Roger Fingas
Apple's primary assembly partner, Foxconn, will soon invest in expanding its U.S. operations, the latter company said on Wednesday, apparently following in the steps of a similar SoftBank announcement.
"While the scope of the potential investment has not been determined, we will announce the details of any plans following the completion of direct discussions between our leadership and the relevant U.S. officials," Foxconn explained in a statement to Bloomberg. "Those plans would be made based on mutually-agreed terms."
Although Foxconn didn't provide specifics, a document held up by SoftBank CEO Masayoshi Son after meeting with U.S. President-Elect Donald Trump allegedly included the words "Foxconn," "$7 billion," and "50,000 new jobs." SoftBank is investing $50 billion in the U.S. and aiming to create 50,000 jobs.
It's unclear if Trump was involved in negotiating a Foxconn deal, but during his presidential campaign he openly criticized Apple and claimed he would make the company move production back to the U.S. Foxconn is based out of Taiwan and runs most of its factories in China. Only one Apple product — the Mac Pro — is assembled in the U.S., and that computer has gone three years without an upgrade.
Establishing serious production in the U.S. would be a difficult prospect for Foxconn. Aside from the fact that most parts suppliers are overseas, complicating logistics, operating in the U.S. is substantially more expensive because of higher safety, labor, and environmental standards. The decline of American manufacturing would also mean having to train many workers. The company could potentially get around some of these problems if it leans heavily on robots.
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29 Comments
In Apple’s seeking for ways for employment equality (US workers to match China), tax breaks, repatriating off-shore banked monies, they have convinced Foxconn to invest 7 billion dollars in the US for building manufacturing facilities. I’ll bet that the Trump family will be the land developers in this deal and they will build living quarters for Americans that mirrors the Foxconn buildings in China complete with nets to catch the workers driven to suicide by working conditions.
It looks like we are heading towards a new mercantilism. In 5 years will Apple be making iPhones in Brazil, India, China, the US, Russia, and France?
This is definitely going to be less efficient, meaning the losers are going to lose more than the winners gain. But I guess it could increase total well-being if the losers are rich guys and the winners are poor guys. Somehow that's never how it works out, though.... somehow, rich guys win no matter what.
My guess is that we will just see the big companies divide the world up into little monopolistic fiefdoms. Their costs might go up, but their price-gouging power will go up even more.
I agree that this might change the way companies operate in the world, but I would love a chance to purchase a US "Patriot" edition of the iPhone. I would even pay more to support an American assembled iPhone.
Apple has been trying to come back to the IS with manufacturing anyway. I think it is a good idea that we support having our stuff built in countries where the laws are setup to protect people and workers. Just because something is cheaper, doesn't make it better.