Trump says he has a problem if Apple builds iThings in India US president Donald Trump has told Apple CEO Tim Cook he has a problem with his plan to manufacture iThings in India. Speaking on Thursday during his visit to Qatar, Trump said he spoke with Cook the previous day to discuss "a little problem". The president said he told Cook “Tim, you're my friend. I’ve treated you very good …
To someone like Donald those are just "details" that obviously wouldn't be an issue if he had been running Apple. He's perfected the "art of the deal" after all.
Then again given his track record in business, the manufacturing location would cease to be an issue before long.
How did China learn it? From a review (by Alex Tapscott) of Patrick McGees new book "Apple in China":
“Apple in China,” by Patrick McGee, tells the gripping tale of how the computer giant’s decades-long investment in China fueled its spectacular success and, in turn, accelerated China’s rise as a technology superpower. This story begins nearly 30 years ago. After returning to Apple in 1997, co-founder Steve Jobs needed a hit product and a way to build it at scale. The iMac was Jobs’ comeback hit. But it was quirky and tricky to assemble. Apple was able to get the iMac launched with the help of Korea’s LG, but early production problems and increasing consumer demand had them looking for a second producer.
At the time, China’s completive advantage was its “low wages, low welfare, low human rights” according to China scholar Qin Hui. That began to change in the 1990s. It was Taiwanese entrepreneurs such as Terry Gou, the charismatic and ruthless cost-cutting CEO and founder of Foxconn, who turned China into a high tech workshop capable of awesome feats of production — and eventually innovation. Apple had seemingly landed on a winning formula: pairing the signature innovation and design personified by the late Steve Jobs, with China’s vast production capacity, overseen by now-CEO Tim Cook, the architect of Apple’s China strategy. Yet despite Apple and Cook’s extraordinary success in China, “Apple in China” is ultimately a cautionary tale. The book describes how hubris and a lack of foresight bordering on wilful blindness to geopolitical realities can eventually pose huge, existential risks to any company.
Apple’s massive investment in China is beginning to look like a Faustian bargain. As Apple entrenched itself in the nation, it became beholden to the Communist Party and eventually became the junior partner in China’s decades long effort to gain technology superiority over the United States through knowledge transfer and best practices. “China allowed Apple to exploit its workers, so that China can, in turn, exploit Apple,” says McGee, a former Financial Times reporter who covered the company for nearly five years. As Apple benefited from China, China parlayed the company’s historic investments into a great technological leap forward for itself. From the start, Apple has embedded its top people and invested significantly in scaling its complex Chinese supply chain. For example, in 2015, Apple committed to spending $275 billion in China over five years, more than double what the US spent on the Marshall Plan to rebuild Europe, adjusted for inflation. Over the decades, Apple estimates it has trained 28 million workers, more than California’s entire labor force. These are nation-building efforts ....
Manufacturing no, but plate spinning of the global supply chain, component design and specifications yes.
What they (a things making automaton) earn in a month in Foxconn/Tata iPhone plants is less than a US worker gets weekly in a blue tabard pushing a Walmart Curbside picking cart gets paid…. Before you look at costs of living.
iPhones, MacBooks, AirPods, iPads, Apple Tags, Apple Watches are not coming home to MAGA
The shift of manufacturing in the 70's,80's,90's allowed more services (thinking jobs) to come about in the west and allow people to use their brains to design them instead of standing on manufacturing lines doing repetitive tasks, which most of know is better done by machines, I'm not saying at all the other countries don't have thinkers, they do and some excellent ones but they do have a major advantage here lots of cheaper labour useful to any corporate. These desicions continue the theme of dumbing down, what's the point of getting a degree/master's/PHD if the only jobs available are manufacturing ones.
Also as mentioned in various posts do the locals want to go back to standing on production lines , a job is a job and if it's the only job going , then there isn't much choice?
Don't have any data to help the debate, but I would note that both Samsung and Xiaomi claim to have fully automated manufacturing for some of their latest phones, Nvidia and other say the same thing about their manufacturing. So we're already seeing far fewer manufacturing jobs, and those that remain won't be hand assembly but production engineering, and maintenance, plus any interfaces that the machines can't yet do such as unloading components from trucks, driving said trucks.
If Apple moved manufacturing back to the US, there would be very few jobs involved other than the short term construction of facilities. But China is still the first choice for manufacturing, followed by nearby Asian countries - cheap land and easy planning rules, world class skills in manufacturing engineering, excellent infrastructure and logistics, and relatively close to the global expertise and production in semiconductors and displays (Taiwan, South Korea). The US never had modern manufacturing engineering skills in the way China does, and if it were just about cheap labour then there's other countries cheaper than China.
As much as I hate to bring facts into this, NIST claims that the US is the second largest manufacturing nation in the world (behind China, not sure their metric) and that manufacturing accounts for 10.2% of the GDP / 9.7% of employment in the US: https://www.nist.gov/el/applied-economics-office/manufacturing/manufacturing-economy/total-us-manufacturing
World Bank says manufacturing is 15% of the overall world economy, and seems to generally agree about US vs China relatively:
https://data.worldbank.org/indicator/NV.IND.MANF.ZS?locations=US-CN-IN-1W&start=2010
https://data.worldbank.org/indicator/NV.IND.MANF.CD?locations=US-CN-IN&start=2010
An hour ago I also thought that the US had mostly offshored manufacturing, but I know a number of people who work in factories and agriculture so the more I read the comments the more the 'no one would do these jobs' C-suite spin wasn't sitting right.
That's the sad truth, the kind of people who were targeted by the trump campaign are the ones for whom a repetitive, mind numbing production line "pick the widget off the belt, put the widget in the box" type job is an ambition.
Those jobs, for a country, are not worth having unless you can absolutely screw down the wages as close to zero as possible.
It always makes me kind of sad when I see people who's ambitions are based on "muh granpappy worked at the plant, muh daddy worked at the plant, we were proud to work at the plant and want it back" instead of "we lost the plant so we created this new industry, business etc."
Move forwards, invest in people and skills
My father (industrial engineer) contracted with dozens of companies through most of the second half of the 20th century, it has not been a stagnant field. When I was in high school (late 1990s) I toured a relatively new auto plant, even then it was all robots and low-touch. No one is going to pay a human to do something a machine can do at the same cost, the companies (like Apple, frankly) who skipped industrial automation because of quarterly financials were always going to be at a competitive disadvantage eventually.
Presumably you and I are in roughly the same demographic as far as ambition, entrepreneurship, education, and I assume we are both compensated commensurately. Many people aren't interested in doing more than just enough to eat, sleep, and be merry; there's beauty in that, and it doesn't make them idiots or whatever you were channeling. I have a lot more respect for an honest laborer, technician, or mechanic than I do a "serial entrepreneur" or most CEOs.
Do not take this as an argument for tariffs; artificially skewing one aspect of a market does not usually end well for the others. I'm just reacting to the unfortunately pervasive ideas that manufacturing hasn't changed since the 1900s and that low-wage, low-ambition workers are idiots.
You've misunderstood at least part of what I was saying, I'm not suggesting people are idiots for wanting a job at a factory, rather that I'm sad they didn't have or the means to create other options when a town loses its biggest employer because that leads to stagnation, the eventual death of a local economy and poverty
Trump has worked out how to solve the labour costs for Apple and all the other companies he wants to move their manufacturing back to the US. The Trump administration as already tested out how they can round up people and send them without any due process to El Salvador prisons where they are forced to work, so why not do that in the US?
Just arrest everyone you don't like and put them in some sort of camp where they have to concentrate all day on tremendous job of making American great again.
"A concept used in China, although the camps included compulsory re-education…
Based my impression of the Trump voter demographic, the "re-" part of that sentence is redundant. Although with the abolishment of the Depot of Education, it will probably depend on which State you live in as to what kind and quality of education you get, if any. I could see some of the less well off States cutting back on education to save money and others politicising education (which has already started in at least one State)
Elmo is already working on that with his "company town", where you lose your home if you resign, get fired etc.
Not long before he goes to the next level and issues company tokens for groceries to be spent in the company store, fines people for not driving Teslas etc.
The US has it's roots in forced labour and slavery, people like Elmo, Zuckerberg, Bezos etc want it back but couched in warm friendly terms
"Moving iPhone production to the USA, however, would increase Apple’s costs, meaning stateside consumers pay more for iThings."
And if these US-produced products are exported outside of the US, then presumably the price NON-stateside consumers pay also increases? If Trump+Apple actually do shift a significant fraction of iPhone production inside US borders, then we'll all suffer a big-ish price hike*.
USA Manufactured products to tend to be good quality (Although manufacturing quality has been in decline everywhere for a while) but expensive. The more product is produced inside US borders, the harder it is for the producer to actually compete on price, as opposed to competing on reputation. Most manufacturing companies want cost reduction, not cost increase. I doubt Apple are an exception to this, so - unless they can 'sell' a reduction in margin/EPS for shareholders on products of US origin - I don't think that'll happen.
If they do and prices rise, from what I've seen it would be entirely possible that Apple could be sued by their shareholders for not correctly executing the corporation's fiduciary duties, i.e. not looking after shareholder interests by reducing the EPS and/or stock price. That's this Brit's take....true or false?
* Won't matter to me, at least directly. I refuse to pay the Cupertino tax :-)
They can build for the US in the US and somewhere else for the rest of the world.
I wonder what the response would be if Apple took out full page adds to say that they were going to pause shipments in the US while a new plant was being built and then prices would double. And then put a picture of Trump underneat it captions "This is why we can't have nice things".
...and after that I did say "(Although manufacturing quality has been in decline everywhere for a while)", which of course includes the USA.
Sure the *software* products are just as shite as everywhere else, but stuff for the physical world like Starets and Greenlee is still ahead of most things...only facing completion from the rather expensive Japanese stuff. That said, there isn't that much differentiation any more as everyone is still racing to the bottom.
Also, I just checked the Greenlee site to make sure I wasn't shoving too much of my foot into my mouth...and find they now sell a 'GX10 TUGGER™', Given the slang meaning of 'tug' for east-pondians, I may buy one :-)
"And if these US-produced products are exported outside of the US, then presumably the price NON-stateside consumers pay also increases? If Trump+Apple actually do shift a significant fraction of iPhone production inside US borders, then we'll all suffer a big-ish price hike*."
We already are. US multinationals are putting up prices world-wide to cushion the blow to US buyers by not fully passing on the costs of the tariffs and maintaining the all important profits. Goods that never touch US shores and still cost the same to make are going up by anything up to 25% for non-US purchasers. See Xbox and PS5 as examples.
Simple question: are the tariffs higher than the price rise necessary were manufacturing to done stateside? Until the answer is yes, manufacturing will stay overseas. And given Trump backed down on tariffs of phones, I can't him forcing manufacturing into the US.
(Or are we forward to Donny's price controls on iPhones which he insists are manufactured in the US?)
I suspect you already know this quite well, but that answer is no.
I suspect that you already know quite well everything else I’m going to say, so take this as more of a general statement in support of your post, rather than a direct reply/criticism/troll/etc.
Part of the reason manufacturing electronics in China works so well is that *everything* is there. The capacitors that go on the board are made in a factory down the street. The capacitor factory needs metals and other raw materials in order to make their products, and the factories that make those raw materials are down the road from the capacitor factory. And so on. You simply cannot get that kind of supply chain integration at that scale anywhere else in the world right now. Chinese manufacturers can literally walk to a local market and buy half a million components for a production run there and then.
You *can* absolutely make iPhones in America. Of course it’ll take a while to get the facilities built and recruit & train people to work there, and unless you produce *all* the components and raw materials needed domestically, you’re still going to have to import from abroad. And it’ll still cost a *hell* of a lot more.
The Raspberry Pi proudly claims UK-based manufacturing, and while I don’t want to detract from their success in this regard, it’s perhaps more pedantic/accurate to say that they’re “assembled” here. The Sony plant in Pencoed still has to import all the components & materials needed, most of which comes from China (though IIRC some materials do come from India).
But, of course, it’s rather a tall order to expect Drumpf or his lackeys to understand this. He’s acting like exactly what he is: a (failed) real estate developer from the late 80s & early 90s. He cut his teeth on extortion; at the time, the mafia and organised crime had a serious foothold in New York labour unions & construction. Ex-mafia dons have even openly said that they had met Trump, along with many other (unnamed) high profile politicians & business leaders. It seems that the lessons he learned then are the only lessons that ever stuck in his head.
He was happy to tout Apple's commitment to investing $500 billion in the US over the next four years as some kind of win for him. even though they announced they would be investing $430 billion at the start of Biden's term and $350 billion at the start of Trump's first time. They just announced what they were already planning to spend, not one penny of it had anything to do with Trump's election.
It was right wing idiots and Trump who decided "that much money must mean Apple is going to build a bunch of factories in the US". None of this money was planned for moving the manufacture of iPhones or Macs or Watches or whatever to the US. It is building datacenters, investments in R&D (and because of US tax laws all your expenses towards software development count towards "R&D") and other stuff they've been doing for years.
There's nothing Trump could do that would force Apple to manufacture in the US. It isn't practical, and even if they wanted to do it they couldn't have that capability up and running before the end of Trump's term - and it would be unnecessary after he's gone unless this shitty brand of banana republic politics where presidents think can tell companies how to operate their business becomes the norm. If that happened Apple would probably be looking to move their HQ out of the US. If they knew about Trump when they designed their "spaceship" campus they would have included in the design requirements that it be able to fly.
There is zero, zero, zero, OK I've said zero too many times, but I feel it is important so I should say it again, zero chance of iPhone production coming to the US! Because you don't have the skills to do it!
Oh. no, wait that sounds like I have just insulted everyone in America, no it's not that you are all incapable, or stupid, you aren't, but for decades manufacturing is something that can be offloaded to someone else while we (and I'm on the other side of the pond; but the same is true) can concentrate of other stuff, like services. And that's fine.
Now you might think (well the current inhabitant of 1600 does) that manufacturing and assembling something as complex as a modern smart phone is just a case of 'using tiny screws to put things together'; err no! You need trained people, and people prepared to do this, people prepared to train for a career in this; which needs a cultural shift.
Right now the culture in the US and the UK and the EU isn't geared for this - it could be, but it will take a generation to do it.
It's simply not happening!
"Right now the culture in the US and the UK and the EU isn't geared for this - it could be, but it will take a generation to do it."
Spot on. Here in "good old Blighty" we are still suffering from the effects of Brexit in terms of farm and hospitality labour shortages because the locals just don't want those kinds of jobs. Most ironically in the agricultural sector because prior to Brexit it seemed like most farmers were very much pro-Brexit!
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2025
