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Apple to Resume U.S. Manufacturing Apple to Resume U.S. Manufacturing
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For the first time in years, Apple will manufacture computers in the United States, the chief executive of Apple, Timothy D. Cook, said in interviews with NBC and Bloomberg Businessweek. Apple plans to join a small but growing number of companies that are bringing some manufacturing jobs back to the United States, drawn by the growing economic and political advantages of producing in their home market.
“Next year, we will do one of our existing Mac lines in the United States,” he said in an interview to be broadcast Thursday on “Rock Center With Brian Williams” on NBC. On Thursday, its chief executive, Tim Cook, who built Apple’s efficient Asian manufacturing network, said the company would invest $100 million in producing some of its Macintosh computers in the United States beyond assembly that it already does in the United States. He provided little detail about how the money would be spent or what kinds of workers might benefit.
Apple, the biggest company in the world by market value, moved most of its manufacturing to Asia in the late 1990s. As an icon of American technology success and innovation, the California-based company has been criticized in recent years for outsourcing jobs abroad. Apple, which long manufactured in the United States but stopped about a decade ago, has been under pressure to create more jobs here given its market power. It sold more than 200 million iPods, iPads, Macs and other devices in the year ended in September.
“I don’t think we have a responsibility to create a certain kind of job,” Mr. Cook said in the Businessweek interview. “But I think we do have a responsibility to create jobs.” “I don’t think we have a responsibility to create a certain kind of job,” Mr. Cook told Bloomberg Businessweek. “But I think we do have a responsibility to create jobs.”
The company plans to spend $100 million on the American manufacturing in 2013, according to the interviews, a small fraction of its overall factory investments and an even tinier portion of its available cash. Some analysts are hopeful that the move by a big, innovative company like Apple could inspire a broader renaissance in American manufacturing, but a number of experts remain skeptical.
In the interviews, Mr. Cook suggested the company would work with partners and that the manufacturing would be more than just the final assembly of parts. He noted that parts of the company’s ubiquitous iPhone, including the “engine” and the glass screen, were already made in America. The processor is manufactured by Samsung in Texas, while Corning makes the glass screen in Kentucky. “I find it hard to see how the supply chains that drive manufacturing are going to move back here,” said Andre Sharon, a professor at Boston University and director of the Fraunhofer Center for Manufacturing Innovation. “So much of the know-how has been lost to Asia, and there’s no compelling reason for it to return. It’s great when a company says they want to create American jobs — but it only really helps the country if those are jobs that belong here, if it starts a chain reaction or is part of a bigger economic shift."
Over the last few years, sales of the iPhone, iPod and iPad have overwhelmed Apple’s line of Macintosh computers, the basis of the company’s early business. Revenue from the iPhone alone made up 48 percent of the company’s total revenue for its fiscal fourth quarter ended Sept. 30. Over the last few years, companies across various industries, including electronics, automotive and medical devices, have announced that they are “re-shoring” jobs in dribs and drabs after decades of shipping them abroad. Lower energy costs in America, rising wages in developing countries like China and Brazil, quality control issues, intellectual property concerns, and the desire to keep the supply chain close to the gigantic American consumer base have all factored into these decisions.
But as recently as October, Apple introduced a new, thinner iMac, the product that pioneered the technique of building the computer innards inside the flat screen. “Companies were going abroad in pursuit of cost reduction, and it turns out there were a lot of unintended costs,” said Diane Swonk, chief economist at Mesirow Financial. “America has been looking a lot more competitive lately.” 
Mr. Cook did not say in the interviews where in the United States the new manufacturing would occur. But he did defend Apple’s track record in American hiring. Even so, the impact on the American job market has been modest. Much of the work brought back has been high value-added, automated production that requires few actual workers, which is part of the reason that higher wages in the United States are not scaring off companies.
“When you back up and look at Apple’s effect on job creation in the United States, we estimate that we’ve created more than 600,000 jobs now,” Mr. Cook told Businessweek. Those jobs include positions at partners and suppliers. American manufacturing has been growing in the last two years, but still has two million fewer jobs than it had when the recession began in December 2007. Worldwide manufacturing appears to be growing much faster, even for many of the American-owned companies that are expanding at home. General Electric, for example, has hired American workers to build water heaters, refrigerators, dishwashers and high-efficiency topload washers, but continues to add more jobs overseas as well.  
Steve Dowling, a spokesman for Apple, declined on Thursday to provide additional details on Apple’s plans, referring to Mr. Cook’s interviews. Apple has not announced plans to move the more complex, faster growing portions of its product lines.  Macs now represent a relatively small portion of Apple’s business, accounting for less than 20 percent of its nearly $36 billion in revenue in its most recent quarter. The company’s iPad and iPhone products, which amount to nearly 70 percent of its sales, will continue to be made in low-cost centers of manufacturing like China, mostly on contract with outside companies like FoxConn.
Apple has for years done the final assembly of some Macs in the United States, mainly systems that customers buy with custom configurations, like bigger hard drives and more memory than on standard machines. Mr. Cook’s statements suggested Apple is planning to build more of the Mac’s ingredients domestically, but with partners. He told Businessweek that the plan “doesn’t mean that Apple will do it ourselves, but we’ll be working with people, and we’ll be investing our money.”
Mr. Cook’s statements suggested Apple is planning to build more of the Mac’s ingredients domestically, although with partners. He told Businessweek that the plan “doesn’t mean that Apple will do it ourselves, but we’ll be working with people, and we’ll be investing our money.” Whether Apple’s newly announced plan might spark the creation of other higher-paying jobs along the supply line depends on the nature of the manufacturing.  
While Apple’s products are typically made in Asian factories owned by other companies, Apple itself often purchases the sophisticated manufacturing equipment required to make its cutting-edge designs, spending billions of dollars a year on such machines.  Other computer manufacturing has been trickling back to the United States after largely shifting overseas in the 1990s.
Foxconn Technology, which manufactures more than 40 percent of the world’s electronics, is one of Apple’s main overseas manufacturing contractors. Based in Taiwan, Foxconn is China’s largest private employer, with 1.2 million workers, and it has come under intense scrutiny over working conditions inside its factories. In October, Lenovo, the China-based computer giant, said it would begin making its Think-branded computers, including notebooks, desktops and some tablets, at a facility in Whitsett, N.C. The move will create 115 manufacturing jobs at the plant, the company said.
In March, Foxconn pledged to sharply curtail the number of working hours and significantly increase wages. The announcement was a response to a far-ranging inspection by the Fair Labor Association, a monitoring group that found widespread problems — including numerous instances where Foxconn violated Chinese law and industry codes of conduct. Mark Stanton, director of global supply chain communications for Lenovo, said moving the jobs to the United States will allow Lenovo to offer faster turnaround times for its customers in North America than if the machines were coming from overseas, and that the company wasn’t specifically creating the American jobs because of any political pressure.
Apple, which recently joined the labor association, had asked the group to investigate plants manufacturing iPhones, iPads and other devices. A growing outcry over conditions at overseas factories prompted protests and petitions, and several labor rights organizations started scrutinizing Apple’s suppliers. “We’re certainly not unaware of the economic situation and political environment,” he said. “It’s an added benefit, but we didn’t go in with that premise. We went in with a business case.”
Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold in 2011 were manufactured overseas. Apple employs 43,000 people in the United States and 20,000 overseas. An additional 700,000 people engineer, build and assemble iPads, iPhones and Apple’s other products, mostly abroad. The globalized model of the electronics industry was shaken last year by supply chain disruptions after floods in Thailand. The auto industry faced similar challenges after the tsunami in Japan.  Not coincidentally, Ford recently announced that it was adding 1,200 jobs in Michigan, and foreign-owned auto manufacturers like Honda and Volkswagen have also invested in more hiring and training in Indiana and Tennessee, respectively.
At a meeting with Silicon Valley executives in 2011, President Obama asked Steven P. Jobs, then the Apple chief executive, what it would take to make iPhones in the United States. Mr. Jobs, who died later that year, told the president, “Those jobs aren’t coming back.” For the most part companies seem to be stepping up production in the United States for domestic customers, as opposed to exports, said Chad Moutray, the chief economist at the National Association of Manufacturers. (Companies are moving their production closer to where their customers are in Europe, too; five years ago, Hewlett-Packard supplied all of Europe’s desktops from China, but today it manufactures in the Czech Republic, Turkey, and Russia instead, according to Tony Prophet, senior vice president for operations for H.P.’s PC and printers.)
Nick Wingfield contributed reporting. But the United States is also becoming a more attractive place to manufacture goods destined for overseas markets. While the National Association of Manufacturers and other business groups complain about an anti-business tax and regulatory environment in the United States, an international ranking from the World Bank on the “ease of doing business” placed the United States near the top of the list, and countries like Brazil, India and the Philippines close to the bottom.
“If you ask how many days does it take to open a business, to get electricity, things like that, you realize there are a lot of reasons why the business environment is really much better here than in places where labor happens to be really cheap,” said Torsten Slok, chief international economist at Deutsche Bank Securities.
On Thursday the White House said it was encouraging to see more big American companies bringing back manufacturing.
“Policy matters, and our country is pushing policies that encourage manufacturing, R.&D., infrastructure, skills and the support for growing supply chains,” said Gene Sperling, director of the president’s National Economic Council. “I think what you want is a mutually reinforcing cycle, where basic economic trends that make the U.S. more competitive for manufacturing and for creating supply chains is encouraged and supported by policies that recognize those location decisions have broader spillover impacts that benefit the economy beyond specific companies.”

Charles Duhigg and Quentin Hardy contributed reporting.