Jon Russell was Asia Editor for The Next Web from 2011 to 2014. Originally from the UK, he lives in Bangkok, Thailand. You can find him on T Jon Russell was Asia Editor for The Next Web from 2011 to 2014. Originally from the UK, he lives in Bangkok, Thailand. You can find him on Twitter, Angel List, LinkedIn.
Donald Trump has never been a shrinking violet and now, the man who questioned the US President on the details of his birth and acceptance to college, has challenged Apple to move production of its devices to the US.
As CNET reports, the Billionaire business man told Fox News that it would “be a great thing” if Apple CEO Tim Cook could build the company’s plants in the US even if, he said, there is little motivating him to do so:
Maybe the incentive’s not there…but when 100 percent of Apple’s products–or virtually 100 percent–are made outside of this country, it’s pretty sad.
Outsourcing of manufacturing and other series occurred because firms believed that overseas employees were keen to carry out such jobs, while of course they demand lower salaries giving firms a huge cost benefit. It has since become standard for tech firms to have products assembled overseas, typically in Asia or Latin America, and companies like Foxconn carries order for Apple, Microsoft and others.
Equally, in the case of Asia, the advancement and efficiency of its supply chain, which is able to take new orders or alternative product designs in quick time, is a key factor for firms.
In spite of the establishment of outsourcing, Trump told Fox that Apple should try to bring things home:
We can do great things in this country…wouldn’t it be great if Apple actually made these products in the United States.
While Trump was a little short on providing tangible benefits to the move for Apple, the idea isn’t as ridiculous as demanding to see Obama’s birth certificate. Indeed, President Obama himself is in favour of bringing manufacturing jobs to the US and The Next Web‘s own Brad McCarty recently penned a compelling case for Apple to do so, amidst continued news of issues amongst its Chinese manufacturers.
The company has masses of cash and nearly $100 billion in liquid assets which McCarty believes gives it a “prime opportunity to simply do what’s right”. Motivated by PR and goodwill over profit, it could wholly revitalise one American city and bring a feel good factor to the country in the process.
McCarty explains that, assuming Apple would match the $1 billion that Foxconn just spent to develop a factory (which builds more than just Apple products), the rest of the financial details are feasible:
If Apple took $3.88 billion (5% of Apple’s current liquid $97.6 billion is $4.88 billion, less the $1 billion for building the plant) and focused on paying fair wages to Detroit workers, it could completely revitalize the city as it stands today. Assuming that Apple paid its workers an average of $20 per hour, 70,000 workers would cost the company $2.9 billion per year in salary. Factor in other costs of doing business and that remaining $3.88 billion would likely be gone in a year, but Apple is still turning profits, adding to the coffers.
President Obama put Trump in his place through an incredible series of jokes in a dinner speech last year, but Apple CEO Tim Cook is much less likely to be responding. Cook already ‘set the record straight’ with employees through a internal email and it remains to be seen whether he will preside over a changed approach to manufacturing.
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