Trump to Tim Cook: Make Apple products in the United States

“After a New York Times article described abject working conditions at China-based Foxconn, Apple has faced a growing firestorm of criticism,” Brooke Crothers reports for CNET. “Foxconn is Apple’s go-to contract manufacturer for iPads and iPhones.”

“Speaking on Fox News, Trump said Cook should decree that its stuff be made in the U.S.,” Crothers reports. “‘Wouldn’t it be a great thing if the new leader of Apple said we’re going to start building plants in the United States,’ he said.”

Crothers reports, “Trump continued. ‘Maybe the incentive’s not there…but when 100 percent of Apple’s products–or virtually 100 percent–are made outside of this country, it’s pretty sad,’ he said… Trump thinks Apple should try anyway. ‘We can do great things in this country…wouldn’t it be great if Apple actually made these products in the United States.'”

Read more in the full article here.

MacDailyNews Take: By SteveJack

Wouldn’t it be great if unicorns pranced the earth and shat out silver dollars? Not so sure how great it would be if iPhones cost $1000 and new models came out once every five years, because that’s about what you’d get if Apple tried to make iPhones in the U.S.A. There aren’t enough qualified people in the U.S. to oversee and ramp up production. Plus, the red tape and wage requirements would destroy Apple’s ability not only to compete on price, but to innovate apace.

Apple is responsible for multiple times more jobs than just those on their payroll: developers, accessory makers, resellers, tech media, etc. Real jobs. Not jobs that will be replaced by robots within a few years anyway.

This isn’t difficult, folks. As the late Steve Jobs said rather succinctly, those jobs are never coming back to the U.S. [UPDATE: 4:28pm EDT: Oh, by the way, most of your Apple iPhone and iPad was Made in the U.S.A..]

So, instead of wasting time on hopes and dreams and dead paradigms, why not get busy preparing for the future?

You want more jobs in the U.S.? Get the hell out of the way, make it as easy as possible for the risk-takers to do what they do best, do not punish or even remotely threaten to punish success, encourage real competition in education by breaking the teachers unions’ stifling grip on public education by providing vouchers, devote serious effort to grooming engineers and scientists, and stop wasting time on untenable fantasies emanating from parrots with bad haircuts.

Trump is now so publicity-addicted that he’s become a pawn led by the nose by yellow journalists.

SteveJack is a pen name used by a long-time Macintosh user, web designer, multimedia producer and, when he feels like it, a contributor to both MacDailyNews Takes and the Opinion section.

Related articles:
BSR: New York Times’ Apple-Foxconn article contains untruths, inaccuracies, and misleading info – January 29, 2012

Most of your Apple iPhone and iPad was Made in the U.S.A. – February 1, 2012
Apple and the American economy – January 24, 2012
Apple, Steve Jobs, Obama, America and a squeezed middle class – January 21, 2012
How Rick Santorum would lure Apple to move assembly from China to Charleston – January 21, 2012
Apple’s real market value: How many U.S. jobs it creates – November 21, 2011
iOS developer salaries skyrocket – November 9, 2011
How many U.S. jobs has Apple’s iPod created? – July 8, 2011

Steve Jobs’ one-on-one ’95 interview now available online – October 27, 2011
Steve Jobs: America’s schools are dying – October 24, 2011
Steve Jobs & Rush Limbaugh agree: U.S. public schools are ‘unionized in the worst possible way’ – February 20, 2007
Apple CEO blasts teacher unions, says US schools are ‘unionized in the worst possible way’ – February 16, 2007

119 Comments

        1. I taught in the public school system (high school) here in the USA for almost three decades. The VERY LAST THING any of my students (or their doting parents) wanted was to work in a soul-less factory, assembling electronic components for a major corporation 8 hours a day.

          Each and every one of my charges was going to be an artist, a rocket scientist, a doctor, a lawyer, a government cabinet minister, a writer, a professional athlete, a philosopher, a denizen of their parents’ basement . . . . . but a FACTORY WORKER? GAWD NO!

          Have you seen the pictures of the assembly lines at Foxconn, the hundreds of women in clean-room uniforms sitting at a assembly line, examining electronic products in disciplined silence and steely concentration?

          That will NEVER happen here (again), folks. Never.

        2. I think Apple will eventually move manufacturing back to the USA, and the leftists will be screaming bloody murder because the plant will be staffed by robots.

          Of course, Trump never did anything worth a damn so he doesn’t have a lot of room to talk, and there’s no point in building things here when the government is so hostile to business.

    1. There may be a down economy, but that doesn’t mean that “normal people” can’t afford to buy a house.

      People need to learn to buy within their means.

      If you can’t find a house within your means, then perhaps you’re meant to be a renter.

      Home ownership is not a right, that everyone should have.

      That attitude is what put us in this mess in the first place.

    1. The “Donald” makes his money with armies of lawyers that protect his wealth from his creditors. It’s guys like him who got the tax code changed so that earning money through work is discouraged by high tax rates and parasitic income ( investment bankers and venture vultures) pay little or nothing.
      Only unions will make work conditions safe, until the workers of China unite they will be treated like our people were before unions were invented.

      1. Unions operate on the idea that they strike and labor stops. In other words labor shortage. Go look at a population density map of China to see how well that’s going to go.

        Also did I mention China is not a free democratic country with free speech? Who do you think controls the government there? The regular workers?

      1. who the fsck would bother to defend an asshole like Trump? He is the walking embodiment of the fact that success doesn’t require extensive knowledge or a deep understanding of all aspects of business.

  1. Said the man whose business does NOT require a deep, sophisticated manufacturing supply chain.

    Tim Cook ought to suggest that Trump personally guarantee that no illegal worker has ever been part of a Trump project.

    1. Talk is cheap. What Trump should do is to buy Dell, then produce all of Dell’s computers and products in the US. Pay the workers top unionized rate. Don’t ever employ immigrant workers. Every worker is entitled to work 6 hours daily, 30 hours weekly and strictly no overtime. Give the workers the best facilities, 3 full meals a day and as many teabreaks as the worker wants. If Donald Trump can make money in this way, best of luck to him.

  2. Most people (probably Trump included) don’t realize that Foxconn is not owned by Apple. They make products for Apple, Microsoft and probably a slew of other companies. The working conditions and hours are not set by Apple. Is the Trump clothing line made here in the US? Or is some kid getting 6¢ per hour cutting the cloth?

      1. You have no idea what the pay, working conditions and hours are at Foxxcon.

        Do you think over 100,000 people would line up to apply to work in Foxxcon’s new factory in east central China if Foxxcon was running a slave labor camp?

        Yes, twill earn a living wage and support their parents and assorted grandparents, aunts and uncles.

        No, they won’t be paid American salaries, work in American conditions, eat American food and sleep in a mortgaged to the hilt American house.

        The sad part is, neither will many Americans.

  3. MDN: …”Not so sure how great it would be if iPhones cost $1000 and new models came out once every five years,…”

    New iPhone 4S currently starts at $650. And that is when it is made by person(s) getting paid $400 per month. If it were to be made by a person getting a minimum of $3000 per month (plus benefits), there is NO WAY it would cost just 30% more.

    If the US were EVER to be able to provide labour and the agility of operations on the scale needed for iPhone manufacturing, the actual retail price would have to be at least $3,000 in order to cover cost. Even with current subsidy levels, that would put a subsidised retail price (with a two-year contract) to over $2.5k for an iPhone.

    I’m curious how many people would be willing to buy an iPhone at such price?

        1. Sure, Terrence. Let’s all give up on that idea based upon the misinformation, illogic, and erroneous numbers that support your baseless beliefs. *Not* Get a friggin’ clue!

      1. Just because you believe it doesn’t make it true. The reality is that the ecosystem for this type of manufacturing no longer exists in the US. It would take much more than Apple wanting to build in the US to recreate it.

        Doubt that? Just see what it takes to build an electronic manufacturing plant in a place like California

        K

      2. Apple would have to build a huge industrial infrastructure, raise a huge work force that just loves to do mind-numbing assembly line work, and somehow get the law changed so that minimum wage becomes about $3 per day.

        Maybe that’s not so feasable?

    1. @Predrag – I normally enjoy your comments, but I have gotten sick and tired of the simplistic labor rate analysis that occurs here and in many other forums. Let’s review the facts:

      + Korean auto makers such as Hyundai and Kia – who rely on cheap labor at home – also build vehicles in the United States. Despite higher labor rates here, those vehicles don’t cost the consumer more than the ones imported from Korea AND are generally as among the best values in autos today.

      + The total cost of assembly for many products is a small fraction of the overall cost. For example, for a typical car, the cost of assembly is 14% to 16% of its total cost to build. The ratio for consumer electronics is even higher – few things cost more than 7% to assemble; many much less.

      In short, the impact that labor costs have on the final cost of an iPhone or iPad is far more nuanced than your simplistic assessment would suggest. And as robotics play a larger role in assembly, it will get even more so, since the technical teams needed to maintain and operate the robot will likely get paid more – even in China – than the current assemblers.

      In the long term, shipping and distribution costs – given the likelihood of rising fuel costs – are going to be a greater factor in determining where stuff gets made than are labor costs.

      1. Ralph,

        I agree that my argument was indeed simplistic (overly so), but labour is likely the most significant reason why Apple simply can’t manufacture in the US. Not so much the cost of it (as what you say is likely correct — the actual wages don’t represent such high percentage of the final retail price); it is the lack of rapidly available and deployable force of thousands of engineers and supporting labourers with a two-week turn-around. Foxxcon has agility and scalability that is simply impossible to match elsewhere.

        As for the share of labour cost in the retail price, even if it is only 7% as you suggest, increasing it ten times would still induce almost double the retail price. Apple was able to easily absorb 50% wage increase at Foxxcon last year; 10,000% increase would likely be out of the question.

        1. Good points about “agility and scalability” – that is true.

          Small nit: Not all of the assembly cost is labor – most companies have other expenses that are lumped into the calculation,

          1. That isn’t just a small nit, Ralph M. It is another fundamental misapplication of mathematics on the part of Predrag. You would think that he was educated at a U.S. public school…

            Predrag, the effect of a sevenfold to eighfold increase in labor costs, as you conjecture, would have a much smaller impact on the retail cost of an iOS product. Do the math!

      2. By the way, this is something I have professional expertise in – as recently as last month I inspected an engine factory in Liuzhou, China, on behalf of a client doing business with a Chinese vehicle manufacturer. And I will be back there next month. Unlike the countless clueless people who spout off drivel about Chinese manufacturing, I actually do this for a living.

    2. There’s simply no basis for your numbers. Macs *were* made in the US as recently as the late 1990s, and they weren’t *that* much more than their imported competitors. (I know, there’s no real competition for Macs.) Ask yourself how much more expensive the Hyundais now built in the US are compared to their South Korean competition.

      Bringing the manufacturing back to the US involves more than building a factory here. Foxconn is, after all, an assembly point, and that means bringing the manufacturers of those components along as well. It means providing a tax and regulatory environment more attractive to those manufacturers. Yes, the US still has some comparative advantages – cheaper land and energy, for example – but they don’t outweigh other factors.

      1. The real cost of Apple building and operating a manufacturing plant in the U.S. is not hourly wages and benefits (although those certainly would increase the product price), but U.S. environmental and labor laws. It would take Apple years to gets through California’s red tape to design and build a manufacturing facility, with all of the environmental studies and other various regulations which need to be complied with.

        The fact is that the U.S. (both federal and states) has made it very difficult for companies to build factories. It is simply far less expensive to build your factory overseas, or better yet, hire someone else (like Foxconn) to construct your product for you. Until that changes, manufacturing will continue to decline in the U.S.

    3. @Predrag: As I have said before, total BS. Until you can identify how many manufacturing/assembly labor hours go into an iPhone or iPad, and what proportion of the unit cost is associated with touch labor, your cost speculations are baseless and utterly irresponsible. They reek of the ignorance of basic math.

      To generate an example, assume that a team of 100 people manufactures 1000 iPhones per day, or 20,000 per month. Using your labor costs ($400/month and $3000 per month), the associated manufacturing labor cost would be $40K for Chinese labor and $300K for U.S. labor. In this example, labor cost contribution would be $0.67 for Chinese workers and $15 for U.S. workers. That’s right – less than $15 more per iPhone. Even if the contribution of each worker was only equivalent to *one* iPhone or iPad per day rather than ten, we still do not come close to your numbers. In this extreme example, the Chinese labor contribution would be $20 per unit while the U.S. labor contribution would be $150 per unit – a delta of $130. That would raise the iPhone 4S cost from $650 to $780. Even if the Chinese workers labored every day (30 days) compared to 20 days for the U.S. workers, the numbers do no change very much.

      If you factor in the potential for incorporating robotics to increase production efficiency (which Foxconn plans on doing in a major way over the next few years) the labor costs become even less of a factor. I do not dispute the fact that it would take time to train a large manufacturing workforce in the U.S. But I contend that it is feasible to bring a portion of iOS device manufacturing into the U.S.

      1. I blasted other people about math and then made an error in my own calculations…embarrassing. I changed some of the assumptions midstream and did not correct all of the calculations.

        For my initial Chinese worker example, the cost per unit is $40K/20,000, or $2 (not $0.67). But that does not materially affect the conclusion. Even if the Chinese workers were unpaid volunteers and the U.S. workers were paid twice as much, Predrag’s $3000 cost assertions would still be way, way off.

  4. “Get the hell out of the way, make it as easy as possible for the risk-takers to do what they do best, do not punish or even remotely threaten to punish success, encourage real competition in education by breaking the teachers unions’ stifling grip on public education by providing vouchers, devote serious effort to grooming engineers and scientists…”

    SteveJack for President!

    1. Since you already turn this political…..

      We don’t need SteveJack, Ron Paul is already in the race. He is saying the same things and trying to restore personal freedom.

      RON PAUL 2012!

      The Dude abides.

      1. Ron Paul is a fscking kook. He only looks reasonable when stacked against the rest of the raging Republican loons vying for the job of President on dead ideas like less government and ever lower taxes.

    2. @ First 2010, Then 2012
      Yup, that’s why Romney — the moderate from MA — just won the Florida primary while all the others were trying to out-conservative each other. Enjoy your fantasy world while it lasts… 😆

        1. Yeah…somehow things will get better if the rest of us “get out of the way” and let the privileged few show us the way to nirvana.

          Seriously, the job creators are not the rich and privileged. That is why trickle down economics did not work. Nothing trickled down – neither jobs nor assets. The most fundamental source of jobs are entrepreneurs starting small businesses. Unfortunately, the economic collapse engineered by the previous administration absolutely gutted small business because they could not get loans from banks for the past several years. Without loans to finance inventory, etc., many small businesses were hit hard.

    3. “Get the hell out of the way, make it as easy as possible for the risk-takers to do what they do best, do not punish or even remotely threaten to punish success, encourage real competition in education by breaking the teachers unions’ stifling grip on public education by providing vouchers, devote serious effort to grooming engineers and scientists…”

      The corner 7-11 is not going to save America by creating part-time, no-benefit, minimum wage jobs. An economy based on “entrepreneurs” selling people things they don’t want, don’t need, and can’t afford just naturally grinds to a halt eventually. That rhetoric is all smoke and mirrors so we won’t see them pocketing our money before fleeing to the safety of their gated communities.

      What creates jobs is the disposable income of a large and thriving middle class. The middle class in America has been systematically looted over the last 30 years, and is now just about gone. The mortgage banks’ theft of any remaining homeowner equity through predatory lending practices and aggregated sales of junk mortgage loans was the coup de gras. It’s time for the people to rise up as they did in Sweden and Norway. Call me a socialist if you like, but I think we have obligations to our society and its members beyond buying ourselves another yacht.

  5. According to Forbes:

    A report written by three U.S. professors showed that only about “$10 or less in direct labor wages goes into an iPhone or iPad is paid to Chinese workers.” The report points out that while Apple products — including components — are manufactured in China, the primary benefits go to the U.S. economy because Apple continues to keep most of its product design, software development, product management, marketing and other high-wage functions in the U.S., not China. China’s role is more of an assembler.

    In other words, the only part of making an iPhone that is done abroad is the grunt work of actually screwing it all together. All of the high-paying jobs involved in designing, engineering, marketing and selling the thing stay right here in the good old U.S.A.

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