In a typically well-orchestrated PR rollout, CEO Tim Cook yesterday bared -- barely -- Apple’s plans to manufacture some of its products in the United States. The announcement came in two separate interviews -- one a cover story in Bloomberg Businessweek and the other airing last night on NBC’s “Rock Center with Brian Williams” -- and the digital punditocracy is weighing in across the media universe this morning.
Cook tells Bloomberg’s Josh Tyrangiel that the company plans to spend about $100 million next year on building Macs in the U.S. “This doesn’t mean that Apple will do it ourselves, but we’ll be working with people and we’ll be investing our money,” he says. “I don’t think we have a responsibility to create a certain kind of job,” Cook says. “But I think we do have a responsibility to create jobs.”
Cook tells “Rock Center”’s Williams why only a portion of the jobs will be relocating to the U.S.: “Over time, there are skills that are associated with manufacturing that have left the U.S. Not necessarily people, but the education system stopped producing them…., he says. “The consumer electronics world was really never here. It’s a matter of starting it here.”
Hmmmm. As Bloomberg Businessweek’s Adam Satariano writes in a separate article, Apple manufactured many products in the U.S. in such locations as Elk Grove, Calif., and Fountain, Colo., until the late 1990s, when it “moved manufacturing to Asia to take advantage of the region’s lower labor costs.”
“What's not to like?” asksSan Jose Mercury News columnist Mike Cassidy. “The world's coolest, richest, most-talked-about company giving a shot in the arm to the Made in America movement; CEO Tim Cook saying that Apple has a responsibility to create jobs; and the prospect of firing up a computer that was shipped from down the street instead of across the ocean.”
But then Cassidy, and his sources, set about deconstructing what really amounts to an investment about 1% of Apple’s projected capital spending for 2013. "The cynical rationale, No.1, is publicity stunt," Santa Clara University business professor Andy Tsay tells Cassidy. Later, he adds, “it's always good if somebody is talking about doing something like this, but the devil is in the details.”
Let’s not forget, of course, that Apple has already created more than 600,000 jobs here in the U.S., as the “Rock Center” report points out, which “includes everything from research and development to retail to a solar power farm.” Not to mention all those folks creating apps in coffeehouses on their own dime.
Apple’s largest overseas partner, China’s Foxconn Technology Group, has been battered by both bad press and worker riots over its working conditions during the past year, as observed by Reuters. Foxconn says this morning that it is “exploring the opportunity to expand its existing manufacturing operations in the U.S.,” CNNMoney’s Charles Riley reports.
The AP’s Peter Svensson takes the tack that “Apple is emerging under Cook's leadership as a kinder corporate citizen.” When, in early 2011, President Obama asked Apple co-founder Steve Jobs whether Apple would consider moving some of its manufacturing back home from China, he reportedly replied, "Those jobs aren't coming back."
"Cook is a gentler being in terms of how he projects himself," Gartner analyst Carolina Milanesi tells Svensson. But that “doesn't mean Cook is a softie,” Svensson writes. "Being gentle and being a pushover are two different things," says Milanesi. Case in point: the ousters of Scott Forstall and John Browett in late October.
Bringing assembly home could help Apple protect its intellectual property, Tim Bradshaw points out in Financial Times. “For the first time since the ’90s, Apple is taking steps to control the last pieces of the value chain it participates in,” Asymco mobile industry analyst Horace Dediu tells him. “It’s a baby step and perhaps it’s going to remain symbolic, but one can imagine a trajectory for this effort which will pay off, as well as retail has paid off 10 years after the first Apple store opened.”
“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,” Catherine Rampell and Nick Wingfield write in the New York Times.
“I find it hard to see how the supply chains that drive manufacturing are going to move back here,” Andre Sharon, director of the Fraunhofer Center for Manufacturing Innovation and a professor at Boston University, tells them. “… 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.”
If all the talk about new jobs is not enough to get tongues wagging in marketing and media-land over the weekend, how about this teaser Cook drops on Williams after suggesting that, indeed, big things are coming to Apple TV: “Our whole role in life is to give you something you didn't know you wanted. And then once you get it, you can't imagine your life without it.”
Apple Maps excluded.