APPLE
By CATHERINE RAMPELL and NICK WINGFIELD
Published: December 6, 2012 312 Comments
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Apple plans to join a small but growing number of companies that are bringing some manufacturing jobs back to the United States, drawn by the growing economic and political advantages of producing in their home market.
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Kevork Djansezian/Getty Images
Timothy Cook, Apple’s chief, said that the company was planning to build more Mac components domestically, with partners.
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On Thursday, Apple’s chief executive, Timothy D. Cook, who built its efficient Asian manufacturing network, said the company would invest $100 million in producing some of its Mac computers in the United States, beyond the assembly work it already does in the United States. He provided little detail about how the money would be spent or what kinds of workers might benefit.
Apple, which long manufactured parts in the United States but stopped about a decade ago, has been under pressure to create more jobs here given its market power. It sold 237 million iPods, iPads, Macs and other devices in the year ended in September.
“I don’t think we have a responsibility to create a certain kind of job,” Mr. Cook told Bloomberg Businessweek. “But I think we do have a responsibility to create jobs.”
Some analysts are hopeful that the move by a big, innovative company like Apple could inspire a broader renaissance in American manufacturing, but a number of experts remain skeptical.
“I find it hard to see how the supply chains that drive manufacturing are going to move back here,” said Andre Sharon, a professor at Boston University and director of the Fraunhofer Center for Manufacturing Innovation. “So much of the know-how has been lost to Asia, and there’s no compelling reason for it to return. It’s great when a company says they want to create American jobs — but it only really helps the country if those are jobs that belong here, if it starts a chain reaction or is part of a bigger economic shift.”
Over the last few years, companies across various industries, including electronics, automotive and medical devices, have announced that they are “reshoring” jobs after decades of shipping them abroad. Lower energy costs in America, rising wages in developing countries like China and Brazil, quality control issues and the desire to keep the supply chain close to the gigantic American consumer base have all factored into these decisions.
“Companies were going abroad in pursuit of cost reduction, and it turns out there were a lot of unintended costs,” said Diane Swonk, chief economist at Mesirow Financial. “America has been looking a lot more competitive lately.”
Even so, the impact on the American job market has been modest so far. Much of the work brought back has been high-value-added, automated production that requires few actual workers, which is part of the reason America’s higher wages are not scaring off companies.
American manufacturing has been growing in the last two years, but the sector still has two million fewer jobs than it had when the recession began in December 2007. Worldwide manufacturing appears to be growing much faster, even for many of the American-owned companies that are expanding at home. General Electric, for example, has hired American workers to build water heaters, refrigerators, dishwashers and high-efficiency topload washers, but continues to add more jobs overseas as well.
Apple has not announced plans to move the complex, faster-growing portions of its product lines. Macs now represent a relatively small part of Apple’s business, accounting for less than 20 percent of its nearly $36 billion in revenue in its most recent quarter. The company’s iPad and iPhone products, which amount to nearly 70 percent of its sales, will continue to be made in low-cost centers of manufacturing like China, mostly on contract with outside companies like Foxconn.
Mr. Cook’s statements suggested Apple was planning to build more of the Mac’s components domestically, but with partners. He told Bloomberg Businessweek that the plan “doesn’t mean that Apple will do it ourselves, but we’ll be working with people, and we’ll be investing our money.”
Whether Apple’s newly announced plan might help create other higher-paying jobs along the supply line depends on the nature of the manufacturing.
Other computer manufacturing has been trickling back to the United States after largely shifting overseas in the 1990s.
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Charles Duhigg and Quentin Hardy contributed reporting.
This article has been revised to reflect the following correction:
Correction: December 8, 2012
An article on Friday about Apple’s decision to build some Mac computers in the United States included erroneous information from the company about the source of desktops that Hewlett-Packard sold in Europe up until five years ago. Most of the desktops — not all — were from China.
A version of this article appeared in print on December 7, 2012, on page A1 of the New York edition with the headline: In Shift of Jobs, Apple Will Make Some Macs in U.S..
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Unni KrishnanMumbai, India
For the survival of America, most corporations will have to follow this example. With moving of operations (particularly of manufacturing) to low cost locations, Americans have lost, not just jobs but also the essential skills. While you still retain the IP, fewer Americans today can weld, solder, fabricate, etc or even write good software.. and thereby you loose the edge and leverage with the countries to which these have been outsourced. Today President Obama is funding Infrastructure development (building roads, bridges, etc, I guess) to create jobs. Why cant the American corporate leaders and stock markets agree to run on lower net profits and bonuses so that more of the jobs can be done within the country? Outsourcing is essential, but its “right outsourcing” that benefits the country and American corporations have outsourced without applying their mind and this is whats hitting the ecconomy. I have been in the IT industry for over 30 years and seen large scale job loss & pink slips in the US and it was painful even for us who got those jobs offshored. I have seen excellent software analysts loose their jobs and take up low end jobs for survival. Thats not the America that can continue to be the world leader you have been.