Apple would rather kill U.S. manufacturing if it could, but doing so would be political suicide

“To this day, the Mac Pro remains one of the few products that Apple actually manufactures in the U.S.,” Evan Niu writes for The Motley Fool. “When the company unveiled the new is-it-a-trash-can-or-a-jet-engine design in 2013, it made sure to point out the shift in manufacturing.”

“At the time, like now, Apple was on the receiving end of criticism regarding its use of Asian contract manufacturers abroad (although the Mac Pro facility is operated by Singapore-based contract manufacturer Flextronics),” Niu writes. “It was a big deal at the time, even if mostly symbolic. Apple earned some political goodwill in the process, while minimizing the financial impact by choosing one of its lowest-volume — and most expensive — products to make at home. Here’s the thing: Apple would still probably prefer to kill off its U.S. manufacturing.”

“In a recent Bloomberg report by Mark Gurman discussing the broader state of the Mac, some light has been shed on some of the challenges that have plagued the Mac Pro and its domestic production,” Niu writes. “The real kicker is this snippet from the report (emphasis added): ‘Because of the earlier challenges, some Apple engineers have raised the possibility of moving production back to Asia, where it’s cheaper and manufacturers have the required skills for ambitious products, according to a person familiar with those internal discussions.'”

“Just because Apple would like to kill off its U.S. manufacturing due to both operational and financial considerations, that doesn’t mean it will. This is particularly true given President-elect Donald Trump’s heavy emphasis on U.S. manufacturing on the campaign trail,” Niu writes. “So while Apple and its investors would still rather keep manufacturing in Asia, the company still has to seriously entertain the idea of making iPhones in America.”

Read more in the full article here.

MacDailyNews Take: Well, so far, we do know one thing at least: Two of Apple’s most important partners – SoftBank (which owns ARM Holdings) and Apple product assembler Foxconn are in on a significant deal to expand operations in the U.S.A.

SEE ALSO:
Apple supplier Foxconn plans U.S. expansion amid President-elect Trump’s Made in America push – December 7, 2016
President-elect Trump named TIME’s Person of the Year; tells Apple CEO Cook: ‘It’s my ambition to get Apple to build a great plant, your biggest and your best’ – December 7, 2016
Softbank to invest $50 billion in the U.S., create 50,000 new tech jobs after meeting with President-elect Trump – and Apple supplier Foxconn is in on the deal – December 6, 2016
President-elect Trump invites tech leaders to roundtable in Manhattan next week – December 6, 2016
President-elect Trump meets with Apple board member Al Gore at Trump Tower in Manhattan – December 5, 2016
President-elect Trump tells Apple CEO Tim Cook that he’d like to see Apple make products in the U.S. – November 23, 2016
President-elect Trump says Apple CEO Tim Cook called him after election victory – November 22, 2016
Apple could make iPhones in the U.S.A. under President Trump, sources say – November 17, 2016
Japan’s Softbank just became one of Apple’s most important suppliers – July 18, 2016

43 Comments

  1. How about not designing something that is so difficult to manufacture in the first place, particularly when that design does not meet the user’s needs in the first place. Guess what? A rectangular box would be much easier to make, and it is what your users are asking for.

    1. Are you inferring that Americans can’t make things as complex or as well as the Chinese can?

      “Introducing, the Apple Big Ass Box. The computer so simple, Americans could make it!” Yeah, that’ll go over well.

      1. There’s complexity, and then there’s grossly unnecessary complexity.

        In the museum of “Rotten Apples”, the Trash Can is going to be in the display case right next to the 20th Anniversary Mac and G4 Cube.

        The Mac Pro contained extensive examples of where they made it harder (and more expensive) than it had to be, creating the bad joke of a Rube Goldberg machine.

        And design-wise, the MBP and iMac aren’t much better. Both are unnecessarily expensive engineering implementation nightmares which underperform because of far too much priority being placed upon the superficial aesthetic.

        Overall, Apple has the resources to solve both of these problems, but due to their hubris … they won’t. They’ll quit first.

        -hh

    2. Dumbing down the product is no answer; then they won’t sell vs the competition.

      The key would be to train US workers with the necessary skills to compete.

      Even then, no matter how skilled the populace, eventually these manufacturing jobs will be replaced by machines. That’s something that Trump needs to take into account.

      We eventually will need a new social contract, because with machines we won’t need people to work as much, yet they still need to be taken care of.

  2. Hey this happened in the car industry too. Foreign companies have manufacturing in the US (and the UK) and helps them get over import limitations.
    This still doesn’t address the issue of getting skilled employees for the work. This is where the US are lacking compared to places like China.
    Trump wants to bring jobs back to the US but is he willing to invest in the education system so that it provides the skills that employers needs?

    1. “Trump wants to bring jobs back to the US but is he willing to invest in the education system so that it provides the skills that employers needs?”

      A lot of people want and have wanted to bring manufacturing back here to the US, but, yes, the education system seems to want to push out parasites like paper-pushing hedge-fund managers or machine-aided singing prostitutes, not even really investing in trade schools or craftspersons, not even really encouraging those professions.

      And, yeah, trump voters (the usual marks) are the least able to even desire such professions. Since they have no idea how to vote for things that might actually help them….

      1. You’re kidding right? The way manufacturing is it done today a person puts one or two bolts and or assembles one part and it moves down the line. There’s very little skill involved. Show him what to do when they’ll do it

      2. Nice generalization. Irony is..you’re probably on if those folks who assume groups that don’t agree with you are “stupid” but get bent out of shape with even a hint of people generalizing about racial stereotypes, etc. hate is hate. The hate is strong with you. Glass houses.

    2. Why is it that the most outspoken capitalists decry anything the government does for the good of the populace, but then petition for handouts at every turn? The same voices demanding that state schools are too expensive and taxes too high are the same ones who want specialist skills from kids, with zero training on the job

      The USA could learn a lot from Germany, where the state and companies partner and fully fund comprehensive worker training.

      China offers threes things: cheap menial labor, huge growing consumer class, and endless corruption that undermines the effectiveness of any product development there.

    1. You are of course referring to delicate snowflake sensibilities implosion, once reality has settled in and their sense of election entitlement but a distant shock & awe correction memory.

  3. They should move manufacturing of the new, ugly, mostly-recycled-iron-ingots Mac Pro box to some rust belt city like Toledo. That way Apple can show it true disdain for that particular desktop computer while scoring political points with the Trump administration. It’s a win for the Midwest, US Steel, labor unions, Apple proving it loves the rust belt, and, of course, Donald J. Trump.

    1. In a way, you may be correct, but you won’t like the actual point of that statement.

      Unions enabled American manufacturing workers to have decent wages and social stability. And during the post-war industrial boom, they proved that profits can still be made while paying the work force a living wage and benefits.

      China is taking the manufacturing jobs because they simply aren’t paying the equivalent of living wages to their workers. Let’s get one thing clear: what Chinese factory workers get for making iPhones is significantly more than any other similar job in China would provide, but in absolute terms, it is less than 1/5 of what an American worker would expect to earn for similar work.

      In the tech industry, Apple is possibly the only company that could afford to move manufacturing of most of their hardware back to the US (and pay US workers the prevailing wages). That isn’t the problem. It has been widely documented that it has become pretty much impossible to find enough American workers that are skilled and disciplined to meet the requirements of these manufacturing jobs. Steve Jobs told Obama that “those jobs are never coming back”. Not just because they are five times more expensive for the manufacturer to have them in the US, but because Apple simply cannot recruit 150,000 skilled workers in a matter of 9 weeks for an iPhone 8 plant. China has 1.3 billion people (4x as much as the US), and there are plenty of engineers who will jump on the opportunity to work at Foxxcon assembling iPhones.

      The only meaningful way to grow a developed economy is to move away from manufacturing and provide services that other countries need. Innovation is the most lucrative, but there are many other that can bring revenue and provide economic growth. Turning screwdrivers and soldering ICs is not it.

      1. Let us not forget; Foxxcon simply shuts down the iPhone 5S plant once Appple decides to discontinue 5S manufacturing. 150,000 Chinese workers lose their jobs (after 3 years of making that iPhone) and are now looking for the next gig.

        There is absolutely no way this kind of treatment of workforce would be acceptable in the US. That’s not what Trump voters were asking for.

          1. New factory, new tooling, new workers. And it most definitely isn’t a planned transition from one to the next.

            When 5S was shut down, 6 and 6S were already in production for a long while. However, those workers (and that factory line) didn’t simply switch from 5S to 7. It may well be that some of those who were manufacturing 5S ended up re-hired for the manufacturing line for 7, but most were jobless for quite some time. Let us not forget, when the model is new, they have to churn out some 10 million devices per month. Next year, when the new model comes out, the old factory that is still making last year’s model has already fired two thirds of its work force, since it is making that many fewer devices.

            The whole point is, Chinese manufacturers can easily hire and fire large amounts of workers, activate three shifts, then downsize to two or one shift, in order to match the demand for output, all on weeks’ notice.

            You simply can’t do these kinds of things with American workers.

      2. That is nice but you have to actually built thing not just design them, the Japanese or the German economy is way stronger and richer than the UK (sell-out) bank-finance economy at street level.

    1. I think it was an experiment on a product that lent itself to a slower production line. For all we know there is only the janitor left working….the rest have been laid off.

  4. Apple could and probably would bring back manufacturing to the US. There are two issues with this. Most of the work would be done with robots. There would be few if any screwdriver jobs. Secondly, the work requires a high level of education. Cook already told both Obama and Trump that such a move would be impossible without vast improvements in US education. That is a long term project. China is already pricing itself out of this labour market and Apple is looking at India and Africa. Those jobs won’t be in the US for another generation. 2036?

  5. Apple could and probably would bring back manufacturing to the US. There are two issues with this. Most of the work would be done with robots. There would be few if any screwdriver jobs. Secondly, the work requires a high level of education. Cook already told both Obama and Trump that such a move would be impossible without vast improvements in US education. That is a long term project. China is already pricing itself out of this labour market and Apple is looking at India and Africa. Those jobs won’t be in the US for another generation. 2036?

  6. The real trouble here is that when it comes to manufacturing it’s a level playing field, i.e. produce the product with the quality required in the shortest and cheapest way possible.
    Fair for everyone that level playing field.

    Of course to succeed on a level playing field is alien to those from Apple’s homeland. Having a total lack of morality and ethics doesn’t help much either.

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