Apple: U-S-A! U-S-A!
The rumors are true: Apple (NASDAQ:AAPL) is bringing some manufacturing back to the U.S. Chief executive Tim Cook said the company had plans to spend more than $100 million next year on building Mac computers in the U.S. The move will take a portion of Apple manufacturing away from China, the company’s assembly headquarters over the last few years.
What Do Apple’s New Manufacturing Plans Entail?
“Next year we’re going to bring some production to the U.S.,” Cook told Bloomberg Businessweek in an interview. “This doesn’t mean that Apple will do it ourselves, but we’ll be working with people and we’ll be investing our money.”
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While Cook didn’t offer many details about how much production will take place in the U.S. and where it may be based, he said operations will include more than just the final assembly. Before it moved the work abroad for labor cost reasons, Apple had handled manufacturing in locations including Elk Grove, California and Fountain, Colorado. Some components of the iPhone and the iPad already are made in the U.S., including the display glass, which is made by Corning (NYSE:GLW) in Kentucky.
What is the Significance of Such a Move?
With the domestic unemployment rate at around 8 percent and the economy still rebounding from the recession, companies are increasingly under pressure to bring some of the jobs back to the U.S. Caterpillar (NYSE:CAT) and General Electric (NYSE:GE) are among those that have spoken of shifting production back home. “I don’t think we have a responsibility to create a certain kind of job,” Cook told Bloomberg. “But I think we do have a responsibility to create jobs.”
Apple and its manufacturing partner Foxconn have also faced criticism for their labor practices in China, and Cook defended Apple’s practices in the interview, saying the company was taking a lot of new measures. “We’re doing a number of things that I think are really great, really different, and industry leading,” Cook said. “No one is looking at this as deeply as we are or going as deep in the supply chain.”
Can This Development Affect Company Stock?
Cook had also expressed an interest in encouraging American-made Apple products at a conference earlier this year, though he acknowledged workforce limitations compared with China. Maybe Apple is facing constrained supply of the redesigned iMac that originated at its China manufacturers and the U.S. production is just to lend a helping hand. In any case, at a time when everything appears to be pulling the stock back, any kind of positive buzz is good news for Apple.
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