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Apple Moving Some Manufacturing to U.S.

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News Posted: Thu, Dec 6 2012 12:35 PM
Perhaps it was the iFixIt teardown a few days ago that showed some new iMacs are stamped with “Assembled in the U.S.A.” that prompted the announcement, but in any case, Apple CEO Tim Cook told both Bloomberg and NBC’s Brian Williams that Apple is moving some of its manufacturing operations back to the good U.S. of A with a $100 million investment.

Cook apparently won’t reveal specifically which product line (or lines) Apple will manufacture stateside yet, but it will be Mac-related. If we had to guess, it will likely include at least the aforementioned iMacs. Some Apple components are already made in the U.S., including the iPhone’s A5 processor and display glass.

iFixIt teardown
The tell-tale label (Image credit: iFixIt)

It’s not surprising that Apple would want to move as much of its operations back to U.S. as possible. The only appeal of overseas manufacturing is that it’s less expensive there than stateside, but there are lots of hidden costs involved. We’ve heard anecdotally, for example, that once a company factors in the loss of hands-on quality control (which can impact product reputation and increase losses due to refunds and returns on defective items), expensive travel, and so on, it just doesn’t make a lot of fiscal sense to outsource manufacturing in some cases. Further, as China emerges as a world power, the up front savings will likely continue to diminish.

iMacs
New iMacs: Made in the USA?

Apple may also see trouble brewing with China manufacturing partner Foxconn, which has made lots of headlines in recent times--virtually all negative--and decide that it’s prudent to slowly but surely disassociate itself with Foxconn’s labor and worker rights issues.

And of course, it’s a huge PR win for any company that can claim to bring jobs to a struggling U.S. economy, and you can bet that Apple will be hammering that point home as much as possible. That’s not to say Apple shouldn’t be lauded for providing jobs in the U.S., but decisions like these are economical, not altruistic.

Foxconn worker
Foxconn worker in China

Cook also told Bloomberg that Apple won’t be doing the actual manufacturing but will be “working with people and we’ll be investing our money”.
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Dave_HH replied on Thu, Dec 6 2012 12:48 PM

I have a whole new respect for Apple now. This is great to see.

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Stole the words of out of my mouth

it’s a huge PR win for any company that can claim to bring jobs to a struggling U.S. economy, and you can bet that Apple will be hammering that point home as much as possible.

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OSunday replied on Thu, Dec 6 2012 11:16 PM

This is a great move for Apple, it helps them bring money back to the U.S., makes it easier to ensure quality control and adequate treatment of its labor sources and help it publicity through pulling away from Foxconn.

Not to mention this will help curb the black market for Apple products that go missing somewhere in transportation or production abroad, and might even help them keep the lid on newly released products or prototypes a little tighter

Does anyone remember hearing about how the "Made in the USA" label is eligible to be applied as long as part of it is made or assembled in the U.S.A. or even just North America?
I can't remember if that was something I heard here or not, but it's just something to consider that "moving manufacturing to the U.S." isn't as clear cut a statement as it sounds and should be 

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It should be remembered that the requirements for putting «Assembled in X country» are both weak and diffuse. Not least when the company, as in this case, is Apple, which is hardly known for its transparency, it might be wise for people in the US to wait for further details before shouting «Hurrah !»...

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Dorkstar replied on Fri, Dec 7 2012 10:24 AM

mhenriday:

It should be remembered that the requirements for putting «Assembled in X country» are both weak and diffuse. Not least when the company, as in this case, is Apple, which is hardly known for its transparency, it might be wise for people in the US to wait for further details before shouting «Hurrah !»...

Henri

I was thinking that as well.  Especially since it says "Assembled in the USA" instead of "made in the USA"  big difference in where the money is going to there.

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mhenriday replied on Fri, Dec 7 2012 10:54 AM

It took a little searching to find what standards are used to judge the validity of an «Assembled in USA» claim, but here's what the Federal Trade Commission has to say about the matter :

Assembled in USA Claims

A product that includes foreign components may be called "Assembled in USA" without qualification when its principal assembly takes place in the U.S. and the assembly is substantial. For the "assembly" claim to be valid, the product’s last "substantial transformation" also should have occurred in the U.S. That’s why a "screwdriver" assembly in the U.S. of foreign components into a final product at the end of the manufacturing process doesn’t usually qualify for the "Assembled in USA" claim.

Example: A lawn mower, composed of all domestic parts except for the cable sheathing, flywheel, wheel rims and air filter (15 to 20 percent foreign content) is assembled in the U.S. An "Assembled in USA" claim is appropriate.

Example: All the major components of a computer, including the motherboard and hard drive, are imported. The computer’s components then are put together in a simple "screwdriver" operation in the U.S., are not substantially transformed under the Customs Standard, and must be marked with a foreign country of origin. An "Assembled in U.S." claim without further qualification is deceptive.

We'll have to see to what degree the Apple products referred to in Seth Colaner's article above will meet this standard....

Henri

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