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Mar, 2017

Is Apple Moving Some Of Their Manufacturing Plants To The US?

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Donald Trump is pushing bringing manufacturing jobs back to the US, and according to a number of sources Apple is debating stepping up to the challenge. Apple phones have long been manufactured in China where it’s incredibly cheap to produce the popular smartphones. Electronics producer Foxconn is one of Apple’s largest suppliers. According to Reuters, Foxconn confirmed in mid-January that they are debating investing $7 billion to create a flat-panel manufacturing facility right here in the USA.

This means Americans could be responsible for creating an important component inside of Apple’s famous smartphones. This would brighten the chances that more manufacturers move their plants to the US too–a win-win for our economy. Founder and chairman of Foxconn Terry Gou said that moving a plant here could create as many as 50,000 new jobs for American workers. Mr. Gou added that the plant would also involve Japanese subsidiary Sharp.

Foxconn has been looking into Pennsylvania, as well as other states, in order to find the best location for the potential factory.

The Interview That Started It All

Speculation sparked after Donald Trump had an interview with Tim Cook, in which he urged him to move at least part of Apple’s production line to the home front, the US.

Trump’s conversation went as follows:

“I was honored yesterday, I got a call from Bill Gates, great call, we had a great conversation, I got a call from Tim Cook at Apple, and I said, ‘Tim, you know one of the things that will be a real achievement for me is when I get Apple to build a big plant in the United States, or many big plants in the United States, where instead of going to China, and going to Vietnam, and going to the places that you go to, you’re making your product right here.’ He said, ‘I understand that.’ I said: ‘I think we’ll create the incentives for you, and I think you’re going to do it. We’re going for a very large tax cut for corporations, which you’ll be happy about.’”

Trump has brought up this conversation on several occasions following his original remarks. Adding that Cook, “loves this country, and I think he’d like to do something major here.”

Foxconn’s exploration of opportunities in the US shows that all of this talk might actually become a reality. In December 2016, Foxconn told CNNMoney, “We are in preliminary discussions regarding a potential investment that would represent an expansion of our current U.S. operations.”

How Much Do Foxconn Employees In China Make?

There are different figures swirling around but none of them look good. Many Chinese factory workers make less than $17 per day, and work as many as 6 days per week just to keep food in their stomachs. Workers make ends meet by putting in a lot of overtime hours—working as much as 160 hours per month. They do make overtime, at around 1.5 times their hourly wage on weekdays and 2 times their hourly wage on weekends. In order to make just $400+ a month, these workers are clocking in 36+ hours of overtime in a single month.

Cheap labor allows iPhones to sell for less than $1,000 while Apple and Foxconn both turn a profit. If you bring these same jobs to the US, we might start paying more for our smartphones in order to compensate for wage discrepancies.

The average American factory worker makes $11.93 per hour X 8 hours a day, which equals $95.44 per day. That’s more than the average China-based Foxconn worker makes in one 5-day workweek.

So Will Apple Really Move Factories To The US?

There are some doubts that Foxconn will open a plant in the US, and even if it does how much will it really contribute to the production of the iPhone? These worries arise because there’s no way Foxconn can operate the same factory for the same costs here in the US.

Foxconn pays more than many Chinese factories, but it still pays next to nothing. In fact, Foxconn factories that produce iPhones are well known for also producing suicidal workers due to the brutal conditions of factory life paired with low pay. In fact, they have attached nets to their building in order to prevent employees from continuing to jump off the building to their death.

Terry Gou, the man behind Foxconn, is filthy rich and yet his employees live in shambles and fight for their lives every day. Clearly, Mr. Gou cares more about his personal bank accounts than the happiness and wellbeing of the employees that make it all possible. That being said, who really wants to work for someone like that? And is he going to change his ways when he opens a plant on American soil? Increased costs and America’s strict labor laws would require a complete change in Gou’s business methodology, something many are doubtful of. What do you think?