Apple partner Pegatron could boost US manufacturing capacity by 3-5x, if pressed

Posted:
in iPhone
The chairman of Apple supplier Pegatron has revealed that his company could expand its operations in the U.S. by three to five times, should it be necessary -- but even that won't make much of a dent in Apple's iPhone and Mac production needs.




According to a Chinese-langauge Economic Daily News report, Pegatron chairman TH Tung said at his company's year-end banquet that its plants in California and Indiana could be expanded to meet the needs of purchasers. It would likely have little impact on the U.S. workforce, as any increase would be accommodated by automation, and not by growing the employment rolls significantly.

The U.S. facilities are primarily used for repair part manufacture for some electronics companies, and very small runs of them, at that.

AppleInsider has learned that neither U.S. facility assembles goods for Apple at this time. Primary customers are HP and Dell. The companies also provide on-site service for some products in the areas that they serve.

While three to five times expansion volume is significant, AppleInsider has also learned it is a "far cry less" than what Apple would need in even a slow Mac sales quarter, let alone the iPhone. Additional capacity would be required from another company, should Pegatron be tapped for this service in the U.S.

When then-Presidential candidate Donald Trump threatened various countermeasures against companies building products overseas, and importing them, rather than relying on U.S.-based manufacture, Apple requested an impact statement from both Foxconn and Pegatron should a move be required. Foxconn developed a plan, and Pegatron reportedly did not, citing costs of the effort.

Trump's campaign promised a 35 percent tariff levied against products like the iPhone manufactured overseas. The plan, published in June, presumably will give companies a significant economic incentive to bring manufacturing jobs back to the U.S. if passed.

"To make iPhones, there will need to be a cluster of suppliers in the same place, which the U.S. does not have at the moment," Apple Chief Executive Tim Cook said in an Dec. 2015 interview about a possible shift. "Even if Trump imposes a 45 percent tariff, it is still possible that manufacturers will decide to continue production overseas as long as the costs together with the tariffs are lower than the amount they need to spend on building and running production lines in the U.S."

Comments

  • Reply 1 of 20
    wood1208wood1208 Posts: 2,545member
    Why everyone is after Apple to pressure bringing manufacturing to USA. How about Walmart getting their stuff Made-in-China ?
    watto_cobracalibaconstang
  • Reply 2 of 20
    plovellplovell Posts: 818member
    And how about Trump getting HIS stuff to be "Made in USA" ?? He's a hypocrite.
    jax44watto_cobraquadra 610MacProcalibaconstangjony0
  • Reply 3 of 20
    60% of Apple's sales are to consumers outside of the USA. Most of Apple's current product line was never manufactured in the USA to begin with. Trump is never in a million years going to implement these stupid import taxes he's talking about. He says John Lewis is all talk and no action but he should take a good look in the mirror because that's exactly what he is.
    quadra 610MacProalbegarcmacxpressbaconstangjony0
  • Reply 4 of 20
    mwhitemwhite Posts: 271member
    60% of Apple's sales are to consumers outside of the USA. Most of Apple's current product line was never manufactured in the USA to begin with. Trump is never in a million years going to implement these stupid import taxes he's talking about. He says John Lewis is all talk and no action but he should take a good look in the mirror because that's exactly what he is.
    You have no idea what he will do once he becomes President....
    canukstormben20techprod1gycali
  • Reply 5 of 20
    flaneurflaneur Posts: 4,526member
    mwhite said:
    60% of Apple's sales are to consumers outside of the USA. Most of Apple's current product line was never manufactured in the USA to begin with. Trump is never in a million years going to implement these stupid import taxes he's talking about. He says John Lewis is all talk and no action but he should take a good look in the mirror because that's exactly what he is.
    You have no idea what he will do once he becomes President....
    And you have no idea what he is going to do to himself.


  • Reply 6 of 20
    tzeshantzeshan Posts: 2,351member
    flaneur said:
    mwhite said:
    60% of Apple's sales are to consumers outside of the USA. Most of Apple's current product line was never manufactured in the USA to begin with. Trump is never in a million years going to implement these stupid import taxes he's talking about. He says John Lewis is all talk and no action but he should take a good look in the mirror because that's exactly what he is.
    You have no idea what he will do once he becomes President....
    And you have no idea what he is going to do to himself.


    This is trivial. Only four days left waiting.
  • Reply 7 of 20
    mwhite said:
    60% of Apple's sales are to consumers outside of the USA. Most of Apple's current product line was never manufactured in the USA to begin with. Trump is never in a million years going to implement these stupid import taxes he's talking about. He says John Lewis is all talk and no action but he should take a good look in the mirror because that's exactly what he is.
    You have no idea what he will do once he becomes President....
    Want to make a wager on him actually implementing all these tariff threats? I feel very confident in saying they're never going to happen. Mostly because if he did other nations would retaliate, all the goods his supporters buy at Walmart would become more expensive, he would become unpopular and we know that's all he cares about.
    macxpressbaconstang
  • Reply 8 of 20
    This article illustrates the huge potential to bring more manufacturing to the US. We need to work harder to keep a percentage of manufacturing in the US. It is possible but we have to fight for every job. That feels like what Trump wants to do. We will see if anything actually happens. But I like the tone. All the negative comments represent exactly what I do not want in our government. You naysayers are the ones who get the country NOWHERE. Good thing you have comment sections otherwise not sure what you would do in life.
  • Reply 9 of 20
    flaneurflaneur Posts: 4,526member
    tzeshan said:
    flaneur said:
    mwhite said:
    60% of Apple's sales are to consumers outside of the USA. Most of Apple's current product line was never manufactured in the USA to begin with. Trump is never in a million years going to implement these stupid import taxes he's talking about. He says John Lewis is all talk and no action but he should take a good look in the mirror because that's exactly what he is.
    You have no idea what he will do once he becomes President....
    And you have no idea what he is going to do to himself.


    This is trivial. Only four days left waiting.
    Yes, the trivial horror show is about to get serious. China's reaction, that he's an amature and a child, seems ominous, and has a certain ring of truth to it

    Tim Cook understates the problem a bit. He says "a cluster of suppliers in the same place." What really is in Taiwan, Korea, Japan, mainland China and elsewhere in Asia is an entire industrial system that's been building for 50 years, making consumer electronics and the fine mechanisms that go with it. The US has never had this capacity, and it's stupid to think the culture of engineering that supports it exists or could exist in the US.

    The US's countervailing strategic strength lies in the knowledge industry, including software, and the free thinking that supports it. Thus Apple, "designed [and programmed] in California."
    baconstang
  • Reply 10 of 20
    flaneurflaneur Posts: 4,526member
    This article illustrates the huge potential to bring more manufacturing to the US. We need to work harder to keep a percentage of manufacturing in the US. It is possible but we have to fight for every job. That feels like what Trump wants to do. We will see if anything actually happens. But I like the tone. All the negative comments represent exactly what I do not want in our government. You naysayers are the ones who get the country NOWHERE. Good thing you have comment sections otherwise not sure what you would do in life.
    " . . . what I do not want in our government." Right, you don't want the truth, or realism. Get used to it, because you're going to get a steady dose of it from people who aren't fooled by fakery like the Carrier buy-off.

    Meanwhile, the real US businesses of the future, like personal, wearable computing, artificial intelligence, environmental sciences, renewable energy, all the stuff that Apple is heading toward, haven't made a blip in Trump's awareness.

    He just hung himself on the ropes again in his interview with The Times of London and Der Bild.
    edited January 2017 baconstang
  • Reply 11 of 20
    flaneur said:
    This article illustrates the huge potential to bring more manufacturing to the US. We need to work harder to keep a percentage of manufacturing in the US. It is possible but we have to fight for every job. That feels like what Trump wants to do. We will see if anything actually happens. But I like the tone. All the negative comments represent exactly what I do not want in our government. You naysayers are the ones who get the country NOWHERE. Good thing you have comment sections otherwise not sure what you would do in life.
    " . . . what I do not want in our government." Right, you don't want the truth, or realism. Get used to it, because you're going to get a steady dose of it from people who aren't fooled by fakery like the Carrier buy-off.

    Meanwhile, the real US businesses of the future, like personal, wearable computing, artificial intelligence, environmental sciences, renewable energy, all the stuff that Apple is heading toward, haven't made a blip in Trump's awareness.

    He just hung himself on the ropes again in his interview with The Times of London and Der Bild.
    It is now very clear that you are full of crap after that rant.
    gtr
  • Reply 12 of 20
    flaneurflaneur Posts: 4,526member
    flaneur said:
    This article illustrates the huge potential to bring more manufacturing to the US. We need to work harder to keep a percentage of manufacturing in the US. It is possible but we have to fight for every job. That feels like what Trump wants to do. We will see if anything actually happens. But I like the tone. All the negative comments represent exactly what I do not want in our government. You naysayers are the ones who get the country NOWHERE. Good thing you have comment sections otherwise not sure what you would do in life.
    " . . . what I do not want in our government." Right, you don't want the truth, or realism. Get used to it, because you're going to get a steady dose of it from people who aren't fooled by fakery like the Carrier buy-off.

    Meanwhile, the real US businesses of the future, like personal, wearable computing, artificial intelligence, environmental sciences, renewable energy, all the stuff that Apple is heading toward, haven't made a blip in Trump's awareness.

    He just hung himself on the ropes again in his interview with The Times of London and Der Bild.
    It is now very clear that you are full of crap after that rant.
    Not that I care, but you should be more specific. Or maybe I just offended you personally. If so, apologies.

    But here's a short piece in Forbes (not a leftie outlet) about how out of touch Trump is on the real world of global business:

    http://www.forbes.com/sites/bertelschmitt/2017/01/16/blasting-bmw-trump-shows-scary-naivete/#424853a04304

    He wants to see Chevrolets in Germany. As if Germans don't know about American vs. German engineering. This is an example of how the US has thrown away its industrial competence during decades of negligence and devotion to planned obsolescence. The Germans and  Japanese took over the world auto industry while GM and Ford were building Escalades and Navigators, and never learning to build smaller cars suitable for export. 

    baconstang
  • Reply 13 of 20
    This article illustrates the huge potential to bring more manufacturing to the US. ...  But I like the tone. All the negative comments represent exactly what I do not want in our government. You naysayers are the ones who get the country NOWHERE. 
    Did you read the article for comprehension? Or did you just miss the part about automation?

    There may be more manufacturing plants here, but those plants don't automatically translate into long-term low-skilled jobs. The majority of that work will be done with robots who can sit and do that job day-in and day-out, 24 hours a day, 365 days a year, and at about $3-4/hour to boot. Holidays included, and no health insurance or other benefits required.

    The days where your parents and mine could sit at an assembly line and stick part A into slot B for $25/hour are long gone, and they're not coming back. And it's not just manufacturing. Transportation, food service, warehousing, health care... everything is going to be impacted.

    Bottom-line accounting is what drove the off-shoring exodus and those same hard numbers are going to be what drives automation. Automation and robotics and AI can do the same work for less money, and lowering costs and increasing profits is the only thing corporate America cares about. 

    This isn't negativism, this is reality. And the sooner you understand that fact is the sooner you'll understand that Trump making vague promises about bringing back the glories of a previous generation are just that: vague promises, not even worth the hot air it took to produce them.

    It's not going to happen. 
    baconstang
  • Reply 14 of 20
    canukstormcanukstorm Posts: 2,534member
    mwhite said:
    60% of Apple's sales are to consumers outside of the USA. Most of Apple's current product line was never manufactured in the USA to begin with. Trump is never in a million years going to implement these stupid import taxes he's talking about. He says John Lewis is all talk and no action but he should take a good look in the mirror because that's exactly what he is.
    You have no idea what he will do once he becomes President....
    Want to make a wager on him actually implementing all these tariff threats? I feel very confident in saying they're never going to happen. Mostly because if he did other nations would retaliate, all the goods his supporters buy at Walmart would become more expensive, he would become unpopular and we know that's all he cares about.
    India, a major market Apple  is focused on breaking into, has large import tariffs. Apple is now working with Foxconn to manufacture iPhones within India. Same goes for Brazil. And China has been waging currency wars through currency manipulation for awhile now, so it'd be hypocritical if they did retaliate.
  • Reply 15 of 20
    ben20ben20 Posts: 126member
    I would never buy a BMW that is made in Mexico. Pegatron and Apple are doing the right thing moving more manufacturing to the USA.
  • Reply 16 of 20
    canukstormcanukstorm Posts: 2,534member
    ben20 said:
    I would never buy a BMW that is made in Mexico. Pegatron and Apple are doing the right thing moving more manufacturing to the USA.
    I owned a 2012 VW Golf (made in Germany) and currently own a 2016 VW Golf (Made in Mexico). I actually find the build quality of the Made-in-Mexico Golf to be much better vs the Made-in-Germany Golf. I know it's anecdotal, but that's my observation. Everything feels so tightly put together.
    baconstang
  • Reply 17 of 20
    avon b7avon b7 Posts: 5,904member
    hmlongco said:
    This article illustrates the huge potential to bring more manufacturing to the US. ...  But I like the tone. All the negative comments represent exactly what I do not want in our government. You naysayers are the ones who get the country NOWHERE. 
    Did you read the article for comprehension? Or did you just miss the part about automation?

    There may be more manufacturing plants here, but those plants don't automatically translate into long-term low-skilled jobs. The majority of that work will be done with robots who can sit and do that job day-in and day-out, 24 hours a day, 365 days a year, and at about $3-4/hour to boot. Holidays included, and no health insurance or other benefits required.

    The days where your parents and mine could sit at an assembly line and stick part A into slot B for $25/hour are long gone, and they're not coming back. And it's not just manufacturing. Transportation, food service, warehousing, health care... everything is going to be impacted.

    Bottom-line accounting is what drove the off-shoring exodus and those same hard numbers are going to be what drives automation. Automation and robotics and AI can do the same work for less money, and lowering costs and increasing profits is the only thing corporate America cares about. 

    This isn't negativism, this is reality. And the sooner you understand that fact is the sooner you'll understand that Trump making vague promises about bringing back the glories of a previous generation are just that: vague promises, not even worth the hot air it took to produce them.

    It's not going to happen. 
    Next month the EU will take a look at the subject of a universal common income for citizens of the EU in the face of a world where robots do a lot of the work and employment is scarce. Interesting times.

    Being an outsider to US politics I can say that Trump comes over as a fool. Whether it's true or not, I can't say but he does himself few favours every time he opens his mouth.

    Reminds me of that old W.A.S.P song, The Neutron Bomber, about Reagan ('oh no, no, here comes Ronnie') only this time it's 'oh no, no, here comes Donny'.

    Trying to force companies into the US will backfire and start a tit for tat sequence of events that will do more harm than good.
    baconstang
  • Reply 18 of 20
    macxpressmacxpress Posts: 5,175member
    It also won't make a dent in US jobs because 90% or better will be fully automated. It will however get Trump to pat himself on the back saying he brought back manufacturing to the US. It didn't do much of anything, but it he brought it back. 
  • Reply 19 of 20
    macxpressmacxpress Posts: 5,175member
    60% of Apple's sales are to consumers outside of the USA. Most of Apple's current product line was never manufactured in the USA to begin with. Trump is never in a million years going to implement these stupid import taxes he's talking about. He says John Lewis is all talk and no action but he should take a good look in the mirror because that's exactly what he is.
    Amen! 
    baconstang
  • Reply 20 of 20
    foggyhillfoggyhill Posts: 4,767member
    flaneur said:
    This article illustrates the huge potential to bring more manufacturing to the US. We need to work harder to keep a percentage of manufacturing in the US. It is possible but we have to fight for every job. That feels like what Trump wants to do. We will see if anything actually happens. But I like the tone. All the negative comments represent exactly what I do not want in our government. You naysayers are the ones who get the country NOWHERE. Good thing you have comment sections otherwise not sure what you would do in life.
    " . . . what I do not want in our government." Right, you don't want the truth, or realism. Get used to it, because you're going to get a steady dose of it from people who aren't fooled by fakery like the Carrier buy-off.

    Meanwhile, the real US businesses of the future, like personal, wearable computing, artificial intelligence, environmental sciences, renewable energy, all the stuff that Apple is heading toward, haven't made a blip in Trump's awareness.

    He just hung himself on the ropes again in his interview with The Times of London and Der Bild.
    It is now very clear that you are full of crap after that rant.
    Anyone with a self aggrandizing screen name (unless it is ironic...) while having a high school level understanding of global business, geopolitics and tech that should be a lot more demure in their assertions; reading things fully would help too (as others have mentioned).
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