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Trump says Apple promised three new US plants: report

Newsdeck

Newsdeck

Trump says Apple promised three new US plants: report

By AFP
26 Jul 2017 0

The Wall Street Journal on Tuesday reported that US President Donald Trump said Apple has promised to expand manufacturing at home with three new US plants.

The Journal quoted Trump as saying that Apple chief executive Tim Cook committed to building “three big plants,” in the United States.

No details were provided, and Apple did not respond to an AFP request for comment.

Cook in May announced  the creation of an Apple fund to get more people in the US to do “advanced manufacturing,” kicking it off with a billion dollars.

Apple building plants in the United States would come as rare common ground with Trump.

Cook has pointed out that Apple spent more than $50 billion in the United States last year — buying from suppliers such as Corning Glass, working with developers behind applications for the California company’s devices and more.

Apple has about 80,000 employees in the US and plans to hire thousands more “in the future,” according to Cook.

It is a sign of Apple’s success but also a thorny problem: a cash stockpile topping a quarter of a trillion dollars, sparking debate on what do with such massive reserves.

The tech giant has resisted the idea of bringing the cash home, because the US tax code allows multinational firms to defer profits while they are held overseas but taxes income at up to 35 percent when repatriated.

Trump vowed while campaigning that he would force Apple to bring production to US soil.

Apple is not in the same position as automakers which relocated US factories overseas to cut costs,  IHS manufacturing processes chief analyst Dan Panzica told AFP earlier this year. Apple never moved jobs offshore, it created them there.

“The Apple jobs were never here,” Panzica said.

“The entire supply chain grew in China.”

Apple benefits in Asia from a network that goes beyond subcontractors assembling smartphones, tablets or laptops. The firm relies on a dense ecosystem of companies that make components and spare parts for its devices as well.

China also offers sources of important raw materials, along with cheap, flexible and abundant labor to keep iPhone assembly lines cranking along.

It would be challenging to replicate that situation with US workers without using more robotics, undermining the political aim of creating jobs here, according to some analysts.

Moving iPhone manufacturing to the US would also likely push up costs, which is not in Apple’s interests.

It was seen as more likely that Apple would make a symbolic move to appease Washington, such as investing more in making Mac Pro computers here, or in a facility for higher-priced, limited-edition devices such as an “anniversary edition iPhone” to mark the handset’s 10th birthday this year. DM

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