Apple to invest in U.S. manufacturing; Foxconn, too

Bringing manufacturing back to the U.S. was a hot topic during the presidential campaign earlier this year. Now, it seems, the world’s highest-valued firm is going to start doing just that—at least with some of its products. In a lengthy interview with BusinessWeek yesterday, Apple CEO Tim Cook revealed that he plans to sink $100 million into domestic manufacturing.

The statement came in an otherwise innocuous response to an interview question. BusinessWeek asked what it would take for Apple to go back to building things in the United States. Cook responded with the following:

It’s not known well that the engine for the iPhone and iPad is made in the U.S., and many of these are also exported—the engine, the processor. The glass is made in Kentucky. And next year we are going to bring some production to the U.S. on the Mac. We’ve been working on this for a long time, and we were getting closer to it. It will happen in 2013. We’re really proud of it. We could have quickly maybe done just assembly, but it’s broader because we wanted to do something more substantial. So we’ll literally invest over $100 million. This doesn’t mean that Apple will do it ourselves, but we’ll be working with people, and we’ll be investing our money.

As we noted earlier this week, some of Apple’s latest-generation iMacs are already rolling off U.S. production lines. The machines have "Assembled in USA" etched on the back.

In related news, Bloomberg reports that Foxconn—unarguably Apple’s biggest supplier—also plans to expand U.S. manufacturing. Foxconn spokesman Louis Woo told the site, "We are looking at doing more manufacturing in the U.S. because, in general, customers want more to be done there." Woo went on to add, "In addition, any manufacturing we take back to the U.S. needs to leverage high-value engineering talent there in comparison to the low-cost labor of China."

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    • brute
    • 7 years ago

    will the parking lot look like a Prius dealership/

      • adisor19
      • 7 years ago

      The Volt is the new Prius, so more like a Volt dealership.

      Adi

    • AlvinTheNerd
    • 7 years ago

    This is a huge thing for the states.

    Industry works in such a way that newcomers have advantages over established players once technology has advanced enough for new equipment to outperform old equipment. IF the US can show that high level, well payed engineers can design a low unit cost plants by whatever means, this the the start of the US competing against China the way 1980’s Japan outcompeted 1980’s US manufacturing.

      • HisDivineOrder
      • 7 years ago

      Except Chinese workers get paid pennies and work far longer than Americans will tolerate. And it’ll cost a LOT of money to design, build, install, and maintain machines to match the production capability of millions of cheap labor. The one advantage is that the Chinese are starting to think they deserve more–more money, more time off, more benefits, more conveniences–and that’s the fast road to entitlements like we have.

      That may compel China to start subsidizing manufacturing less reliant on their huge worker base. Problem is, China also happens to have a lot more money and political focus than the US to put into such things.

        • MadManOriginal
        • 7 years ago

        It’s easy to have foreseen this and to see where it could go, but Chinese governance is what makes it unpredictable. If they had a Western-style democracy, it would be directly comparable to the early 1900’s in the US during the industrial revolution. If the government gets too restricitve they might have revolt, or I should say *more* revolt…there is nothing widespread but labor rights movements are growing in China, you hear about short strikes and labor riots every once in a while.

    • NeelyCam
    • 7 years ago

    $100mil? That’s it? Both GloFo and Intel are “sinking” billions into US manufacturing.

    Sounds like a PR move more than anything else.

      • tanker27
      • 7 years ago

      of course it is. But starting with 100mil is a great start for a company that has billions in cash on hand. This is so that if they need to pull the plug it could be easily written off.

      And in case you didnt see the interview, Cook was very poignant about the fact that the reason most of these manufacturing jobs are overseas is because the American people lack the skills and wouldnt even bother with this sort of menial jobs. So its a catch 22.

      Those that bemoan and decry the fact that these jobs are overseas would rarely take on such a job themselves. They feel they are above it.

      • Silus
      • 7 years ago

      It’s just like the fact that Apple says they have reports on the working conditions of each facility they have to assemble their devices and that if any of those reports show something fishy (like hiring underage workers) they will at first try to correct the problem and if it persists, terminate the contract with that company. This has happened several times @ Foxconn and Apple’s own reports show it, yet they never terminated any contract with Foxconn or any other company.

      So yeah, it’s just marketing as usual. That’s all that Apple does these days. They don’t compete with products that actually surpass the competition, but rather just do a me too, while trying to sue every competitor out of the market and with shady practices at that.

        • tanker27
        • 7 years ago

        Silus,

        I dont know how you can make that last accusation when the iPhone/ iOS was dropped it was truly the first in the world of mobile computing. NOBODY, had a touch screen even remotely close to it when it was unveiled.

        Hell they even resurrected a defunct product by Corning that was invented in the 1960’s for it. (See the Gorilla glass story.)

      • Beelzebubba9
      • 7 years ago

      Do any other PC manufacturers currently assemble systems in the US?

        • MadManOriginal
        • 7 years ago

        Boutique brands, but that’s an obvious one. This includes large company botique branding, and large and small – down to mom&pop – independent botique shops. High-end low volume not necessarily x86 servers are assembled in the US.

        There are some large system integrators who still assemble in the US though:

        Lenovo recently announced the will open a facility in N.C. (Nice irony, eh?) I think they already had US assembly before that.

        Dell used to do all their custom configuration in the US. I decided to look up the current status and it’s outlined nicely [url=http://en.wikipedia.org/wiki/Dell#Manufacturing<]here[/url<] Alienware (which counts as botique) is assembled in the US, and their servers are assembled in the US. Not sure on HP, I couldn't find anything quickly. At best, they might be similar to Dell.

          • Beelzebubba9
          • 7 years ago

          Yeah, Lenovo was the only one I could think of, and that announcement amused the hell out of me.

      • ludi
      • 7 years ago

      You cite two fab companies, where $1.5 billion is pretty much the cover charge due to extremely high capital equipment costs (mostly of foreign manufacture AFAIK), then scoff at $100 million that will probably employ MORE workers of a comparatively LOWER skill level?

    • oldog
    • 7 years ago

    ‘Bout damn time!

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