Apple's plan for U.S. assembly encouraging; job impact limited
It might be smart public relations — or a small symbol of hope for domestic high-tech manufacturing — but Apple computer CEO Tim Cook made news last week when he said the company famous for its iphones and ipods would assemble one of its computer lines in the United States.
The news came in an interview with NBC’s Brian Williams. When asked why Apple, which is one of the world’s most valuable companies, manufactures all its products in China, Cook replied that the U.S. lacks enough engineers to manage the massive and highly flexible production capabilities that Apple has at the giant Foxconn facility in China. Foxconn also makes Sony Playstations and products for HP.
Cook pledged that Apple will shift production of one of its Mac computers to the U.S. next year. As promising as that announcement is, the issue of manufacturing, particularly high-tech manufacturing, is complicated.
While talking about assembling some computers in the U.S., Cook pointed out that glass screens on the iphone and ipad are made in the U.S., as is the “engine” or computer processor inside many of Apple’s products.
Most Apple products are designed in the U.S., but assembled in China. At first, that made sense for cost-savings alone. Then, as the China market for Apple products exploded, it made sense for Apple to make products in a huge growth market.
Cook’s announcement, even if likely to have only a small impact on U.S. manufacturing jobs, reinforces the so-called in-sourcing of manufacturing back to the United States from China. That reversal of earlier trends is due to increasing wages in China and high transportation costs.
Assembling some products in the U.S. will give Apple positive press, which will be welcome after Apple was hurt by stories earlier this year of unhealthy or oppressive working conditions at Foxconn’s massive facility in China.
Since the first reports came out, Cook has made some changes, including supporting higher wages and improved working conditions at Foxconn.
In the past decade, the U.S. has lost 28 percent of its high-tech manufacturing jobs. But rising wages in China and higher transportation costs tied to the price of oil rising to $100 a barrel from $30 a barrel are sparking a growing movement to shift manufacturing back to the U.S.
Foxxcon, for its part, said it plans to expand its limited operations in the U.S.
That’s an encouraging trend. Many buyers of ipads, iphones and Mac computers would like to know they are supporting more American workers. Apple might gain a marketing edge by stamping more of its products with the words, “Made in the U.S.A.”
But restoring or rebuilding high-tech manufacturing in the U.S. will be tough. Cook voiced his concern over the lack of qualified engineers and stressed the need for colleges, trade schools and community colleges to step up to meet demand. Also, it’s likely that any new manufacturing plants will be highly automated, using more robots and fewer people, just as in the automotive industry. So new electronic plants should not be expected to add thousands of jobs. And the jobs they do add will be mostly high-skill jobs.
Still, Apple’s announcement is good news. It can be seen as a small, early step in rebuilding high-tech manufacturing in the U.S. Even though Apple, with sales of $150 billion, is planning to spend only $100 million on this effort, the move is encouraging.
If it’s successful, Apple could further expand its U.S. manufacturing — and other companies might follow.
