x Abu Dhabi, UAE Thursday 20 July 2017

America gets a bigger slice of Apple pie

A pledge by the Apple chief executive Tim Cook to invest in making Mac computers in the United States will probably create about 200 jobs if he follows the pattern of companies such as Lenovo Group and LG Chem.

Workers on a production line at a Foxconn plant in Shenzen, China. Apple is investing $100m in a Mac computer manufacturing facility in the US. Voishmel / AF
Workers on a production line at a Foxconn plant in Shenzen, China. Apple is investing $100m in a Mac computer manufacturing facility in the US. Voishmel / AF

A pledge by the Apple chief executive Tim Cook to invest in making Mac computers in the United States will probably create about 200 jobs if he follows the pattern of companies such as Lenovo Group and LG Chem.

The investment plan, unveiled by Mr Cook on Thursday, marks a reversal for Apple, which made and assembled many products in the US until the late 1990s. It shifted manufacturing to Asia to take advantage of the region's expanding industrial base and lower labour costs. Mr Cook, who took over from Steve Jobs last year, said in an interview with Bloomberg Businessweek that Apple would work with partners on the project and put in at least US$100 million (Dh367.3m) of its own money.

Outside involvement may increase the total. The investment "sounds like a 200-job operation with about a million-unit output," said Dan Luria, a labour economist at Michigan Manufacturing Technology Center in Plymouth, Michigan, who studies factory operations.

Apple will probably rely on tax breaks and other incentives for the facility, he said.

Even some foreign companies are taking early steps toward building some products in the US that had previously been handled abroad. Lenovo will assemble computers in Whitsett, North Carolina, starting next year, while LG Chem and other companies plan to create batteries for hybrid and electric cars in Michigan.

Foxconn Technology Group, the Chinese maker of Apple's iPhone and other products, is a likely partner on the Mac investment, said Michael Hasler, an associate academic director for the Supply Chain Management Center of Excellence at the University of Texas, a state where Apple already has operations.

Hewlett-Packard works with Foxconn to manufacture personal computers in Indianapolis for US markets. The facility employs 1,300 workers and will build 2.9 million PCs this year, said Tony Prophet, senior vice president for HP's printing and personal systems.

Mr Cook did not identify the specific Mac product or a location for the manufacturing.

About 70 per cent of Apple's revenue now comes from iPhone and iPad sales.

Apple has taken other steps to beef up operations in the US. It is adding about 3,600 support workers over the next decade in Austin, Texas, where it already has a 3,500-employee customer-support centre. The company also gets chips for some products from a nearby $14bn Samsung Electronics facility.

"One of our major recruitment targets is general manufacturing," said Dave Porter, a senior vice president of economic development for the Austin Chamber of Commerce. The chamber promotes a five-county region that includes Austin.

While Apple's commitment could set a precedent for electronics suppliers, it probably does not presage a large or rapid shift of production back to the US, said Michael Marks, the former chief executive of Flextronics International, which was the largest contract manufacturer in the world before the rise of Foxconn.