President Donald Trump’s latest media interview brought this not-very-revealing revelation: Apple Inc. promised the President that it would build “three big plants, beautiful plants,” he said.
I have no idea what the President meant, and Mr. Trump didn’t elaborate in the interview. Clearly, the President wants to take credit for convincing the world’s most valuable public company to start making iPhones in US factories that hire US workers. It’s a pledge Mr. Trump made when he was campaigning for president. But there is a zero-per-cent chance this is true.
Apple doesn’t build or operate factories – except a lonely one in Ireland that manufactures some Mac computers, but exists mostly for tax reasons. Apple made itself an American success story by helping to create one of the world’s most intricate manufacturing and production networks – in Asia, owned and operated by Apple’s corporate partners in Asia, employing people in Asia. This won’t change by US presidential decree.
We’re all left to parse the real meaning behind the President’s words. This is the impossible situation faced by both the political and the business press in trying to write about public figures who should be authoritative sources, but can’t be believed.
It’s possible the President and Apple have discussed or reached agreement on expanded US facilities that aren’t Apple-owned manufacturing plants. There are a few existing middlemen companies that do at least some assembly of relatively small numbers of Mac computers in places such as Austin, Tex., and Fremont, Calif.
Maybe Apple is working to expand the work of these middlemen in the United States. That’s not what Mr. Trump said, of course, but Apple chief executive officer Tim Cook has previously boasted about these contract manufacturing companies as signs of Apple’s commitment to US production.
It’s also possible Mr. Trump was referring to new factories under consideration from the companies that make iPhones or parts used to make iPhones and other Apple gadgets. Foxconn, the Taiwanese company that assembles iPhones under contract with Apple, is scouting for locations to build a US factory, and Mr. Trump was expected to announce one on Wednesday. This potential future factory won’t be making Apple products, however, even if it does one day materialize. Foxconn hasn’t followed through on previous pledges to invest millions of dollars to create US jobs.
Mr. Cook also said the company planned to invest at least $1-billion (US) to support advanced manufacturing companies in the United States. Corning, which makes glass used in iPhone and iPad screens, was the first recipient of money from this Apple investment pool. Again, these are not Apple plants, but they do create jobs in the United States.
Maybe the President was referring to new Apple server complexes. Apple operates these warehouses full of computer equipment in places such as North Carolina and Nevada (in return for big tax breaks) to store people’s files including photos and iTunes music. It’s worth nothing that these computer facilities are highly automated and require very few workers. Some of these data centres Mr. Trump might find “beautiful,” if he enjoys giant complexes stuffed with computer equipment and chilled to a temperature that is uncomfortable for humans.
Or maybe when he said “three big plants,” he meant lower-case “apple.” No matter what Mr. Trump says, a “made in America” iPhone isn’t coming. If Apple planned to start its own manufacturing facilities in the United States or anywhere else, it would need to completely upend how it does business. Its stock price would be tanking. But Apple shares are up about 75 cents on Wednesday. Investors by now know not to take the President’s comments literally.
Published in Daily Times, July 30th , 2017.