Apple's CEO to bring production back to U.S. from China

Technology Dec. 07, 2012 - 08:46AM JST ( 49 )

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49 Comments

7

wanderlustDec. 07, 2012 - 09:40AM JST

Maybe someone is waking up to the fact the out-sourcing is not so cheap in the long run, that there is a limit to continuously finding lower cost countries with skilled workers to make your products and enough economic differentials to make short-term profits. Plus politically and emotionally, it's appealing to create jobs and pay taxes in the US.
4

jforceDec. 07, 2012 - 10:24AM JST

Well, this is great news. I hope other companies follow suit and get back to Canada and the US. We need to start training our labour to be technical once again. Service economies do not give the same satisfaction as actually doing something skillful. Let's get out of China and come home to the economy where you were born. Corporate patriotism and loyalty would go a long way to quieting those conspiracy seekers, too. Triple win.
-11

basroilDec. 07, 2012 - 10:31AM JST

Asked why Apple would not move out of China entirely and manufacture everything in the United States, Cook told NBC, “It’s not so much about price, it’s about the skills.”

Interesting, since most of the other companies have build centers in the USA, and they've never complained about a lack of skills. Cook is thinking 100% about cost, zero percent about doing the right thing.
7

Outta hereDec. 07, 2012 - 10:38AM JST

basroil

Interesting, since most of the other companies have build centers in the USA, and they've never complained about a lack of skills. Cook is thinking 100% about cost, zero percent about doing the right thing.

Thats funny Basroil saying its 100% about cost. Where is your proof? Yes China is a cheap manufacturing base, but there was an interesting article in the NY Times a few months back about how many of the manufacturing jobs that went offshore from the US are unable to be brought back because the workforce in the US is now to unskilled to do the jobs since they are now largely automated. Guess you are just throwing mud at your favourite target again without actually getting your facts straight hey?
7

LFRAgainDec. 07, 2012 - 11:10AM JST

"Next year we're going to bring some production to the U.S.," Cook told Businessweek."

Well, it's about freaking time. Everyone keeps scratching their heads about how to bring the economy back to life. This is an important first step.

The next is to pressure corporations to adopt CEO pay packages that are more in line with, well, reality. CEOs whined constantly throughout the 90's and 00's that American workers were just too expensive to work with and that their pay cut into profits, all the while receiving compensation packages that were and are bats#it insane.

Since 1966 when the data started to be complied CEOs went from receiving 25 times the compensation of the average production worker to a peak of over 300 times in 2000, before settling down to a still morally offensive ratio or 160:1.

No one, and I mean no one genuinely deserves that kind of compensation. Any claims to the contrary are utter horse puckey.

Now, if, as Outta Here accurately points out, we can get our workforce back up to snuff, instead of allowing it to wallow in mediocrity, as we have over the past two decades, we'll start to see some positive changes.

Might not be a bad idea to start taking the matter of improving our public education system more seriously either. After all, the wealthy who will only attend private schools more certainly aren't going to want to stoop to something so mundane as a high-tech assembly job. That would involve getting their hands dirty. We need someone to put their iPads together for them.
-8

basroilDec. 07, 2012 - 11:27AM JST

Outta hereDec. 07, 2012 - 10:38AM JST

an interesting article in the NY Times a few months back about how many of the manufacturing jobs that went offshore from the US are unable to be brought back because the workforce in the US is now to unskilled to do the jobs since they are now largely automated.

Who sent them out there in the first place? Oh yea, that was Cook under the direction of Jobs.

And no, the unskilled workforce is a myth. For new products with vastly different build orders, like the iphones and ipads, you gain almost nothing using a workforce trained for an older version. If they were building tubes of toothpaste you might be right, but when 80% of the parts change in shape, size, and location, it's practically irrelevant.
5

ScroteDec. 07, 2012 - 11:33AM JST

Some of the new iMacs already have "Assembled in USA" written on them. They must have a test production line in operation somewhere.
5

ZenpunDec. 07, 2012 - 11:39AM JST

@basroil

Interesting, since most of the other companies have build centers in the USA, and they've never complained about a lack of skills. Cook is thinking 100% about cost, zero percent about doing the right thing.

According http://edition.cnn.com/2012/12/06/tech/innovation/apple-made-in-us-cook/index.html?hpt=hp_t3 it is about the skills shortage. Not about the cost! US has many highly skilled engineers. However it is not sufficient. Silicon Valley is dominated by Indian and Taiwanese skilled immigrants. IT is stand for India and Taiwan.

** Cook told NBC that Apple isn't concerned about the higher cost of manufacturing in the United States creating pressure to raise prices. Apple assembled many of its products in the United States until the late 1990s, when it exported that work to Asia where labor costs are lower.

"It's not so much about price, it's about the skills, etc.," he told NBC's Williams. "Over time, there are skills that are associated with manufacturing that have left the United States. Not necessarily people, but the education system has just stopped producing that. It's a concerted effort to get them back."**
0

gogogoDec. 07, 2012 - 12:12PM JST

Parts are still made overseas, don't really understand why you want to "assemble" them in the US, doesn't make much business logic unless you're just trying to employee people?
-1

JeffLeeDec. 07, 2012 - 12:19PM JST

There was an interesting article in the NY Times a few months back about how many of the manufacturing jobs are...unable to be brought back because the workforce in the US is now to unskilled.

A more recent NY Times article said the skilled-worker shortage in the US is a myth. The problem is not the employees, it's the employers: they're only willing to pay 10 dollars an hour.
-2

Outta hereDec. 07, 2012 - 12:52PM JST

JeffLee

A more recent NY Times article said the skilled-worker shortage in the US is a myth. The problem is not the employees, it's the employers: they're only willing to pay 10 dollars an hour.

Let me ask you this. You are an employer, you can get labour to do a job and pay $10 an hour with no issues. Or you can pay $20 an hour, be held to ransom by unions, suffer shut downs, uncooperative employees, lazy employees, employees unwilling to train, change roles do anything outside their workplace agreement. Who would you employee?

Now as a customer would you pay $500 for an item made overseas or $1000 for the same item made locally? Its just the way it is. Many manufacturing companies head overseas yes but you blame the companies.... Maybe you should also look at the real cause of the move. Its also the employees and the unions that force this move.
2

zichiDec. 07, 2012 - 01:06PM JST

All BTO mac's have always been made in the USA, and more than 50% sold are BTO's. Looks like the iMac line will be the one made in America. The component parts will still be made overseas, good if they could find a way to do that in America too. Apple's system of manufacture is no different than the other top computer companies, including Microsoft.

In October, the Chinese company Lenovo, made an announcement it will make laptops, tablets, and desktops in the U.S.
4

bookowlsDec. 07, 2012 - 01:10PM JST

I'm a big fan of keeping business local. Sure, the production costs may go up but Apple can afford it and it's a great move in bringing jobs back to the US. Whether it's one job or two, is irrelevant. Keeping business at home is good all round. Consumers may or may not feel the pinch in pricing based on how the company resolves to regain higher production costs.
4

RecklessDec. 07, 2012 - 01:20PM JST

I would also assume making in the US would allow them to protect their trade secrets and manufacturing more than in China.
2

WakarimasenDec. 07, 2012 - 01:27PM JST

Publicity ploy but still nice too.
3

House AtreidesDec. 07, 2012 - 02:33PM JST

Apple is bringing manufacturing back to the United States because of advancements in robotic technology. Here's an excerpt from the Forbes article The End of Chinese Manufacturing and Rebirth of U.S. Industry:

Even if the Chinese automate their factories with AI-powered robots and manufacture 3D printers, it will no longer make sense to ship raw materials all the way to China to have them assembled into finished products and shipped back to the U.S. Manufacturing will once again become a local industry with products being manufactured near raw materials or markets.
3

zichiDec. 07, 2012 - 02:43PM JST

The Chinese company Foxconn stated it will open a factory in the USA.
-4

titaniumdioxideDec. 07, 2012 - 02:57PM JST

The Chinese company Foxconn stated it will open a factory in the USA.

Taiwan(Foxconn) is not a part of China. Though the stupid red Chinese gov't is claiming it as their own with their new Chinese passport(page 8).

U.S employees will have higher wages and better benefits, while the overworked Chinese workers are left with the same working condition. Shame on Apple.
-8

basroilDec. 07, 2012 - 03:11PM JST

House AtreidesDec. 07, 2012 - 02:33PM JST

Apple is bringing manufacturing back to the United States because of advancements in robotic technology. Here's an excerpt from the Forbes article The End of Chinese Manufacturing and Rebirth of U.S. Industry:

No such thing right now. I have a 3d printer in my lab and I can tell you it sits mostly unused because it can't print out metal parts. 3d printing is great for prototyping, and 3d milling great for low run high quality products, but when it comes to mass production, you're still going to be molding or stamping.

As for robot technology, it's still another 10 years off at the current pace, maybe 5 years with a large push away from China. One of the biggest issues is wear of the machines, especially those that are nimble enough to do what's needed, and the other is motion planning and control. The first one means high costs, second one reduces feasibility.

The shift of iMac production to the US is actually entirely cost based. Built to order systems have been made in the US for some time, with most jobs having never left the country. Since mac sales have declined drastically thanks to the higher cost and lower performance ($100 higher base cost for comparatively less modern processors compared to 2009-2011, they no longer use desktop chips at all, only laptop components), they would actually save money not having to ship the computers from China.
-7

basroilDec. 07, 2012 - 03:14PM JST

titaniumdioxideDec. 07, 2012 - 02:57PM JST

Taiwan(Foxconn) is not a part of China. Though the stupid red Chinese gov't is claiming it as their own with their new Chinese passport(page 8).

Hon Hai (Foxconn) is only headquartered in Taiwan, their manufacturing is entirely in China for Apple products. In fact, most of their factories are in mainland China.
-3

basroilDec. 07, 2012 - 04:08PM JST

Outta hereDec. 07, 2012 - 12:52PM JST

Let me ask you this. You are an employer, you can get labour to do a job and pay $10 an hour with no issues.

You can also pollute the rivers, burn forests, and relocate millions to make dams that power factories. Saying "no issues" is like saying it's not illegal to kill someone where there's no laws against it. There's plenty of issues with Apple's manufacturing company's work conditions, including child labor (much less now at least), unpaid overtime (plenty of that), and dangerous working conditions (that are illegal in USA, Europe, and Japan)
1

zichiDec. 07, 2012 - 04:27PM JST

Foxconn is a Taiwan company, and the Taiwanese are Chinese, at least they think so, and my Taiwanese friends tell me they are Chinese.

So Foxconn is a Taiwan Chinese company. I never said anythiing about Foxconn being part of China although that's were their factories are. Foxconn produce not only for Apple but every major computer company including Microsoft.
4

zichiDec. 07, 2012 - 04:29PM JST

72% of desktops and laptops sold by Apple are laptops. The iMac and Mac Pro desktops don't use laptop chips.
2

Outta hereDec. 07, 2012 - 04:33PM JST

basroil

You can also pollute the rivers, burn forests, and relocate millions to make dams that power factories.

Wow so Apple is guilty of doing all that is it? I think you will find that that is a Chinese government issue not Apple. If Apple never went to china those things would still have happened. But then you couldn't attack your favourite whipping boy now could you?

Saying "no issues" is like saying it's not illegal to kill someone where there's no laws against it.

You do realise basroil that if there is no law about something then it cannot be illegal to do it. Illegal means against the law. If ere is no law then how can it be illegal? Strange point you make there buddy.....

There's plenty of issues with Apple's manufacturing company's work conditions, including child labor (much less now at least), unpaid overtime (plenty of that), and dangerous working conditions (that are illegal in USA, Europe, and Japan)

A so it's only Apple that has these conditions? Nope think not, every single company that is in china would and will have the same issues from Toyota, to Motorola, to microsoft, and so on. But that doesn't fit your incessant Apple bashing so you won't mention it now will you?
3

zichiDec. 07, 2012 - 04:57PM JST

The Taiwan Chinese Foxconn have factories in China, Brazil, Europe, India, Japan ( two in Osaka), Malaysia and Mexico. Some of its major customers are Acer, Amazon, Apple, Cisco, Dell, HP, Microsoft, Samsung, Sony, Toshiba, Vizio.
-4

basroilDec. 07, 2012 - 05:12PM JST

Outta hereDec. 07, 2012 - 04:33PM JST

if there is no law about something then it cannot be illegal to do it. Illegal means against the law. If ere is no law then how can it be illegal?

If you were to read, I likened your statements to one saying it is NOT illegal when there is no law. Just because it's not illegal doesn't mean it's right, it just means that you won't get the law thrown at you. In Apple's case, they abuse workers and take advantage of loopholes in Chinese law to get away with things that WOULD BE ILLEGAL elsewhere, including the USA. Their business practices are immoral and unethical, even if they aren't illegal where they are practiced.
4

zichiDec. 07, 2012 - 05:12PM JST

HP, the No2 American computer company have all their products made outside of the USA.

Apple is now the biggest American company, ever and have surpassed Microsoft. http://online.wsj.com/article/SB10000872396390443855804577601773524745182.html
4

zichiDec. 07, 2012 - 05:27PM JST

The post is about Apple moving at least one of its major production lines, probably iMacs,back to America and that small step must be good for Americans. Maybe Apple will be able to move other production lines, I think that's what Tim Cook wants.

It would be good if other companies like Microsoft moved some of their production lines back to the USA. If companies like Foxconn open a factory in America then more jobs too.

Whatever Apple does will always gain disapproval from the Microdic's.
-1

Korlacan KhanthavilayDec. 07, 2012 - 06:48PM JST

72% of desktops and laptops sold by Apple are laptops. The iMac and Mac Pro desktops don't use laptop chips.

The iMac uses both desktop and laptop parts. A desktop cpu and laptop gpu.

It would be good if other companies like Microsoft moved some of their production lines back to the USA. If companies like Foxconn open a factory in America then more jobs too.

It's not as big a deal for MS, as they are predominantly a software company, not hardware. Xbox, Surface, and some computer peripherals. If Foxconn does get the US plant up and running, that single plant could easily produce MS hardware.

The 360 is made in Brazil. I believe the Surface is made in China. Their computer peripherals...haven't a clue. Probably China, but that doesn't take a rocket surgeon to build a keyboard or mouse. They can keep that.
-2

Tiger_In_The_HermitageDec. 07, 2012 - 06:54PM JST

Better get your Apple now, if its produced in US, prices going up 30% at least.

the Chinese people can breave a sigh of releaf, less polution, less people working in cramped up & poor working conditions.......
2

SerranoDec. 07, 2012 - 07:18PM JST

"just do what's right"

Can't argue with that.
-3

basroilDec. 07, 2012 - 07:27PM JST

Korlacan KhanthavilayDec. 07, 2012 - 06:48PM JST

The iMac uses both desktop and laptop parts. A desktop cpu and laptop gpu.

They use S versions of desktop chips that run 10% slower and at 65W, so they are closer to the 55W laptop chips rather than the 77W desktop ones. They also pair them with SO-DIMM like the type used in laptops, which makes them more expensive and slower.

Also limited to HD2500 integrated graphics (except i7 upgrade that costs twice the price difference of the chip) rather than HD4000, so actually not as good as laptops (though it can only use both when running windows, though not sure what mobo type they chose).

So yes, it's not really laptop grade, but it's far closer to laptop performance than it is to the workstation performance they used to have.
-1

Korlacan KhanthavilayDec. 07, 2012 - 09:13PM JST

The iMacs do have the integrated graphics, but they are paired with discrete graphics. Geforce GT 640M and GT 650M for the 21.5" models. GTX 660M, GTX 675MX, and GTX 680MX for the 27" models.

The S versions of the chips are only on the 21.5" models. The 27" uses the regular desktop variant. Both models are stuck with the SO-DIMMs though. Theoretically, they are suppose to be the same, but it usually never is. They tend to make the SO-DIMMs lower voltage. With it comes power savings, but also crappier timings. So less performance. Not to mention a higher price tag of course. It's not that much though. Only like $10+ more for the SO-DIMM version, compared to the DIMM version.

Overall, yes, they are pretty much inbetween laptop and desktop performance. The 21.5" are closer to laptop, while the 27" are closer to desktop.
2

zichiDec. 07, 2012 - 10:12PM JST

Its likely the Apple product line to be made in the USA, will still be made by Foxconn but from a new factory in America.
-2

Korlacan KhanthavilayDec. 07, 2012 - 10:24PM JST

It's unlikely that Apple will spend hundreds of millions of dollars to build a factory, employ workers, etc to produce anything Apple. It'll definitely get contracted out to companies like Foxconn.
2

zichiDec. 07, 2012 - 10:56PM JST

From the post, Apple will invest $100 million to make one of it product lines in America, that will most likely be with a partnership company and that could be a new Foxconn factory in the USA.
-2

Korlacan KhanthavilayDec. 08, 2012 - 12:29AM JST

Probably. Toss money at Foxconn to setup a facility to produce their products for a set amount of time. Then eventually Foxconn will be allowed to start producing other companies products.

Apple should simply start making their own facilities, but that'd probably take a couple years to do that and it wouldn't be cost effective.
-1

motytrahDec. 08, 2012 - 03:09AM JST

Apple does actually have a couple factories in the US still. Most of them do refurbishing and repair, tech support, etc. Foxconn is still a distinct possibility. Foxconn created a robotics division years ago and has already indicated it is their intention to automate the majority of production. Any facility in US would likely be highly automated and it's inline with Foxconn's expansion outside Asia (they already have factories in South America).

I would also say as a Taiwanese company they have zero compunction about laying off the majority of their mainland work force. Robots don't complain about low wages or jump off buildings.
-4

jeff198527Dec. 08, 2012 - 05:27AM JST

American manufacturing was never that great in terms of quality. It may be two or three steps above Chinese manufacturing at best.
-3

AthletesDec. 08, 2012 - 06:33AM JST

American manufacturing was never that great in terms of quality. It may be two or three steps above Chinese manufacturing at best.

I agree. America is good for service, design and innovation. It has no efficiency like Germany, China and Japan. Manufacturing needs speed, cost effectiveness, strong supply chain and sound logistic management. BMW will not move their plant to US from China even they will be given 100 billions. US is not manufacturing paradise.
2

LostinNagoyaDec. 08, 2012 - 08:28AM JST

It is unbelievable that some anxious fandroids see only negativeness, even from good news like this one. Only because it's about Apple. Bringing back jobs to USA is a huge step that you don't hear from other giant companies. And guys still think it's bad. If it's in China, it's bad. If it's in USA, it's bad. Confused??
-1

JeffLeeDec. 08, 2012 - 08:51AM JST

America...has no efficiency like Germany, China and Japan

That's hilarious. US workers are among the world's most productive. Japan's labor productivity is considerably lower, around the level of Spain's.

As for American quality, when Apple computers were manufactured in the US, the build quality seemed really good. As equally as good if not better than the build quality of their Japan-made counterparts.

US manufacturers add quality depending on the market demands. When quality really matters, such as for aerospace or military hardware, America leads the world.
-1

House AtreidesDec. 08, 2012 - 11:00AM JST

That's hilarious. US workers are among the world's most productive. Japan's labor productivity is considerably lower, around the level of Spain's.

The quality of the worker will become increasingly irrelevant as robots take over manufacturing. What will be of greater importance will be the level of robotics technology a nation has. Why Apple Got a 'Made in U.S.A.' Bug from the NY Times:

As cheap as a Chinese assembly worker may be, an emerging trend in manufacturing, specialized robots, promises to be even cheaper. The most valuable part of the computer, a motherboard loaded with microprocessors and memory, is already largely made with robots. People do things like fitting in batteries and snapping on screens. As more robots are built, largely by other robots, "assembly can be done here as well as anywhere else," Mr. Enderle said. "That will replace most of the workers, though you will need a few people to manage the robots."
0

basroilDec. 08, 2012 - 11:34AM JST

House AtreidesDec. 08, 2012 - 11:00AM JST

The quality of the worker will become increasingly irrelevant as robots take over manufacturing. What will be of greater importance will be the level of robotics technology a nation has. Why Apple Got a 'Made in U.S.A.' Bug from the NY Times:

Robots do practically nothing in Apple's products, practically the only thing that is made by "robots" is the circuit boards and individual chips. The rest is done manually, with the help of some semi-automated tools. Check it out: http://micgadget.com/29723/the-undercover-report-on-how-the-new-iphone-5-is-made-inside-foxconn-factory/
0

motytrahDec. 09, 2012 - 05:38AM JST

There are some things that can't be made by Robots. In particular large heavy machines. Kubota recently commented that they make all their largest equipment in the United States by hand because the skills can't be found at that level anywhere else in the world (thanks mostly to decades of defense industry building) and there simply isn't a robot big enough to handle a 2 story high machine. Hitachi Heavy also makes it's largest machines in the US for similar reasons.

You look at the history of industrialization in the United States and there are things build back in the 1960's that 50 years later still eclipse everything else in the world.
-1

Korlacan KhanthavilayDec. 09, 2012 - 05:49PM JST

"When quality really matters, such as for aerospace or military hardware, America leads the world."

But that's not mass production. Do they mass produce space shuttles? Do they mass produce fighter jets? No. The military would be lucky to get 1 million new jets a year. Of course the quality is going to be high. Not to mention, more stringent guidelines and higher cost.

Either way, it's no different than any other company in the world, building products where lives are at stake and also your main customer is some kind of country's government. BAE Systems is hardly going to lose to a US company when creating aerospace or military hardware. That's just one of the many companies out there that the US Military also goes to for aerospace or military hardware. What's that tell you about US companies?

"You look at the history of industrialization in the United States and there are things build back in the 1960's that 50 years later still eclipse everything else in the world."

It's cause in the 60's, man was stupid. Things had to be taller, bigger, longer, etc. We had to show the world that we were the best at anything and everything. Since then, we'd become smarter. We don't need to try to increase our penis size through other inanimate objects. China isn't one of those countries though. They are doing just the opposite. Trying to make the tallest building in like 30 days, they made a useless maglev train, that crappy computer processor (can't even remember the name, but it's on even x86 capable), and a slew of other things.
-2

JeffLeeDec. 10, 2012 - 07:44AM JST

But that's not mass production

I suggest your examine the build quality of an Apple computer that was made in the California, say around 10 years ago. That WAS mass production, and as I stated above, the build quality would be top notch.
-3

Korlacan KhanthavilayDec. 10, 2012 - 05:24PM JST

AH HA HA HA HA!!! I can't believe you think the Power Mac G4s was top notch build quality. It's got the build quality of a crappy Dell. It was a crappy plastic covered SECC steel shell. It used cheap internal hardware too.

The Power Mac G3 was even worse. They didn't even try with that one. Would have rather bought an eMachines over that pile of crap.
0

jeff198527Dec. 10, 2012 - 09:09PM JST

The only jobs left in America include the phrases "Would you like fries with that" or "Paper or plastic".