At the end of last week, CEO Timothy Cook announced that Apple intends to invest $100 million next year to relaunch part of its manufacturing operations in the US.
Apple and Foxconn, the contractor responsible for manufacturing iPhones, iPads and a host of other Apple products in China and other countries, is expanding its existing operations in America to build Mac computers. How many jobs will it create? About 200—a number that wouldn’t even get you noticed in the Fortune 1000.
Last year the Boston Consulting Group published a study forecasting a “manufacturing renaissance” in the U.S. as China’s wage rates and currency rise, skilled workers grow scarcer, and U.S. productivity maintains a strong lead over China’s. Apple thus joins a group of U.S. companies—Caterpillar, Ford, NCR—that have already reckoned that “Made in USA” makes good business sense.
Something important is happening here. With the rapid emergence of China, India, and other developing countries as “middle income nations,” the classic cheap-labor-for-exports model is losing its primacy. So, it appears, is the automatic assumption that wage rates more or less dictate where a manufacturer will locate. As Boston Consulting argued, in the future companies such as Apple will manufacture in China for the Chinese market and in America for American consumers.
It will be interesting, with these studies in view, to see how manufacturing fares in the U.S. in coming years. We still have 2 million fewer manufacturing jobs than we did pre-crisis back in 2007. And do not forget: Apple is all about iPads and iPhones now; the Macs coming back account for less than a fifth of its revenue. It still promises some jobs. But what is good for Apple may not prove good for everybody making things. This is not the beginning of a gold rush.
Apple and Foxconn, the contractor responsible for manufacturing iPhones, iPads and a host of other Apple products in China and other countries, is expanding its existing operations in America to build Mac computers. How many jobs will it create? About 200—a number that wouldn’t even get you noticed in the Fortune 1000.
Last year the Boston Consulting Group published a study forecasting a “manufacturing renaissance” in the U.S. as China’s wage rates and currency rise, skilled workers grow scarcer, and U.S. productivity maintains a strong lead over China’s. Apple thus joins a group of U.S. companies—Caterpillar, Ford, NCR—that have already reckoned that “Made in USA” makes good business sense.
Something important is happening here. With the rapid emergence of China, India, and other developing countries as “middle income nations,” the classic cheap-labor-for-exports model is losing its primacy. So, it appears, is the automatic assumption that wage rates more or less dictate where a manufacturer will locate. As Boston Consulting argued, in the future companies such as Apple will manufacture in China for the Chinese market and in America for American consumers.
It will be interesting, with these studies in view, to see how manufacturing fares in the U.S. in coming years. We still have 2 million fewer manufacturing jobs than we did pre-crisis back in 2007. And do not forget: Apple is all about iPads and iPhones now; the Macs coming back account for less than a fifth of its revenue. It still promises some jobs. But what is good for Apple may not prove good for everybody making things. This is not the beginning of a gold rush.
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