Why Apple Got a ‘Made in U.S.A.’ Bug
Apple’s decision to make some of its computers in the United States
may be a positive for American jobs. It is certainly a marker of where
much of the global computer industry has gone.
Today, rising energy prices and a global market for computers are
changing the way companies make their machines. Hewlett-Packard, which
turns out over 50 million computers a year through its own plants and
subcontractors, makes many of its larger desktop personal computers in
such higher-cost areas as Indianapolis and Tokyo to save on fuel costs
and to serve business buyers rapidly.
Tim Cook, Apple’s Chief introduces the iPad mini in October |
“It’s important that they get an order in five days, and there is a
pride for the local consumer to see a sticker that says ‘Made in
Tokyo,’” says Tony Prophet, senior vice president of operations for
H.P.’s PCs and printers. Five years ago, he says, H.P. supplied most of
Europe’s desktops from China, but today it manufactures in the Czech
Republic, Turkey and Russia instead.
H.P. sells those kinds of computers particularly to business
customers. The Macs that Tim Cook, Apple’s chief executive, talked about
making in the United States are likewise large machines, though it is
not clear if Apple is doing so to pursue more enterprise business.The
iPhones and iPads will still apparently be made in China.
If Cook is bringing his computer assembly back to the United States,
it will probably be for larger, lower-value goods that Apple wants to
sell locally, said Rob Enderle, an analyst in San Jose, Calif., who has
been following the industry for a quarter-century.
“A big-value product, like an iPhone or an iPad, would be a bigger
deal,” he said. “Cook is looking to give Apple some good news. He
doesn’t want people thinking about Apple as a declining company that
Steve Jobs used to run.”
Computer manufacturers have shipped work overseas for decades. At
first it was considered prestigious. In 1998, President Bill Clinton
visited a Gateway Computer factory outside Dublin to cheer the role of
American manufacturers in the rise of a “Celtic Tiger” in technology.
That plant was shut in 2001, when Gateway elected to save costs by
manufacturing in China. Dell, which made its mark by developing lean
manufacturing techniques in Texas, closed its showcase Austin factory in
2008 as part of a companywide move to manufacturing in China. A Dell
factory in Winston-Salem, N.C., for which Dell received $280 million in
incentives from the government, was shut in 2010 (Dell had to repay some
of the incentives).
More recent products, laptops and notebook computers, were in many
cases originally assembled in China, and they are still largely made
there.
So are most smartphones and tablets. Every week, H.P. sends a group
of cargo containers filled with notebooks to Europe.
The labor cost on a notebook, which is about 4 to 5 percent of the
retail price, is only slightly higher than the cost of shipping by air.
Soon even that is likely to change because of the twin forces of lower
manufacturing costs from automation and higher transportation costs from
rising global activity.
While the assembly of parts creates some jobs, the value in computers
is primarily in semiconductors, like processors and graphics chips, and
in screens. Here, the market is both global and concentrated in a few
areas.
Intel, which makes most of the processors, has plants in Oregon,
Arizona, New Mexico, Israel, Ireland and China. Many other chip
companies design their own products and have them made in giant
factories, largely in Taiwan and China. Computer screens are made in
Taiwan and South Korea, for the most part.
The special glass used for the touch screens of Apple’s iPhone and
iPad, however, is an exception. It comes primarily from the United
States.
As cheap as a Chinese assembly worker may be, an emerging trend in
manufacturing, specialized robots, promises to be even cheaper. The most
valuable part of the computer, a motherboard loaded with microprocessors
and memory, is already largely made with robots.
People do things like fitting in batteries and snapping on screens.
As more robots are built, largely by other robots, “assembly can be
done here as well as anywhere else,” Enderle said.
“That will replace most of the workers, though you will need a few
people to manage the robots.”
-New York Times |