The only way I can see this making sense is if it is an assembly plant rather than a real chips-to-finished-product factory.
Why?
The advantage you have in these cities (almost literally) in China dedicated to manufacturing is that almost the entire supply chain is local and very finely tuned. This is particularly true for operations that might do work for companies like Apple.
The PCB manufacturers, assemblers, chip makers, connector manufacturers, LED manufacturers, display manufactures, plastics and sheet-metal manufacturers and more, are all centrally located. If not, they are within the proximal geographic regions.
The same is true of qualified workers. Need 100,000 assemblers in a hurry? No problem. Technicians, engineers, managers, etc. Lots of them and easy to hire within days of your requirement.
In sharp contrast to this, the supply chain anywhere in the US is most-definitely not localized and highly fragmented. Virtually nothing you are going to use in electronics manufacturing is made in the US. That means that rather than your LEDs being a few hours away by truck they are three weeks away by boat --from China.
In terms of mechanical components, such as screws, well, yes, they are available in the US, of course. The problem is that they will cost more. No question about it. Because our industry, due to the need to survive, has had to focus on market segments that can pay a premium (military, medical, etc.) you can pay through your teeth to get anything made here. That's just the truth.
In terms of machining and bending metal or injecting plastics, well, it depends. If you are dealing with a unionized operation, forget it. Costs will be ridiculous. Plastics, in very large quantities, can be reasonable here. Punching and bending metal or machining metal could be plausible at a very large scale and with a very finely tuned factory.
Let's not add regulatory and tax issues to the pile.
Because of all of this and a few more data points from first-hand experience manufacturing in the US, my guess is that Apple is going to simply import pre-fabricated modules assemblies and parts. They'll have US workers bolt them together and test the finished product. You can slap a "Assembled in the US" (and maybe even "Made in the US" sticker on it and feel good about it.
Remember what Steve Jobs told Obama about manufacturing jobs coming back to the US. I don't think anything significant enough has changed since then to invalidate his statement.
Steve Jobs, like many other corporate leaders was always fine with making broad forward looking statements based on Apple's position right now. He would then have a complete and immediate turn around once Apple was ready to do something. I'm not criticizing, it's a smart strategy. All I'm saying is that we shouldn't look to the past words of Steve Jobs as a guide for the future.
I am in the camp that it is a product like the Mac Pro. A product which has a large number of user customizations combined with low sales volumes that effectively removes it from common mass production methods.
Oh I am quite sure you can bound up the chassis, power supply, and perhaps the main board, and ship it off for final assembly here and still be labeled as made here.
Yeah, Mac Pro is ideal for this. It has low enough sales volumes that Apple could even make it in Cupertino.
I wonder if having a high end American made machine would win them specific contracts (vs other vendors, or vs a Chinese made iMac) -- either Buy American or security considerations.
I'd be happy paying 5-10% premium on the Mac Pro for US production from the motherboard up. I trust Intel. Knowing the provenance of the other chips would be nice too.
> The only way I can see this making sense is if it is an assembly plant rather than a real chips-to-finished-product factory.
Quote from the interview:
And next year we are going to bring some production to the U.S. on the Mac. We’ve been working on this for a long time, and we were getting closer to it.
It will happen in 2013. We’re really proud of it. We could have quickly maybe done just assembly, but it’s broader because we wanted to do something more substantial.
Note: more than just assembly. This doesn't mean everything is going to be made on one place, but it does mean more than just slapping a case on.
I wouldn't be surprised if it was not a high value product like the announced new Mac Pro. Probably not just assembly but also making many parts. Its low volume, perhaps semi custom, and much of the demand is in the US.
That seems true, but it could be that Jobs was speaking at a time when changes were happening that are coming to fruition now. For example New York state has invested heavily in semiconductor fabs upstate
Why?
The advantage you have in these cities (almost literally) in China dedicated to manufacturing is that almost the entire supply chain is local and very finely tuned. This is particularly true for operations that might do work for companies like Apple.
The PCB manufacturers, assemblers, chip makers, connector manufacturers, LED manufacturers, display manufactures, plastics and sheet-metal manufacturers and more, are all centrally located. If not, they are within the proximal geographic regions.
The same is true of qualified workers. Need 100,000 assemblers in a hurry? No problem. Technicians, engineers, managers, etc. Lots of them and easy to hire within days of your requirement.
In sharp contrast to this, the supply chain anywhere in the US is most-definitely not localized and highly fragmented. Virtually nothing you are going to use in electronics manufacturing is made in the US. That means that rather than your LEDs being a few hours away by truck they are three weeks away by boat --from China.
In terms of mechanical components, such as screws, well, yes, they are available in the US, of course. The problem is that they will cost more. No question about it. Because our industry, due to the need to survive, has had to focus on market segments that can pay a premium (military, medical, etc.) you can pay through your teeth to get anything made here. That's just the truth.
In terms of machining and bending metal or injecting plastics, well, it depends. If you are dealing with a unionized operation, forget it. Costs will be ridiculous. Plastics, in very large quantities, can be reasonable here. Punching and bending metal or machining metal could be plausible at a very large scale and with a very finely tuned factory.
Let's not add regulatory and tax issues to the pile.
Because of all of this and a few more data points from first-hand experience manufacturing in the US, my guess is that Apple is going to simply import pre-fabricated modules assemblies and parts. They'll have US workers bolt them together and test the finished product. You can slap a "Assembled in the US" (and maybe even "Made in the US" sticker on it and feel good about it.
Remember what Steve Jobs told Obama about manufacturing jobs coming back to the US. I don't think anything significant enough has changed since then to invalidate his statement.