Let the geeks, and we use the term endearingly, argue over the changes Apple Inc.announced this week to its mobile operating system. Our focus is on something more prosaic: an advertisement -- and what that ad says about the state of U.S. manufacturing.
Apple’s latest slick promotion touts the “Designed by Apple in California” line it includes on its devices (conveniently overlooking the second line, “Assembled in China”). At the end of the ad, a somber voice intones: “This is our signature. And it means everything.”
What it means is that Apple is feeling pressure from U.S. politicians and labor activists over the tiny number of domestic jobs it provides, compared with the huge workforce Apple supports offshore. The pressure was evident last month, when Chief Executive Officer Tim Cook, on the hot seat over the small amount of corporate tax Apple pays, reminded a Senate subcommittee that the company is investing $100 million to make some of its Macintosh computers in the U.S.
It’s not a huge amount of money for a company that earned $9.6 billion last quarter. Still, the operation, to be based in Texas, will be Apple’s first domestic assembly foray since 2004, and other technology manufacturers are moving jobs onshore. Google Inc.’s Motorola Mobility, for example, also plans to assemble smartphones in Texas.
It’s not all public relations: These companies are taking advantage of low energy costs and a decade of wage stagnation, which has made U.S. factory jobs more competitive with those in China, where wages are rising. Even China’s Lenovo Group Ltd. is starting to assemble notebook computers in North Carolina.
The insourcing movement has led to what some are calling an American manufacturing renaissance. This is an overstatement: Yes, manufacturing was responsible for the largest increase in economic value added (total output minus the value of intermediate products) in 2011 and 2012, according to the Labor Department. And since 2010, the U.S. has gained back some of the steep losses in manufacturing jobs. Yet the sector has lost 21,000 jobs since March. And the current employment of about 12 million people is a far cry from the peak of 17 million in 2000.
Getting back to that level will be tough, if not impossible. Apple’s Texas initiative might result in 200 new jobs, by some estimates. What’s more, the Apple, Lenovo and Motorola plants will only assemble devices, not build them from scratch. The components may even have to come from China, which pretty much controls the worldwide electronics supply chain.
Apple’s latest slick promotion touts the “Designed by Apple in California” line it includes on its devices (conveniently overlooking the second line, “Assembled in China”). At the end of the ad, a somber voice intones: “This is our signature. And it means everything.”What it means is that Apple is feeling pressure from U.S. politicians and labor activists over the tiny number of domestic jobs it provides, compared with the huge workforce Apple supports offshore. The pressure was evident last month, when Chief Executive Officer Tim Cook, on the hot seat over the small amount of corporate tax Apple pays, reminded a Senate subcommittee that the company is investing $100 million to make some of its Macintosh computers in the U.S.
It’s not a huge amount of money for a company that earned $9.6 billion last quarter. Still, the operation, to be based in Texas, will be Apple’s first domestic assembly foray since 2004, and other technology manufacturers are moving jobs onshore. Google Inc.’s Motorola Mobility, for example, also plans to assemble smartphones in Texas.
It’s not all public relations: These companies are taking advantage of low energy costs and a decade of wage stagnation, which has made U.S. factory jobs more competitive with those in China, where wages are rising. Even China’s Lenovo Group Ltd. is starting to assemble notebook computers in North Carolina.
The insourcing movement has led to what some are calling an American manufacturing renaissance. This is an overstatement: Yes, manufacturing was responsible for the largest increase in economic value added (total output minus the value of intermediate products) in 2011 and 2012, according to the Labor Department. And since 2010, the U.S. has gained back some of the steep losses in manufacturing jobs. Yet the sector has lost 21,000 jobs since March. And the current employment of about 12 million people is a far cry from the peak of 17 million in 2000.
Getting back to that level will be tough, if not impossible. Apple’s Texas initiative might result in 200 new jobs, by some estimates. What’s more, the Apple, Lenovo and Motorola plants will only assemble devices, not build them from scratch. The components may even have to come from China, which pretty much controls the worldwide electronics supply chain.
by The Editors, Bloomberg | Read more:
Image: Gilles Mingasson/Liaison via Getty Images
