Apple (AAPL) - Get Report is under more pressure than ever to move at least some of its iPhone manufacturing operations to the U.S. from Asia after President Donald Trump claimed Apple CEO Tim Cook had promised to build three manufacturing plants in the U.S.
"I said you know, Tim, unless you start building your plants in this country, I won't consider my administration an economic success. He called me, and he said they are going forward," Trump told The Wall Street Journal in a 45-minute interview on Juky 26. Trump, who first called on Apple to start making iPhones in the U.S. in January 2016, noted that Cook did not specify where or when the plants would be built in the U.S.
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Trump is pressuring Apple to start building iPhones and other devices in the U.S. because he's under pressure to deliver on campaign trail promises to revive U.S. manufacturing and bring jobs back to the U.S. But just how many jobs would an iPhone factory in the U.S. create? According to research, not that many.
In order to consider how many jobs Apple's potential three plants would create, there has to be a distinction made between Apple simply assembling iPhones in the U.S. and Apple gettings its components for the iPhone in the U.S. and assembling it in the U.S.
In the first scenario, Apple would get components for the iPhone, such as the memory chip, processor, and display screen, shipped to its hypothetical plants in the U.S. from around the world and put it together in the plants. This wouldn't actually create that many jobs because much of the assembly has been automated, according to 9to5Mac.
Keep in mind that China makes 200 million iPhones per year. Industry experts worry that the U.S. does not have the same workforce power to make those numbers happen, even with robots. When Apple needed 8,700 engineers to oversee the 200,000 iPhone workers in China, the country was able to fill the spots in 15 days. To fill that many jobs in the U.S. would have taken nine months, according to Apple.
Cook explained this issue himself in a "60 Minutes" interview in 2015: "China put an enormous focus on manufacturing. The U.S., over time, began to stop having as many vocational kinds of skills. 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."
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In the second scenario, Apple would actually get its components from the U.S. and assemble the iPhone here in the U.S. This is tough considering Apple has more than 700 suppliers, with the majority of them in China, Taiwan, and Japan. This method, while better, still wouldn't create a meaningful number of jobs, MIT electrical engineer Duane Boning told 9to5Mac.
One reason components are outsourced is simply because many of them can only be made overseas because the iPhone requires materials that simply aren't available in the U.S., according to Alex King, director of the Critical Materials Institute headquartered at the Department of Energy's Ames Laboratory, who is quoted in the 9to5Mac article. That means Apple would actually only be able to create a small amount of the iPhone components in the U.S. and would have to ship the rest from Asia, which means less U.S. jobs and huge shipping and transportation costs.
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While Cook has yet to confirm the three plants, major Apple supplier Foxconn (FXCOF) has said it will build a $7 billion liquid-crystal display panel plant in the U.S. The plant could create 30,000 to 50,000 jobs and might be built in Wisconsin, according to reports. President Donald Trump will hold a news conference with Wisconsin officials at 5 p.m. EST on Wednesday and is expected to announce further plans for the plant.