Apple already owns a massive share of the smartphone, tablet and home computer markets, thanks to their sleek, intuitive design, well integrated operating system and incredibly popular app store. But according to an announcement from Timothy Cook, Apple’s CEO, the computing giant is looking to increase their share of the U.S. job market as well, by returning some of their manufacturing positions to American soil. Thursday’s declaration of that intent should wins Apple additional support from consumers and industry insiders, while also allowing the company to utilize certain political and economic advantages that can now be found through American manufacturing.
According to Cook, Apple will spend $100 million on infrastructure that will allow the company to fully produce certain Mac computers here in the U.S. Apple currently does a significant amount of assembly here in the States, but they enjoy a fluid manufacturing network in Asia that has served them very well. Cook didn’t go into much detail about exactly where that $100 million would be spent, nor did he outline specific job types or totals. Apple ceased manufacturing their parts in America around 2002. But given the fact that they’ve sold upwards of 230 million computers and mobile devices in the United States in the past year, the company has come under increasing pressure to act as a job creator.
Cook addressed this specifically in a conversation with Businessweek. He admitted that Apple should be creating jobs, but that he wouldn’t lock them into any type of job in particular. And therein lies the rub. Apple supporters are hopeful that a company of this magnitude aggressively moving manufacturing back to the United States could inspire other companies to do the same. Yet skeptics feel it is incredibly unlikely that Apple will be able to do it successfully. The supply chain that now exists in Asia, which really is the strength behind technology manufacture, simply cannot be found in the United States. And these Asian sub-contractors are now more knowledgeable and experienced than any of their American counterparts. So while it is a nice PR move it is also somewhat forced, and could backfire on Apple and the international economy.
Yet there are compelling arguments for “reshoring”, or ending outsourcing to bring jobs home. The push has been seen not only in the electronic industry, but in medical supply and automotive manufacturing as well. The cost of energy is plummeting in America as compared to other parts of the world, and the development of previous ‘third world’ countries such as Brazil and China has led to increased wages for local workers. There have also been several dangerous, highly publicized quality control issues at foreign factories. Add all of that onto the shipping savings a large company could realize by keeping manufacturing so close to the massive United States consumer demand, and this warranted shift could have some staying power.
So how will this actually impact the job situation here in the U.S.? That answer is not so clear. Much of the manufacture that will be moved is automated, meaning more machines and not necessarily more workers. Job growth has occurred in manufacturing here, but there are still two million fewer jobs in this sector than there were five years ago. And as Apple and other large brands add jobs here at home, the expansion overseas continues at a much greater rate. Apple will continue to make their iPhones and iPads, which are the bulk of their business through jobs in Riyadh, in China and in several other foreign markets. Hopefully this is more than just good publicity, and makes a real economic difference that Americans can begin to count on.