What US Apple Factory Means for Workers
Apple CEO Tim Cook announced last week that the company would manufacture one line of Mac computers in the U.S. TechNewsDaily looks at what that means for American workers.
When Apple CEO Tim Cook announced last week that the company will manufacture a line of Mac computers in the U.S., TechNewsDaily wondered what that meant for American workers. How many U.S. jobs would Apple create? And what kind of education and skills would someone need to get one of these hot, new jobs?
Based on the $100 million that Apple will invest in U.S. manufacturing, as Cook told Bloomberg Businessweek, the Cupertino-based company is probably looking to create a number of factory jobs in the "low hundreds," said Pat McGibbon, vice president of strategy and research at the Association of Manufacturing Technology.
"[$100 million] is a really, really small number in the scheme of things for Apple, so this is probably their little toe getting in the water," he told TechNewsDaily. "And they got nine more toes."
Nevertheless, McGibbon considered the Apple move a sign that the company may build more factories in the U.S. in the future. He also thinks it's an important message to other companies. "For manufacturers of the United States, we couldn't have a better flag than to have Apple coming back," he said.
Would-be Apple workers will probably need a mix of two- and four-year degrees, perhaps provided in part by Apple, McGibbon added.
McGibbon's association represents companies that make factory machinery. "Our industry makes equipment that would make Apples," he explained. Such companies have many of the same operations and processes that an electronics company would, he said.
Learning to work with robots
Apple has not said exactly what kinds of jobs it will offer in its U.S. facility, but McGibbon said any American Apple factory worker would probably need to know how to deal with specialized robots and computer systems. "You're talking about people who can program robots, know about computer-aided design," he said. "You're managing machines."
That high level of automation and the small parts used in the electronics industry explain why $100 million doesn't translate into many jobs, McGibbon said. A similar investment by an automaker, by contrast, could mean as many as a thousand new jobs, he said, in part because auto parts are larger and heavier, and many still require hand-fitting.
Several recent reports have found that, to varying degrees, U.S. workers don't have the skills companies are looking for. Apple may find itself with the same problem. "I have a feeling that Apple is bringing back jobs that will fall into that same basket," McGibbon said. But the company is in a good position to build the workforce it wants, he thinks.
Large companies such as Apple are able to set up deals with local community colleges and universities to offer classes and degrees that the company could use, McGibbon said. Member companies of the Association of Manufacturing Technology often do this, but generally, the only companies that have enough clout for such agreements earn at least $10 million in revenue a year.
Why come to the U.S. now
Several factors make it more appealing for companies to do some manufacturing in the U.S now, McGibbon said.
The pay gap between Chinese and American workers has shrunk as Chinese wages have increased. At the same time, more and better robots in factories mean labor costs form a smaller proportion of the overall cost of business. So the difference between American and overseas workers is sometimes offset by shipping costs, McGibbon said.
Having factories in the U.S. also helps companies that sell to American customers respond more quickly to changes in the market. If there's a sudden drop in demand, for example, U.S. factories are able to quickly scale back production, McGibbon said. Overseas factories, on the other hand, may make things further ahead of time and find themselves with extra, unwanted devices they then have to sell at a discount.
The economics of manufacturing are changing quickly, McGibbon said. In 2010, Steve Jobs told President Barack Obama that iPhone and iPad manufacturing jobs would never return to the U.S., as the New York Times reported. "That's really the crux of the importance of this announcement, how quickly things turned," McGibbon said.