Those who watch the macroeconomic picture have already spotted an unusual trend: the return of manufacturing jobs from overseas countries. A new report suggests that Tim Cook is planning to join the trend, and bring back some Apple (News - Alert) computer construction to the United States from China starting next year.
Cook recently had an interview with NBC, to be aired late tonight, saying that one of the current Mac lines will be made in the United States, but in another interview with Bloomberg (News - Alert) Businessweek, Cook pinned down how much that would mean cash-wise: over $100 million total to do the job. Cook elaborated somewhat, saying that Apple wasn't planning necessarily to "do it ourselves", but they would be "working with people and (we'll be) investing (our) money" to get the job done.
Image via Shutterstock
While Apple didn't appear to discuss reasons behind this, there are actually a few good points that could have contributed to such a move. Perhaps first among them is that, in recent years, the total costs of outsourcing have narrowed. With outsourcing, the cost of labor is often significantly lowered to reflect the costs of living in that particular country, and that makes it attractive to businesses. Why pay an American worker $15 an hour or more to build a product when the product can be built for $3 an hour or less overseas?
But by like token, those products have to be brought back to the United States to be distributed, and the raw materials have to be transported to those facilities. As fuel costs increase worldwide, the savings on outsourcing fall to match. After all, if it costs $15 an hour to build in the United States but $5 an hour in fuel to move all the related materials, and the price switches to $3 an hour to build, but $17 an hour to ship with overseas production, where did the savings go?
Additionally, there's a public relations bonus to be had; outsourcing isn't exactly a favorite topic among Americans, especially those who have lost jobs thanks to it. Those companies that use outsourcing sometimes find themselves on informal boycotts, or at least having lost good will. Moving production back to the United States provides jobs, and also gains good will on the part of the American people, still part of the largest market on Earth.
While the exact motives behind Apple’s return to the United States are unclear, the point is that it's being done, and it's going to mean jobs for somebody. These days, that's good news, and for some, the difference between life and death.
Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO Miami 2013, Jan 29- Feb. 1 in Miami, Florida. Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.
Edited by Brooke Neuman