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Apple Spent $60B on 9,000 American Suppliers in 2018, Supporting 450,000 Jobs (macrumors.com)

Posted by msmash on from the closer-look dept.

An anonymous reader shares a report: Well timed with a report from The New York Times today that explained why Apple is unlikely to manufacture more of its products in the United States, Apple has published a press release highlighting how several components it uses are manufactured by U.S. suppliers such as Finisar, Corning, and Broadcom. Apple says it spent $60 billion with 9,000 American component suppliers and companies in 2018, an increase of more than 10 percent from the year before. Apple says this spending supports more than 450,000 jobs in the United States.

22 of 54 comments (clear)

  1. They'd probably like to spend more by olsmeister · · Score: 2

    But they can't.

  2. Re:Blatant advertisment by nadass · · Score: 2

    No, it's Bolstering The Stock Market Day

  3. "By U.S. Suppliers", not "in the U.S." by Anonymous Coward · · Score: 1

    Note that they say they're manufactured "by U.S. suppliers" - but not that they're made IN the U.S.

    By that standard, iPhones are provided by a U.S. supplier. They just happen to be manufactured by slave labor in China.

    1. Re:"By U.S. Suppliers", not "in the U.S." by Nidi62 · · Score: 1

      Note that they say they're manufactured "by U.S. suppliers" - but not that they're made IN the U.S.

      Yep. From the FAQ section of Finisar's website:

      Where does Finisar operate and how many employees does Finisar have?

      Finisar's corporate headquarters is located in Sunnyvale, CA, while its primary manufacturing facilities are located in Ipoh, Malaysia, Shanghai, China, and Wuxi, China. Finisar fabricates its VCSEL lasers for datacom applications in Allen, TX, operates a fab in Fremont, CA for making DFB and FP lasers for longer distance datacom and telecom applications, and operates a tunable laser fab in Jarfalla, Sweden used primarily in our tunable XFP transceivers, primarily for telecom applications. The Company also has manufacturing and R&D facilities in Horsham, PA (USA) and as well as Australia, Germany, Korea, and Singapore. Finisar employs approximately 13,000 employees worldwide.

      So the Apple products are probably made in the primary facilities in Malaysia and China.

      --
      The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
    2. Re:"By U.S. Suppliers", not "in the U.S." by Anonymous Coward · · Score: 1

      "American Made" is synonymous with "Garbage", world-wide. Has been the case longer than I've been alive. It seems like the only people who don't understand this are the Americans.

      There are a lot of niche products that are "American Made" that are pretty good, but this is because the company making them actually cares about their product. Mass manufacturing in the USA (electronics, cars, white goods) is pitiful - American cars, for eg, are laughably bad, overpriced garbage. High quality Japanese cars destroyed them in the mid market, cheap and cheerful Korean imports dominate the entry level and European imports own the high end. There's a bit of prestige owning an American-badged car still for petrolheads but you soon tire of the cheap interior, rattles, clunks and repairs.

      Contrast with European manufacturing, where QA and design are still a big factor across most industries. It's more expensive but it works well.

      The problem is not that manufacturing moved overseas. The problem is what allowed it to move overseas in the first place - brands and manufacturers chasing cheapness and higher volume without any balance against quality of product or design. There's little stigma remaining in making a shitty product - the annoyance of consumers is there, but the company either keeps churning it out if people keep buying or folds up that operation and changes the name. There's minimal consumer protection and corporate responsibility and minimal political will to enforce what is there.

      Unless you have companies that care about their products you're not going to have better products, even produced domestically. If you don't have better/cheaper products (and you're not winning the price war with China), the rest of the world will just keep buying from China while the US hunkers down in its little protectionist bubble and loses relevance.

  4. Apple PR Success by Luthair · · Score: 5, Insightful

    Notice how we suddenly have multiple articles at the same time about how Apple is great for the economy and how they couldn't possibly manufacture here. The source of these articles couldn't possibly be a PR campaign from Apple about how they're an important US company who contributes domestically despite how hard it is.

  5. 60 billion / 450,000 by greythax · · Score: 4, Insightful

    Did I do the math right, that's like $133,000 a job? Wonder what percentage of that makes it to the workers?

    1. Re:60 billion / 450,000 by TFlan91 · · Score: 3, Interesting

      Ha! That's 60$ billion TOTAL COST, not just labor.

      I'd say 2 - 3/5ths of that is going towards labor.

      So anywhere between $50 - $80k

    2. Re:60 billion / 450,000 by vux984 · · Score: 5, Insightful

      Who knows what their methodology was? Did they disclose it? They could have just summed up the employment figures of all the suppliers they do business with for all I know.

      And then maybe added in the knock on employment as well.

      For example, a mill or a mine can effectively 'create' a whole town. The mine just pays the mine workers, the mine workers in turn use their salaries for everything from kitchen renovation contractors to haircuts from mcdonalds burgers to daycare for their kids... and the mine takes "credit" for the entire job market of the town. And its not even 'wrong'... because we've all seen a mine close and the town die.

      Suppose also that an ore refinery in the next town over has a contract to buy all the ore from that mine for $1 billion a year. It *can* claim that $1 billion is creating all the jobs in the town. And its not "wrong" because its supporting the mine... But you obviously can't just take a dollar amount and divide it by people to figure out an average salary in a calculation like this. A big chunk of that money was paying for the output of the mine itself... the actual ore to refine. And this is of course a super simplistic example.

      But the point is there are economic 'models' one can use, and methodologies one can use for estimating how many 'jobs' you create with an investment of size X in an industry Y.

      And all kinds of ways of stretching and abusing and oversimplifying those estimates if you just want a good PR puff piece and only care about 'somewhat plausible' vs 'accurate'.

    3. Re:60 billion / 450,000 by Rolgar · · Score: 1

      When you buy anything, all of the costs are labor or profit.

      I buy a product from Amazon. Somebody paid shipping which a small part goes to the mailman who dropped it at my door, and the guys who drove the trucks from city A to city C, and the people who moved the items from truck X to truck Y, and the people who sorted them in between. Obviously the manufacturer paid their people to produce it. But all of the stuff purchased as components were paid to people who made the screens, buttons, circuit boards, etc. And all of the stuff taken out of the ground only cost the labor and profit of the trucks, extraction equipment, chemicals, etc and of the entire processes upstream. And every cost has a labor component, and the non-labor components have a labor compenent, and their non labor prices can all be traced to somebody else's labor costs.

      The only other things I can think of are buying unrefined capital (undeveloped land) and profit.

    4. Re:60 billion / 450,000 by viperidaenz · · Score: 4, Insightful

      When you buy an iPhone, most of the money goes to Apple's cash account, sitting off shore waiting for the next tax avoidance scheme to be implemented.
      They're up to nearly $300 billion in cash reserves.

    5. Re:60 billion / 450,000 by CanadianMacFan · · Score: 2

      As was pointed out below the 450, 000 jobs most likely included those knock on jobs. But just because Apple spent money with the companies in the US doesn't mean all of that money stayed within the US. Just like when you buy an iPhone, iPad, or Mac in the US, not all of your money stays within the US. Some of that goes to those suppliers in the US. There are also supplies in Asia that are paid. Most of the actual components are fabricated in Asia so money ends up there for that. I would bet that many of those 60 American suppliers have overseas production facilities.

      Then those companies have all of the other costs of doing business such as utilities, taxes (federal, state, local, sales, payroll), facility costs, shipping, cost of manufacturing if it isn't software, legal, sales, etc. Plus they want to be making a profit to keep the shareholders happy.

      The money Apples sends to suppliers can't just be divided by the number of estimated jobs to come up with a salary for them. Besides, those companies (hopefully) have other customers too.

    6. Re:60 billion / 450,000 by fluffernutter · · Score: 1

      Don't look at Apple to provide books and supplies to poor school kids.

      --
      Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
    7. Re:60 billion / 450,000 by Solandri · · Score: 1

      The thing you have to watch out for in these PR pieces is that if someone at a company they hire spends half their time filling Apple's order, half their time filling orders for other customers, they'll still count that as one job. When in fact it's only half of a job. To appraise it correctly, you have to multiply the number of individual jobs by the percentage of those people's time which was spent producing stuff for the $60 billion (as opposed to time spent making stuff for other customers).

      That will get you a revenue per employee statistic which you can then compare to other companies. If you take $133,000 RPE at face value, that's actually really low. About on par with the level most small businesses operate at, and indicative of very inefficient operation. Which is a pretty good sign that it's just wrong, and the true number of fractional jobs they add to the economy is much less.

      And if you want to gripe about what percentage of that is going to the employee, you need to look at profit (net income) per employee. That is, how much more could these companies pay each employee if all profits went to them instead of shareholders. That's why revenue per employee isn't used that often - it mixes together COGS, insurance, equipment costs, taxes, etc with payroll and profit. Net income per employee is a much better metric for judging how much extra each employee could have been paid.

      But the tech industry (along with banking, petroleum, and pharmaceuticals is skewed way towards the high end in terms of net income per employee. Most big companies operate at less than $10,000 net income per employee. That is, even if all profits were distributed to employees instead of to shareholders and owners, each employee would only get a few thousand dollars extra.

  6. Globalism as it should be by Sarten-X · · Score: 3, Insightful

    In other words, despite what propagandists love to spout, the economy is global, and buying from anywhere creates jobs everywhere. It's stupidly short-sighted to focus on one particular industry in one particular location, because global shipping is so cheap that it's more cost-effective to move parts around than to stand up a local manufacturing process.

    Buy parts from country A, built components in B and C, assemble in D, sell to E. Everybody benefits a little bit, and the end result is a product that's cheap enough to be reasonably affordable.

    --
    You do not have a moral or legal right to do absolutely anything you want.
    1. Re:Globalism as it should be by viperidaenz · · Score: 1

      Buying from anywhere creates a few very high paying jobs in USA and many many more jobs in China and Taiwan.

  7. Translation by hashish16 · · Score: 1

    We buy stuff from U.S. suppliers and companies that, along with all their parent companies and subsidiaries and auxiliary partners, have employees that totals 450,000 which together support making their products in China.

  8. that's heaps... by viperidaenz · · Score: 3, Interesting

    All $60 billion went the those companies Chinese subsidiaries.

    They're saying it like they're unique in the industry.

    Most midrange or better smart phones have Corning glass. They'll probably also have Broadcom, Qualcomm or Intel chips in them.
    It's probably only Samsung that isn't full of American designed chips (of which only Intel are probably made in USA, the rest at TSMC) but they'll still have Corning glass.

  9. Assembly of electronics, not worth much by Anonymous Coward · · Score: 1

    https://www.forbes.com/sites/timworstall/2011/12/24/china-makes-almost-nothing-out-of-apples-ipads-and-i/#12655dbc60b4

    A report was done on the value of iPhone components, and assembly by different nations. China's assembly value was 1.8 percent of the iPhone's total cost. Assembly can also move to cheaper nations, like Vietnam.

  10. 9,000 Suppliers. by Fly+Swatter · · Score: 2

    I would love to see that list. Probably includes pizza delivery, magazine subscriptions, lawn care, grocery store toilet paper runs... How many actually went into manufacturing their product? We know it wasn't screws.

  11. SNOPES by p51d007 · · Score: 1

    LOL about as reliable as CNN!

  12. More like 2 million by juancn · · Score: 1
    From TFA:

    Since 2011, the total number of jobs created and supported by Apple in the United States has more than tripled — from almost 600,000 to 2 million across all 50 states.