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Apple plans to spend $1B to support advanced manufacturing jobs in the U.S
- ardit33 10y agoThere is also geopolitical reasons for this. There is a high chance that east asia will be embroiled with some war coming soon, which will disrupt both manufacturing (either in china or Taiwan), or transports of goods. Even if the North Korea problem gets solved, the China problem is still there and it wont be solved anytime soon. If you have some streamlined manufacturing here, it is easier to fork it in case the main area of supplies goes offline due to regional wars/embargoes/troubles. Right now relying only on east asian manufacturing is a single point of failure for apple.
- brink 10y agoSorry, I guess I haven't been following the news that closely. Apart from NK, what's the China problem?
- xname2 10y agoSouth China Sea.
- ianceicys 10y agoDebt. Look at the financials in China and you'll see a huge bubble that's just beginning to burst. Going to take a year to fully materialize but it will be ugly.
- imron 10y agoPeople have been making that same claim for a couple of decades already [0], and it still hasn't happened. I mean, I'm sure it will happen eventually and then all the naysayers will be 'right', but not really (broken clock, twice a day, yadda, yadda, yadda). 0: https://en.wikipedia.org/wiki/The_Coming_Collapse_of_China https://en.wikipedia.org/wiki/The_Coming_Collapse_of_China
- ianceicys 10y agoJust remember people said the housing crisis would never happen in the US. '"Someone Is Blowing Up": RBC Warns China-Induced Unwinds Are Escalating' http://www.zerohedge.com/news/2017-05-04/someone-blowing-rbc-warns-china-induced-unwinds-are-escalating http://www.zerohedge.com/news/2017-05-04/someone-blowing-rbc... Just realize it's not all sunshine and rainbows in China.
- nickik 10y agoThey may have a recession at some point but just as recessions in the rest of the world, they usually end and the country goes back to some trendline.
- lowtolerance 10y agoI've been hearing people say that there are signs that the bubble is bursting in China for the last several years now. This time it's for real, though, right? edit: I had a hunch you'd be the kind of person who would cite a zerohedge article as a source on this. They have been gleefully predicting the collapse of China's economy since the site's inception. No doubt, they will gleefully take credit for "predicting" its collapse, too (should it actually happen), despite all of the failed predictions year after year.
- frgtpsswrdlame 10y agoNot to support zerohedge citations but isn't it totally expected that people who see a collapse coming wouldn't be able to time it exactly? You know the common refrain, the markets can stay irrational longer than you stay solvent, doesn't that go both ways? That if I see the markets are being irrational, it may take quite a long time for the bust to actually happen? But that doesn't mean they weren't irrational and it doesn't mean I didn't see it.
- philipkglass 10y agoMarket economies go through boom-bust cycles. Predicting timing for the next bust is much more impressive than predicting that there will be a bust, eventually. If you predict in 2016 that an apparently healthy economy will suffer a severe downturn, and it happens in 2017, that's impressive. If you predict a severe downturn in 2009 and it only happens in 2017, that's significantly less impressive. If you predict a severe downturn every year since 2009, that's zerohedge. It reminds me of the peak oil prophets who went from predicting collapse by 2012 to predicting collapse, uh... eventually. Remaining pessimistic in the face of contrary data doesn't make them any smarter than being irrationally optimistic.
- JumpCrisscross 10y agoI don't understand why this is being so heavily down voted. It's a major risk theme amongst asset managers: what happens if a major war in the South China Sea disrupts ASEAN and Chinese supply chains and/or trade relations.
- komali2 10y agoSeems like a wild bet to make when the region has been embroiled in conflict far worse. People were still manufacturing in China during the American (Vietnam) war.
- blackguardx 10y agoNot many. China in the 60s and 70s had a very poor manufacturing base compared to today.
- xienze 10y agoYeah I think just a bit more stuff is being manufactured in China today versus 50ish years ago.
- RUG3Y 10y agoI believe that in the 60s, Japan was the source of many of the kinds of imports that we're now getting from China.
- deleted 10y ago[deleted]
- LiweiZ 10y agoIn that case, the market demand would sink. Everything needs recalculated.
- tmsldd 10y agoSo.. 0.3% of their cash pile?
- vnchr 10y agoI had the same thought. It's outlandish that a $1B investment in anything could be viewed as insignificant.
- tmsldd 10y agoIt makes me wonder.. how much Apple invest in China currently?
- cowsandmilk 10y agoApple's latest 10-K has them with 7.807 billion of long-lived assets in China; the majority of that is going to be manufacturing equipment. They anticipate $16B of capital expenditure in 2017, where the breakdown there is between US Data Centers, the new campus, and manufacturing equipment requires someone who actually does analysis.
- self-diversity 10y agoViewing the investment as insignificant because the investor has more money is a seriously foolish perspective that ought to be fought against instead of expressed
- tmsldd 10y agoIt is a valid point of view. Although perspective and proportionality are equally valid as well.. Apple invest in anyone else but themselves.
- self-diversity 10y agoIt is a point of view that can only be held by people who feel like their opinions on how Apple should spend its money are valid, which is utterly ridiculous in every way that isn't imaginary.
- foepys 10y agoI guess it's part of a plan to pay lower taxes on their oversea cash when they will bring it into the US. Create jobs, get tax breaks. Apple has stashed about $250 billion overseas and paying a billion to reduce the tax burden is most likely the cheaper option.
- jlebrech 10y agoTrump spoke to Tim Cook last night
- mattnewton 10y agoWhile I don't doubt Trump will rush to claim credit, Apple has been looking at ways it can hedge against China and get "Made in America" gravitas for a long time, and steadily experimenting on that front with things like the Mac Pro.
- jlebrech 10y agoit was a joke, i thought people would have like that.
- wonderbread23 10y agoStick to Reddit. A lot of people come here to avoid pathetic circle jerk humor.
- ryanmarsh 10y ago> Cook told "60 Minutes” in 2015. “I mean, you can take every tool and die maker in the United States and probably put them in a room that we’re currently sitting in. In China, you would have to have multiple football fields.” In that interview he also said that the jobs weren't coming back. This is one of the most powerful statements uttered on American labor and employment trends in recent memory. I have shared this quote with every middle/lower-middle class person I know who voted for Trump and their responses have all been the same, horror. Financial interests convinced liberals and conservatives alike that globalism was a good thing (for altruistic or selfish reasons respectively). Instead it just gave Capital access to cheap labor and totally fucked the American worker.
- pm90 10y agoAmerican labor was fucked anyways, Globalism only accelerated trends that would have happened anyhow. From a long term perspective, its absolutely amazing that the US has managed to export all the factory level jobs to other countries and yet managed to keep the better paying jobs back here in the states. The current lack of (low skilled) jobs in manufacturing has made it clear to those Americans willing to listen: they (or their children) need to acquire those skills that make them employable in the 21st century, and those do not include low-skilled factory jobs. The next generation will be better prepared and I predict the US will continue as a global technological powerhouse (unless it gets fucked by Trumpism and populism of course).
- ryanmarsh 10y ago> continue as a global technological powerhouse (unless it gets fucked by Trumpism and populism of course). Capitalism breathes credit, credit is a function of belief in the future. I'm curious how much protectionism is necessary at home to maintain necessary levels of belief in the future. > they (or their children) need to acquire those skills that make them employable in the 21st century How? What skills are necessary and where do they get them? As far as I can tell the education ecosystem in the US is wholly unsuited for this task.
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- malandrew 10y agoIt's so incredibly obvious that the best course of action is to let all these companies bring home all those foreign revenues so long as a significant portion of it is reinvested in the US is a reasonable period of time, excluding investments in financial instruments (stocks and bonds) and non-productive assets like land. Any money that is stuck abroad will be reinvested abroad, making foreign economies more competitive relative to the US economy. Anyone arguing for taxing profits from abroad heavily I can only assume has a very poor understanding of macroeconomics.
- deleted 10y ago[deleted]
- qyv 10y agoThe money isn't "stuck" abroad, it is hidden there. Don't pretend that it is the big bad tax man that is stopping these companies from being altruistic, this is 100% about maximizing profit. The idea of reinvesting money domestically is good in theory, but how do you actually ensure that the money stays here? Is Apple Et Al. going to build, staff and operate these factories with local labour? Or, are they going to sub-contract out to the lowest domestic bidder who will just end up outsourcing the work overseas where the factories and labour is already established and cheaper?
- malandrew 10y agoTake the spirit of my comment and exercise the principle of charity: https://en.wikipedia.org/wiki/Principle_of_charity https://en.wikipedia.org/wiki/Principle_of_charity I already suggested that we attach restrictions on what constitutes a valid reinvestment in the US. If you considered the spirit of my comment, it should be obvious that I would support restrictions that would prohibit the loophole you suggested. Maybe we can even make it so the money can only be brought home piecemeal, one investment at a time, with each investment going through a process that demonstrates that the overwhelming majority of each repatriated tax dollar is going to benefit the US economy.
- xapata 10y ago> I can only assume Perhaps they have a very good understanding of accounting and how easy it is for a company to artificially inflate overseas profits. Note the legal troubles about Ireland. If companies could bring overseas profits home tax-free, we'd miraculously have no domestic profit the next year.
- danm07 10y agoAnyone else find it odd that all these headlines states only how much these companies are going to spend on manufacturing, but none of them say what they're actually going to be making?
- pm90 10y agoIs it really that odd? Its a way for companies to prevent getting hit by a Trump tweet that deplores them for not hiring enough Americans. So now, everyone wants to portray any US investment they make, any US workers they hire, loudly and with big but vague/unspecific numbers.
- mikeyouse 10y agoExactly this, which is also why every single automaker now publicly announces their retooling costs and shift changes for new model years. "We're spending $4B to improve manufacturing and hiring 10,000 workers" is a politically friendly headline even if you've done the same thing every year for the past few decades.
- cmdrfred 10y agoIf that is true why was that message not popular under Obama as well?
- SmellTheGlove 10y agoWell, Obama didn't do a lot of shitposting on Twitter. Trump shaming companies on a daily basis is probably part of the reason.
- pottersbasilisk 10y agoMaybe obama should have too instead of planning to take 400,000 dollar wall street speeches.
- mediumdeviation 10y agoI assume since you used the word, you know what it means - what the fuck is globalism? I know what glottalization is, as a concept, a trend, and all of the debates surrounding it for the past four decades, but what the fuck is globalism?
- omginternets 10y agoIn the time it took for you to write an agressive, graceless comment, you could have typed "globalism" into google and clicked on the first link: https://en.wikipedia.org/wiki/Globalism https://en.wikipedia.org/wiki/Globalism
- sctb 10y agoWe detached this subthread from https://news.ycombinator.com/item?id=14266093 https://news.ycombinator.com/item?id=14266093 and marked it off-topic.
- unchocked 10y agoSetting up a fund to create jobs is a pretty telling indicator that those jobs don't exist, and aren't expected to.
- jonknee 10y ago> Apple says that it intends to bolster the U.S. manufacturing sector by creating a $1 billion “advanced manufacturing fund” — with some of that initial money going toward a company the tech giant is prepared to partner with, chief executive Tim Cook said. Amazing what passes for news these days. This sounds no different from what they normally do with their supply chain. Anyone remember GT Advanced Technologies? Apple wanted their sapphire glass for the iPhone 6 and fronted $439m for a factory in Arizona. The deal went south and Apple ended up owning everything and 700+ people were laid off. Apple turned it into a data center.
- mcphage 10y ago> The deal went south It wasn't that the deal went south, it was that the company was unable to produce & deliver the product that they said they could, at the price they agreed to. GT bet the company on being able to fulfill their contract with Apple, and failed.
- jonknee 10y ago> it was that the company was unable to produce & deliver the product that they said they could, at the price they agreed to How is that not the deal going south?
- mcphage 10y agoMaybe it's not, but I think of "the deal went south" more as "negotiations broke down", instead of "it cost more to make the things than one party agreed to pay for them."
- ghostly_s 10y agoSo something counts as business-as-usual now because it was attempted precisely once before, unsuccessfully, in the company's 40 year history?
- jonknee 10y agoI'd counter that it would be huge news if this was the first deal of its kind. GT's deal only became public because of a nasty bankruptcy case and Apple fought to keep it under wraps [1]. If GT had been able to produce the screens there wouldn't have been any public knowledge that Apple fronted them the money for the furnaces. Apple is a very secretive company and even with this announcement they conveniently left out where the money is going. This is business as usual, but there is now an incentive to brag about domestic investment because a simpleton is in the Whitehouse. [1] https://www.recode.net/2014/10/14/11631890/apple-asks-courts-permission-to-challenge-gt-bankruptcy-in-secret https://www.recode.net/2014/10/14/11631890/apple-asks-courts...
- paulrpotts 10y agoOr, less than one-half of one percent of their cash reserves. That's generous and I'm sure it will be effective and not at all just a marketing gesture.
- devy 10y agoFinally! This is long-overdue indeed. On a related note, I was pretty shocked when I first knew scientific glass blower was a very special skill set and is dying.[1] [1]: http://www.latimes.com/local/education/la-me-caltech-glassblower-20160613-snap-story.html http://www.latimes.com/local/education/la-me-caltech-glassbl...
- yummybear 10y agoSo, engineers for the robots?
- tengbretson 10y agoI cannot even fathom what it's like to have this kind of warped self-preservation instinct.
- andrepd 10y agoWhat, being rational and objective instead of acting on purely egotistical considerations?
- tengbretson 10y agoI would make the exact opposite argument in fact. I would argue it is entirely irrational to perpetuate this bizarre notion that living in a prosperous nation is some sort of original sin that must be atoned for by self-flagellation. Prosperity is not a finite resource. I believe equilibrium doesn't necessarily have to come at cost to anyone.
- ice109 10y ago>sort of original sin that must be atoned for by self-flagellation. whether it's original sin aside (though i do believe it is) where do you see self-flagellation? i'm simply saying i'm okay with china becoming more competitive and market forces taking their natural course.
- sctb 10y agoWe detached this subthread from https://news.ycombinator.com/item?id=14266501 https://news.ycombinator.com/item?id=14266501 and marked it off-topic.
- khana 10y agoThe right thing to do.
- euphoria83 10y agoThis is the way to bring jobs back to the US. Start with investing "small" sums of money to create an enterprise that will require manufacturing expertise in some area. The ecosystem will then expand. Other companies can then take advantage of the same expertise. Also, the radius of expertise will grow as supporting jobs crop up.
- CrankyBear 10y agoOr, to put this into perspective, that 1/250th of their cash on hand. http://money.cnn.com/2017/05/02/investing/apple-cash-quarter-trillion/ http://money.cnn.com/2017/05/02/investing/apple-cash-quarter...
- J0-nas 10y agoTo be fair, while they are "richer than god" most of their money is either in some non-us bank to avoid taxes or invested...
- mtgx 10y agoThis isn't just out of Apple's good heart: https://theintercept.com/2017/05/04/theres-nothing-apples-ceo-cares-about-more-than-not-paying-taxes/ https://theintercept.com/2017/05/04/theres-nothing-apples-ce...
- brudgers 10y agoI read the headline and thought: + Advanced manufacturing jobs are done by robots. + $1 billion builds one moderately sized manufacturing plant (Tesla's Gigafactory is $5 billion [1]) + There's a scene Austin Powers: International Man of Mystery I wish the press would review before reporting so breathlessly. [1]: https://en.wikipedia.org/wiki/Gigafactory_1 https://en.wikipedia.org/wiki/Gigafactory_1
- deleted 10y ago[deleted]
- PatrickAuld 10y agoI think "Advanced Manufacturing Jobs" are going to be roboticist, machine learning and mechanical engineer related. Foxconn is moving this direction and I'm betting Apple thinks they can do it as well as them. Plus possible tax breaks based on Trump's comments.
- tooltalk 10y agoApple isn't probably thinking about doing this themselves. Note that Cook is going to "support," not actually build themselves. They are most likely to invest in Foxconn to help them open up shops in the US.
- PatrickAuld 10y agoDefinitely possible, Apple uses vendors in a way that would be difficult to do themselves. However, if I'm right about the types of jobs this will create it does fall in line with Apple's expertise more than a human built process. Just as they are building their own silicon they may want to own pieces of build process.
- ericfrederich 10y agoSo what'll that be?... 5 new jobs created? Look at the Tesla Gigafactory, they brag on how dense it is and how automated it is... that means less jobs. I'm not saying it's a good thing or a bad thing, I'm just saying bringing manufacturing back to the US doesn't mean jobs, it couldn't and still be profitable. Any new factory in the US will have to be so heavily automated it couldn't possibly provide any jobs
- easilyBored 10y ago$1 billion. I wonder what % of their marketing PR a billion is. Because that's all this is. PR to buy a few good mentions and to enable Apple to say, "Yeah we're doing something..."
- acd 10y agoRobots will assemble iphones in the US.