Fox that cons you?? WTF?!)
And why Apple sucks because Apple uses Foxconn.
And we will ignore the fact that nearly every other major brand's electronics also come out of Foxconn factories (or other similar outsourced manufacturers).
Come on man, keep up with the times - bitching about what you imagine Apple to be abusing is the theme of the day!

Re:What dividend promise? by perpenso · 2012-12-06 05:46 · Score: 4, Insightful

Yes because they are so short of cash they need to conserve it right?

Promising such a dividend, such a dividend being a reasonable thing to do, and speculators expecting such a dividend by year end to avoid a tax increase are entirely different things.

Besides, such a cash horde helped them get through a bad *decade* in the past. If they were not so fiscally conservative they might not be here now. Plus they are in the position of being able to make massive strategic purchases or investments without going into debt. That puts them in a pretty strong position with respect to whatever comes "next". The engineer in me likes to see such flexibility and options rather than managing according to wall street expectations and norms.

Re:Assembled in America means... by sdsucks · 2012-12-06 06:07 · Score: 3, Informative

This lie again? Why are you misleading people?

An “Assembled in USA” claim requires a product’s “last substantial transformation” happen in the United States even if the components of a product are manufactured overseas. However, this requires more than a “screwdriver” assembly of the parts at the end of the process. For Apple to be putting “Assembled in USA” labels on some new iMacs, the company is claiming that it’s doing more than slapping together components into a finished whole.

- http://www.digitaltrends.com/computing/does-assembled-in-usa-mean-anything-for-apple/

This is like Sony movint to the States by future+assassin · 2012-12-06 06:27 · Score: 2

for manufacturing. Well its still a parasite of a company.

Hey look that serial rapist is going to church now. We'll good for him maybe we can bring him to dinner now.

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by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*

trades jobs are also needed as well by Joe_Dragon · 2012-12-06 06:51 · Score: 2

trades jobs are also needed as well and higher education is not just degrees it's tech / trades as well.

Manufacturing Production Certificate at the Community College level.

http://goforward.harpercollege.edu/academics/areas/manufacturing/mpc.php

Re:ASSembled in America? by jo_ham · 2012-12-06 06:53 · Score: 2, Informative

That's great kid, but the text on the iMacs involved specifically says "USA" and it is explicitly stated that a new line will be made in the USA.

I know "haters gonna hate" but you're grasping at straws.

It's not... by ayvee · 2012-12-06 07:26 · Score: 2

It's not altruistic, and it's not just Apple. The Atlantic had an article recently about how a lot of companies (e.g. GM) are doing the same thing, for two reasons: (a) Chinese wages have been rising at about 18% per year since 2000, (b) oil is very pricey now, meaning shipping stuff over from China is more expensive. So, yeah, Apple aren't doing this because they've suddenly discovered patriotism. This is based on a cold cost calculation, just like the original decision to move their manufacturing to China. Not that there's anything wrong with that, but the spin they're trying to put on this is more than a little disingenuous.

Re:What dividend promise? by Algae_94 · 2012-12-06 08:23 · Score: 2

Just to step in here. A dividend to the share holders is not wasting the money. The share holders are the owners of a company, and like it or not, sometimes the owners want to get paid.

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Apple CEO Tim Cook On Apple's US Manufacturing Move

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